Q3 Highlights:
- Revenue of $16.9 million
- GAAP Gross Profit of 51%
- GAAP Operating Expenses of $17.0 million
- Cash, Cash Equivalents and Short-Term Investments of $25.6 million
Ikanos Communications, Inc. (
"Ikanos achieved better than expected third quarter results, with gross profits exceeding our target, while revenue ended near the mid-range of our guidance," said Dennis Bencala, chief financial officer and vice president of finance at Ikanos. "We achieved revenue of $16.9 million, with a GAAP gross profit of 51%, well above our guidance of 47% to 49%. We also sequentially reduced operating expenses for the fourth consecutive quarter, with OPEX down to $17.0 million and below our guidance of $17.5 to $18.5 million. Additionally, quarter-end inventory was managed to $1.6 million, while meeting customer demand and contributing to a quarter-ending cash and short-term investments balance of $25.6 million."
"While we continued to grow our opportunity pipeline with a number of new design wins in Q3, we also took a significant step forward in securing Ikanos' position in the emerging FTTdp market," said Omid Tahernia, president and CEO at Ikanos. "This was accomplished through the introduction of our single-port CO processor, the Velocity™-Uni, which was formally launched at the Broadband World Forum (BBWF) conference in Amsterdam last week. Also at the conference, we were quite pleased to be selected as the recipient of InfoVision's "Best Broadband Enabler" award this year, with our Velocity™-3 taking the top spot in recognition of its technical excellence."
"While we continue to navigate through the current transition in our business, we remain positive on the outlook," continued Tahernia. "We see the additional design wins, the expansion of our TAM with new products such as inSIGHT and Velocity™-Uni, and the early customer demand for our next-generation G.fast platform, creating tremendous market momentum and future growth potential for our overall business."
Financial Highlights
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), non-GAAP gross profits, non-GAAP operating expenses and non-GAAP earnings per share, where applicable, exclude the income statement effects of stock-based compensation, restructuring charges and amortization of intangible assets. Ikanos has provided these measures because its 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 Ikanos operating performance and to plan for its future. However, non-GAAP measures are not a substitute for GAAP reporting. For a reconciliation of GAAP versus non-GAAP financial information, please see the attached schedules.
Fiscal Third Quarter 2013 Results
Revenue for the third quarter of 2013 was $16.9 million, compared to revenue of $31.4 million for the third quarter of 2012 and revenue of $19.1 million for the second quarter of 2013. GAAP gross profit for the third quarter of 2013 was 51%, compared to a GAAP gross profit of 47% for the third quarter of 2012 and GAAP gross profit of 49% for the second quarter of 2013.
Non-GAAP gross profit for the third quarter of 2013 was 52%, compared to a non-GAAP gross profit of 48% for the third quarter of 2012 and non-GAAP gross profit of 49% for the second quarter of 2013.
GAAP operating expenses for the third quarter of 2013 were $17.0 million, compared to operating expenses of $21.1 million for the third quarter of 2012 and operating expenses of $17.5 million for the second quarter of 2013.
Non-GAAP operating expenses for the third quarter of 2013 were $16.0 million, compared to non-GAAP operating expenses of $20.2 million for the third quarter of 2012 and non-GAAP operating expenses of $16.5 million for the second quarter of 2013.
GAAP net loss for the third quarter of 2013 was $(8.7) million, or a loss of $(0.12) per share on 71.7 million weighted average shares outstanding. This compares with a net loss of $(6.4) million, or a loss of $(0.09) per share on 69.8 million weighted average shares outstanding for the third quarter of 2012 and a GAAP net loss of $(8.7) million, or a loss of $(0.12) per share on 71.2 million weighted average shares outstanding for the second quarter of 2013.
Non-GAAP net loss for the third quarter of 2013 was $(7.5) million, or a loss of $(0.11) per share on 71.7 million weighted average shares outstanding compared to a non-GAAP net loss of $(5.1) million, or a loss of $(0.07) per share on 69.8 million weighted average shares outstanding for the third quarter of 2012, and a non-GAAP loss of $(7.5) million, or a loss of $(0.11) per share on 71.2 million weighted average shares outstanding for the second quarter of 2013.
Cash, cash equivalents and short-term investments at the end of third quarter of 2013 were $25.6 million, compared to $27.3 million at the end of the second quarter of 2013.
Additionally, at the end of the third quarter of 2013 inventory was $1.6 million compared to $4.0 million at the end of the second quarter of 2013. Current liabilities at the end of the third quarter of 2013 were $25.8 million, compared to $21.1 million at the end of the second quarter of 2013.
Outlook
Revenue is expected to be between $17.0 million and $19.0 million for the fiscal fourth quarter of 2013.
GAAP gross profit for the fiscal fourth quarter of 2013 is expected to be between 49% and 51%. Non-GAAP gross profit is expected to be between 50% and 52% for the fourth quarter of 2013.
GAAP operating expenses for the fiscal fourth quarter of 2013 are expected to be in the range of $17.0 million to $18.0 million. On a non-GAAP basis operating expenses are expected to be in the range of $16.0 million to $17.0 million for the fourth quarter of 2013.
GAAP net loss for the fiscal fourth quarter of 2013 is expected to be in the range of approximately $(7.5) million to $(9.9) million, or a GAAP loss per share of $(0.10) to $(0.14). Non-GAAP net loss for the fiscal fourth quarter of 2013 is expected to be in the range of approximately $(6.5) million to $(8.6) million, or a non-GAAP loss per share of $(0.09) to $(0.12).
Third Quarter Conference Call
Management will review the third quarter financial results and its expectations for subsequent periods on a conference call on Tuesday, October 29, 2013 at 1:30 p.m. Pacific Time. To listen to the call, please visit
http://www.ikanos.com/investor/irevents/ and click on the link provided for the webcast or dial (888) 428-9490 or (719) 325-2432 and enter conference ID 8616859. The webcast will be archived and available for 90 days at
http://www.ikanos.com/investor/irevents/. A replay of the conference call will be accessible until January 27, 2014 by dialing (888) 203-1112 or (719) 457-0820 and entering conference ID 8616859.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (
© 2013 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos and the Ikanos logo, the Bandwidth without boundaries tagline, Fusiv, inSIGHT, Neos, Ikanos Velocity and Ikanos NodeScale are among the trademarks or registered trademarks of Ikanos Communications. All other trademarks mentioned herein are properties of their respective holders.
Safe Harbor Statement
Some of the statements included in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and our industry in general. Statements that include the words "expect," "intend," "plan," "believe," "anticipate," "estimate," and similar statements of a future or forward-looking nature identify forward-looking statements.
