& cplSiteName &

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        ADD A COMMENT
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
February 26-28, 2018, Santa Clara Convention Center, CA
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
Dan Jones, Mobile Editor, 12/11/2017
Verizon's New Fios TV Is No More
Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
The Anatomy of Automation: Q&A With Cisco's Roland Acra
Steve Saunders, Founder, Light Reading, 12/7/2017
You Can't Fix OTT Streaming Problems If You Can't See Them
Mike Hollyman, Head of Consulting Engineering, Nokia Deepfield, 12/8/2017
Animals with Phones
Don't Fall Asleep on the Job! Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed