MICROSEMI FREQUENCY AND TIME CORP 
By SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire/ -- Symmetricom, Inc. (NASDAQ: SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its second quarter of fiscal year 2013 ended December 30, 2012.
(Logo: http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)
Net revenue for the second quarter of fiscal 2013 was $49.2 million, down $9.1 million, or 15.6%, compared to the $58.3 million reported for the second quarter of fiscal 2012. Symmetricom reported a net loss of $1.8 million, or $0.04 per share, for the second quarter of fiscal 2013, compared to net income of $2.4 million, or $0.06 per share, in the second quarter of fiscal 2012. The loss for the second quarter of fiscal 2013 included $1.2 million of restructuring charges, principally related to the Company's previously announced R&D consolidation activities.
The decrease in net revenue was due primarily to lower U.S. government spending and lower communications service provider spending on wireline-related equipment. Partially offsetting this weakness in the quarter was continued strength in shipments of the Company's Quantum(TM) SA.45s Chip Scale Atomic Clock (CSAC), a key strategic initiative for the Company.
Non-GAAP net income for the second quarter of fiscal 2013 was $0.3 million, or $0.01 per share, compared to $4.2 million, or $0.10 per share, reported for the second quarter of fiscal 2012.
Cash, cash equivalents and short-term investments totaled $70.8 million as of December 30, 2012, a decrease of $0.8 million from the $71.6 million reported as of September 30, 2012. Net cash provided by operating activities in the second quarter was $2.3 million, and property, plant and equipment purchases were approximately $1.2 million, resulting in free cash flow of $1.1 million.
The Company also announced a restructuring action today to reduce operating costs while retaining focus on its strategic initiatives. Symmetricom plans to reduce the size of its workforce by approximately 20 positions. The reductions will begin in January and are expected to be complete by August 2013. In conjunction with the headcount reduction, the Company will further reduce the size of its facility presence in Santa Rosa, CA. Symmetricom expects to incur restructuring charges in the range of $1.5 million to $1.8 million in connection with the plan. Upon completion, Symmetricom expects these restructuring actions to reduce annual costs by approximately $4.0 million.
"The financial results of our second quarter were lower than we originally anticipated due to further softening of purchases by both U.S. government customers and wireline operators," said Dave Cote, president and chief executive officer of Symmetricom. "As we manage through the near term environment, we are taking actions to tighten our operating cost model and enhance profitability. At the same time, we remain focused on building our product and customer portfolios, and we will continue to invest in our key initiatives, including Quantum(TM) CSAC, PackeTime® and Government Programs. I am enthusiastic about the progress we are making on these initiatives and their potential to fuel Symmetricom's long-term growth."
Business Segment Revenue Results
Revenue in the Communications Business in the second quarter of fiscal 2013 was $26.2 million, compared to $33.3 million reported in the second quarter of fiscal 2012. Revenue in the Government and Enterprise Business in the second quarter of fiscal 2013 was $23.0 million, compared to $25.0 million reported in the second quarter of fiscal 2012.
Third Quarter 2013 Guidance
Symmetricom's guidance for the third quarter of fiscal 2013 is as follows:
-- Net revenue is expected to be in the range of $48 million to $54 million
-- GAAP earnings (loss) per share is expected to be in the range of $(0.07)
to $0.01
-- Non-GAAP earnings per share is expected to be in the range of $0.00 to
$0.05
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 +1-212-547-0198 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 +1-203-369-1432.
About Symmetricom, Inc.
Symmetricom (NASDAQ:SYMM), a world leader in precise time solutions, sets the world's standard for time. The Company generates, distributes and applies precise time for the communications, aerospace/defense, IT infrastructure and metrology industries. Symmetricom's customers, from communications service providers and network equipment manufacturers to governments and their suppliers worldwide, are able to build more reliable networks and systems by using the Company's advanced timing technologies, atomic clocks, services and solutions. All products support today's precise timing standards, including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol (NTP), Synchronous Ethernet and DOCSIS® timing. Symmetricom is based in San Jose, California, with offices worldwide. For more information, visit: http://www.symmetricom.com or join the dialogue at http://www.twitter.com/symmetricom.
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 equity-based compensation, acquisition-related costs, amortization of intangible assets, restructuring charges, and off-shore development transition costs that the Company does not consider indicative of its ongoing performance. The income tax effect after these non-GAAP adjustments is determined based upon Symmetricom's estimate of its annual non-GAAP effective tax rate excluding these non-GAAP adjustments. Symmetricom believes that excluding such items provides investors, analysts and management with a representation of the Company's core operating performance and with information useful in assessing, in conjunction with GAAP results, underlying trends in operating performance. Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information 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 or used in operating activities minus purchases of property, plant and equipment. Symmetricom believes this metric provides useful information to its investors, analysts, and management about the level of cash generated by or used in 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 third quarter fiscal 2013 guidance and future performance as well as the information regarding the usefulness of the non-GAAP financial information. The statements in this press release are made as of the date of this press release, even if subsequently made available by Symmetricom on its website or otherwise. Symmetricom expressly disclaims any obligation to update or revise any forward-looking statement contained herein, whether as a result of a change in its expectations, a change in any events, conditions or circumstances on which a forward-looking statement is based, or otherwise. 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, but are not limited to, the extent and magnitude of customer orders received and shipped within the same quarter, risks relating to general economic conditions in the markets we address and the telecommunications and government markets in general, risks related to the development of our new products and services, reliance on our contract manufacturer, the effects of increasing competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws or misappropriation of intellectual property, developments in and expenses related to litigation, the inability to obtain sufficient amounts of key components, the rescheduling or cancellation of key customer orders, the loss of a key customer, the effects of new and emerging technologies, the risk that excess inventory may result in write-offs, price erosion and decreased demand, fluctuations in the rate of exchange of foreign currency, changes in our effective tax rate, market acceptance of our new products and services, technological advancements, undetected errors, design flaws, defects in our products or start-up manufacturing difficulties, the risks associated with our international sales, potential short-term investment losses and other risks due to credit market dislocation, geopolitical risks and risk of terrorist activities, the risks associated with attempting to integrate other companies and businesses we acquire, 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 July 1, 2012 and subsequent Forms 10-Q and 8-K.
SYMM-F
Contact:
Justin Spencer
Chief Financial Officer
+1-408-428-7801
jspencer@symmetricom.com
SYMMETRICOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three months ended Six months ended
------------------ ----------------
December 30, September 30, January 1, December 30, January 1,
2012 2012 2012 2012 2012
---- ---- ---- ---- ----
Net revenue $49,151 $56,391 $58,294 $105,542 $114,672
Cost of sales:
Cost of products and services 27,861 31,900 32,225 59,761 62,055
Acquisition-related costs 248 234 185 482 371
Restructuring charges 41 (45) 674 (4) 1,091
--- --- --- --- -----
Total cost of sales 28,150 32,089 - 33,084 60,239 63,517
------ ------ --- ------ ------ ------
Gross profit 21,001 24,302 25,210 45,303 51,155
Gross margin 42.7% 43.1% 43.2% 42.9% 44.6%
Operating expenses:
Research and development 7,805 8,313 6,548 16,118 13,446
Selling, general and administrative 14,778 16,227 14,864 31,005 29,674
Amortization of intangible assets 86 86 52 172 104
Restructuring charges 1,146 55 103 1,201 199
----- --- ----- ---
Total operating expenses 23,815 24,681 21,567 48,496 43,423
------ ------ ------ ------ ------
Operating income (loss) (2,814) (379) 3,643 (3,193) 7,732
Interest income, net of amortization
(accretion) of premium (discount) on
investments 178 (36) (296) 142 (230)
--- ---- --- ----
Income (loss) before taxes (2,636) (415) 3,347 (3,051) 7,502
Income tax provision (benefit) (861) (212) 902 (1,073) 2,308
---- ---- --- ------ -----
Net income (loss) $(1,775) $(203) $2,445 $(1,978) $5,194
======= ===== ====== ======= ======
Earnings (loss) per share:
Basic $(0.04) $(0.01) $0.06 $(0.05) $0.12
====== ====== ===== ====== =====
Diluted $(0.04) $(0.01) $0.06 $(0.05) $0.12
====== ====== ===== ====== =====
Shares used in computing earnings (loss)
per share:
Weighted average shares outstanding -
basic 40,356 40,510 42,292 40,432 42,490
====== ====== ====== ====== ======
Weighted average shares outstanding -
diluted 40,356 40,510 42,762 40,432 42,989
====== ====== ====== ====== ======
SYMMETRICOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
December 30, July 1,
2012 2012
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $25,966 $27,659
Short-term investments 44,789 39,280
Accounts
receivable, net 35,789 45,952
Inventories 48,176 47,618
Prepaids and
other current
assets 19,290 16,943
Total current assets 174,010 177,452
Property, plant and equipment, net 23,075 22,702
Intangible assets, net 3,364 3,458
Deferred taxes and other assets 28,200 27,413
Total assets $228,649 $231,025
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $12,715 $9,300
Accrued compensation 12,606 14,574
Accrued warranty 1,492 1,722
Other accrued liabilities 10,409 11,841
Total current
liabilities 37,222 37,437
Long-term obligations 5,239 5,472
Deferred income taxes 334 334
---
Total liabilities 42,795 43,243
Stockholders' equity:
Common stock 193,408 193,478
Accumulated other
comprehensive
loss (112) (232)
Accumulated deficit (7,442) (5,464)
Total
stockholders'
equity 185,854 187,782
Total liabilities and
stockholders' equity $228,649 $231,025
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
Three months ended Six months ended
------------------ ----------------
December 30, September 30, January 1, December 30, January 1,
2012 2012 2012 2012 2012
---- ---- ---- ---- ----
Reconciliation from
GAAP to Non-GAAP
GAAP Net income (loss) $(1,775) $(203) $2,445 $(1,978) $5,194
Non-GAAP adjustments:
Equity-based
compensation expense:
Cost of products and
services 250 291 215 541 334
Research and
development 316 361 295 677 584
Selling, general and
administrative 1,121 1,120 1,170 2,241 1,925
----- ----- ----- ----- -----
Total equity-based
compensation expense 1,687 1,772 1,680 3,459 2,843
Acquisition-related
costs and
amortization of
intangible assets:
Cost of products and
services 248 234 185 482 371
Operating expenses 86 86 52 172 104
--- --- --- --- ---
Total acquisition-
related costs and
amortization of
intangible assets 334 320 237 654 475
Restructuring charges 1,187 10 777 1,197 1,290
Off-shore development
transition costs - 729 - 729 -
Income tax effect of
Non-GAAP adjustments (1,154) (1,070) (934) (2,224) (1,470)
------ ------ ------
Non-GAAP Net income $279 $1,558 $4,205 $1,837 $8,332
==== ====== ====== ====== ======
Earnings (loss) per
share -diluted:
GAAP Net income (loss) $(0.04) $(0.01) $0.06 $(0.05) $0.12
Non-GAAP Net income $0.01 $0.04 $0.10 $0.04 $0.19
Weighted average
shares outstanding -
diluted 41,464 41,675 42,762 41,514 42,989
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
Three months ended Six months ended
------------------ ----------------
December 30, September 30, January 1, December 30, January 1,
2012 2012 2012 2012 2012
---- ---- ---- ---- ----
GAAP Revenue $49,151 $56,391 $58,294 $105,542 $114,672
Reconciliation from GAAP to Non-GAAP Gross Profit:
GAAP Gross profit (A) $21,001 $24,302 $25,210 $45,303 $51,155
GAAP Gross margin 42.7% 43.1% 43.2% 42.9% 44.6%
Non-GAAP adjustments:
Equity-based compensation expense 250 291 215 541 334
Acquisition-related costs 248 234 185 482 371
Restructuring charges 41 (45) 674 (4) 1,091
Non-GAAP Gross profit (B) $21,540 $24,782 $26,284 $46,322 $52,951
===
Non-GAAP Gross margin 43.8% 43.9% 45.1% 43.9% 46.2%
Reconciliation from GAAP to Non-GAAP Operating Expense:
GAAP Operating expenses (C) $23,815 $24,681 $21,567 $48,496 $43,423
Operating expense % to revenue 48.5% 43.8% 37.0% 45.9% 37.9%
Non-GAAP adjustments:
Equity-based compensation expense (1,437) (1,481) (1,465) (2,918) (2,509)
Amortization of intangible assets (86) (86) (52) (172) (104)
Restructuring charges (1,146) (55) (103) (1,201) (199)
Off-shore development transition costs - (729) - (729) -
Non-GAAP operating expenses (D) $21,146 $22,330 $19,947 $43,476 $40,611
===
Non-GAAP operating expenses % to revenue 43.0% 39.6% 34.2% 41.2% 35.4%
Reconciliation from GAAP to Non-GAAP Operating Income (loss):
GAAP Operating income (loss) (A) - (C) $(2,814) $(379) $3,643 $(3,193) $7,732
========
Operating income % to revenue -5.7% -0.7% 6.2% -3.0% 6.7%
Non-GAAP Operating income (B) - (D) $394 $2,452 $6,337 $2,846 $12,340
========
Operating income % to revenue 0.8% 4.3% 10.9% 2.7% 10.8%
SYMMETRICOM, INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR GAAP REVENUE AND EPS
TO NON-GAAP GUIDANCE FOR REVENUE AND EPS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ending March 31, 2013
----------------------------------
Revenue Earnings Per Share
------- ------------------
From To From To
GAAP Guidance $48,000 $54,000 $(0.07) $0.01
Estimated Non-GAAP Adjustments
Equity-based compensation expense 0.04 0.04
Amortization of intangible assets 0.01 0.01
Integration and restructuring
charges 0.07 0.06
Income tax effect of non-GAAP
adjustments (0.05) (0.07)
-----
Total Non-GAAP Adjustments 0.07 0.04
Non-GAAP Guidance $48,000 $54,000 $0.00 $0.05
======= ======= ===== =====
SOURCE Symmetricom, Inc.
