Symmetricom Reports Third Quarter Fiscal Year 2013 Financial Results

- Net revenue of $53.3 million

- Net income of $0.8 million, or $0.02 per share

- Non-GAAP net income of $2.8 million, or $0.07 per share

- Gross margin of 45.1%; up on a year-over-year and sequential basis and the highest level since the first quarter of fiscal 2012

Apr 24, 2013, 16:05 ET from Symmetricom, Inc.

SAN JOSE, Calif., April 24, 2013 /PRNewswire/ -- Symmetricom, Inc. (NASDAQ: SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its third quarter of fiscal year 2013 ended March 31, 2013.

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Net revenue for the third quarter of fiscal 2013 was $53.3 million, compared to the $60.4 million reported for the third quarter of fiscal 2012.  Symmetricom reported net income of $0.8 million, or $0.02 per share, for the third quarter of fiscal 2013, compared to net income of $2.2 million, or $0.05 per share in the third quarter of fiscal 2012. On a sequential basis, revenue, net income and earnings per share increased from the second quarter of fiscal 2013.    

Non-GAAP net income for the third quarter of fiscal 2013 was $2.8 million, or $0.07 per share, compared to $3.3 million, or $0.08 per share, reported for the third quarter of fiscal 2012.  Non-GAAP net income increased sequentially by $2.5 million, or $0.06 per share, from the second quarter of fiscal 2013.

Cash, cash equivalents and short-term investments totaled $69.7 million as of March 31, 2013 compared to $70.8 million reported as of December 30, 2012. Net cash provided by operating activities in the third quarter was $1.3 million, and property, plant and equipment purchases were approximately $2.1 million, resulting in free cash outflow of ($0.8) million.

"Symmetricom delivered improved results compared to last quarter, with revenue at the high end of our expectations.  Profitability also improved sequentially, reflecting higher revenue, improved CSAC margins and the benefits from our ongoing savings efforts," said Dave Cote, president and chief executive officer of Symmetricom. "We continue to focus on driving our key growth initiatives, including the Quantum Chip Scale Atomic Clock, PackeTime and Government Programs. With our solid competitive position, a suite of leading solutions, and a healthy balance sheet, we remain well-positioned for the future."

Business Segment Revenue Results Revenue in the Communications Business in the third quarter of fiscal 2013 was $30.0 million, compared to $32.6 million reported in the third quarter of fiscal 2012.  Revenue in the Government and Enterprise Business in the third quarter of fiscal 2013 was $23.3 million, compared to $27.8 million reported in the third quarter of fiscal 2012.  Revenue in both segments increased from the second quarter of fiscal 2013, with the larger increase in the Communications segment.

Fourth Quarter 2013 Guidance Symmetricom's guidance for the fourth quarter of fiscal 2013 is as follows:

  • Net revenue is expected to be in the range of $51 million to $57 million
  • GAAP earnings (loss) per share is expected to be in the range of $0.00 to $0.05
  • Non-GAAP earnings per share is expected to be in the range of $0.05 to $0.10

A reconciliation of GAAP and non-GAAP guidance is provided at the end of this press release.

Investor Conference Call As previously announced, management will hold a conference call to discuss these results today, at 1:30 p.m. Pacific Time.  Investors are invited to join the conference call by dialing +1-212-547-0198 and referencing "Symmetricom."  A live webcast will also be available on the investor relations section of the Company's website at www.symmetricom.com.  An audio replay will be available for one week and can be accessed by dialing +1-203-369-2034.

About Symmetricom, Inc. Symmetricom (NASDAQ: SYMM), a world leader in precise time solutions, sets the world's standard for time. The Company generates, distributes and applies precise time for the communications, aerospace/defense, IT infrastructure, power and metrology industries.  Symmetricom's customers, from communications service providers and network equipment manufacturers to governments and their suppliers worldwide, are able to build more reliable networks and systems by using the Company's advanced timing technologies, atomic clocks, services and solutions.  All products support today's precise timing standards, including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol (NTP), Synchronous Ethernet and DOCSIS® timing.  Symmetricom is based in San Jose, California, with offices worldwide.  For more information, visit: http://www.symmetricom.com or join the dialogue at http://www.twitter.com/symmetricom.

Non-GAAP Information Certain non-GAAP financial information is included in this press release.  In the reconciliation of GAAP to non-GAAP results, Symmetricom excludes certain items related to non-cash equity-based compensation, acquisition-related costs, amortization of intangible assets, restructuring charges and off-shore development transition costs that the Company does not consider indicative of its ongoing performance. The income tax effect after these non-GAAP adjustments is determined based upon Symmetricom's estimate of its annual non-GAAP effective tax rate excluding these non-GAAP adjustments.  Symmetricom believes that excluding such items provides investors, analysts and management with a representation of the Company's core operating performance and with information useful in assessing, in conjunction with GAAP results, underlying trends in operating performance.  Management uses such non-GAAP information to evaluate financial results and to establish operational goals.  Non-GAAP information should not be considered superior to or as a substitute for data prepared in accordance with GAAP.  A reconciliation of the non-GAAP results to the GAAP results is provided in the financial schedules portion of this press release.

Free cash flow is defined as net cash provided by or used in operating activities minus purchases of property, plant and equipment.  Symmetricom believes this metric provides useful information to its investors, analysts, and management about the level of cash generated by or used in normal business operations, including the use of cash for the purchase of property, plant and equipment.  Management also views it as a measure of cash available to pay debt and return cash to stockholders.  Free cash flow is not a GAAP financial measure and should not be considered superior to or a substitute for operating cash flow or other cash flow data prepared in accordance with GAAP.

Safe Harbor This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections.  These forward-looking statements include statements concerning fourth quarter fiscal 2013 guidance and future performance as well as the information regarding the usefulness of the non-GAAP financial information.  The statements in this press release are made as of the date of this press release, even if subsequently made available by Symmetricom on its website or otherwise.  Symmetricom expressly disclaims any obligation to update or revise any forward-looking statement contained herein, whether as a result of a change in its expectations, a change in any events, conditions or circumstances on which a forward-looking statement is based, or otherwise.  Symmetricom's actual results could differ materially from those projected or suggested in these forward-looking statements.  Factors that could cause future actual results to differ materially from the results projected in or suggested by such forward-looking statements include, but are not limited to, the extent and magnitude of customer orders received and shipped within the same quarter, risks relating to general economic conditions in the markets we address and the telecommunications and government markets in general, risks related to the development of our new products and services, reliance on our contract manufacturer, the effects of increasing competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws or misappropriation of intellectual property, developments in and expenses related to litigation, the inability to obtain sufficient amounts of key components, the rescheduling or cancellation of key customer orders, the loss of a key customer, the effects of new and emerging technologies, the risk that excess inventory may result in write-offs, price erosion and decreased demand, fluctuations in the rate of exchange of foreign currency, changes in our effective tax rate, market acceptance of our new products and services, technological advancements, undetected errors, design flaws, defects in our products or start-up manufacturing difficulties, the risks associated with our international sales, potential short-term investment losses and other risks due to credit market dislocation, geopolitical risks and risk of terrorist activities, the risks associated with attempting to integrate other companies and businesses we acquire, and the risk factors listed from time to time in Symmetricom's reports filed with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year ended July 1, 2012 and subsequent Forms 10-Q and 8-K.

Contact: Justin Spencer Chief Financial Officer +1-408-428-7801 jspencer@symmetricom.com

SYMM-F

 

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

Three months ended

 

Nine months ended

March 31,

December 30,

April 1,

March 31,

April 1,

2013

2012

2012

2013

2012

Net revenue 

$  53,349

$        49,151

$  60,438

$  158,891

$  175,110

Cost of sales:

     Cost of products and services

28,654

27,861

35,638

88,415

97,693

     Acquisition-related costs

237

248

74

719

445

     Restructuring charges

375

41

65

371

1,156

         Total cost of sales

29,266

28,150

35,777

89,505

99,294

         Gross profit

24,083

21,001

24,661

69,386

75,816

         Gross margin

45.1%

42.7%

40.8%

43.7%

43.3%

Operating expenses:

     Research and development

8,291

7,805

7,129

24,409

20,575

     Selling, general and administrative

14,593

14,778

14,281

45,598

43,955

     Amortization of intangible assets

87

86

52

259

156

     Restructuring charges

947

1,146

(76)

2,148

123

          Total operating expenses

23,918

23,815

21,386

72,414

64,809

          Operating income (loss)

165

(2,814)

3,275

(3,028)

11,007

Interest income, net of amortization (accretion) of premium (discount) on investments

98

178

225

240

(5)

     Income (loss) before taxes

263

(2,636)

3,500

(2,788)

11,002

Income tax provision (benefit)

(556)

(861)

1,296

(1,629)

3,604

     Net income (loss)

$      819

$         (1,775)

$   2,204

$    (1,159)

$     7,398

Earnings (loss) per share:

     Basic

$     0.02

$           (0.04)

$     0.05

$      (0.03)

$       0.18

     Diluted

$     0.02

$           (0.04)

$     0.05

$      (0.03)

$       0.17

Shares used in computing earnings (loss) per share:

   Weighted average shares outstanding - basic

40,502

40,356

41,795

40,456

42,258

   Weighted average shares outstanding - diluted

40,956

40,356

42,615

40,456

42,937

 

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

March 31,

July 1,

2013

2012

ASSETS

Current assets:

Cash and cash equivalents

$  22,371

$  27,659

Short-term investments

47,351

39,280

Accounts receivable, net

38,870

45,952

Inventories

47,195

47,618

Prepaids and other current assets

17,379

16,943

     Total current assets

173,166

177,452

Property, plant and equipment, net

23,148

22,702

Intangible assets, net

3,519

3,458

Deferred taxes and other assets

28,898

27,413

          Total assets

$228,731

$231,025

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$  10,343

$    9,300

Accrued compensation

11,923

14,574

Accrued warranty

1,455

1,722

Other accrued liabilities

10,748

11,841

     Total current liabilities

34,469

37,437

Long-term obligations

4,938

5,472

Deferred income taxes

334

334

     Total liabilities

39,741

43,243

Stockholders' equity:

Common stock

195,821

193,478

Accumulated other comprehensive loss

(208)

(232)

Accumulated deficit

(6,623)

(5,464)

     Total stockholders' equity

188,990

187,782

          Total liabilities and stockholders' equity

$228,731

$231,025

 

SYMMETRICOM, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(unaudited)

Three months ended

Nine months ended

March 31,

December 30,

April 1,

March 31,

April 1,

2013

2012

2012

2013

2012

Reconciliation from GAAP to Non-GAAP 

GAAP Net income (loss)

$      819

$        (1,775)

$2,204

$  (1,159)

$  7,398

Non-GAAP adjustments:

Equity-based compensation expense:

     Cost of products and services

274

250

272

815

606

     Research and development

304

316

312

981

896

     Selling, general and administrative

1,212

1,121

1,154

3,453

3,079

Total equity-based compensation expense

1,790

1,687

1,738

5,249

4,581

 Acquisition-related costs and amortization of intangible assets:

     Cost of products and services

237

248

74

719

445

     Operating expenses

87

86

52

259

156

Total acquisition-related costs and amortization of intangible assets

324

334

126

978

601

Restructuring charges

$   1,322

$         1,187

$    (11)

$   2,519

$  1,279

Off-shore development transition costs

-

-

-

729

-

Income tax effect of Non-GAAP adjustments

(1,429)

(1,154)

(793)

(3,653)

(2,263)

Non-GAAP Net income

$   2,826

$           279

$3,264

$    4,663

$11,596

Earnings (loss) per share - diluted:

     GAAP Net income (loss)

$     0.02

$         (0.04)

$  0.05

$    (0.03)

$    0.17

     Non-GAAP Net income

$     0.07

$          0.01

$  0.08

$      0.11

$    0.27

Weighted average shares outstanding - diluted

40,956

41,464

42,615

41,396

42,937

 

SYMMETRICOM, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(unaudited)

Three months ended

Nine months ended

March 31,

December 30,

April 1,

March 31,

April 1,

2013

2012

2012

2013

2012

GAAP Revenue

$  53,349

$        49,151

$  60,438

$  158,891

$  175,110

Reconciliation from GAAP to Non-GAAP Gross Profit:

GAAP Gross profit

(A)

$  24,083

$        21,001

$  24,661

$   69,386

$   75,816

GAAP Gross margin

45.1%

42.7%

40.8%

43.7%

43.3%

Non-GAAP adjustments:

Equity-based compensation expense

274

250

272

815

606

Acquisition-related costs

237

248

74

719

445

Restructuring charges

375

41

65

371

1,156

Non-GAAP Gross profit

(B)

$  24,969

$        21,540

$  25,072

$   71,291

$   78,023

Non-GAAP Gross margin

46.8%

43.8%

41.5%

44.9%

44.6%

Reconciliation from GAAP to Non-GAAP Operating Expense:

GAAP Operating expenses

(C)

$  23,918

$        23,815

$  21,386

$   72,414

$   64,809

Operating expense % to revenue

44.8%

48.5%

35.4%

45.6%

37.0%

Non-GAAP adjustments:

Equity-based compensation expense

(1,516)

(1,437)

(1,466)

(4,434)

(3,975)

Amortization of intangible assets

(87)

(86)

(52)

(259)

(156)

Restructuring charges

(947)

(1,146)

76

(2,148)

(123)

Off-shore development transition costs

-

-

-

729

-

Non-GAAP operating expenses

(D)

$  21,368

$        21,146

$  19,944

$   66,302

$   60,555

Non-GAAP operating expenses % to revenue

40.1%

43.0%

33.0%

41.7%

34.6%

Reconciliation from GAAP to Non-GAAP Operating Income (loss):

GAAP Operating income (loss)

(A) - (C)

$      165

$         (2,814)

$   3,275

$    (3,028)

$   11,007

Operating income % to revenue

0.3%

-5.7%

5.4%

-1.9%

6.3%

Non-GAAP Operating income 

(B) - (D)

$   3,601

$             394

$   5,128

$     4,989

$   17,468

Operating income % to revenue

6.7%

0.8%

8.5%

3.1%

10.0%

 

SYMMETRICOM, INC.

RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES

TO PROJECTED GAAP REVENUE AND EPS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ending June 30, 2013

Revenue

Earnings / (Loss) Per Share from Continuing Operations

From

To

From

To

GAAP Guidance

$51,000

$57,000

$0.00

$0.05

Estimated Non-GAAP Adjustments

Equity-based compensation expense

$0.04

$0.04

Amortization of intangible assets

$0.01

$0.01

Integration and restructuring charges

$0.02

$0.02

Income tax effect of non-GAAP adjustments

($0.02)

($0.02)

Total Non-GAAP Adjustments

$0.05

$0.05

Non-GAAP Guidance

$51,000

$57,000

$0.05

$0.10

SOURCE Symmetricom, Inc.



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