First Quarter Highlights
- Revenue of $14.5 million
- GAAP net loss of $(10.3) million, or $(0.10) per share
- Ending cash, cash equivalents and short-term investments of $33.7 million
Ikanos Communications, Inc. (
"We achieved first-quarter revenue and gross profits within our guidance, with revenue of $14.5 million and a GAAP gross profit of 49%, while recording operating expenses of $17.5 million, near the mid-point of our guidance," said Dennis Bencala, CFO of Ikanos. "During the quarter, we continued to effectively manage our business and cash position, with cash totaling $33.7 million and inventory of $1.3 million at quarter end."
Omid Tahernia, president and CEO of Ikanos, said, "Our design win pipeline and new product revenue continued with positive momentum into 2014. We ended the first quarter with several new design wins for both access and gateway processors. For the first time, we have a Velocity™-3 based OEM system in a large carrier lab being qualified for deployment. We are also seeing very positive progress with our diversification strategy, winning new tenders in South America for 2014 revenue. The demand for our Vx500 gateway processor family is also on the rise. We announced our first LTE gateway design win with this new family at Mobile World Congress in February, and anticipate more OEM and ODM design activities in the second quarter."
Financial Details
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 and non-GAAP operating expenses, where applicable, exclude the income statement effects of stock-based compensation and the 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 its 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.
First Quarter 2014 Results
Revenue for the first quarter of 2014 was $14.5 million, compared to revenue of $26.2 million for the first quarter of 2013 and revenue of $17.6 million for the fourth quarter of 2013. GAAP gross profit for the first quarter of 2014 was 49%, compared to a GAAP gross profit of 53% for the first quarter of 2013 and GAAP gross profit of 50% for the fourth quarter of 2013.
Non-GAAP gross profit for the first quarter of 2014 was 50%, compared to a non-GAAP gross profit of 54% for the first quarter of 2013 and 51% for the fourth quarter of 2013.
GAAP operating expenses for the first quarter of 2014 were $17.5 million, compared to operating expenses of $18.3 million for the first quarter of 2013 and operating expenses of $17.1 million for the fourth quarter of 2013.
Non-GAAP operating expenses for the first quarter of 2014 were $16.5 million, compared to non-GAAP operating expenses of $17.3 million for the first quarter of 2013 and non-GAAP operating expenses of $16.2 million for the fourth quarter of 2013.
GAAP net loss for the first quarter of 2014 was $(10.3) million, or a loss of $(0.10) per share on 98.7 million weighted average shares outstanding, compared to a GAAP net loss of $(4.4) million, or $(0.06) per share on 70.4 million weighted average shares outstanding, for the first quarter of 2013 and a GAAP net loss of $(8.6) million, or $(0.10) per share on 85.6 million weighted shares outstanding, for the fourth quarter of 2013.
Non-GAAP net loss for the first quarter of 2014 was $(9.2) million, or a loss of $(0.09) per share on 98.7 million weighted average shares outstanding, compared to a non-GAAP net loss of $(3.3) million, or $(0.05) per share on 70.4 million weighted average shares outstanding, for the first quarter of 2013 and a non-GAAP loss of $(7.6) million, or $(0.09) per share on 85.6 million weighted average shares outstanding, for the fourth quarter of 2013.
Cash and cash equivalents and short-term investments at the end of the first quarter of 2014 were $33.7 million, compared to $39.5 million at the end of the fourth quarter of 2013. Additionally, at the end of the first quarter of 2014, inventory was $1.3 million, compared to $2.0 million at the end of the fourth quarter of 2013. Current liabilities at the end of the first quarter of 2014 were $22.5 million, compared to $24.9 million at the end of the fourth quarter of 2013. For both the first quarter of 2014 and fourth quarter of 2013, current liabilities include an accounts receivable backed, revolving line of credit advance of $8.5 million and $12.0 million, respectively.
For a more complete review of our 2014 results and year-over-year comparisons please see the attached financial schedules.
Outlook
Revenue is expected to be between $11 million and $13 million for the second quarter of 2014.
"The key factor contributing to the short-term decline in overall revenue was the lower demand in certain maturing markets, namely Japan and Korea, which have had a significant impact on our legacy product revenue," said Tahernia. "Revenue in Korea in particular dropped to historic lows. This is a trend we expect to continue to see in those regions. However, we anticipate great demand for G.fast in both regions, which should present the next cycle of growth for Ikanos."
GAAP gross profit for the second quarter of 2014 is expected to be between 46% and 48%. Non-GAAP gross profit is expected to be between 47% and 49% for second quarter of 2014. GAAP operating expenses for second quarter of 2014 are expected to be in the range of $17.5 million to $18.5 million. Non-GAAP operating expenses are expected to be in the range of $16.5 million to $17.5 million for second quarter of 2014. GAAP net loss for second quarter of 2014 is expected to be in the range of approximately $(11.6) million to $(13.7) million, or a GAAP loss per share of $(0.12) to $(0.14). Non-GAAP net loss is expected to be in the range of approximately $(10.4) million to $(12.6) million, or a non-GAAP loss per share of $(0.11) to $(0.13).
First Quarter Conference Call
Management will review the first quarter financial results and its expectations for subsequent periods at a conference call on April 29, 2014 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) 438-5525 and enter conference ID 2023583. 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 July 28, 2014 by dialing (888) 203-1112 and entering conference ID 2023583.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (
© 2014 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 under the Private Securities Litigation Reform Act of 1995
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 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.
