Recent Highlights:
FREMONT, Calif., Jan. 29 /PRNewswire-FirstCall/ -- Ikanos Communications, Inc. (NASDAQ:IKAN), a leading developer and provider of Fiber Fast(TM) broadband solutions, today reported its financial results for the fourth quarter and fiscal year ended December 30, 2007.
"I am very pleased that Ikanos achieved profitable growth during our fourth quarter 2007. Our quarterly revenue increased 10% sequentially and 42% from the year ago period, driven by increased worldwide demand for our interactive broadband solutions," said Michael A. Ricci, Ikanos' president and CEO. "We continue to see increased interest in our industry-leading access infrastructure and digital home solutions, as carriers upgrade their networks to offer advanced, revenue-generating triple play services such as high definition IPTV. We believe that Ikanos is in a leading position to benefit from this market trend." Financial Highlights: Revenue in the fourth quarter of 2007 was $29.9 million compared with revenue of $27.3 million for the third quarter of 2007 and revenue of $21.0 million for the fourth quarter of 2006.
Ikanos reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP) and additionally on a non-GAAP basis. Non-GAAP net income (loss), where applicable, excludes the income statement effects of stock-based compensation, restructuring charges, certain expenses incurred in connection with a common stock offering, and certain expenses resulting from acquisitions such as amortization of intangible assets, fair value adjustment of the acquired inventory and in-process research and development charges. Ikanos has provided these measures because management believes these additional non-GAAP measures are useful to investors for performing financial analysis as these additional measures highlight Ikanos' recurring operating results. Ikanos' management uses these non-GAAP measures internally to evaluate its operating performance and to plan for its future. However, non-GAAP measures are not a substitute for GAAP measures. For a reconciliation of GAAP versus non-GAAP financial information, please see the attached schedules.
GAAP net loss for the fourth quarter of 2007 was $4.1 million, or $0.14 per share, on 29.3 million weighted average shares. This compares with a net loss of $13.0 million, or $0.45 per share, on 28.7 million weighted average shares in the third quarter of fiscal 2007 and with a net loss of $15.6 million, or $0.56 per share, on 27.6 million weighted average shares in the fourth quarter of 2006.
Non-GAAP net income for the fourth quarter of 2007 was $0.3 million, or $0.01 per diluted share, on 30.7 million weighted average shares. This compares with non-GAAP net loss of $4.9 million, or $0.17 per share, in the third quarter of fiscal 2007 and with a non-GAAP net loss of $8.6 million, or $0.31 per share, in the fourth quarter of 2006.
For the year ended December 30, 2007, revenue was $107.5 million, compared with the $134.7 million reported for the year ago period.
GAAP net loss for the year ended December 30, 2007 was $33.3 million, or $1.16 per share, on 28.6 million weighted average shares. This compares with a net loss of $22.8 million, or $0.86 per share, on 26.6 million weighted average shares for the year ago period.
Non-GAAP net loss for the year ended December 30, 2007 was $12.1 million, or $0.42 per share, compared with non-GAAP net income of $2.3 million, or $0.08 per diluted share, for the year ago period. Weighted average shares used in computing non-GAAP net income (loss) per share were 28.6 million in 2007 and 28.9 million in 2006.
Recent Highlights:
-- Ikanos announced that SOFTBANK BB Corp. named Ikanos as the
exclusive provider of multi-mode VDSL2 central office (CO) and
customer premises equipment (CPE) chipsets to power its new Fiber to
the Remote (FTTR) deployment in Japan. The chipsets will offer
significantly higher bandwidth than currently deployed ADSLx
technologies, thus facilitating future deployment of
revenue-enhancing services such as triple play. -- Ikanos' entered into a definitive agreement to purchase DSL
technology and assets from Centillium Communications, Inc. Their
people, products and intellectual property -- including nearly 60
patents and applications -- further enhance Ikanos' leadership
position and provide an expanded customer base in Europe while
fortifying its leading position in Japan. -- Ikanos announced that its Fusiv Vx155 processor will be used in a
major Korean telecommunication service provider's first trial
deployment of residential gateways. Ikanos' Fusiv Vx155 powers
Mercury Corporation's PHY-agnostic residential gateway, which is
designed to be used with VDSL2-, PON- and AON-based access networks
for distributing triple play services in the home. Mercury
Corporation is the only gateway vendor to successfully pass the
Korean telco's rigorous benchmark testing and reach field trial
deployment. Outlook:
The following guidance reflects Ikanos' business without consideration of the effect of purchasing Centillium's DSL assets.
-- Revenue is expected to be between $28 million and $30 million in the
first quarter of 2008. -- Non-GAAP gross margins are expected to be between 44% and 46% in the
first quarter of 2008. GAAP gross margins in the first quarter of
2008 will be lower than non-GAAP gross margins, as they will include
amortization of acquisition-related intangibles of approximately
$1.0 million and charges related to stock-based compensation expense
in accordance with FAS 123(R) of approximately $0.1 million. -- Non-GAAP operating expenses are expected to be in the range of $13.5
to $14.5 million in the first quarter of 2008. GAAP operating
expenses in the first quarter of 2008 will be higher, as they will
include amortization of acquisition-related intangibles of $0.3
million and charges related to stock-based compensation expense in
accordance with FAS 123(R) of $3.0 to $4.0 million. Fourth Quarter and Fiscal Year 2007 Conference Call:
Management will review the fourth quarter and fiscal year 2007 financial results and its expectations for subsequent periods at a conference call on January 29, at 2:00 p.m. Pacific Standard Time. To listen to the call and view the accompanying slides, please visit http://ir.ikanos.com/ and click on the link provided for the web cast or dial 706-902-1343 password 30420614. The web cast will be archived and available through February 4, 2008 at http://ir.ikanos.com/ or by calling 706-645-9291 and entering conference ID number 30420614.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ:IKAN) develops chipsets that enable carriers to offer Fiber Fast(TM) bandwidth and Gigabit network processing for enhanced triple play services. Ikanos' multi-mode VDSL2/ADSLx and network processor solutions power access infrastructure and customer premises equipment for many of the world's leading network equipment manufacturers. Ikanos' solutions enable fast and cost-effective carrier rollouts of interactive broadband services, including IPTV. For more information, visit http://www.ikanos.com/.
(C) 2008 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos, the Ikanos logo, Ikanos Programmable Operating System, CleverConnect, Eagle, Fiber Fast, Fusiv, Fx, FxS, LoopNostics, RRA, SmartLeap and VLR are among the trademarks or registered trademarks of Ikanos.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This document contains forward-looking statements that involve risks and uncertainties concerning Ikanos, including statements regarding the demand for its products, customers' expected deployment plans, expected revenue for the first quarter of 2008, expected gross margins for the first quarter of 2008, and expected operating expenses for the first quarter of 2008. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, the ability of the Company to deliver full production releases of our newer products that are accepted by our customers, the continued demand by telecommunications service providers for ADSL and VDSL semiconductor products, the failure of service providers to implement deployment plans on schedule or at all, Ikanos' continued ability to create new products and technologies, our ability to generate demand and close transactions for the sale of our products, and unexpected future costs, expenses and financing requirements. In addition, for a more extensive discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in Ikanos' Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as well as other reports that Ikanos files from time to time with the Securities and Exchange Commission. Ikanos is under no obligation to update these forward-looking statements to reflect events or circumstances subsequent to date of this press release.
IKANOS COMMUNICATIONS, INC. Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data) Three Months Ended Year Ended
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
2007 2006 2007 2006 Revenue $29,866 $20,998 $107,467 $134,685
Cost and operating
expenses:
Cost of revenue 16,204 14,665 63,264 81,352
Research and
development 12,116 13,722 51,056 53,733
Selling, general and
administrative 6,425 7,562 27,398 25,082
Restructuring charges 193 1,691 3,661 1,691
Common stock offering
expenses - - - 954
Total cost and
operating expenses 34,938 37,640 145,379 162,812
Loss from operations (5,072) (16,642) (37,912) (28,127)
Interest income, net 1,091 1,182 4,942 4,970
Loss before income taxes (3,981) (15,460) (32,970) (23,157)
Provision for income
taxes 70 127 294 280
Loss before cumulative
effect of change in
accounting principle,
net of tax (4,051) (15,587) (33,264) (23,437)
Cumulative effect of
change in accounting
principle, net of
tax - - - 638
Net loss $(4,051) $(15,587) $(33,264) $(22,799) Basic and diluted net
loss per share:
Prior to cumulative
effect of change in
accounting
principle, net of
tax $(0.14) $(0.56) $(1.16) $(0.88)
Cumulative effect of
change in accounting
principle, net of tax - - - 0.02
Net loss per share $(0.14) $(0.56) $(1.16) $(0.86)
Weighted average number
of shares 29,311 27,601 28,626 26,627
IKANOS COMMUNICATIONS, INC. Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data) Three Months Ended Three Months Ended
December 30, 2007 December 31, 2006
As Non-GAAP Non- As Non-GAAP Non-
Reported Adjustments GAAP Reported Adjustments GAAP
Revenue $29,866 $- $29,866 $20,998 $- $20,998
Cost and
operating
expenses:
Cost of
revenue 16,204 (146)(a) 15,752 14,665 (29)(a) 13,395
(306)(b) (1,241)(b)
Research and
development 12,116 (2,103)(a) 9,888 13,722 (1,670)(a) 11,927
(125)(b) (125)(b)
Selling,
general and
adminis-
trative 6,425 (1,240)(a) 4,974 7,562 (1,828)(a) 5,296
(211)(b) (438)(b)
Restructuring
charges 193 (193)(c) - 1,691 (1,691)(c) - Total cost
and
operating
expenses 34,938 (4,324) 30,614 37,640 (7,022) 30,618
Income (loss)
from
operations (5,072) 4,324 (748) (16,642) 7,022 (9,620)
Interest
income and
other, net 1,091 - 1,091 1,182 - 1,182
Income (loss)
before income
taxes (3,981) 4,324 343 (15,460) 7,022 (8,438)
Provision for
income taxes 70 - 70 127 - 127
Net income
(loss) $(4,051) $4,324 $273 $(15,587) $7,022 $(8,565) Net income (loss)
per shares:
Basic $(0.14) $0.01 $(0.56) $(0.31)
Diluted $(0.14) $0.01 $(0.56) $(0.31)
Weighted average
number of
shares:
Basic 29,311 29,311 27,601 27,601
Diluted 29,311 30,678 27,601 27,601 Notes:
Three Months Ended
Dec. 30, Dec. 31,
2007 2006
(a) Stock-based compensation $3,489 $3,527
(b) Amortization of acquired intangible assets 642 1,804
(c) Restructuring charges 193 1,691
Total non-GAAP adjustments $4,324 $7,022 IKANOS COMMUNICATIONS, INC. Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data) Year Ended Year Ended
December 30, 2007 December 31, 2006
As Non-GAAP Non- As Non-GAAP Non-
Reported Adjustments GAAP Reported Adjustments GAAP
Revenue $107,467 $- $107,467 $134,685 $- $134,685
Cost and
operating
expenses:
Cost of
revenue 63,264 (271)(a) 60,732 81,352 (267)(a) 74,151
(2,261)(b) (5,911)(b)
(1,023)(c)
Research and
development 51,056 (7,917)(a) 42,639 53,733 (4,920)(a) 44,621
(500)(b) (680)(b)
(3,512)(d)
Selling,
general and
adminis-
trative 27,398 (5,686)(a) 20,825 25,082 (4,471)(a) 18,306
(887)(b) (2,305)(b)
Restructuring
charges 3,661 (3,661)(e) - 1,691 (1,691)(e) - Common stock
offering
expenses - - - 954 (954)(f) - Total
cost and
operating
expenses 145,379 (21,183) 124,196 162,812 (25,734) 137,078
Income (loss)
from
operations (37,912) 21,183 (16,729) (28,127) 25,734 (2,393)
Interest
income and
other, net 4,942 - 4,942 4,970 - 4,970
Income (loss)
before income
taxes (32,970) 21,183 (11,787) (23,157) 25,734 2,577
Provision for
income taxes 294 - 294 280 - 280
(33,264) 21,183 (12,081) (23,437) 25,734 2,297
Cumulative
effect of
change in
accounting
principle, net
of tax - - - 638 (638)(g) - Net income
(loss) $(33,264) $21,183 $(12,081) $(22,799) $25,096 $2,297 Net income (loss)
per shares:
Basic $(1.16) $(0.42) $(0.86) $0.09
Diluted $(1.16) $(0.42) $(0.86) $0.08
Weighted average
number of
shares:
Basic 28,626 28,626 26,627 26,627
Diluted 28,626 28,626 26,627 28,896 Notes:
Year Ended
Dec. 30, Dec. 31,
2007 2006 (a) Stock-based compensation $13,874 $9,658
(b) Amortization of acquired intangible assets 3,648 8,896
(c) Fair value adjustment of acquired inventory - 1,023
(d) In-process research and development - 3,512
(e) Restructuring charges 3,661 1,691
(f) Common stock offering expenses - 954
(g) Cumulative effect of change in accounting - (638)
Total non-GAAP adjustments $21,183 $25,096 IKANOS COMMUNICATIONS, INC. Unaudited Condensed Consolidated Balance Sheets
(In thousands) December 30, December 31,
2007 2006
Assets
Current assets:
Cash, cash equivalents and short-term
investments $83,972 $109,638
Accounts receivable, net 17,081 15,140
Inventory 13,025 12,801
Prepaid expenses and other current assets 3,192 3,086
Total current assets 117,270 140,665
Long-term investments 7,001 -
Property and equipment, net 13,916 18,073
Intangible assets, net 6,564 10,212
Goodwill 6,247 6,247
Other assets 2,158 660
$153,156 $175,857
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $28,223 $31,162
Other current liabilities - 818
Total current liabilities 28,223 31,980
Long-term liabilities - 987
Total liabilities 28,223 32,967
Stockholders' equity 124,933 142,890
$153,156 $175,857
DATASOURCE: Ikanos Communications, Inc.
CONTACT: Media, Margo Westfall, +1-510-438-6276, ; or Investors, Bonnie Mott, +1-510-438-5360, , both of Ikanos Communications, Inc.
Web site: http://www.ikanos.com/
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