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

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.

(Logo: http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)

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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