Exhibit 99.1
As described in the Explanatory Note preceding Item 1 of this Annual Report, the unaudited quarterly Condensed Consolidated Financial Statements for the first two quarters in the fiscal year ended December 31, 2006 and all quarters in the fiscal year ended December 31, 2005 have been restated to defer a portion of the revenue previously recorded for system sales in China which was recognized earlier than it should have been and recognize additional non-cash stock-based compensation expense arising from using corrected measurement dates for certain stock options grants.
The unaudited Condensed Consolidated Financial Statements for 2005 also reflect restatements to report sales to certain third party resellers and associated cost of net sales, as related party sales and related party cost of net sales, because in 2006 we determined that sales to these entities are, in substance, sales to SOFTBANK CORP., which is one of our significant shareholders. These corrections had no effect on reported total net sales, total cost of sales, total gross profit, or total net income (loss). The accounts receivable resulting from these sales are now reported as accounts receivable, related parties. This correction had no effect on reported total accounts receivable, total current assets, or total assets.
Lastly, the Company has corrected the unaudited Condensed Consolidated Balance Sheets at March 31, 2006 and June 30, 2006 and the Condensed Consolidated Statements of Cash Flows for the three month period ended March 31, 2006 and the six month period ended June 30, 2006 to report $6.2 million of time deposits as short-term investments. Formerly these time deposits with original maturities of more than three months had incorrectly been reported as cash equivalents. These corrections had no effect on reported total current assets or total assets in the restated Condensed Consolidated Balance Sheets at March 31, 2006 or June 30, 2006. The corrections to the Condensed Consolidated Statements of Cash Flow for the three month period ended March 31 and the six month period ended June 30, 2006 resulted in changes in the above amounts to be reported as investing activities rather than changes in cash balances.
Following are the restated Condensed Consolidated Balance Sheets and Statements of Operations at and for the three month and year-to-date periods ended June 30, 2006, March 31, 2006, September 30, 2005, June 30, 3005 and March 31, 2005. Also included are the restated Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and the six months ended June 30, 2006, which give effect to the corrections for the aforementioned 2006 error in the classification of certain time deposits, and the restated Condensed Consolidated Statement of Operations for the three month period ended December 31, 2005. This follows guidance issued by the SEC concerning presenting information about the effects of restating previously issued financial statements for the effects of correcting errors in prior stock option accounting. Pursuant to this guidance we do not intend to amend any of our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatements and such reports should not be relied upon.
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended June 30, 2006 |
| Six months ended June 30, 2006 |
| ||||||||||||||||||||||||
|
| As previously |
|
|
|
|
| As previously |
|
|
|
|
| ||||||||||||||||
|
| reported |
| Adjustments |
| As restated |
| reported |
| Adjustments |
| As restated |
| ||||||||||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrelated party |
|
| $ | 515,733 |
|
|
| $ | (1,835 | ) |
|
| $ | 513,898 |
|
|
| $ | 1,076,094 |
|
|
| $ | (5,160 | ) |
| $ | 1,070,934 |
|
Related party |
|
| 33,413 |
|
|
| 4,215 |
|
|
| 37,628 |
|
|
| 69,623 |
|
|
| 12,949 |
|
| 82,572 |
| ||||||
|
|
| 549,146 |
|
|
| 2,380 |
|
|
| 551,526 |
|
|
| 1,145,717 |
|
|
| 7,789 |
|
| 1,153,506 |
| ||||||
Cost of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrelated party |
|
| 414,364 |
|
|
| (251 | ) |
|
| 414,113 |
|
|
| 873,744 |
|
|
| 1,953 |
|
| 875,697 |
| ||||||
Related party |
|
| 25,496 |
|
|
| 2,967 |
|
|
| 28,463 |
|
|
| 40,233 |
|
|
| 4,835 |
|
| 45,068 |
| ||||||
Gross profit |
|
| 109,286 |
|
|
| (336 | ) |
|
| 108,950 |
|
|
| 231,740 |
|
|
| 1,001 |
|
| 232,741 |
| ||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Selling, general and administrative |
|
| 82,423 |
|
|
| 686 |
|
|
| 83,109 |
|
|
| 165,593 |
|
|
| 1,240 |
|
| 166,833 |
| ||||||
Research and development |
|
| 46,743 |
|
|
| (140 | ) |
|
| 46,603 |
|
|
| 93,052 |
|
|
| (47 | ) |
| 93,005 |
| ||||||
Amortization of intangible assets |
|
| 4,821 |
|
|
| — |
|
|
| 4,821 |
|
|
| 9,746 |
|
|
| — |
|
| 9,746 |
| ||||||
Total operating expenses |
|
| 133,987 |
|
|
| 546 |
|
|
| 134,533 |
|
|
| 268,391 |
|
|
| 1,193 |
|
| 269,584 |
| ||||||
Operating loss |
|
| (24,701 | ) |
|
| (882 | ) |
|
| (25,583 | ) |
|
| (36,651 | ) |
|
| (192 | ) |
| (36,843 | ) | ||||||
Interest income |
|
| 3,947 |
|
|
| — |
|
|
| 3,947 |
|
|
| 7,479 |
|
|
| — |
|
| 7,479 |
| ||||||
Interest expense |
|
| (3,166 | ) |
|
| — |
|
|
| (3,166 | ) |
|
| (6,667 | ) |
|
| — |
|
| (6,667 | ) | ||||||
Other income, net |
|
| 6,887 |
|
|
| — |
|
|
| 6,887 |
|
|
| 10,454 |
|
|
| — |
|
| 10,454 |
| ||||||
Loss before income taxes and minority interest |
|
| (17,033 | ) |
|
| (882 | ) |
|
| (17,915 | ) |
|
| (25,385 | ) |
|
| (192 | ) |
| (25,577 | ) | ||||||
Income tax expense |
|
| (4,669 | ) |
|
| — |
|
|
| (4,669 | ) |
|
| (7,508 | ) |
|
| — |
|
| (7,508 | ) | ||||||
Minority interest in losses of consolidated subsidiaries |
|
| 259 |
|
|
| — |
|
|
| 259 |
|
|
| 815 |
|
|
| — |
|
| 815 |
| ||||||
Net loss |
|
| $ | (21,443 | ) |
|
| $ | (882 | ) |
|
| $ | (22,325 | ) |
|
| $ | (32,078 | ) |
|
| $ | (192 | ) |
| $ | (32,270 | ) |
Loss per share—Basic |
|
| $ | (0.18 | ) |
|
| $ | (0.01 | ) |
|
| $ | (0.19 | ) |
|
| $ | (0.27 | ) |
|
| $ | — |
|
| $ | (0.27 | ) |
Loss per share—Diluted |
|
| $ | (0.18 | ) |
|
| $ | (0.01 | ) |
|
| $ | (0.19 | ) |
|
| $ | (0.27 | ) |
|
| $ | — |
|
| $ | (0.27 | ) |
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended March 31, 2006 |
| |||||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Unrelated party |
|
| $ | 560,361 |
|
|
| $ | (3,324 | ) |
|
| $ | 557,037 |
|
|
Related party |
|
| 36,210 |
|
|
| 8,734 |
|
|
| 44,944 |
|
| |||
|
|
| 596,571 |
|
|
| 5,410 |
|
|
| 601,981 |
|
| |||
Cost of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Unrelated party |
|
| 459,381 |
|
|
| 2,204 |
|
|
| 461,585 |
|
| |||
Related party |
|
| 14,736 |
|
|
| 1,869 |
|
|
| 16,605 |
|
| |||
Gross profit |
|
| 122,454 |
|
|
| 1,337 |
|
|
| 123,791 |
|
| |||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Selling, general and administrative |
|
| 83,172 |
|
|
| 552 |
|
|
| 83,724 |
|
| |||
Research and development |
|
| 46,309 |
|
|
| 93 |
|
|
| 46,402 |
|
| |||
Amortization of intangible assets |
|
| 4,925 |
|
|
| — |
|
|
| 4,925 |
|
| |||
Total operating expenses |
|
| 134,406 |
|
|
| 645 |
|
|
| 135,051 |
|
| |||
Operating loss |
|
| (11,952 | ) |
|
| 692 |
|
|
| (11,260 | ) |
| |||
|
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Interest income |
|
| 3,532 |
|
|
| — |
|
|
| 3,532 |
|
| |||
Interest expense |
|
| (3,500 | ) |
|
| — |
|
|
| (3,500 | ) |
| |||
Other income, net |
|
| 3,568 |
|
|
| — |
|
|
| 3,568 |
|
| |||
Loss before income taxes and minority interest |
|
| (8,352 | ) |
|
| 692 |
|
|
| (7,660 | ) |
| |||
Income tax expense |
|
| (2,839 | ) |
|
| — |
|
|
| (2,839 | ) |
| |||
Minority interest in losses of consolidated subsidiaries |
|
| 556 |
|
|
| — |
|
|
| 556 |
|
| |||
Net loss |
|
| $ | (10,635 | ) |
|
| $ | 692 |
|
|
| $ | (9,943 | ) |
|
Loss per share—Basic |
|
| $ | (0.09 | ) |
|
| $ | 0.01 |
|
|
| $ | (0.08 | ) |
|
Loss per share—Diluted |
|
| $ | (0.09 | ) |
|
| $ | 0.01 |
|
|
| $ | (0.08 | ) |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended December 31, 2005 |
| |||||||||||||
|
| As previously |
|
|
|
|
| |||||||||
|
| reported |
| Adjustments |
| As restated |
| |||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Unrelated party |
|
| $ | 613,434 |
|
|
| $ | (13,031 | ) |
|
| $ | 600,403 |
|
|
Related party |
|
| 62,220 |
|
|
| 18,469 |
|
|
| 80,689 |
|
| |||
|
|
| 675,654 |
|
|
| 5,438 |
|
|
| 681,092 |
|
| |||
Cost of net sales |
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Unrelated party |
|
| 570,534 |
|
|
| (29,188 | ) |
|
| 541,346 |
|
| |||
Related party |
|
| 44,019 |
|
|
| 33,072 |
|
|
| 77,091 |
|
| |||
Gross profit |
|
| 61,101 |
|
|
| 1,554 |
|
|
| 62,655 |
|
| |||
Operating expenses: |
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Selling, general and administrative |
|
| 73,907 |
|
|
| 166 |
|
|
| 74,073 |
|
| |||
Research and development |
|
| 54,455 |
|
|
| 60 |
|
|
| 54,515 |
|
| |||
Amortization of intangible assets |
|
| 5,462 |
|
|
| — |
|
|
| 5,462 |
|
| |||
Restructuring |
|
| 11,164 |
|
|
| — |
|
|
| 11,164 |
|
| |||
Total operating expenses |
|
| 144,988 |
|
|
| 226 |
|
|
| 145,214 |
|
| |||
|
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Operating loss |
|
| (83,887 | ) |
|
| 1,328 |
|
|
| (82,559 | ) |
| |||
|
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Interest income |
|
| 2,617 |
|
|
| — |
|
|
| 2,617 |
|
| |||
Interest expense |
|
| (3,900 | ) |
|
| — |
|
|
| (3,900 | ) |
| |||
Other income, net |
|
| 45,388 |
|
|
| — |
|
|
| 45,388 |
|
| |||
|
|
|
|
|
|
| — |
|
|
| — |
|
| |||
Loss before income taxes, minority interest and equity in loss of affiliated companies |
|
| (39,782 | ) |
|
| 1,328 |
|
|
| (38,454 | ) |
| |||
Income tax (expense) benefit |
|
| (2,501 | ) |
|
| — |
|
|
| (2,501 | ) |
| |||
Minority interest in losses of consolidated subsidiaries |
|
| 598 |
|
|
| — |
|
|
| 598 |
|
| |||
Equity in loss of affiliated companies |
|
| (3,645 | ) |
|
| — |
|
|
| (3,645 | ) |
| |||
Net loss |
|
| $ | (45,330 | ) |
|
| $ | 1,328 |
|
|
| $ | (44,002 | ) |
|
Loss per share—Basic |
|
| $ | (0.38 | ) |
|
| $ | 0.01 |
|
|
| $ | (0.37 | ) |
|
Loss per share—Diluted |
|
| $ | (0.38 | ) |
|
| $ | 0.01 |
|
|
| $ | (0.37 | ) |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended September 30, 2005 |
| Nine months ended September 30, 2005 |
| ||||||||||||||||||||||||
|
| As previously |
| Adjustments |
| As restated |
| As previously |
| Adjustments |
| As restated |
| ||||||||||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrelated party |
|
| $ | 625,902 |
|
|
| $ | (41,830 | ) |
|
| $ | 584,072 |
|
|
| $ | 1,921,264 |
|
|
| $ | (126,369 | ) |
| $ | 1,794,895 |
|
Related party |
|
| 6,144 |
|
|
| 7,219 |
|
|
| 13,363 |
|
|
| 332,425 |
|
|
| 62,698 |
|
| 395,123 |
| ||||||
|
|
| 632,046 |
|
|
| (34,611 | ) |
|
| 597,435 |
|
|
| 2,253,689 |
|
|
| (63,671 | ) |
| 2,190,018 |
| ||||||
Cost of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Unrelated party |
|
| 575,907 |
|
|
| (27,221 | ) |
|
| 548,686 |
|
|
| 1,704,751 |
|
|
| (58,958 | ) |
| 1,645,793 |
| ||||||
Related party |
|
| 3,185 |
|
|
| 7,677 |
|
|
| 10,862 |
|
|
| 146,422 |
|
|
| 24,622 |
|
| 171,044 |
| ||||||
Gross profit |
|
| 52,954 |
|
|
| (15,067 | ) |
|
| 37,887 |
|
|
| 402,516 |
|
|
| (29,335 | ) |
| 373,181 |
| ||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Selling, general and administrative |
|
| 86,362 |
|
|
| 52 |
|
|
| 86,414 |
|
|
| 298,384 |
|
|
| (994 | ) |
| 297,390 |
| ||||||
Research and development |
|
| 60,797 |
|
|
| 20 |
|
|
| 60,817 |
|
|
| 192,678 |
|
|
| (381 | ) |
| 192,297 |
| ||||||
Amortization of intangible assets |
|
| 6,643 |
|
|
| — |
|
|
| 6,643 |
|
|
| 20,391 |
|
|
| — |
|
| 20,391 |
| ||||||
Impairment oflong-lived |
|
| 218,094 |
|
|
| — |
|
|
| 218,094 |
|
|
| 218,094 |
|
|
| — |
|
| 218,094 |
| ||||||
Restructuring |
|
| 3,378 |
|
|
| — |
|
|
| 3,378 |
|
|
| 18,505 |
|
|
| — |
|
| 18,505 |
| ||||||
In-process research and development |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 660 |
|
|
| — |
|
| 660 |
| ||||||
Total operating |
|
| 375,274 |
|
|
| 72 |
|
|
| 375,346 |
|
|
| 748,712 |
|
|
| (1,375 | ) |
| 747,337 |
| ||||||
Operating loss |
|
| (322,320 | ) |
|
| (15,139 | ) |
|
| (337,459 | ) |
|
| (346,196 | ) |
|
| (27,960 | ) |
| (374,156 | ) | ||||||
Interest income |
|
| 1,673 |
|
|
| — |
|
|
| 1,673 |
|
|
| 4,474 |
|
|
| — |
|
| 4,474 |
| ||||||
Interest expense |
|
| (3,876 | ) |
|
| — |
|
|
| (3,876 | ) |
|
| (12,864 | ) |
|
| — |
|
| (12,864 | ) | ||||||
Gain on extinguishment of subordinated notes |
|
| 20,297 |
|
|
| — |
|
|
| 20,297 |
|
|
| 31,392 |
|
|
| — |
|
| 31,392 |
| ||||||
Other income, net |
|
| 7,352 |
|
|
| — |
|
|
| 7,352 |
|
|
| (1,723 | ) |
|
| — |
|
| (1,723 | ) | ||||||
Loss before income taxes, minority interest and equity in loss of affiliated companies |
|
| (296,874 | ) |
|
| (15,139 | ) |
|
| (312,013 | ) |
|
| (324,917 | ) |
|
| (27,960 | ) |
| (352,877 | ) | ||||||
Income tax (expense) benefit |
|
| (107,469 | ) |
|
| (17,753 | ) |
|
| (125,222 | ) |
|
| (115,388 | ) |
|
| (18,653 | ) |
| (134,041 | ) | ||||||
Minority interest in losses of consolidated subsidiaries |
|
| 3 |
|
|
| — |
|
|
| 3 |
|
|
| 94 |
|
|
| — |
|
| 94 |
| ||||||
Equity in loss of affiliated companies |
|
| (786 | ) |
|
| — |
|
|
| (786 | ) |
|
| (1,818 | ) |
|
| — |
|
| (1,818 | ) | ||||||
Net loss |
|
| $ | (405,126 | ) |
|
| $ | (32,892 | ) |
|
| $ | (438,018 | ) |
|
| $ | (442,029 | ) |
|
| $ | (46,613 | ) |
| $ | (488,642 | ) |
Loss per share—Basic |
|
| $ | (3.43 | ) |
|
| $ | (0.27 | ) |
|
| $ | (3.70 | ) |
|
| $ | (3.81 | ) |
|
| $ | (0.41 | ) |
| $ | (4.22 | ) |
Loss per share—Diluted |
|
| $ | (3.43 | ) |
|
| $ | (0.27 | ) |
|
| $ | (3.70 | ) |
|
| $ | (3.81 | ) |
|
| $ | (0.41 | ) |
| $ | (4.22 | ) |
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended June 30, 2005 |
| Six months ended June 30, 2005 |
| |||||||||||||||||||||||||||||
|
| As previously |
|
|
|
|
| As previously |
|
|
|
|
| |||||||||||||||||||||
|
| reported |
| Adjustments |
| As restated |
| reported |
| Adjustments |
| As restated |
| |||||||||||||||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Unrelated party |
|
| $ | 691,431 |
|
|
| $ | (42,041 | ) |
|
| $ | 649,390 |
|
|
| $ | 1,295,362 |
|
|
| $ | (84,539 | ) |
| $ | 1,210,823 |
| |||||
Related party |
|
| 28,328 |
|
|
| 22,795 |
|
|
| 51,123 |
|
|
| 326,281 |
|
|
| 55,479 |
|
| 381,760 |
| |||||||||||
|
|
| 719,759 |
|
|
| (19,246 | ) |
|
| 700,513 |
|
|
| 1,621,643 |
|
|
| (29,060 | ) |
| 1,592,583 |
| |||||||||||
Cost of net sales |
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| — |
|
| — |
| |||||||||||
Unrelated party |
|
| 591,892 |
|
|
| (18,758 | ) |
|
| 573,134 |
|
|
| 1,128,844 |
|
|
| (31,738 | ) |
| 1,097,106 |
| |||||||||||
Related party |
|
| 15,729 |
|
|
| 8,796 |
|
|
| 24,525 |
|
|
| 143,237 |
|
|
| 16,945 |
|
| 160,182 |
| |||||||||||
Gross profit |
|
| 112,138 |
|
|
| (9,284 | ) |
|
| 102,854 |
|
|
| 349,562 |
|
|
| (14,267 | ) |
| 335,295 |
| |||||||||||
Operating expenses: |
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| — |
|
| — |
| |||||||||||
Selling, general and administrative |
|
| 103,009 |
|
|
| 78 |
|
|
| 103,087 |
|
|
| 212,020 |
|
|
| (1,047 | ) |
| 210,973 |
| |||||||||||
Research and development |
|
| 65,621 |
|
|
| 29 |
|
|
| 65,650 |
|
|
| 131,881 |
|
|
| (399 | ) |
| 131,482 |
| |||||||||||
Amortization of intangible assets |
|
| 6,776 |
|
|
| — |
|
|
| 6,776 |
|
|
| 13,748 |
|
|
| — |
|
| 13,748 |
| |||||||||||
Restructuring |
|
| 15,127 |
|
|
| — |
|
|
| 15,127 |
|
|
| 15,127 |
|
|
| — |
|
| 15,127 |
| |||||||||||
In-process research and development |
|
| 660 |
|
|
| — |
|
|
| 660 |
|
|
| 660 |
|
|
| — |
|
| 660 |
| |||||||||||
Total operating expenses |
|
| 191,193 |
|
|
| 107 |
|
|
| 191,300 |
|
|
| 373,436 |
|
|
| (1,446 | ) |
| 371,990 |
| |||||||||||
|
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| — |
|
| — |
| |||||||||||
Operating loss |
|
| (79,055 | ) |
|
| (9,391 | ) |
|
| (88,446 | ) |
|
| (23,874 | ) |
|
| (12,821 | ) |
| (36,695 | ) | |||||||||||
|
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| — |
|
| — |
| |||||||||||
Interest income |
|
| 1,452 |
|
|
| — |
|
|
| 1,452 |
|
|
| 2,801 |
|
|
| — |
|
| 2,801 |
| |||||||||||
Interest expense |
|
| (4,711 | ) |
|
| — |
|
|
| (4,711 | ) |
|
| (8,989 | ) |
|
| — |
|
| (8,989 | ) | |||||||||||
Gain on extinguishment of subordinated notes |
|
| 11,095 |
|
|
| — |
|
|
| 11,095 |
|
|
| 11,095 |
|
|
| — |
|
| 11,095 |
| |||||||||||
Other income (expense), net |
|
| (2,228 | ) |
|
| — |
|
|
| (2,228 | ) |
|
| (9,075 | ) |
|
| — |
|
| (9,075 | ) | |||||||||||
|
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| — |
|
| — |
| |||||||||||
Loss before income taxes, minority interest and equity in loss of affiliated companies |
|
| (73,447 | ) |
|
| (9,391 | ) |
|
| (82,838 | ) |
|
| (28,042 | ) |
|
| (12,821 | ) |
| (40,863 | ) | |||||||||||
Income tax (expense) benefit |
|
| (240 | ) |
|
| (3,050 | ) |
|
| (3,290 | ) |
|
| (7,920 | ) |
|
| (900 | ) |
| (8,820 | ) | |||||||||||
Minority interest in losses of consolidated subsidiaries |
|
| 313 |
|
|
| — |
|
|
| 313 |
|
|
| 91 |
|
|
| — |
|
| 91 |
| |||||||||||
Equity in loss of affiliated companies |
|
| (574 | ) |
|
| — |
|
|
| (574 | ) |
|
| (1,033 | ) |
|
| — |
|
| (1,033 | ) | |||||||||||
Net loss |
|
| $ | (73,948 | ) |
|
| $ | (12,441 | ) |
|
| $ | (86,389 | ) |
|
| $ | (36,904 | ) |
|
| $ | (13,721 | ) |
| $ | (50,625 | ) | |||||
Loss per share—Basic |
|
| $ | (0.64 | ) |
|
| $ | (0.11 | ) |
|
| $ | (0.75 | ) |
|
| $ | (0.32 | ) |
|
| $ | (0.12 | ) |
| $ | (0.44 | ) | |||||
Loss per share—Diluted |
|
| $ | (0.64 | ) |
|
| $ | (0.11 | ) |
|
| $ | (0.75 | ) |
|
| $ | (0.32 | ) |
|
| $ | (0.12 | ) |
| $ | (0.44 | ) | |||||
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)
|
| Three months ended March 31, 2005 |
| |||||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||||
|
| (in thousands, except per share amounts) |
| |||||||||||||
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Unrelated party |
|
| $ | 603,931 |
|
|
| $ | (42,499 | ) |
|
| $ | 561,432 |
|
|
Related party |
|
| 297,953 |
|
|
| 32,684 |
|
|
| 330,637 |
|
| |||
|
|
| 901,884 |
|
|
| (9,815 | ) |
|
| 892,069 |
|
| |||
Cost of net sales |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Unrelated party |
|
| 536,952 |
|
|
| (12,980 | ) |
|
| 523,972 |
|
| |||
Related party |
|
| 127,508 |
|
|
| 8,149 |
|
|
| 135,657 |
|
| |||
Gross profit |
|
| 237,424 |
|
|
| (4,984 | ) |
|
| 232,440 |
|
| |||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Selling, general and administrative |
|
| 109,011 |
|
|
| (1,125 | ) |
|
| 107,886 |
|
| |||
Research and development |
|
| 66,260 |
|
|
| (429 | ) |
|
| 65,831 |
|
| |||
Amortization of intangible assets |
|
| 6,972 |
|
|
| — |
|
|
| 6,972 |
|
| |||
Total operating expenses |
|
| 182,243 |
|
|
| (1,554 | ) |
|
| 180,689 |
|
| |||
Operating income |
|
| 55,181 |
|
|
| (3,430 | ) |
|
| 51,751 |
|
| |||
Interest income |
|
| 1,349 |
|
|
| — |
|
|
| 1,349 |
|
| |||
Interest expense |
|
| (4,278 | ) |
|
| — |
|
|
| (4,278 | ) |
| |||
Other income, net |
|
| (6,847 | ) |
|
| — |
|
|
| (6,847 | ) |
| |||
Income before income taxes, minority interest and equity in loss of affiliated companies |
|
| 45,405 |
|
|
| (3,430 | ) |
|
| 41,975 |
|
| |||
Income tax (expense) benefit |
|
| (7,680 | ) |
|
| 2,150 |
|
|
| (5,530 | ) |
| |||
Minority interest in losses of consolidated subsidiaries |
|
| (222 | ) |
|
| — |
|
|
| (222 | ) |
| |||
Equity in loss of affiliated companies |
|
| (459 | ) |
|
| — |
|
|
| (459 | ) |
| |||
Net income |
|
| $ | 37,044 |
|
|
| $ | (1,280 | ) |
|
| $ | 35,764 |
|
|
Earnings per share—Basic |
|
| $ | 0.32 |
|
|
| $ | (0.01 | ) |
|
| $ | 0.31 |
|
|
Earnings per share—Diluted |
|
| $ | 0.29 |
|
|
| $ | (0.02 | ) |
|
| $ | 0.27 |
|
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
|
| June 30, 2006 |
| |||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| $ | 647,274 |
|
|
| $ | (6,254 | ) |
| $ | 641,020 |
|
Short-term investments |
|
| 10,339 |
|
|
| 6,254 |
|
| 16,593 |
| |||
Accounts receivable, net of allowances for doubtful accounts |
|
| 383,507 |
|
|
| (1,779 | ) |
| 381,728 |
| |||
Accounts receivable, related parties |
|
| 41,110 |
|
|
| 1,779 |
|
| 42,889 |
| |||
Notes receivable |
|
| 11,593 |
|
|
| — |
|
| 11,593 |
| |||
Inventories |
|
| 455,015 |
|
|
| — |
|
| 455,015 |
| |||
Deferred costs |
|
| 256,812 |
|
|
| — |
|
| 256,812 |
| |||
Prepaids and other current assets |
|
| 94,177 |
|
|
| — |
|
| 94,177 |
| |||
Restricted cash and short-term investments |
|
| 71,119 |
|
|
| — |
|
| 71,119 |
| |||
Total current assets |
|
| 1,970,946 |
|
|
| — |
|
| 1,970,946 |
| |||
Property, plant and equipment, net |
|
| 216,325 |
|
|
| — |
|
| 216,325 |
| |||
Long-term investments |
|
| 29,824 |
|
|
| — |
|
| 29,824 |
| |||
Goodwill |
|
| 3,063 |
|
|
| — |
|
| 3,063 |
| |||
Intangible assets, net |
|
| 65,568 |
|
|
| — |
|
| 65,568 |
| |||
Long-term deferred costs |
|
| — |
|
|
| 180,248 |
|
| 180,248 |
| |||
Other long-term assets |
|
| 31,092 |
|
|
| — |
|
| 31,092 |
| |||
Total assets |
|
| $ | 2,316,818 |
|
|
| $ | 180,248 |
|
| $ | 2,497,066 |
|
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable |
|
| $ | 363,097 |
|
|
| $ | — |
|
| $ | 363,097 |
|
Short-term debt |
|
| 122,587 |
|
|
| — |
|
| 122,587 |
| |||
Income taxes payable |
|
| 37,101 |
|
|
| 621 |
|
| 37,722 |
| |||
Customer advances |
|
| 291,964 |
|
|
| — |
|
| 291,964 |
| |||
Deferred revenue |
|
| 66,776 |
|
|
| 33,739 |
|
| 100,515 |
| |||
Other current liabilities |
|
| 218,194 |
|
|
| 1,516 |
|
| 219,710 |
| |||
Total current liabilities |
|
| 1,099,719 |
|
|
| 35,876 |
|
| 1,135,595 |
| |||
Long-term deferred revenue |
|
| 16,270 |
|
|
| 246,194 |
|
| 262,464 |
| |||
Long-term debt |
|
| 274,900 |
|
|
| — |
|
| 274,900 |
| |||
Other long-term liabilities |
|
| 11,200 |
|
|
| — |
|
| 11,200 |
| |||
Total liabilities |
|
| 1,402,089 |
|
|
| 282,070 |
|
| 1,684,159 |
| |||
Minority interest in consolidated subsidiaries |
|
| 7,593 |
|
|
| — |
|
| 7,593 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock |
|
| 152 |
|
|
| — |
|
| 152 |
| |||
Additional paid-in capital |
|
| 1,171,175 |
|
|
| 25,102 |
|
| 1,196,277 |
| |||
Deferred stock compensation |
|
| — |
|
|
| — |
|
| — |
| |||
Retained earnings (accumulated deficit) |
|
| (285,252 | ) |
|
| (123,914 | ) |
| (409,166 | ) | |||
Accumulated other comprehensive income |
|
| 21,061 |
|
|
| (3,010 | ) |
| 18,051 |
| |||
Total stockholders’ equity |
|
| 907,136 |
|
|
| (101,822 | ) |
| 805,314 |
| |||
Total liabilities, minority interest and stockholders’ equity |
|
| $ | 2,316,818 |
|
|
| $ | 180,248 |
|
| $ | 2,497,066 |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)
|
| March 31, 2006 |
| |||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| $ | 673,625 |
|
|
| $ | (6,237 | ) |
| $ | 667,388 |
|
Short-term investments |
|
| 10,852 |
|
|
| 6,237 |
|
| 17,089 |
| |||
Accounts receivable, net of allowances for doubtful accounts |
|
| 405,938 |
|
|
| (6,936 | ) |
| 399,002 |
| |||
Accounts receivable, related parties |
|
| 89,050 |
|
|
| 6,936 |
|
| 95,986 |
| |||
Notes receivable |
|
| 7,659 |
|
|
| — |
|
| 7,659 |
| |||
Inventories |
|
| 424,028 |
|
|
| — |
|
| 424,028 |
| |||
Deferred costs |
|
| 246,678 |
|
|
| — |
|
| 246,678 |
| |||
Prepaids and other current assets |
|
| 103,275 |
|
|
| — |
|
| 103,275 |
| |||
Restricted cash and short-term investments |
|
| 69,078 |
|
|
| — |
|
| 69,078 |
| |||
Total current assets |
|
| 2,030,183 |
|
|
| — |
|
| 2,030,183 |
| |||
Property, plant and equipment, net |
|
| 221,003 |
|
|
| — |
|
| 221,003 |
| |||
Long-term investments |
|
| 25,643 |
|
|
| — |
|
| 25,643 |
| |||
Goodwill |
|
| 3,063 |
|
|
| — |
|
| 3,063 |
| |||
Intangible assets, net |
|
| 70,389 |
|
|
| — |
|
| 70,389 |
| |||
Long-term deferred costs |
|
| — |
|
|
| 182,480 |
|
| 182,480 |
| |||
Other long-term assets |
|
| 25,235 |
|
|
| — |
|
| 25,235 |
| |||
Total assets |
|
| $ | 2,375,516 |
|
|
| $ | 182,480 |
|
| $ | 2,557,996 |
|
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable |
|
| $ | 339,865 |
|
|
| $ | — |
|
| $ | 339,865 |
|
Short-term debt |
|
| 172,141 |
|
|
| — |
|
| 172,141 |
| |||
Income taxes payable |
|
| 31,708 |
|
|
| 622 |
|
| 32,330 |
| |||
Customer advances |
|
| 265,359 |
|
|
| — |
|
| 265,359 |
| |||
Deferred revenue |
|
| 86,681 |
|
|
| 33,427 |
|
| 120,108 |
| |||
Other current liabilities |
|
| 243,888 |
|
|
| 1,514 |
|
| 245,402 |
| |||
Total current liabilities |
|
| 1,139,642 |
|
|
| 35,563 |
|
| 1,175,205 |
| |||
Long-term deferred revenue |
|
| 17,798 |
|
|
| 248,104 |
|
| 265,902 |
| |||
Long-term debt |
|
| 274,900 |
|
|
| — |
|
| 274,900 |
| |||
Other long-term liabilities |
|
| 13,145 |
|
|
| — |
|
| 13,145 |
| |||
Total liabilities |
|
| 1,445,485 |
|
|
| 283,667 |
|
| 1,729,152 |
| |||
|
|
|
|
|
|
| — |
|
| — |
| |||
Minority interest in consolidated subsidiaries |
|
| 7,852 |
|
|
| — |
|
| 7,852 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock |
|
| 152 |
|
|
| — |
|
| 152 |
| |||
Additional paid-in capital |
|
| 1,166,519 |
|
|
| 24,591 |
|
| 1,191,110 |
| |||
Deferred stock compensation |
|
| — |
|
|
| — |
|
| — |
| |||
Accumulated deficit |
|
| (263,809 | ) |
|
| (123,032 | ) |
| (386,841 | ) | |||
Accumulated other comprehensive income |
|
| 19,317 |
|
|
| (2,746 | ) |
| 16,571 |
| |||
Total stockholders’ equity |
|
| 922,179 |
|
|
| (101,187 | ) |
| 820,992 |
| |||
Total liabilities, minority interest and stockholders’ equity |
|
| $ | 2,375,516 |
|
|
| $ | 182,480 |
|
| $ | 2,557,996 |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)
|
| September 30, 2005 |
| |||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| $ | 496,126 |
|
|
| $ | — |
|
| $ | 496,126 |
|
Short-term investments |
|
| 15,091 |
|
|
| — |
|
| 15,091 |
| |||
Accounts receivable, net of allowances for doubtful accounts |
|
| 544,925 |
|
|
| (10,749 | ) |
| 534,176 |
| |||
Accounts receivable, related parties |
|
| 26,920 |
|
|
| 10,749 |
|
| 37,669 |
| |||
Notes receivable |
|
| 22,934 |
|
|
| — |
|
| 22,934 |
| |||
Inventories |
|
| 474,485 |
|
|
| — |
|
| 474,485 |
| |||
Deferred costs |
|
| 238,294 |
|
|
| — |
|
| 238,294 |
| |||
Prepaids and other current assets |
|
| 83,147 |
|
|
| — |
|
| 83,147 |
| |||
Restricted cash and short-term investments |
|
| 36,922 |
|
|
| — |
|
| 36,922 |
| |||
Total current assets |
|
| 1,938,844 |
|
|
| — |
|
| 1,938,844 |
| |||
Property, plant and equipment, net |
|
| 251,009 |
|
|
| — |
|
| 251,009 |
| |||
Long-term investments |
|
| 37,427 |
|
|
| — |
|
| 37,427 |
| |||
Goodwill |
|
| 3,063 |
|
|
| — |
|
| 3,063 |
| |||
Intangible assets, net |
|
| 80,775 |
|
|
| — |
|
| 80,775 |
| |||
Long-term deferred costs |
|
| — |
|
|
| 188,633 |
|
| 188,633 |
| |||
Other long-term assets |
|
| 31,932 |
|
|
| — |
|
| 31,932 |
| |||
Total assets |
|
| $ | 2,343,050 |
|
|
| $ | 188,633 |
|
| $ | 2,531,683 |
|
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable |
|
| $ | 291,466 |
|
|
| $ | — |
|
| $ | 291,466 |
|
Short-term debt |
|
| 226,400 |
|
|
| — |
|
| 226,400 |
| |||
Income taxes payable |
|
| 25,244 |
|
|
| 621 |
|
| 25,865 |
| |||
Customer advances |
|
| 202,233 |
|
|
| — |
|
| 202,233 |
| |||
Deferred revenue |
|
| 96,981 |
|
|
| 32,378 |
|
| 129,359 |
| |||
Other current liabilities |
|
| 250,260 |
|
|
| 1,495 |
|
| 251,755 |
| |||
Total current liabilities |
|
| 1,092,584 |
|
|
| 34,494 |
|
| 1,127,078 |
| |||
Long-term deferred revenue |
|
| — |
|
|
| 257,339 |
|
| 257,339 |
| |||
Long-term debt |
|
| 274,900 |
|
|
| — |
|
| 274,900 |
| |||
Total liabilities |
|
| 1,367,484 |
|
|
| 291,833 |
|
| 1,659,317 |
| |||
Minority interest in consolidated subsidiaries |
|
| 5,287 |
|
|
| — |
|
| 5,287 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock |
|
| 151 |
|
|
| — |
|
| 151 |
| |||
Additional paid-in capital |
|
| 1,165,227 |
|
|
| 23,819 |
|
| 1,189,046 |
| |||
Deferred stock compensation |
|
| (4,052 | ) |
|
| (115 | ) |
| (4,167 | ) | |||
Retained earnings (accumulated deficit) |
|
| (207,844 | ) |
|
| (125,055 | ) |
| (332,899 | ) | |||
Accumulated other comprehensive income |
|
| 16,797 |
|
|
| (1,849 | ) |
| 14,948 |
| |||
Total stockholders’ equity |
|
| 970,279 |
|
|
| (103,200 | ) |
| 867,079 |
| |||
Total liabilities, minority interest and stockholders’ equity |
|
| $ | 2,343,050 |
|
|
| $ | 188,633 |
|
| $ | 2,531,683 |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)
|
| June 30, 2005 |
| |||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| $ | 350,324 |
|
|
| $ | — |
|
| $ | 350,324 |
|
Short-term investments |
|
| 31,402 |
|
|
| — |
|
| 31,402 |
| |||
Accounts receivable, net of allowances for doubtful accounts |
|
| 755,251 |
|
|
| (74,717 | ) |
| 680,534 |
| |||
Accounts receivable, related parties |
|
| 89,569 |
|
|
| 74,717 |
|
| 164,286 |
| |||
Notes receivable |
|
| 30,815 |
|
|
| — |
|
| 30,815 |
| |||
Inventories |
|
| 535,780 |
|
|
| — |
|
| 535,780 |
| |||
Deferred costs |
|
| 249,589 |
|
|
| — |
|
| 249,589 |
| |||
Prepaids and other current assets |
|
| 99,691 |
|
|
| 1,197 |
|
| 100,888 |
| |||
Restricted cash and short-term investments |
|
| 32,607 |
|
|
| — |
|
| 32,607 |
| |||
Current deferred taxes |
|
| 43,344 |
|
|
| 4,759 |
|
| 48,103 |
| |||
Total current assets |
|
| 2,218,372 |
|
|
| 5,956 |
|
| 2,224,328 |
| |||
Property, plant and equipment, net |
|
| 273,027 |
|
|
| — |
|
| 273,027 |
| |||
Long-term investments |
|
| 37,099 |
|
|
| — |
|
| 37,099 |
| |||
Goodwill |
|
| 196,037 |
|
|
| — |
|
| 196,037 |
| |||
Intangible assets, net |
|
| 89,100 |
|
|
| — |
|
| 89,100 |
| |||
Long-term deferred costs |
|
| — |
|
|
| 165,239 |
|
| 165,239 |
| |||
Other long-term assets |
|
| 76,801 |
|
|
| 12,698 |
|
| 89,499 |
| |||
Total assets |
|
| $ | 2,890,436 |
|
|
| $ | 183,893 |
|
| $ | 3,074,329 |
|
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable |
|
| $ | 431,361 |
|
|
| $ | — |
|
| $ | 431,361 |
|
Short-term debt |
|
| 265,236 |
|
|
| — |
|
| 265,236 |
| |||
Income taxes payable |
|
| 3,488 |
|
|
| 1,522 |
|
| 5,010 |
| |||
Customer advances |
|
| 144,590 |
|
|
| — |
|
| 144,590 |
| |||
Deferred revenue |
|
| 86,870 |
|
|
| 30,121 |
|
| 116,991 |
| |||
Other current liabilities |
|
| 253,334 |
|
|
| 1,458 |
|
| 254,792 |
| |||
Total current liabilities |
|
| 1,184,879 |
|
|
| 33,101 |
|
| 1,217,980 |
| |||
Long-term deferred revenue |
|
| — |
|
|
| 219,318 |
|
| 219,318 |
| |||
Long-term debt |
|
| 364,800 |
|
|
| — |
|
| 364,800 |
| |||
Total liabilities |
|
| 1,549,679 |
|
|
| 252,419 |
|
| 1,802,098 |
| |||
Minority interest in consolidated subsidiaries |
|
| 5,290 |
|
|
| — |
|
| 5,290 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock |
|
| 146 |
|
|
| — |
|
| 146 |
| |||
Additional paid-in capital |
|
| 1,138,374 |
|
|
| 23,859 |
|
| 1,162,233 |
| |||
Deferred stock compensation |
|
| (4,584 | ) |
|
| (223 | ) |
| (4,807 | ) | |||
Retained earnings (accumulated deficit) |
|
| 197,281 |
|
|
| (92,163 | ) |
| 105,118 |
| |||
Accumulated other comprehensive income |
|
| 4,250 |
|
|
| 1 |
|
| 4,251 |
| |||
Total stockholders’ equity |
|
| 1,335,467 |
|
|
| (68,526 | ) |
| 1,266,941 |
| |||
Total liabilities, minority interest and stockholders’ equity |
|
| $ | 2,890,436 |
|
|
| $ | 183,893 |
|
| $ | 3,074,329 |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)
|
| March 31, 2005 |
| |||||||||||
|
| As previously |
| Adjustments |
| As restated |
| |||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| $ | 372,714 |
|
|
| $ | — |
|
| $ | 372,714 |
|
Short-term investments |
|
| 16,224 |
|
|
| — |
|
| 16,224 |
| |||
Accounts receivable, net of allowances for doubtful accounts |
|
| 737,696 |
|
|
| (49,152 | ) |
| 688,544 |
| |||
Accounts receivable, related parties |
|
| 168,997 |
|
|
| 49,151 |
|
| 218,148 |
| |||
Notes receivable |
|
| 22,926 |
|
|
| — |
|
| 22,926 |
| |||
Inventories |
|
| 601,717 |
|
|
| — |
|
| 601,717 |
| |||
Deferred costs |
|
| 211,973 |
|
|
| — |
|
| 211,973 |
| |||
Prepaids and other current assets |
|
| 109,787 |
|
|
| 1,195 |
|
| 110,982 |
| |||
Restricted cash and short-term investments |
|
| 29,551 |
|
|
| — |
|
| 29,551 |
| |||
Current deferred taxes |
|
| 141,713 |
|
|
| 4,759 |
|
| 146,472 |
| |||
Total current assets |
|
| 2,413,298 |
|
|
| 5,953 |
|
| 2,419,251 |
| |||
Property, plant and equipment, net |
|
| 278,487 |
|
|
| — |
|
| 278,487 |
| |||
Long-term investments |
|
| 35,131 |
|
|
| — |
|
| 35,131 |
| |||
Goodwill |
|
| 195,816 |
|
|
| — |
|
| 195,816 |
| |||
Intangible assets, net |
|
| 94,438 |
|
|
| — |
|
| 94,438 |
| |||
Long-term deferred costs |
|
| — |
|
|
| 155,269 |
|
| 155,269 |
| |||
Other long-term assets |
|
| 83,889 |
|
|
| 12,699 |
|
| 96,588 |
| |||
Total assets |
|
| $ | 3,101,059 |
|
|
| $ | 173,921 |
|
| $ | 3,274,980 |
|
LIABILITIES, MINORITY INTEREST AND |
|
|
|
|
|
|
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Accounts payable |
|
| $ | 440,706 |
|
|
| $ | — |
|
| $ | 440,706 |
|
Short-term debt |
|
| 275,485 |
|
|
| 3 |
|
| 275,488 |
| |||
Income taxes payable |
|
| 111,640 |
|
|
| (1,529 | ) |
| 110,111 |
| |||
Customer advances |
|
| 137,442 |
|
|
| — |
|
| 137,442 |
| |||
Deferred revenue |
|
| 95,004 |
|
|
| 27,247 |
|
| 122,251 |
| |||
Other current liabilities |
|
| 238,668 |
|
|
| 1,438 |
|
| 240,106 |
| |||
Total current liabilities |
|
| 1,298,945 |
|
|
| 27,159 |
|
| 1,326,104 |
| |||
Long-term deferred revenue |
|
| — |
|
|
| 202,955 |
|
| 202,955 |
| |||
Long-term debt |
|
| 402,500 |
|
|
| — |
|
| 402,500 |
| |||
Total liabilities |
|
| 1,701,445 |
|
|
| 230,114 |
|
| 1,931,559 |
| |||
Minority interest in consolidated subsidiaries |
|
| 5,604 |
|
|
| — |
|
| 5,604 |
| |||
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Common stock |
|
| 144 |
|
|
| — |
|
| 144 |
| |||
Additional paid-in capital |
|
| 1,123,826 |
|
|
| 23,901 |
|
| 1,147,727 |
| |||
Deferred stock compensation |
|
| (5,527 | ) |
|
| (372 | ) |
| (5,899 | ) | |||
Retained earnings (accumulated deficit) |
|
| 271,229 |
|
|
| (79,722 | ) |
| 191,507 |
| |||
Accumulated other comprehensive income |
|
| 4,338 |
|
|
| — |
|
| 4,338 |
| |||
Total stockholders’ equity |
|
| 1,394,010 |
|
|
| (56,193 | ) |
| 1,337,817 |
| |||
Total liabilities, minority interest and stockholders’ equity |
|
| $ | 3,101,059 |
|
|
| $ | 173,921 |
|
| $ | 3,274,980 |
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
| Six months ended June 30, 2006 |
| ||||||||||
|
| As previously |
| Total |
|
|
| ||||||
|
| reported |
| adjustments |
| As restated |
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| (32,078 | ) |
|
| (190 | ) |
|
| (32,268 | ) |
|
Adjustments to reconcile net loss to net cash provided by |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 34,653 |
|
|
| — |
|
|
| 34,653 |
|
|
Loss on sale and disposal of assets |
|
| 2,169 |
|
|
| — |
|
|
| 2,169 |
|
|
Stock-based compensation expense |
|
| 8,769 |
|
|
| 1,166 |
|
|
| 9,935 |
|
|
Provision for doubtful accounts |
|
| 3,133 |
|
|
| — |
|
|
| 3,133 |
|
|
Provision for deferred costs |
|
| 5,978 |
|
|
| — |
|
|
| 5,978 |
|
|
Other |
|
| (2,930 | ) |
|
| — |
|
|
| (2,930 | ) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
| — |
|
|
|
|
|
|
Accounts receivable |
|
| 97,596 |
|
|
| — |
|
|
| 97,596 |
|
|
Inventories |
|
| (36,916 | ) |
|
| — |
|
|
| (36,916 | ) |
|
Deferred costs |
|
| (13,677 | ) |
|
| — |
|
|
| (13,677 | ) |
|
Other assets |
|
| (7,784 | ) |
|
| 6,822 |
|
|
| (962 | ) |
|
Accounts payable |
|
| 39,693 |
|
|
| — |
|
|
| 39,693 |
|
|
Income taxes payable |
|
| 3,438 |
|
|
| — |
|
|
| 3,438 |
|
|
Customer advances |
|
| 69,280 |
|
|
| — |
|
|
| 69,280 |
|
|
Deferred revenue |
|
| (2,699 | ) |
|
| (7,813 | ) |
|
| (10,512 | ) |
|
Other current liabilities |
|
| (89,469 | ) |
|
| 15 |
|
|
| (89,454 | ) |
|
Net cash provided by operating activities |
|
| 79,156 |
|
|
| — |
|
|
| 79,156 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
| (12,288 | ) |
|
| — |
|
|
| (12,288 | ) |
|
Investment in affiliates, net of cash acquired |
|
| (302 | ) |
|
| — |
|
|
| (302 | ) |
|
Proceeds from sale of business |
|
| 19,965 |
|
|
| — |
|
|
| 19,965 |
|
|
Change in restricted cash and long-term investments |
|
| (19,994 | ) |
|
| — |
|
|
| (19,994 | ) |
|
Purchase of short-term investments |
|
| (21,810 | ) |
|
| (6,222 | ) |
|
| (28,032 | ) |
|
Proceeds from sale of short-term investments |
|
| 25,588 |
|
|
| — |
|
|
| 25,588 |
|
|
Other |
|
| 1,672 |
|
|
| — |
|
|
| 1,672 |
|
|
Net cash used in investing activities |
|
| (7,169 | ) |
|
| (6,222 | ) |
|
| (13,391 | ) |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
| — |
|
|
|
|
|
|
Proceeds from borrowing |
|
| 62,545 |
|
|
| — |
|
|
| 62,545 |
|
|
Payments on borrowings |
|
| (140,053 | ) |
|
| — |
|
|
| (140,053 | ) |
|
Other |
|
| 1,967 |
|
|
| — |
|
|
| 1,967 |
|
|
Net cash used in financing activities |
|
| (75,541 | ) |
|
| — |
|
|
| (75,541 | ) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
| 5,257 |
|
|
| (32 | ) |
|
| 5,225 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
| 1,703 |
|
|
| (6,254 | ) |
|
| (4,551 | ) |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
| 645,571 |
|
|
| — |
|
|
| 645,571 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
| 647,274 |
|
|
| (6,254 | ) |
|
| 641,020 |
|
|
UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
(In thousands)
|
| Three months ended March 31, 2006 |
| |||||||||||||
|
| As previously |
| Total |
|
|
| |||||||||
|
| reported |
| adjustments |
| As restated |
| |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Net loss |
|
| $ | (10,635 | ) |
|
| $ | 692 |
|
|
| $ | (9,943 | ) |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Depreciation and amortization |
|
| 17,476 |
|
|
| — |
|
|
| 17,476 |
|
| |||
Loss on sale and disposal of assets |
|
| 4,708 |
|
|
| — |
|
|
| 4,708 |
|
| |||
Stock-based compensation expense |
|
| 1,769 |
|
|
| 656 |
|
|
| 2,425 |
|
| |||
Provision for doubtful accounts |
|
| 892 |
|
|
| — |
|
|
| 892 |
|
| |||
Provision for deferred costs |
|
| 795 |
|
|
| — |
|
|
| 795 |
|
| |||
Other |
|
| (578 | ) |
|
| — |
|
|
| (578 | ) |
| |||
Changes in operating assets and liabilities: |
|
|
|
|
|
| — |
|
|
|
|
|
| |||
Accounts receivable |
|
| 28,787 |
|
|
| — |
|
|
| 28,787 |
|
| |||
Inventories |
|
| (4,337 | ) |
|
| — |
|
|
| (4,337 | ) |
| |||
Deferred costs |
|
| (810 | ) |
|
| — |
|
|
| (810 | ) |
| |||
Other assets |
|
| (6,771 | ) |
|
| 4,055 |
|
|
| (2,716 | ) |
| |||
Accounts payable |
|
| 18,077 |
|
|
| — |
|
|
| 18,077 |
|
| |||
Income taxes payable |
|
| (2,020 | ) |
|
| — |
|
|
| (2,020 | ) |
| |||
Customer advances |
|
| 43,097 |
|
|
| — |
|
|
| 43,097 |
|
| |||
Deferred revenue |
|
| 14,207 |
|
|
| (5,418 | ) |
|
| 8,789 |
|
| |||
Other current liabilities |
|
| (50,985 | ) |
|
| 15 |
|
|
| (50,970 | ) |
| |||
Net cash provided by operating activities |
|
| 53,672 |
|
|
| — |
|
|
| 53,672 |
|
| |||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Additions to property, plant and equipment |
|
| (3,162 | ) |
|
| — |
|
|
| (3,162 | ) |
| |||
Sale of business |
|
| 19,965 |
|
|
| — |
|
|
| 19,965 |
|
| |||
Change in restricted cash and long-term investments |
|
| (17,037 | ) |
|
| — |
|
|
| (17,037 | ) |
| |||
Purchase of short-term investments |
|
| (10,819 | ) |
|
| (6,222 | ) |
|
| (17,041 | ) |
| |||
Proceeds from sale of short-term investments |
|
| 13,309 |
|
|
| — |
|
|
| 13,309 |
|
| |||
Other |
|
| 499 |
|
|
| — |
|
|
| 499 |
|
| |||
Net cash provided by (used in) investing activities |
|
| 2,755 |
|
|
| (6,222 | ) |
|
| (3,467 | ) |
| |||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Proceeds from borrowings |
|
| 62,370 |
|
|
| — |
|
|
| 62,370 |
|
| |||
Payments on borrowings |
|
| (89,948 | ) |
|
| — |
|
|
| (89,948 | ) |
| |||
Other |
|
| (3,184 | ) |
|
| — |
|
|
| (3,184 | ) |
| |||
Net cash used in financing activities |
|
| (30,762 | ) |
|
| — |
|
|
| (30,762 | ) |
| |||
Effect of exchange rate changes on cash and cash equivalents |
|
| 2,389 |
|
|
| (15 | ) |
|
| 2,374 |
|
| |||
Net increase (decrease) in cash and cash equivalents |
|
| 28,054 |
|
|
| (6,237 | ) |
|
| 21,817 |
|
| |||
Cash and cash equivalents at beginning of period |
|
| 645,571 |
|
|
| — |
|
|
| 645,571 |
|
| |||
Cash and cash equivalents at end of period |
|
| 673,625 |
|
|
| (6,237 | ) |
|
| 667,388 |
|
| |||