Symmetricom Reports First Quarter Fiscal Year 2012 Financial Results

SAN JOSE, Calif., Oct. 26, 2011 /PRNewswire/ -- Symmetricom®, Inc. (NASDAQ: SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its first quarter of fiscal year 2012 ended October 2, 2011.

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Net revenue for the first quarter of fiscal 2012 was $56.4 million, up $2.0 million, or 3.7%, compared to the first quarter of fiscal 2011, driven by higher shipments of cable timing products and solid performance in the government programs business.  Symmetricom reported income from continuing operations of $2.7 million, or $0.06 per share, for the first quarter of fiscal 2012, compared to income from continuing operations of $3.1 million, or $0.07 per share, in the first quarter of fiscal 2011.

Non-GAAP income from continuing operations for the first quarter of fiscal 2012 was $4.1 million, or $0.10 per share, compared to $5.6 million, or $0.13 per share, reported for the first quarter of the prior year.

Cash, cash equivalents and short-term investments totaled $57.0 million as of October 2, 2011, a decrease of $6.7 million from the $63.7 million reported as of July 3, 2011, reflecting a significant reduction in payables associated with a higher level of inventory receipts at the end of fiscal 2011 and approximately $2 million in stock repurchases during the first quarter of fiscal 2012.  Net cash used in operating activities in the first quarter was $4.1 million and property, plant and equipment purchases were approximately $1.0 million, resulting in free cash outflow of approximately $5.1 million.

"Symmetricom had a strong start to fiscal 2012, delivering solid revenue growth and profitability in-line with our expectations.  Demand for our critical timing solutions remained solid, with strong orders in a number of categories and increased backlog in the quarter," said Dave Cote, president and chief executive officer of Symmetricom.  "We are benefiting from long-term client relationships in our Communications business and remain a leader in the expanding packet synchronization market; our PackeTime™ equipment is now deployed in more than 100 live networks around the world.  With an extensive product set, we are well-positioned to capitalize upon the migration to next generation networks.  Our Government and Enterprise business had another solid quarter, with revenues up 7% year-over-year driven by our government programs and solutions for space, defense and avionics.  In addition, we see great potential for our Quantum™ Chip Scale Atomic Clock and its many potential market applications.  We are executing on our strategic initiatives and are focused on profitable growth.  The critical nature of our solutions, our customer and geographic diversity, and our broadening pool of verticals position us well for fiscal 2012 and beyond."

Business Results

Revenue in the Communications Business in the first quarter of fiscal 2012 was $33.6 million, compared to $33.1 million reported in the same period last year.  Revenue in the Government and Enterprise Business in the first quarter of fiscal 2012 was $22.8 million, compared to $21.2 million reported in the same period last year.  Symmetricom has changed the name of this business to Government and Enterprise to more accurately reflect the expansion of the business' customers and initiatives.  The unit is managing the company's growing enterprise vertical and leading the push into new commercial markets such as high-performance computing, oil and gas exploration, and the power utility market.

Second Quarter 2012 Guidance

Symmetricom's guidance for the second quarter of fiscal 2012 is as follows:

• Net revenue is expected to be in the range of $54 million to $60 million
• GAAP earnings per share from continuing operations is expected to be in the range of $0.01 to $0.07
• Non-GAAP earnings per share from continuing operations is expected to be in the range of $0.07 to $0.12

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 +1-312-470-0071 and referencing "Symmetricom."  A live webcast will also be available on the investor relations section of the company's website at http://www.symmetricom.com.  An audio replay will be available for one week and can be accessed by dialing +1-402-220-6538.

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 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.

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, amortization of purchased technology and intangible assets, restructuring charges, and non-cash income tax expenses for valuation allowances against deferred tax assets 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 second quarter fiscal 2012 guidance and future performance, expectations regarding contributions of new products, a positive operational and financial outlook for fiscal 2012, our positioning to capitalize upon the migration to next generation networks, the potential for our Quantum™ Chip Scale Atomic Clock, our strategic initiatives and focus on profitable growth 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, risks relating to general economic conditions in the markets we address and the telecommunications market in general, risks related to the development of our new products and services, reliance on our contract manufacturer for the manufacturing previously carried out at our Puerto Rico facility and by other third party vendors, the effects of increasing competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws, 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 or defects in our products, 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 3, 2011 and subsequent Form 8-K's.

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SOURCE Symmetricom, Inc.