Light Reading

Ikanos Reports Q2 Loss

Light Reading
News Wire Feed
Light Reading
7/31/2014
50%
50%

FREMONT, Calif. -- Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of advanced broadband semiconductor and software products for the digital home, today announced its financial results for the second quarter of 2014, ended June 29, 2014.

"We achieved second quarter revenue of $11.3 million, within our guidance, while exceeding our margin expectations with a GAAP gross profit of 49%," said Dennis Bencala, CFO of Ikanos. "During the quarter, we continued to effectively manage our business and cash position, recording operating expenses of $17.5 million, at the low-end of the guidance, with cash and short-term investments totaling $20.6 million at quarter end."

Omid Tahernia, president and CEO of Ikanos, said, "As anticipated, the rapid drop in demand for our legacy products in certain maturing markets, most notably Korea, resulted in a decline in revenue for the second quarter. While we navigate through our revenue transition, we have taken meaningful steps to manage operating expenses which we expect to result in up to a 20% reduction in costs for the second half of 2014, as compared to the first half of 2014. In the meantime, our new products continue to show positive momentum, with Velocity-3 and inSIGHT making great progress at carrier trials and Vx500 receiving tremendous market interest following its official roll-out at Computex in June."

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.

Second Quarter 2014 Results

Revenue for the second quarter of 2014 was $11.3 million, compared to revenue of $19.1 million for the second quarter of 2013 and revenue of $14.5 million for the first quarter of 2014. GAAP gross profit for the second quarter of 2014 was 49%, compared to a GAAP gross profit of 49% for the second quarter of 2013 and GAAP gross profit of 49% for the first quarter of 2014.

Non-GAAP gross profit for the second quarter of 2014 was 50%, compared to a non-GAAP gross profit of 49% for the second quarter of 2013 and 50% for the first quarter of 2014.

GAAP operating expenses for the second quarter of 2014 were $17.5 million, compared to operating expenses of $17.5 million for the second quarter of 2013 and operating expenses of $17.5 million for the first quarter of 2014.

Non-GAAP operating expenses for the second quarter of 2014 were $16.6 million, compared to non-GAAP operating expenses of $16.5 million for the second quarter of 2013 and non-GAAP operating expenses of $16.5 million for the first quarter of 2014.

GAAP net loss for the second quarter of 2014 was $(12.3) million, or a loss of $(0.12) per share on 99.1 million weighted average shares outstanding, compared to a GAAP net loss of $(8.7) million, or $(0.12) per share on 71.2 million weighted average shares outstanding, for the second quarter of 2013 and a GAAP net loss of $(10.3) million, or $(0.10) per share on 98.7 million weighted shares outstanding, for the first quarter of 2014.

Non-GAAP net loss for the second quarter of 2014 was $(11.3) million, or a loss of $(0.11) per share on 99.1 million weighted average shares outstanding, compared to a non-GAAP net loss of $(7.5) million, or $(0.11) per share on 71.2 million weighted average shares outstanding, for the second quarter of 2013 and a non-GAAP loss of $(9.2) million, or $(0.09) per share on 98.7 million weighted average shares outstanding, for the first quarter of 2014. Cash and cash equivalents and short-term investments at the end of the second quarter of 2014 were $20.6 million, compared to $33.7 million at the end of the first quarter of 2014. Additionally, at the end of the second quarter of 2014, inventory was $2.2 million, compared to $1.3 million at the end of the first quarter of 2014. Current liabilities at the end of the second quarter of 2014 were $21.6 million, compared to $22.5 million at the end of the first quarter of 2014. For both the second quarter of 2014 and first quarter of 2014, current liabilities included an accounts receivable-backed revolving line of credit advance of $6.9 million and $8.5 million, respectively.

For a more complete review of our Q2 2014 results and quarter over quarter comparisons please see the attached financial schedules.

Outlook

Revenue is expected to be between $11.0 million and $13.0 million for the third quarter of 2014.

"While we anticipate returning to revenue growth by year end, the third quarter is expected to remain sequentially flat," said Tahernia. "This is due to a combination of two factors; our reduced but now stable legacy revenue, and delay in customer ramps of certain new multi-mode gateway designs."

GAAP gross profit for the third quarter of 2014 is expected to be between 48% and 50%. Non-GAAP gross profit is expected to be between 49% and 51% for third quarter of 2014. GAAP operating expenses for third quarter of 2014 are expected to be in the range of $14.5 million to $15.5 million. Non-GAAP operating expenses are expected to be in the range of $13.5 million to $14.5 million for third quarter of 2014. GAAP net loss for third quarter of 2014 is expected to be in the range of approximately $(8.3) million to $(10.5) million, or a GAAP loss per share of $(0.08) to $(0.11). Non-GAAP net loss is expected to be in the range of approximately $(7.2) million to $(9.4) million, or a non-GAAP loss per share of $(0.07) to $(0.09).

Ikanos Communications Inc. (Nasdaq: IKAN)

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Huawei Video Resource Center
Huawei's Power Play With GrupoGiro

4|1|15   |   2:51   |   (0) comments


Daniel Heredia, CEO of Energiro, the power management services part of Spain's Grupo Giro, explains why his company has just struck a partnership with Huawei for uninterruptible power supply products and how he hopes it can take the partnership into other markets.
LRTV Huawei Video Resource Center
Huawei Intros Smart Device for eLTE

3|30|15   |   05:25   |   (0) comments


Huawei has developed a secure, location-aware multimedia smartphone for its eLTE trunked radio solution, says Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Win Video, Win All

3|30|15   |   06:44   |   (0) comments


Video is going to be the next main source of revenue for operators. Operators have big opportunities and advantages to monetize video services. Globally, Huawei has helped more than 70 operators achieve over 30 million video subscribers. Watch this video for more.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
Just Don't Say IBM Is 'Relaunching' Networking Business
Mitch Wagner, West Coast Bureau Chief, Light Reading, 3/26/2015
TV Everywhere Nears Mainstream Adoption
Mari Silbey, Independent Technology Editor, 3/27/2015
Carriers Are Bright Spot in BlackBerry Q4
Sarah Thomas, Editorial Operations Director, 3/27/2015
Comcast Says TWC Deal Will Close Later
Mari Silbey, Independent Technology Editor, 3/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.