EX-99.1 2 a08-27163_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

2300 Orchard Parkway

San Jose, CA 95131-1017

Tel: (408) 433-0910

Fax: (408) 428-7998

 

 

Contact:

Dan Madden

SVP Finance & Investor Relations

(408) 428-7929

dmadden@symmetricom.com

 

Symmetricom Reports Fiscal First Quarter 2009 Financial Results

Year-Over-Year Growth in Revenue and Net Income

 

·                  Revenue of $55.9 million, up 10.2% from the first quarter of 2008

·                  Net income from continuing operations of $2.6 million, up $2.9 million from the first quarter of 2008

·                  EPS of $0.06, up $0.07 from the first quarter of 2008

·                  Non-GAAP net income of $4.5 million, or $0.10 EPS, up $.06 from the first quarter of 2008

 

SAN JOSE, Calif. — Oct. 29, 2008 — Symmetricom, Inc. (NASDAQ:SYMM), a worldwide leader in precise time and frequency technologies that accelerate the deployment, enable the management and assure the performance of next generation networks, today reported financial results for its first fiscal quarter ended September 28, 2008.

 

Revenue for the first quarter of fiscal 2009 was $55.9 million, an increase of 10.2% from $50.7 million in the first quarter of fiscal 2008.  Symmetricom earned $2.6 million, or $0.06 per share from continuing operations on a fully diluted basis, compared with a net loss from continuing operations of $0.3 million, or $0.01 per share on a fully diluted basis, in the first quarter of fiscal 2008.

 

Non-GAAP net income in the first quarter was $4.5 million, or $0.10 per share on a fully diluted basis, compared with $1.8 million, or $0.04 per share on a fully diluted basis, in the same period of the prior year.  A reconciliation of GAAP and non-GAAP results is provided at the end of this press release.

 

Cash and short term investments totaled $106.4 million as of September 28, 2008, a decrease of $57.9 million from June 29, 2008. During the first quarter, the company used $62.5 million to repurchase a portion of Symmetricom’s outstanding convertible debentures and $1.8 million for stock buybacks.   Net cash flow from operating activities was $8.4 million and property, plant and equipment purchases were $1.1 million, resulting in free cash flow of $7.3 million.

 

Business Segment Results

 

Telecom Solutions Division revenue in the quarter was $39.0 million, up 27.9% from $30.5 million in the same period of the prior year.  Growth in Telecom Solutions Division revenue was

 

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primarily driven by shipments of TimeCreator™, our new precise timing product for DOCSIS 3.0 broadband cable networks.  Timing, Test & Measurement Division revenue in the quarter was $16.9 million, down 16.5% from $20.2 million in the same period of the prior year.

 

“Strong shipments of our new cable product made a significant contribution to overall revenue growth and operating profit in the first quarter,” said Thomas Steipp, president and CEO.  “I credit our strong financial performance to the growing diversification of our product portfolio and markets we serve. On the commercial side, cable has become a meaningful revenue contributor, while in our government business, strong orders show broad-based and relatively stable Government spending on our products.”

 

“In addition to an expanding product portfolio and customer base, our solid balance sheet provides flexibility and allows us to capitalize on a wider range of opportunities, such as the recently announced increase to our stock repurchase program,” said Justin Spencer, chief financial officer.

 

Second Quarter and Fiscal 2009 Guidance

 

Symmetricom reaffirms its previous guidance for fiscal year 2009 as follows:

 

·                  Net revenues in the range of $230 million to $240 million

·                  GAAP earnings in the range of $0.20 to $0.26 per share

·                  Non-GAAP earnings in the range of $0.35 to $0.41 per share

 

For the second fiscal quarter, Symmetricom expects:

 

·                  Net revenues in the range of $50 million to $57 million

·                  GAAP results ranging from a net loss of $(0.01) per share to net earnings of $0.04 per share

·                  Non-GAAP earnings in the range of $0.03 to $0.08 per share

 

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 1-210-234-0003 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 1-402-220-6422.

 

Analyst and Investor Day

 

Symmetricom will host an Analyst and Investor Day on Thursday, November 13, 2008 from 9:00 am to 1:30 pm Eastern Standard Time at the Grand Hyatt Hotel in New York City.  Tom Steipp, president and chief executive officer, Justin Spencer, chief financial officer, and other senior executives will present information about the company.  Mr. Nicholas Hamilton-Piercy, the former Chief Technology Officer of Rogers Communications, Inc., will join Symmetricom management as a special guest speaker.

 

The meeting will be webcast simultaneously and a replay will be available for 30 days.  To access the webcast, please go to http://www.wsw.com/webcast/symm/.

 

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About Symmetricom, Inc.

 

As a worldwide leader in precise time and frequency products and services, Symmetricom provides “Perfect Timing” to customers around the world. Since 1985, the company’s solutions have helped define the world’s time and frequency standards, delivering precision, reliability and efficiency to wireline and wireless networks, instrumentation and testing applications and network time management. Deployed in more than 90 countries, the company’s synchronization solutions include primary reference sources, building integrated timing supplies (BITS), GPS timing receivers, time and frequency distribution systems, network time servers and ruggedized oscillators. Symmetricom also incorporates technologies including Universal Timing Interface (UTI), Network Time Protocol (NTP), Precision Time Protocol (IEEE 1588), and others supporting the world’s migration to Next-Generation-Networks (NGN). Symmetricom is based in San Jose, Calif., with offices worldwide. For more information, visit 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 compensation, amortization of acquired intangibles, impairment of goodwill and other intangibles, integration and restructuring charges, investment gains and losses, and unusual and non-recurring items. Symmetricom believes that excluding such items provides investors and management with a representation of the company’s core operating performance and with information useful in assessing our prospects for the future and underlying trends in Symmetricom’s operating performance.  Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information is not determined using GAAP and 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 operating activities minus purchases of property, plant and equipment. We believe this metric provides useful information to our investors, analysts, and management about the level of cash generated by 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 and fiscal 2009 guidance and our expectations of operating performance in fiscal 2009, as well as the information regarding the usefulness of the non-GAAP financial information. 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: reduced rates of demand for telecommunication

 

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products, cable products or test and measurement products, our customers’ ability and need to upgrade existing equipment, our ability to reduce manufacturing and operating costs, timing of orders, cancellation or delay of customer orders, loss of customers, customer acceptance of new products, recessionary pressures, geopolitical risks such as terrorist acts 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 June 29, 2008 and subsequent Form 10-Q’s and Form 8-K’s.

 

Note: Financial schedules attached.

 

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SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

 

 

 

Three months ended

 

 

 

September 28,

 

September 30,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

Net revenue

 

$

55,898

 

$

50,735

 

Cost of products and services

 

26,609

 

28,027

 

Amortization of purchased technology

 

368

 

805

 

Integration and restructuring charges

 

—

 

3

 

Gross profit

 

28,921

 

21,900

 

Gross margin

 

51.7

%

43.2

%

Operating expenses:

 

 

 

 

 

Research and development

 

7,304

 

7,286

 

Selling, general and administrative

 

15,679

 

15,516

 

Amortization of intangible assets

 

103

 

260

 

Integration and restructuring charges

 

585

 

293

 

Operating income (loss)

 

5,250

 

(1,455

)

Loss on repayment of convertible notes

 

(522

)

—

 

Loss on investments

 

(473

)

—

 

Interest income

 

768

 

2,210

 

Interest expense

 

(765

)

(1,195

)

Earnings (loss) before income taxes

 

4,258

 

(440

)

Income tax provision (benefit)

 

1,660

 

(129

)

Net income (loss) from continuing operations

 

2,598

 

(311

)

Gain from discontinued operations, net of tax

 

—

 

68

 

Net income (loss)

 

$

2,598

 

$

(243

)

 

 

 

 

 

 

Earnings (loss) per share - basic:

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.06

 

(0.01

)

Gain from discontinued operations

 

—

 

—

 

Net earnings (loss)

 

$

0.06

 

$

(0.01

)

Weighted average shares outstanding - basic

 

43,964

 

45,474

 

 

 

 

 

 

 

Earnings (loss) per share - diluted:

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.06

 

(0.01

)

Gain from discontinued operations

 

—

 

—

 

Net earnings (loss)

 

$

0.06

 

$

(0.01

)

Weighted average shares outstanding - diluted

 

44,582

 

45,474

 

 

5


 

SYMMETRICOM, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(unaudited)

 

 

 

Three months ended

 

 

 

September 28,

 

September 30,

 

 

 

2008

 

2007

 

Reconciliation from GAAP to Non-GAAP

 

 

 

 

 

GAAP net earnings (loss) from continuing operations

 

$

2,598

 

$

(311

)

 

 

 

 

 

 

Equity-based compensation expense:

 

 

 

 

 

Cost of products and services

 

205

 

270

 

Research and development

 

329

 

538

 

Selling, general and administrative

 

472

 

779

 

Total equity-based compensation expense

 

1,006

 

1,587

 

Amortization of intangible assets:

 

 

 

 

 

Cost of products and services

 

368

 

805

 

Operating expenses

 

103

 

260

 

Total amortization of intangible assets

 

471

 

1,065

 

 

 

 

 

 

 

Integration and restructuring charges

 

585

 

296

 

Loss on repayment of convertible notes

 

522

 

—

 

Loss on investments

 

473

 

—

 

Income tax effect of Non-GAAP adjustments

 

(1,189

)

(864

)

Non-GAAP net earnings from continuing operations

 

$

4,466

 

$

1,773

 

 

 

 

 

 

 

Earnings from continuing operations per share-diluted:

 

 

 

 

 

GAAP income (loss) from continuing operations

 

$

0.06

 

$

(0.01

)

Non-GAAP income from continuing operations

 

$

0.10

 

$

0.04

 

Shares used in diluted shares calcuation

 

44,582

 

46,068

 

 

6


 

SYMMETRICOM, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(unaudited)

 

 

 

Three months ended

 

 

 

September 28,

 

September 30,

 

 

 

2008

 

2007

 

Reconciliation from GAAP to Non-GAAP Gross Margin:

 

 

 

 

 

GAAP Revenue

 

$

55,898

 

$

50,735

 

GAAP Gross profit

 

28,921

 

21,900

 

GAAP Gross margin

 

51.7

%

43.2

%

 

 

 

 

 

 

Add Non-GAAP Items:

 

 

 

 

 

Equity-based compensation expense

 

205

 

270

 

Amortization of intangible assets

 

368

 

805

 

Integration and restructuring charges

 

—

 

3

 

 

 

 

 

 

 

Non-GAAP Gross profit

 

$

29,494

 

$

22,978

 

Non-GAAP Gross margin

 

52.8

%

45.3

%

Reconciliation from GAAP to Non-GAAP Operating Expense:

 

 

 

 

 

GAAP Revenue

 

$

55,898

 

$

50,735

 

GAAP Operating expenses

 

23,671

 

23,355

 

Operating expenses % to revenue

 

42.3

%

46.0

%

 

 

 

 

 

 

Add Non-GAAP Items:

 

 

 

 

 

Equity-based compensation expense

 

$

801

 

$

1,317

 

Amortization of intangible assets

 

103

 

260

 

Integration and restructuring charges

 

585

 

293

 

 

 

 

 

 

 

Non-GAAP operating expenses

 

$

22,182

 

$

21,485

 

Non-GAAP operating expenses % to revenue

 

39.7

%

42.3

%

 

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SYMMETRICOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

 

 

September 28,

 

June 29,

 

 

 

2008

 

2008

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

88,014

 

$

142,419

 

Short-term investments

 

18,383

 

21,910

 

Accounts receivable, net

 

36,378

 

36,682

 

Inventories, net

 

40,339

 

38,273

 

Prepaids and other current assets

 

15,006

 

14,402

 

Total current assets

 

198,120

 

253,686

 

Property, plant and equipment, net

 

23,990

 

25,036

 

Goodwill, net

 

48,144

 

48,144

 

Other intangible assets, net

 

6,721

 

7,191

 

Deferred taxes and other assets

 

41,689

 

44,512

 

Total assets

 

$

318,664

 

$

378,569

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

10,647

 

$

9,018

 

Accrued compensation

 

16,252

 

13,582

 

Accrued warranty

 

3,622

 

3,801

 

Other accrued liabilities

 

9,363

 

11,233

 

Current maturities of long-term obligations

 

1,006

 

64,515

 

Total current liabilities

 

40,890

 

102,149

 

Long-term obligations

 

59,898

 

59,855

 

Deferred income taxes

 

426

 

426

 

Total liabilities

 

101,214

 

162,430

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

180,916

 

182,201

 

Accumulated other comprehensive income

 

(62

)

(60

)

Retained earnings

 

36,596

 

33,998

 

Total stockholders’ equity

 

217,450

 

216,139

 

Total liabilities and stockholders’ equity

 

$

318,664

 

$

378,569

 

 

8


 

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 December 28, 2008

 

 

 

Revenue

 

Earnings (Loss) Per Share

 

 

 

From

 

To

 

From

 

To

 

 

 

 

 

 

 

 

 

 

 

GAAP Guidance

 

$

50,000

 

$

57,000

 

$

(0.01

)

$

0.04

 

 

 

 

 

 

 

 

 

 

 

Estimated Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

$

0.03

 

$

0.03

 

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

 

 

 

 

 

$

0.04

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Guidance

 

$

50,000

 

$

57,000

 

$

0.03

 

$

0.08

 

 

 

 

Twelve Months Ending June 28, 2009

 

 

 

Revenue

 

Earnings Per Share

 

 

 

From

 

To

 

From

 

To

 

 

 

 

 

 

 

 

 

 

 

GAAP Guidance

 

$

230,000

 

$

240,000

 

$

0.20

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

Estimated Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

 

 

 

$

0.13

 

$

0.13

 

Amortization of intangible assets

 

 

 

 

 

$

0.04

 

$

0.04

 

Integration and restructuring charges

 

 

 

 

 

$

0.04

 

$

0.04

 

Loss on repayment of convertible notes

 

 

 

 

 

$

0.01

 

$

0.01

 

Loss on investments

 

 

 

 

 

$

0.01

 

$

0.01

 

Income tax effect of non-GAAP adjustments

 

 

 

 

 

$

(0.08

)

$

(0.08

)

Total Non-GAAP Adjustments

 

 

 

 

 

$

0.15

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Guidance

 

$

230,000

 

$

240,000

 

$

0.35

 

$

0.41

 

 

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