UTStarcom Reports Record First Quarter Results

Quarterly Revenues Up 103% Year Over Year



Apr 26, 2001, 01:00 ET from UTStarcom, Inc.

    ALAMEDA, Calif., April 26 /PRNewswire/ -- UTStarcom, Inc. (Nasdaq:   UTSI)
 today reported its first quarter 2001 results for the period ended
 March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001102/UTSILOGO )
     Net sales for the first quarter of 2001 increased to $119.2 million, a
 103% increase over the $58.6 million in net sales reported in the prior year
 period.  Pro forma net income (excluding non-cash charges for stock
 compensation and amortization) for the first quarter of 2001 increased to
 $12.1 million, or $0.12 per share, as compared to $3.4 million, or $0.04 per
 share in the prior year period.
     "We are extremely pleased with the continued growth in the business and
 our quarterly results," said Hong Lu, President and Chief Executive Officer of
 UTStarcom.  "During the quarter we recorded significant new bookings, which
 reflected the strong demand and customer acceptance of our products.  In
 addition, we continue to see a push in China for increased telecom spending as
 evidenced by the fact that we added 25 customers for our PAS product during
 the quarter."
     Actual net income (including stock compensation expense, amortization of
 intangible assets, in-process research and development costs and beneficial
 conversion feature) for the first quarter of 2001 was $9.4 million, or
 $0.09 per share compared to a net loss of $4.2 million, or a net loss of
 $0.12 per share for the first quarter of 2000.
 
     Conference Call
     UTStarcom will conduct a conference call on April 26 at 1:30 p.m. (PDT),
 which is open to the public.  The conference call dial-in numbers are:
 United States -- 877-209-9920; International -- 612-332-0107.
     A conference call replay will be available following the conference call
 from approximately 5:00 p.m. (PDT) on April 26 to 5:00 p.m. (PDT) on
 May 1.  The conference call replay numbers are:  United States
 -- 800-475-6701; International -- 320-365-3844.  The Access Code is 582657.
 
     About UTStarcom, Inc.
     UTStarcom designs, sells, manufactures and installs an integrated suite of
 wireless and wireline network access and switching systems that allow
 communications service providers to offer efficient and scalable voice, data
 and Internet access services.  The Company's customers are public
 telecommunications service providers that operate wireless and wireline voice
 and data networks in rapidly growing communications markets around the world.
 Current product offerings include:
 
     -- PAS(TM), which provides voice and data services over city-wide mobile
        wireless networks; our latest innovation, IP-based PAS(TM), provides an
        SS7 network interface and facilitates the eventual migration of voice
        and data transmission from conventional circuit-switched (TDM) networks
        to IP-based 3G wireless broadband networks;
     -- AN-2000, a broadband and narrowband access system for wireline
        networks;
     -- WACOS, an IP-based SoftSwitch platform designed to deliver voice and
        data services using a highly distributed architecture.  WACOS contains
        a SoftSwitch call server, a distributed multi-service IP gateway and a
        full suite of subscriber management, mediation and billing services.
 
     The Company manufactures the majority of its products at two ISO9002
 certified facilities located in China, and maintains sales and customer
 support sites throughout Mainland China and in Iselin, New Jersey; Alameda,
 California; Miami, Florida; Taipei, Taiwan; Hong Kong; and Tel Aviv, Israel.
 UTStarcom's research and development facilities are located in the USA and
 China.
     UTStarcom was founded in 1991 and is headquartered in Alameda, California.
 For more information about UTStarcom, visit the Company's website at
 www.utstar.com.
     NOTE:  PAS, AN-2000, WACOS and the UTStarcom name and logo are trademarks
 of UTStarcom, Inc. and its subsidiaries.
 
     Forward-Looking Statements
     The foregoing statements regarding the Company's estimates of backlog and
 recognition of backlog, new bookings, customer acceptance of products,
 continued demand for the Company's products and continued telecom spending in
 China are forward-looking in nature and subject to risks and uncertainties
 that may cause actual results to differ materially.  These factors include
 rapidly changing technology, the changing nature of China's telecommunications
 markets, the termination of significant contracts, reduction or delays in
 system deployments, product transitions, changes in demand for the Company's
 products, potential cancellation and non-recognition of backlog, general
 adverse economic conditions and trends and uncertainties such as changes in
 government regulation and licensing requirements.  The Company also refers
 readers to the risk factor identified in its Annual Report on Form 10-K and
 Quarterly Report on Form 10-Q filed with the Securities and Exchange
 Commission.
 
 
                                  UTStarcom, Inc.
                            Consolidated Balance Sheets
                                   (In thousands)
                                    (Unaudited)
                                                March 31,    December 31,
                                                  2001          2000
                                               (unaudited)
     ASSETS
       Current assets:
       Cash and cash equivalents                $208,484       $232,970
       Accounts receivable, net                  169,708        161,330
       Receivable from related parties               857            406
       Inventories, net                          153,142        118,995
       Other current assets                       36,399         17,674
     Total current assets                        568,590        531,375
     Property, plant and equipment, net           28,494         21,999
     Long-term investments                        13,132         12,397
     Goodwill and intangible assets, net          27,975         20,238
     Other long term assets                        3,863          5,828
       Total assets                             $642,054       $591,837
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                          $39,937        $44,564
       Debt                                       55,427         43,381
       Amounts due to related parties              1,335             --
       Income taxes payable                        5,026          7,170
       Deferred revenue                           43,989         31,678
       Other                                      38,984         34,721
     Total current liabilities                   184,698        161,514
 
     Long-term debt                               22,748         12,048
     Minority interest in consolidated
      subsidiaries                                 5,844          5,956
     Stockholders' equity:
     Common stock                                    122            120
     Additional paid-in capital                  432,207        426,665
     Deferred stock compensation                 (5,129)        (6,491)
     Retained earnings (deficit)                   1,554        (7,808)
     Notes receivable from shareholders            (292)          (314)
     Other comprehensive income                      302            147
     Total stockholders' equity                  428,764        412,319
 
       Total liabilities and
        stockholders' equity                    $642,054       $591,837
 
 
                                  UTStarcom, Inc.
                       Consolidated Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                   Three months ended
                                                 March 31,     March 31,
                                                  2001           2000
                                                              as restated
                                                               (Note 2)
 
     Net sales                                  $119,181        $58,587
     Cost of sales                                77,768         37,974
     Gross profit                                 41,413         20,613
     Operating expenses:
       Selling, general and administrative        14,131         11,064
       Research and development                   12,412         10,909
       Amortization of intangible assets           1,471          1,223
       In-process research and
        development costs
     Total operating expenses                     28,014         23,196
 
     Operating income                             13,399        (2,583)
 
     Interest and other income (expenses)            452            772
     Equity in income (loss) of
      affiliated companies                         (244)          (279)
     Income (loss) before income
      taxes and minority interest                 13,607        (2,090)
     Income tax expense                            3,652            918
     Minority interest in (earnings) of
      consolidated subsidiaries                    (593)          (261)
 
     Income (loss) before cumulative effect
      of change in accounting principle            9,362        (3,269)
     Cumulative effect of change
      in accounting principle                         --          (980)
     Net income (loss)                            $9,362       $(4,249)
 
     Basic earnings (loss) per share:
 
     Income (loss) before cumulative effect
      of change in accounting principle             0.10         (0.09)
     Cumulative effect of change
      in accounting principle                         --         (0.03)
     Net income (loss) per share                   $0.10        $(0.12)
 
     Diluted earnings (loss) per share:
 
     Income (loss) before cumulative effect
      of change in accounting principle             0.09         (0.09)
     Cumulative effect of change in
      accounting principle                            --         (0.03)
     Net income (loss) per share                   $0.09        $(0.12)
 
     Weighted average shares used
      in per-share calculation:
       - Basic                                    95,873         35,867
       - Diluted                                 104,262         35,867
 
 
     1. The above statements include the
        following stock compensation expense:
 
 
     Cost of Sales                                    13             33
     Selling, general and administrative             681          1,802
     Research and development                        578          4,595
     Total stock compensation expense              1,272          6,430
 
 
     2. The results of operations for the three months ended March 31, 2000, as
     previously reported in the Company's interim 2000 financial statements
     filed on Form 10-Q, have been adjusted to reflect the application of
     SAB 101 "Revenue Recognition in Financial Statements" effective
     January 1, 2000.  The Company recorded a cumulative adjustment in first
     quarter 2000 of $980,000, or $0.03 per share, basic and diluted, to
     reflect the change in accounting principle.  The impact of adopting
     SAB 101 on fiscal 2000 first quarter net income was $0.3 million, with no
     effect on basic or diluted net income per share for the quarter.
 
 
                                  UTStarcom, Inc.
                  Pro Forma Consolidated Statements of Operations
        Excluding Amortization of Deferred Compensation and Amortization of
                                 Intangible Assets
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                   Three months ended
                                                 March 31,     March 31,
                                                  2001           2000
                                                              as restated
                                                               (Note 2)
 
     Net sales                                  $119,181        $58,587
     Cost of sales                                77,755         37,941
     Gross profit                                 41,426         20,646
     Operating expenses:
       Selling, general and administrative        13,450          9,262
       Research and development                   11,834          6,314
     Total operating expenses                     25,284         15,576
 
     Operating income                             16,142          5,070
 
     Interest and other income (expenses)            452            772
     Equity in income (loss) of
      affiliated companies                         (244)          (279)
     Income (loss) before income taxes,
      minority interest and cumulative
      effect of a change of
      accounting principle                        16,350          5,563
     Income tax expense                            3,652            918
     Minority interest in (earnings) of
      consolidated subsidiaries                    (593)          (261)
 
     Income (loss) before cumulative effect
      of change in accounting principle           12,105          4,384
     Cumulative effect of change in
      accounting principle                            --          (980)
     Net income                                  $12,105         $3,404
 
     Basic earnings (loss) per share:
 
     Income before cumulative effect of
      change in accounting principle                0.13           0.12
     Cumulative effect of change in
      accounting principle                            --         (0.03)
     Net income per share                          $0.13          $0.09
 
     Diluted earnings (loss) per share:
 
     Loss before cumulative effect of
      change in accounting principle                0.12           0.05
     Cumulative effect of change in
      accounting principle                            --         (0.01)
     Net income per share                          $0.12          $0.04
 
     Weighted average shares used
      in per-share calculation:
       - Basic                                    95,873         35,867
       - Diluted                                 104,262         95,787
 
 
     1. The above pro forma statements
        have been adjusted to exclude
        the following non-cash expenses:
     Stock compensation expense:
 
     Cost of Sales                                    13             33
     Selling, general and administrative             681          1,802
     Research and development                        578          4,595
     Total stock compensation expense              1,272          6,430
 
     Amortization of intangible assets             1,471          1,223
 
 
     2. The results of operations for the three months ended March 31, 2000,
     as previously reported in the Company's interim 2000 financial statements
     filed on Form 10-Q, have been adjusted to reflect the application of
     SAB 101 "Revenue Recognition in Financial Statements" effective
     January 1, 2000.  The Company recorded a cumulative adjustment in first
     quarter 2000 of $980,000, or $0.03 per share basic and diluted, to
     reflect the change in accounting principle.  The impact of adopting
     SAB 101 on fiscal 2000 first quarter net income was $0.3 million, with no
     effect on basic or diluted net income per share for the quarter.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X76461421
 
 

SOURCE UTStarcom, Inc.
    ALAMEDA, Calif., April 26 /PRNewswire/ -- UTStarcom, Inc. (Nasdaq:   UTSI)
 today reported its first quarter 2001 results for the period ended
 March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001102/UTSILOGO )
     Net sales for the first quarter of 2001 increased to $119.2 million, a
 103% increase over the $58.6 million in net sales reported in the prior year
 period.  Pro forma net income (excluding non-cash charges for stock
 compensation and amortization) for the first quarter of 2001 increased to
 $12.1 million, or $0.12 per share, as compared to $3.4 million, or $0.04 per
 share in the prior year period.
     "We are extremely pleased with the continued growth in the business and
 our quarterly results," said Hong Lu, President and Chief Executive Officer of
 UTStarcom.  "During the quarter we recorded significant new bookings, which
 reflected the strong demand and customer acceptance of our products.  In
 addition, we continue to see a push in China for increased telecom spending as
 evidenced by the fact that we added 25 customers for our PAS product during
 the quarter."
     Actual net income (including stock compensation expense, amortization of
 intangible assets, in-process research and development costs and beneficial
 conversion feature) for the first quarter of 2001 was $9.4 million, or
 $0.09 per share compared to a net loss of $4.2 million, or a net loss of
 $0.12 per share for the first quarter of 2000.
 
     Conference Call
     UTStarcom will conduct a conference call on April 26 at 1:30 p.m. (PDT),
 which is open to the public.  The conference call dial-in numbers are:
 United States -- 877-209-9920; International -- 612-332-0107.
     A conference call replay will be available following the conference call
 from approximately 5:00 p.m. (PDT) on April 26 to 5:00 p.m. (PDT) on
 May 1.  The conference call replay numbers are:  United States
 -- 800-475-6701; International -- 320-365-3844.  The Access Code is 582657.
 
     About UTStarcom, Inc.
     UTStarcom designs, sells, manufactures and installs an integrated suite of
 wireless and wireline network access and switching systems that allow
 communications service providers to offer efficient and scalable voice, data
 and Internet access services.  The Company's customers are public
 telecommunications service providers that operate wireless and wireline voice
 and data networks in rapidly growing communications markets around the world.
 Current product offerings include:
 
     -- PAS(TM), which provides voice and data services over city-wide mobile
        wireless networks; our latest innovation, IP-based PAS(TM), provides an
        SS7 network interface and facilitates the eventual migration of voice
        and data transmission from conventional circuit-switched (TDM) networks
        to IP-based 3G wireless broadband networks;
     -- AN-2000, a broadband and narrowband access system for wireline
        networks;
     -- WACOS, an IP-based SoftSwitch platform designed to deliver voice and
        data services using a highly distributed architecture.  WACOS contains
        a SoftSwitch call server, a distributed multi-service IP gateway and a
        full suite of subscriber management, mediation and billing services.
 
     The Company manufactures the majority of its products at two ISO9002
 certified facilities located in China, and maintains sales and customer
 support sites throughout Mainland China and in Iselin, New Jersey; Alameda,
 California; Miami, Florida; Taipei, Taiwan; Hong Kong; and Tel Aviv, Israel.
 UTStarcom's research and development facilities are located in the USA and
 China.
     UTStarcom was founded in 1991 and is headquartered in Alameda, California.
 For more information about UTStarcom, visit the Company's website at
 www.utstar.com.
     NOTE:  PAS, AN-2000, WACOS and the UTStarcom name and logo are trademarks
 of UTStarcom, Inc. and its subsidiaries.
 
     Forward-Looking Statements
     The foregoing statements regarding the Company's estimates of backlog and
 recognition of backlog, new bookings, customer acceptance of products,
 continued demand for the Company's products and continued telecom spending in
 China are forward-looking in nature and subject to risks and uncertainties
 that may cause actual results to differ materially.  These factors include
 rapidly changing technology, the changing nature of China's telecommunications
 markets, the termination of significant contracts, reduction or delays in
 system deployments, product transitions, changes in demand for the Company's
 products, potential cancellation and non-recognition of backlog, general
 adverse economic conditions and trends and uncertainties such as changes in
 government regulation and licensing requirements.  The Company also refers
 readers to the risk factor identified in its Annual Report on Form 10-K and
 Quarterly Report on Form 10-Q filed with the Securities and Exchange
 Commission.
 
 
                                  UTStarcom, Inc.
                            Consolidated Balance Sheets
                                   (In thousands)
                                    (Unaudited)
                                                March 31,    December 31,
                                                  2001          2000
                                               (unaudited)
     ASSETS
       Current assets:
       Cash and cash equivalents                $208,484       $232,970
       Accounts receivable, net                  169,708        161,330
       Receivable from related parties               857            406
       Inventories, net                          153,142        118,995
       Other current assets                       36,399         17,674
     Total current assets                        568,590        531,375
     Property, plant and equipment, net           28,494         21,999
     Long-term investments                        13,132         12,397
     Goodwill and intangible assets, net          27,975         20,238
     Other long term assets                        3,863          5,828
       Total assets                             $642,054       $591,837
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                          $39,937        $44,564
       Debt                                       55,427         43,381
       Amounts due to related parties              1,335             --
       Income taxes payable                        5,026          7,170
       Deferred revenue                           43,989         31,678
       Other                                      38,984         34,721
     Total current liabilities                   184,698        161,514
 
     Long-term debt                               22,748         12,048
     Minority interest in consolidated
      subsidiaries                                 5,844          5,956
     Stockholders' equity:
     Common stock                                    122            120
     Additional paid-in capital                  432,207        426,665
     Deferred stock compensation                 (5,129)        (6,491)
     Retained earnings (deficit)                   1,554        (7,808)
     Notes receivable from shareholders            (292)          (314)
     Other comprehensive income                      302            147
     Total stockholders' equity                  428,764        412,319
 
       Total liabilities and
        stockholders' equity                    $642,054       $591,837
 
 
                                  UTStarcom, Inc.
                       Consolidated Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                   Three months ended
                                                 March 31,     March 31,
                                                  2001           2000
                                                              as restated
                                                               (Note 2)
 
     Net sales                                  $119,181        $58,587
     Cost of sales                                77,768         37,974
     Gross profit                                 41,413         20,613
     Operating expenses:
       Selling, general and administrative        14,131         11,064
       Research and development                   12,412         10,909
       Amortization of intangible assets           1,471          1,223
       In-process research and
        development costs
     Total operating expenses                     28,014         23,196
 
     Operating income                             13,399        (2,583)
 
     Interest and other income (expenses)            452            772
     Equity in income (loss) of
      affiliated companies                         (244)          (279)
     Income (loss) before income
      taxes and minority interest                 13,607        (2,090)
     Income tax expense                            3,652            918
     Minority interest in (earnings) of
      consolidated subsidiaries                    (593)          (261)
 
     Income (loss) before cumulative effect
      of change in accounting principle            9,362        (3,269)
     Cumulative effect of change
      in accounting principle                         --          (980)
     Net income (loss)                            $9,362       $(4,249)
 
     Basic earnings (loss) per share:
 
     Income (loss) before cumulative effect
      of change in accounting principle             0.10         (0.09)
     Cumulative effect of change
      in accounting principle                         --         (0.03)
     Net income (loss) per share                   $0.10        $(0.12)
 
     Diluted earnings (loss) per share:
 
     Income (loss) before cumulative effect
      of change in accounting principle             0.09         (0.09)
     Cumulative effect of change in
      accounting principle                            --         (0.03)
     Net income (loss) per share                   $0.09        $(0.12)
 
     Weighted average shares used
      in per-share calculation:
       - Basic                                    95,873         35,867
       - Diluted                                 104,262         35,867
 
 
     1. The above statements include the
        following stock compensation expense:
 
 
     Cost of Sales                                    13             33
     Selling, general and administrative             681          1,802
     Research and development                        578          4,595
     Total stock compensation expense              1,272          6,430
 
 
     2. The results of operations for the three months ended March 31, 2000, as
     previously reported in the Company's interim 2000 financial statements
     filed on Form 10-Q, have been adjusted to reflect the application of
     SAB 101 "Revenue Recognition in Financial Statements" effective
     January 1, 2000.  The Company recorded a cumulative adjustment in first
     quarter 2000 of $980,000, or $0.03 per share, basic and diluted, to
     reflect the change in accounting principle.  The impact of adopting
     SAB 101 on fiscal 2000 first quarter net income was $0.3 million, with no
     effect on basic or diluted net income per share for the quarter.
 
 
                                  UTStarcom, Inc.
                  Pro Forma Consolidated Statements of Operations
        Excluding Amortization of Deferred Compensation and Amortization of
                                 Intangible Assets
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                   Three months ended
                                                 March 31,     March 31,
                                                  2001           2000
                                                              as restated
                                                               (Note 2)
 
     Net sales                                  $119,181        $58,587
     Cost of sales                                77,755         37,941
     Gross profit                                 41,426         20,646
     Operating expenses:
       Selling, general and administrative        13,450          9,262
       Research and development                   11,834          6,314
     Total operating expenses                     25,284         15,576
 
     Operating income                             16,142          5,070
 
     Interest and other income (expenses)            452            772
     Equity in income (loss) of
      affiliated companies                         (244)          (279)
     Income (loss) before income taxes,
      minority interest and cumulative
      effect of a change of
      accounting principle                        16,350          5,563
     Income tax expense                            3,652            918
     Minority interest in (earnings) of
      consolidated subsidiaries                    (593)          (261)
 
     Income (loss) before cumulative effect
      of change in accounting principle           12,105          4,384
     Cumulative effect of change in
      accounting principle                            --          (980)
     Net income                                  $12,105         $3,404
 
     Basic earnings (loss) per share:
 
     Income before cumulative effect of
      change in accounting principle                0.13           0.12
     Cumulative effect of change in
      accounting principle                            --         (0.03)
     Net income per share                          $0.13          $0.09
 
     Diluted earnings (loss) per share:
 
     Loss before cumulative effect of
      change in accounting principle                0.12           0.05
     Cumulative effect of change in
      accounting principle                            --         (0.01)
     Net income per share                          $0.12          $0.04
 
     Weighted average shares used
      in per-share calculation:
       - Basic                                    95,873         35,867
       - Diluted                                 104,262         95,787
 
 
     1. The above pro forma statements
        have been adjusted to exclude
        the following non-cash expenses:
     Stock compensation expense:
 
     Cost of Sales                                    13             33
     Selling, general and administrative             681          1,802
     Research and development                        578          4,595
     Total stock compensation expense              1,272          6,430
 
     Amortization of intangible assets             1,471          1,223
 
 
     2. The results of operations for the three months ended March 31, 2000,
     as previously reported in the Company's interim 2000 financial statements
     filed on Form 10-Q, have been adjusted to reflect the application of
     SAB 101 "Revenue Recognition in Financial Statements" effective
     January 1, 2000.  The Company recorded a cumulative adjustment in first
     quarter 2000 of $980,000, or $0.03 per share basic and diluted, to
     reflect the change in accounting principle.  The impact of adopting
     SAB 101 on fiscal 2000 first quarter net income was $0.3 million, with no
     effect on basic or diluted net income per share for the quarter.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X76461421
 
 SOURCE  UTStarcom, Inc.