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        ADD A COMMENT
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Between the CEOs
Ericsson CTO on the Changing Telecom Market

1|21|16   |   10:26   |   (0) comments


At CES 2015, CTO of Ericsson, Ulf Ewaldsson, sits down with CEO of Light Reading, Steve Saunders, to discuss the changing telecom market, the new partnership with Cisco and the future of the telecom industry.
LRTV Interviews
Ireland's Data Dream

1|21|16   |   14:31   |   (0) comments


Host In Ireland president Gary Connolly tells Light Reading's Steve Saunders about the role Ireland is playing in hosting data for the world's largest organizations.
LRTV Custom TV
Brocade Keynote: Transitioning to the New IP

1|20|16   |   27:23   |   (0) comments


At 2020 Vision in Dublin, Andrew Coward, VP of Service Provider Strategy at Brocade, presents the transition to the New IP.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Cisco's latest VNI numbers suggest the world will be using 366.8 exabytes of data on smartphones and Internet of Things devices, up from 44.2 exabytes, in 2015.
Hot Topics
Alphabet Is Serious About Google Fiber
Mari Silbey, Senior Editor, Cable/Video, 2/1/2016
Did Juniper Pay 'Peanuts' for BTI?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/2/2016
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
How Data Center Outsourcing Fuels AT&T NetBond Growth
Carol Wilson, Editor-at-large, 2/3/2016
3.5GHz Startup Gets $22M for Small Cells
Dan Jones, Mobile Editor, 2/2/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
As anyone who knows me will tell you, I like to think I know a fair bit about this next-gen-comms malarkey, but there's nothing like an interview with one of the ...
Animals with Phones
Happy Groundhogs for Technology Day! Click Here
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.