Exhibit 99.1
UTSTARCOM RELEASES FINANCIAL RESULTS FOR THE FOURTH
QUARTER AND FULL YEAR 2008
ALAMEDA, Calif., — February 26, 2008 – UTStarcom, Inc. (Nasdaq: UTSI) today reported financial results for the fourth quarter of 2008 and for the full year ended December 31, 2008.
On July 1, 2008 the Company divested its Personal Communications Division (“PCD”) which has historically represented a significant portion of the Company’s revenues. On December 18, 2008 the Company announced actions to wind down its Korea-based handset manufacturing operations by July 2009. To enable a comparison of the financial results for the Company on a year-over-year basis the Company has prepared certain pro forma non-GAAP results which present the Company’s results as if both the divestiture of PCD and the wind down of the Company’s Korea-based handset operations were completed prior to each time period presented. The reconciliation between GAAP and these pro forma non-GAAP financial measures is provided at the end of this press release and on the Company’s website.
Fourth Quarter 2008 Financial Results
Net sales for the fourth quarter 2008 were $241 million as compared to $806 million in the fourth quarter of 2007. Gross margins for the fourth quarter 2008 were 12.4% as compared to 12.7% in the fourth quarter of 2007. The operating loss for the fourth quarter of 2008 and 2007 was $79 million and $53 million, respectively. The fourth quarter 2008 pro forma non-GAAP revenue was $149 million, the pro forma non-GAAP gross margin was 22.8% and the pro forma non-GAAP operating loss was $70 million. This compares to the fourth quarter 2007 pro forma non-GAAP revenue of $246 million, the pro forma non-GAAP gross margin of 26.8% and the pro forma non-GAAP operating loss of $74 million. The decrease in pro forma non-GAAP revenues and pro forma non-GAAP gross margins primarily reflects the expected volume decline in our PAS business.
The GAAP net loss for the fourth quarter of 2008 was $80.9 million, or a loss of $0.65 per share, as compared to a loss of $24.6 million, or $0.20 per share in the fourth quarter of 2007.
The fourth quarter GAAP gross profit of $30 million was impacted by the following significant items:
· The Company recorded an increase of $18.5 million in inventory reserves primarily related to the Korea-based handset operations.
· The Company’s Broadband segment recorded an additional loss reserve of approximately $6.0 million related to its large infrastructure project in India.
The fourth quarter GAAP operating expenses of $109 million were impacted by the following significant items:
· Recording a $13.1 million restructuring charge related to the actions announced on December 18, 2008 largely comprised of severance payment accruals.
· Recording a $27.2 million non cash asset impairment relating to long-lived assets (primarily intangible assets, equipment and capitalized software).
· Reduction of 2008 bonus accruals by $9.0 million.
Net cash, cash equivalents and short-term investments as of December 31, 2008 was $314 million compared to $180 million on December 31, 2007. The increase reflects the sale of PCD partially offset by usage of cash flow from operations.
Full Year 2008 Financial Results
Net sales for the year 2008 were $1.6 billion as compared to $2.5 billion for the year 2007. Gross margins for the year 2008 were 15.9% as compared to 13.0% in 2007. The operating loss for the full year 2008 and 2007 was $176 million and $212 million, respectively. The full year 2008 pro forma non-GAAP revenue, gross margins and operating loss were $634 million, 29.7% and $199 million, respectively. This compares to the full year 2007 pro forma non-GAAP revenue, gross margins and operating loss of $803 million, 27.4% and $251
million, respectively. The decrease in pro forma non-GAAP revenues primarily reflects the expected volume decline in our PAS business.
The GAAP net loss for the full year 2008 was $150.3 million, or a loss of $1.22 per share, as compared to a loss of $195.6 million, or $1.62 per share in the prior year.
“Our fourth quarter results reflect the significant changes we made during the year to both simplify the Company and to focus on our core business,” said Peter Blackmore, UTStarcom’s chief executive officer and president. “Importantly we ended the year with net cash and short term investments of $314 million. During the fourth quarter we also announced aggressive actions to further reduce our operating expenses and streamline our business. We shall continue to drive further reductions in expenses during 2009 as we focus on growing revenues in our core IP based product portfolio.”
Going Concern
As a result of the Company’s history of recurring losses and negative cash flows from operations, the Company expects its independent registered public accounting firm will issue a going concern uncertainty explanatory paragraph in its audit report on the financial statements for the year ended December 31, 2008.
However, management believes that if the Company is able to achieve its projected sales in 2009 and contain expenses and cash used in operations to the levels contemplated in the Company’s 2009 financial plan, the Company will have sufficient liquidity to finance its anticipated working capital and capital expenditure requirements for the next twelve months.
Q1 2009 Guidance
During the conference call management will provide financial guidance for the first quarter of 2009. Due to the current economic climate the Company will not provide annual guidance.
Conference Call
The Company will host a conference call to discuss the results at 2:00 p.m. (PST) / 5:00 p.m. (EST) on February 26, 2009. The conference call dial-in numbers are as follows: United States 888-889-1058; International 706-634-2327. The conference ID number is 86513483.
A replay of the call will be available for 30 days. The conference call replay numbers are as follows: United States — 800-642-1687; International — 706-645-9291. The Access Code is 86513483.
Investors will also have the opportunity to listen to the conference call and the replay over the Internet through the investor relations section of UTStarcom’s Web site at: http://www.utstar.com.
To listen to the live call, please go to the Web site at least 15 minutes early to register, and to download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will also be available on this site.
Discussion of Pro Forma Non-GAAP Financial Measures
In order to provide both management and investors with a more complete understanding of UTStarcom’s underlying results and trends in light of the PCD divestiture and planned wind down of its Korea-based handset manufacturing operations, UTStarcom has prepared reconciliation tables for comparing GAAP results to non-GAAP measures of revenues, gross profits, operating expenses and operating profit (loss), along with an abbreviated, pro forma non-GAAP profit and loss statement based on these non-GAAP measures. The pro forma non-GAAP measures present the Company’s results as if both the July 2008 divestiture of the Company’s Personal Communications Division and the wind down of the Company’s Korea-based handset operations were completed prior to each time period below.
In addition, these pro forma non-GAAP measures are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. Founded in 1991 and headquartered in Alameda, California, the Company has research and development operations in the United States, China, Korea and India. For more information about UTStarcom, visit the Company’s Web site at http://www.utstar.com.
Forward-Looking Statements
This release includes forward-looking statements, including statements regarding the Company’s strategy to reduce operating expenses, expected financial results in the first quarter of 2009, anticipated liquidity, capital expenditure requirements, the nature and contents of the audit report to be delivered by the Company’s independent registered public accounting firm concerning the financial statements for the year ended December 31, 2008 and the expected investment in the Company’s IP-based product portfolio. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially. These risks include the ability of the Company to realize anticipated results of operational improvements, increase bookings and execute on its business plan as well as risk factors identified in its latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission.
# # #
Company Contact
Barry Hutton
Senior Director, Investor Relations
UTStarcom, Inc.
(510) 769-2807
barry.hutton@utstar.com
UTStarcom, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
| | December 31, | | December 31, | |
| | 2008 | | 2007 | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash, cash equivalents and short-term investments | | $ | 313,865 | | $ | 503,078 | |
Accounts and notes receivable, net | | 169,496 | | 343,525 | |
Inventories and deferred costs | | 304,716 | | 524,727 | |
Prepaids and other current assets | | 144,515 | | 121,636 | |
Total current assets | | 932,592 | | 1,492,966 | |
Long-term assets: | | | | | |
Property, plant and equipment, net | | 175,287 | | 209,094 | |
Long-term deferred costs | | 149,258 | | 164,766 | |
Other long-term assets | | 53,669 | | 117,762 | |
Total assets | | $ | 1,310,806 | | $ | 1,984,588 | |
| | | | | |
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 176,384 | | $ | 148,440 | |
Short-term debt | | — | | 322,829 | |
Customer advances | | 144,700 | | 229,050 | |
Deferred revenue | | 117,584 | | 100,502 | |
Other current liabilities | | 181,852 | | 302,395 | |
Total current liabilities | | 620,520 | | 1,103,216 | |
Long-term liabilities: | | | | | |
Long-term debt | | — | | 333 | |
Long-term deferred revenue and other liabilities | | 222,644 | | 259,358 | |
Total liabilities | | 843,164 | | 1,362,907 | |
| | | | | |
Minority interest in consolidated subsidiaries | | 808 | | 3,705 | |
Total stockholders’ equity | | 466,834 | | 617,976 | |
Total liabilities, minority interest and stockholders’ equity | | $ | 1,310,806 | | $ | 1,984,588 | |
UTStarcom, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
| | Three months ended December 31, | | Years ended December 31, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
Net sales | | $ | 241,097 | | $ | 806,330 | | $ | 1,640,449 | | $ | 2,466,970 | |
Cost of net sales | | 211,209 | | 704,326 | | 1,379,207 | | 2,145,519 | |
Gross profit | | 29,888 | | 102,004 | | 261,242 | | 321,451 | |
| | | | | | | | | |
Operating expenses (income): | | | | | | | | | |
Selling, general and administrative | | 46,360 | | 76,146 | | 257,559 | | 319,145 | |
Research and development | | 26,634 | | 40,575 | | 143,291 | | 168,275 | |
Amortization of intangible assets | | 278 | | 3,824 | | 4,111 | | 15,961 | |
Impairment of goodwill and other long-lived assets | | 27,220 | | 19,912 | | 27,220 | | 19,912 | |
Restructuring charges | | 13,059 | | 14,474 | | 13,059 | | 14,474 | |
Net gain on divestitures | | (4,327 | ) | — | | (7,782 | ) | (4,271 | ) |
Total operating expenses | | 109,224 | | 154,931 | | 437,458 | | 533,496 | |
| | | | | | | | | |
Operating loss | | (79,336 | ) | (52,927 | ) | (176,216 | ) | (212,045 | ) |
| | | | | | | | | |
Interest income (expense), net | | 776 | | (6,612 | ) | (2,948 | ) | (18,216 | ) |
Other (expense) income | | (2,680 | ) | 56,318 | | 35,427 | | 64,796 | |
Loss before income taxes and minority interest | | (81,240 | ) | (3,221 | ) | (143,737 | ) | (165,465 | ) |
Income taxes benefit (expense) | | 309 | | (22,164 | ) | (7,087 | ) | (32,898 | ) |
| | | | | | | | | |
Minority interest in (gain) losses of consolidated subsidiaries | | (18 | ) | 828 | | 508 | | 2,788 | |
Net loss | | $ | (80,949 | ) | $ | (24,557 | ) | $ | (150,316 | ) | $ | (195,575 | ) |
| | | | | | | | | |
Loss per share - Basic and Diluted | | $ | (0.65 | ) | $ | (0.20 | ) | $ | (1.22 | ) | $ | (1.62 | ) |
| | | | | | | | | |
Weighted average shares used in per share calculation: | | | | | | | | | |
- Basic and Diluted | | 124,843 | | 121,340 | | 123,490 | | 121,059 | |
UTStarcom, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| | Year ended December
31, 2008 | | Year ended December
31, 2007 | |
| | | | | |
Net cash used in operating activities | | $ | (55,164 | ) | $ | (225,093 | ) |
| | | | | |
Cash flows from investing activities: | | | | | |
Property, plant and equipment, net | | (14,214 | ) | (27,324 | ) |
Investments, net | | | | | |
Proceeds from divestitures | | 214,051 | | 4,271 | |
(Purchase of) proceeds from disposition of an investment interest | | (8,655 | ) | 3,255 | |
Proceeds from repayment of loan by a variable interest entity | | 7,728 | | — | |
Change in restricted cash | | (8,216 | ) | 6,591 | |
Short-term investments, net | | 54,991 | | 41,950 | |
Other | | 361 | | 695 | |
Net cash provided by investing activities | �� | 246,046 | | 29,438 | |
Cash flows from financing activities: | | | | | |
Borrowings, net | | (325,317 | ) | (61,605 | ) |
Other | | (7,295 | ) | 3,500 | |
Net cash (used in) financing activities | | (332,612 | ) | (58,105 | ) |
Effect of exchange rate changes on cash and cash equivalents | | 13,884 | | 29,586 | |
Net decrease in cash and cash equivalents | | (127,846 | ) | (224,174 | ) |
Cash and cash equivalents at beginning of period | | 437,449 | | 661,623 | |
Cash and cash equivalents at end of period | | $ | 309,603 | | $ | 437,449 | |
UTSTARCOM, INC.
February 26, 2009 Conference Call
RECONCILIATION OF GAAP REVENUE TO PRO FORMA NON-GAAP REVENUE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP basis, UTStarcom uses certain pro forma non-GAAP measures which are adjusted to present those metrics as if both PCD had been divested and Korea BU had been wound down prior to each time period reflected below. We believe this enables year over year comparisons to our recent financial results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of UTStarcom’s underlying results and trends. In addition, these adjusted pro forma non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
| | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | |
| | 31-Mar-07 | | 30-Jun-07 | | 30-Sep-07 | | 31-Dec-07 | | 31-Dec-07 | | 31-Mar-08 | | 30-Jun-08 | | 30-Sep-08 | | 31-Dec-08 | | 31-Dec-08 | |
GAAP Revenue (a) | | $ | 476 | | $ | 538 | | $ | 647 | | $ | 806 | | $ | 2,467 | | $ | 586 | | $ | 633 | | $ | 181 | | 241 | | $ | 1,641 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: PCD Segment Revenue (b) | | 288 | | 358 | | 458 | | 560 | | 1,664 | | 431 | | 449 | | — | | — | | 880 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: Korea BU Sales to PCD (c) | | — | | — | | — | | — | | — | | — | | — | | 35 | | 92 | | $ | 127 | |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Revenue | | $ | 188 | | $ | 180 | | $ | 189 | | $ | 246 | | $ | 803 | | $ | 155 | | $ | 184 | | $ | 146 | | $ | 149 | | $ | 634 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) GAAP Revenue for each period is the consolidated revenue as reported on Form 10-Q or Form 10-K, as applicable, for such period, except for the consolidated revenue for the quarter ended December 31, 2007, which is derived from the revenue reported in the Form 10-Qs and Form 10-K with respect to fiscal year 2007.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea BU did not record revenue for units shipped to PCD as this activity was an intercompany transfer. After July 1, 2008 this activity was recorded as a third party sale in the Handset segment.
UTSTARCOM, INC.
February 26, 2009 Conference Call
RECONCILIATION OF GAAP GROSS PROFIT TO PRO FORMA NON-GAAP GROSS PROFIT
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP basis, UTStarcom uses certain pro forma non-GAAP measures which are adjusted to present those metrics as if both PCD had been divested and Korea BU had been wound down prior to each time period reflected below. We believe this enables year over year comparisons to our recent financial results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of UTStarcom’s underlying results and trends. In addition, these adjusted pro forma non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
| | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | |
| | 31-Mar-07 | | 30-Jun-07 | | 30-Sep-07 | | 31-Dec-07 | | 31-Dec-07 | | 31-Mar-08 | | 30-Jun-08 | | 30-Sep-08 | | 31-Dec-08 | | 31-Dec-08 | |
GAAP Gross Profit (a) | | $ | 75 | | $ | 80 | | $ | 64 | | $ | 102 | | $ | 321 | | $ | 92 | | $ | 82 | | $ | 57 | | $ | 30 | | $ | 261 | |
GAAP Gross Margin % | | 16 | % | 15 | % | 10 | % | 13 | % | 13 | % | 16 | % | 13 | % | 31 | % | 12 | % | 16 | % |
| | | | | | | | | | | | | | | | | | | | | |
Less: PCD Segment Gross Profit (b) | | 17 | | 16 | | 27 | | $ | 34 | | 94 | | 33 | | 36 | | — | | — | | 69 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: Korea BU Gross Profit from Sales to PCD (c) | | 1 | | 2 | | 2 | | 2 | | 7 | | 2 | | 0 | | 6 | | (4 | ) | 4 | |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Gross Profit | | $ | 57 | | $ | 62 | | $ | 35 | | $ | 66 | | $ | 220 | | $ | 57 | | $ | 46 | | $ | 51 | | $ | 34 | | $ | 188 | |
Non-GAAP Gross Margin % | | 30 | % | 34 | % | 19 | % | 27 | % | 27 | % | 37 | % | 25 | % | 35 | % | 23 | % | 30 | % |
(a) GAAP Gross Profit and GAAP Gross Margin % for each period is the consolidated gross profit and gross margin % as reported on Form 10-Q or Form 10-K, as applicable, for such period, except for the consolidated gross profit and gross margin % for the quarter ended December 31, 2007, which is derived from the gross profit and gross margin % reported in the Form 10-Qs and Form 10-K with respect to fiscal year 2007.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Prior to the July 1, 2008 divestiture of PCD, Korea BU earned a gross profit on the intercompany transfer of inventory to PCD. This gross profit was recorded in the Handset segment. After July 1, 2008 this activity was recorded as a third party transaction.
UTSTARCOM, INC.
February 26, 2009 Conference Call
RECONCILIATION OF GAAP OPERATING EXPENSE TO PRO FORMA NON-GAAP OPERATING EXPENSE
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP basis, UTStarcom uses certain pro forma non-GAAP measures which are adjusted to present those metrics as if both PCD had been divested and Korea BU had been wound down prior to each time period reflected below. We believe this enables year over year comparisons to our recent financial results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of UTStarcom’s underlying results and trends. In addition, these adjusted pro forma non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
| | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | |
| | 31-Mar-07 | | 30-Jun-07 | | 30-Sep-07 | | 31-Dec-07 | | 31-Dec-07 | | 31-Mar-08 | | 30-Jun-08 | | 30-Sep-08 | | 31-Dec-08 | | 31-Dec-08 | |
GAAP Operating Expense (a) | | $ | 128 | | $ | 135 | | $ | 116 | | $ | 154 | | $ | 533 | | $ | 123 | | $ | 113 | | $ | 92 | | $ | 109 | | $ | 437 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: PCD Operating Expense (b) | | 9 | | 8 | | 7 | | 7 | | 31 | | 8 | | 7 | | — | | — | | $ | 15 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: Korea BU Operating Expense (c) | | 7 | | 8 | | 8 | | 8 | | 31 | | 9 | | 10 | | 10 | | 5 | | $ | 34 | |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Operating Expense | | $ | 112 | | $ | 119 | | $ | 101 | | $ | 139 | | $ | 471 | | $ | 106 | | $ | 96 | | $ | 82 | | $ | 104 | | $ | 388 | |
(a) GAAP Operating Expense for each period is the consolidated operating expense as reported on Form 10-Q or Form 10-K, as applicable, for such period, except for the consolidated operating expense for the quarter ended December 31, 2007, which is derived from the operating expenses reported in the Form 10-Qs and Form 10-K with respect to the fiscal year 2007.
(b) Effective July 1, 2008 the PCD segment was divested by the Company.
(c) Both prior to and after the July 1, 2008 divestiture of PCD, all direct operating expense relating to Korea BU has been recorded in the Handset segment.
UTSTARCOM, INC.
February 26, 2009 Conference Call
RECONCILIATION OF GAAP OPERATING LOSS TO PRO FORMA NON-GAAP OPERATING LOSS
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP basis, UTStarcom uses certain pro forma non-GAAP measures which are adjusted to present those metrics as if both PCD had been divested and Korea BU had been wound down prior to each time period reflected below. We believe this enables year over year comparisons to our recent financial results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of UTStarcom’s underlying results and trends. In addition, these adjusted pro forma non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
| | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | |
| | 31-Mar-07 | | 30-Jun-07 | | 30-Sep-07 | | 31-Dec-07 | | 31-Dec-07 | | 31-Mar-08 | | 30-Jun-08 | | 30-Sep-08 | | 31-Dec-08 | | 31-Dec-08 | |
GAAP Operating Loss (a) | | $ | (52 | ) | $ | (55 | ) | $ | (52 | ) | $ | (53 | ) | $ | (212 | ) | $ | (31 | ) | $ | (31 | ) | $ | (35 | ) | $ | (79 | ) | (176 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Less: PCD Operating Profit (b) | | 8 | | 8 | | 20 | | 27 | | 63 | | 25 | | 28 | | — | | — | | 53 | |
| | | | | | | | | | | | | | | | | | | | | |
Less: Korea BU Operating Loss (c) | | (6 | ) | (6 | ) | (6 | ) | (6 | ) | (24 | ) | (7 | ) | (10 | ) | (4 | ) | (9 | ) | (30 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Operating Loss | | $ | (54 | ) | $ | (57 | ) | $ | (66 | ) | $ | (74 | ) | $ | (251 | ) | $ | (49 | ) | $ | (49 | ) | (31 | ) | (70 | ) | (199 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) GAAP Operating Loss for each period is the consolidated operating loss as reported on Form 10-Q or Form 10-K, as applicable, for such period, except for the consolidated operating loss for the quarter ended December 31, 2007, which is derived from the operating loss reported in the Form 10-Qs and Form 10-K with respect to fiscal year 2007. |
|
(b) Effective July 1, 2008 the PCD segment was divested by the Company. |
|
(c) Both prior to and after the July 1, 2008 divestiture of PCD, the operating loss relating to Korea BU has been recorded in the Handset segment. |
UTSTARCOM, INC.
February 26, 2009 Conference Call
ABBREVIATED PRO FORMA NON-GAAP P&L STATEMENT (a)
($ in millions)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP basis, UTStarcom uses certain pro forma non-GAAP measures which are adjusted to present those metrics as if both PCD had been divested and Korea BU had been wound down prior to each time period reflected below. We believe this enables year over year comparisons to our recent financial results. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of UTStarcom’s underlying results and trends. In addition, these adjusted pro forma non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States.
| | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | | Qtr ended | | Qtr ended | | Qtr ended | | Qtr ended | | Year ended | |
| | 31-Mar-07 | | 30-Jun-07 | | 30-Sep-07 | | 31-Dec-07 | | 31-Dec-07 | | 31-Mar-08 | | 30-Jun-08 | | 30-Sep-08 | | 31-Dec-08 | | 31-Dec-08 | |
Non-GAAP Revenue | | $ | 188 | | $ | 180 | | $ | 189 | | $ | 246 | | $ | 803 | | $ | 155 | | $ | 184 | | $ | 146 | | $ | 149 | | $ | 634 | |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Gross Profit | | 57 | | 62 | | 35 | | 66 | | 220 | | 57 | | 46 | | 51 | | 34 | | $ | 188 | |
Non-GAAP Gross Margin % | | 30 | % | 34 | % | 19 | % | 27 | % | 27 | % | 37 | % | 25 | % | 35 | % | 23 | % | 30 | % |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Operating Expense | | 112 | | 119 | | 101 | | 139 | | 471 | | 106 | | 96 | | 82 | | 104 | | $ | 388 | |
| | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Operating Loss | | $ | (54 | ) | $ | (57 | ) | $ | (66 | ) | $ | (74 | ) | $ | (251 | ) | $ | (49 | ) | $ | (49 | ) | $ | (31 | ) | $ | (70 | ) | $ | (199 | ) |
(a) Please refer to the preceding reconciliation tables for the adjustments to GAAP Revenue, Gross Profit, Operating Expense and Operating Loss.
