UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 1, 2008
SYMMETRICOM, INC.
(Exact name of registrant as specified in its charter)
Delaware | | 000-02287 | | 95-1906306 |
(State or other jurisdiction
of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification
Number) |
2300 Orchard Parkway, San Jose, California 95131-1017
(Address of principal executive offices, including zip code)
(408) 433-0910
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02: Results of Operations and Financial Condition.
The following financial schedules provide supplementary information related to the financial reports (Form 10-K/A for the fiscal year ended July 1, 2007, Form 10-Q/A for the quarter ended September 30, 2007, Form 10-Q for the quarter ended December 30, 2007, and Form 10-Q for the quarter ended March 30, 2008) filed by Symmetricom, Inc. on June 17, 2008. The reason for furnishing this supplementary information is to conform certain supplemental (non-GAAP) information included in previous earnings releases to the information in the June 17, 2008 filings and to provide earnings information on a non-GAAP basis for the quarter ended March 30, 2008.
Non-GAAP Information
Certain non-GAAP financial information is included in this Form 8-K filing. In the Reconciliation of GAAP to Non-GAAP Results, Symmetricom excludes certain items related to non-cash compensation, amortization of acquired intangibles, impairment of goodwill and other intangibles, integration and restructuring charges and unusual and non-recurring items. Symmetricom believes that excluding such items provides investors and management with a representation of the company’s core operating performance and with information useful in assessing our prospects for the future and underlying trends in Symmetricom’s operating performance. Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information is not determined using GAAP and should not be considered superior to or as a substitute for data prepared in accordance with GAAP. A reconciliation of the non-GAAP results to the GAAP results is provided in the following financial schedules.
2
SYMMETRICOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
| | Twelve months ended | |
| | July 1, | | July 2, | | July 3, | | June 27, | | June 29, | |
| | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
| | | | | | | | | | | |
Net revenue | | $ | 208,380 | | $ | 176,112 | | $ | 179,388 | | $ | 163,310 | | $ | 127,088 | |
Cost of products and services | | 109,837 | | 91,626 | | 88,162 | | 93,212 | | 75,637 | |
Amortization of purchased technology | | 3,317 | | 3,622 | | 3,899 | | 3,911 | | 3,104 | |
Impairment of intangibles | | — | | 1,198 | | — | | — | | — | |
Write-off of Telmax royalty | | — | | — | | — | | — | | 567 | |
Integration and restructuring charges | | 224 | | 1,154 | | — | | 5,862 | | 1,733 | |
Gross profit | | 95,002 | | 78,512 | | 87,327 | | 60,325 | | 46,047 | |
Gross margin | | 45.6 | % | 44.6 | % | 48.7 | % | 36.9 | % | 36.2 | % |
Operating expenses: | | | | | | | | | | | |
Research and development | | 23,692 | | 18,836 | | 16,286 | | 16,772 | | 21,468 | |
Selling, general and administrative | | 60,543 | | 56,357 | | 52,248 | | 45,805 | | 46,543 | |
Acquired in-process research and development | | 188 | | — | | — | | — | | 1,561 | |
Amortization of intangible assets | | 792 | | 522 | | 613 | | 838 | | 1,171 | |
Integration and restructuring charges | | 549 | | — | | — | | 2,325 | | 6,711 | |
Impairment of goodwill | | — | | 6,963 | | — | | — | | 14,723 | |
Operating income (loss) | | 9,238 | | (4,166 | ) | 18,180 | | (5,415 | ) | (46,130 | ) |
Gain (loss) on equity investments, net | | — | | — | | 389 | | — | | (450 | ) |
Interest income | | 9,231 | | 7,478 | | 1,533 | | 308 | | 625 | |
Interest expense | | (4,823 | ) | (4,983 | ) | (814 | ) | (585 | ) | (628 | ) |
Earnings (loss) before income taxes | | 13,646 | | (1,671 | ) | 19,288 | | (5,692 | ) | (46,583 | ) |
Income tax provision (benefit) | | 7,588 | | (814 | ) | 2,078 | | (2,525 | ) | (12,197 | ) |
Net earnings (loss) from continuing operations | | 6,058 | | (857 | ) | 17,210 | | (3,167 | ) | (34,386 | ) |
Gain (loss) from discontinued operations, net of tax | | 242 | | 921 | | 985 | | 949 | | (14,609 | ) |
Net earnings (loss) | | $ | 6,300 | | $ | 64 | | $ | 18,195 | | $ | (2,218 | ) | $ | (48,995 | ) |
| | | | | | | | | | | |
Earnings (loss) per share - basic: | | | | | | | | | | | |
Earnings (loss) from continuing operations | | $ | 0.13 | | $ | (0.02 | ) | $ | 0.38 | | $ | (0.07 | ) | $ | (0.96 | ) |
Gain (loss) from discontinued operations | | 0.01 | | 0.02 | | 0.02 | | 0.02 | | (0.41 | ) |
Net earnings (loss) | | $ | 0.14 | | $ | — | | $ | 0.40 | | $ | (0.05 | ) | $ | (1.37 | ) |
Weighted average shares outstanding - basic | | 45,572 | | 45,913 | | 45,532 | | 43,691 | | 35,645 | |
| | | | | | | | | | | |
Earnings (loss) per share - diluted: | | | | | | | | | | | |
Earnings (loss) from continuing operations | | $ | 0.13 | | $ | (0.02 | ) | $ | 0.37 | | $ | (0.07 | ) | $ | (0.96 | ) |
Gain (loss) from discontinued operations | | 0.01 | | 0.02 | | 0.02 | | 0.02 | | (0.41 | ) |
Net earnings (loss) | | $ | 0.14 | | $ | — | | $ | 0.39 | | $ | (0.05 | ) | $ | (1.37 | ) |
Weighted average shares outstanding - diluted | | 46,389 | | 46,791 | | 46,936 | | 43,691 | | 35,645 | |
3
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
| | Twelve months ended | |
| | July 1, | | July 2, | | July 3, | | June 27, | | June 29, | |
| | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
Reconciliation from GAAP to Non-GAAP | | | | | | | | | | | |
GAAP net earnings (loss) from continuing operations | | $ | 6,058 | | $ | (857 | ) | $ | 17,210 | | $ | (3,167 | ) | $ | (34,386 | ) |
| | | | | | | | | | | |
Equity-based compensation expense: | | | | | | | | | | | |
Cost of products and services | | 1,034 | | 564 | | 91 | | 24 | | — | |
Research and development | | 1,345 | | 482 | | — | | — | | — | |
Selling, general and administrative | | 4,013 | | 3,575 | | 1,915 | | 227 | | — | |
Total equity-based compensation expense | | 6,392 | | 4,621 | | 2,006 | | 251 | | — | |
Amortization of intangible assets: | | | | | | | | | | | |
Cost of products and services | | 3,317 | | 3,622 | | 3,899 | | 3,911 | | 3,104 | |
Operating expenses | | 792 | | 435 | | 356 | | 508 | | 1,171 | |
Total amortization of intangible assets | | 4,109 | | 4,057 | | 4,255 | | 4,419 | | 4,275 | |
| | | | | | | | | | | |
Integration and restructuring charges | | 773 | | 1,154 | | — | | 8,187 | | 8,444 | |
Write-off of non collectable sublease contract | | 298 | | — | | — | | — | | — | |
Write-off of Telmax royalty | | — | | — | | — | | — | | 567 | |
Acquired in-process research and development | | 188 | | — | | — | | — | | 1,561 | |
Impairment of purchased technology | | — | | 1,198 | | — | | — | | — | |
Impairment of goodwill | | — | | 6,963 | | — | | — | | 14,723 | |
Gain on sale of investment | | — | | — | | (389 | ) | — | | 450 | |
Collection of old Datum receivables that were fully reserved | | — | | — | | (656 | ) | — | | — | |
Adjustment for a reserve for a repayment to a bankrupt customer of a collected receivable | | — | | — | | (368 | ) | — | | — | |
Reserve adjustment for the retirement plan acquired from the Datum acquisition | | — | | — | | (118 | ) | — | | — | |
Income tax effect of QoSmetrics liquidation | | 3,412 | | — | | — | | — | | — | |
Income tax effect of Non-GAAP adjustments | | (3,599 | ) | (8,763 | ) | (1,074 | ) | (5,709 | ) | (2,470 | ) |
Non-GAAP net earnings from continuing operations | | $ | 17,631 | | $ | 8,373 | | $ | 20,866 | | $ | 3,981 | | $ | (6,836 | ) |
| | | | | | | | | | | |
Earnings from continuing operations per share-diluted: | | | | | | | | | | | |
GAAP earnings (loss) from continuing operations | | $ | 0.13 | | $ | (0.02 | ) | $ | 0.37 | | $ | (0.07 | ) | $ | (0.96 | ) |
Non-GAAP earnings from continuing operations | | $ | 0.38 | | $ | 0.18 | | $ | 0.44 | | $ | 0.09 | | $ | (0.19 | ) |
Shares used in diluted shares calculation | | 46,389 | | 46,791 | | 46,936 | | 43,691 | | 35,645 | |
4
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands)
(unaudited)
| | Twelve months ended | |
| | July 1, | | July 2, | | July 3, | | June 27, | | June 29, | |
| | 2007 | | 2006 | | 2005 | | 2004 | | 2003 | |
Reconciliation from GAAP to Non-GAAP Gross Margin: | | | | | | | | | | | |
GAAP Revenue | | $ | 208,380 | | $ | 176,112 | | $ | 179,388 | | $ | 163,310 | | $ | 127,088 | |
GAAP Gross profit | | 95,002 | | 78,512 | | 87,327 | | 60,325 | | 46,047 | |
GAAP Gross margin | | 45.6 | % | 44.6 | % | 48.7 | % | 36.9 | % | 36.2 | % |
| | | | | | | | | | | |
Add Non-GAAP Items: | | | | | | | | | | | |
Equity-based compensation expense | | 1,034 | | 564 | | 91 | | 24 | | — | |
Amortization of intangible assets | | 3,317 | | 3,622 | | 3,899 | | 3,911 | | 3,104 | |
Impairment of purchased technology | | — | | 1,198 | | — | | — | | — | |
Write-off of Telmax royalty | | — | | — | | — | | — | | 567 | |
Integration and restructuring charges | | 224 | | 1,154 | | — | | 5,862 | | 1,733 | |
| | | | | | | | | | | |
Non-GAAP Gross profit | | $ | 99,577 | | $ | 85,050 | | $ | 91,317 | | $ | 70,122 | | $ | 51,451 | |
Non-GAAP Gross margin | | 47.8 | % | 48.3 | % | 50.9 | % | 42.9 | % | 40.5 | % |
Reconciliation from GAAP to Non-GAAP Operating Expense: | | | | | | | | | | | |
GAAP Revenue | | $ | 208,380 | | $ | 176,112 | | $ | 179,388 | | $ | 163,310 | | $ | 127,088 | |
GAAP Operating expenses | | 85,764 | | 82,678 | | 69,147 | | 65,740 | | 92,177 | |
Operating expenses % to revenue | | 41.2 | % | 46.9 | % | 38.5 | % | 40.3 | % | 72.5 | % |
| | | | | | | | | | | |
Add Non-GAAP Items: | | | | | | | | | | | |
Equity-based compensation expense | | 5,358 | | 4,057 | | 1,915 | | 227 | | — | |
Uncollectable sublease payment | | 298 | | — | | — | | — | | — | |
Impairment of goodwill | | — | | 6,963 | | — | | — | | 14,723 | |
Collection of old Datum receivables that were fully reserved | | — | | — | | (656 | ) | — | | — | |
Adjustment for a reserve for a repayment to a bankrupt customer of a collected receivable | | — | | — | | (368 | ) | — | | — | |
Reserve adjustment for the retirement plan acquired from the Datum acquisition | | — | | — | | (118 | ) | — | | — | |
Amortization of intangible assets | | 792 | | 435 | | 356 | | 508 | | 1,171 | |
Acquired in-process research and development | | 188 | | — | | — | | — | | 1,561 | |
Integration and restructuring charges | | 549 | | — | | — | | 2,325 | | 6,711 | |
| | | | | | | | | | | |
Non-GAAP operating expenses | | $ | 78,579 | | $ | 71,223 | | $ | 68,018 | | $ | 62,680 | | $ | 68,011 | |
Non-GAAP operating expenses % to revenue | | 37.7 | % | 40.4 | % | 37.9 | % | 38.4 | % | 53.5 | % |
5
SYMMETRICOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
| | Three months ended | |
| | March 30, | | December 30, | | September 30, | |
| | 2008 | | 2007 | | 2007 | |
| | | | | | | |
Net revenue | | $ | 51,469 | | $ | 48,843 | | $ | 50,735 | |
Cost of products and services | | 28,348 | | 26,022 | | 28,027 | |
Amortization of purchased technology | | 832 | | 861 | | 805 | |
Integration and restructuring charges | | 319 | | 164 | | 3 | |
Gross profit | | 21,970 | | 21,796 | | 21,900 | |
Gross margin | | 42.7 | % | 44.6 | % | 43.2 | % |
Operating expenses: | | | | | | | |
Research and development | | 6,801 | | 6,587 | | 7,286 | |
Selling, general and administrative | | 15,937 | | 15,531 | | 15,516 | |
Amortization of intangible assets | | 232 | | 233 | | 260 | |
Integration and restructuring charges | | 135 | | 7 | | 293 | |
Operating income (loss) | | (1,135 | ) | (562 | ) | (1,455 | ) |
Gain on sale of asset | | — | | 700 | | — | |
Loss, other than temporary, on investments | | (1,090 | ) | (620 | ) | — | |
Interest income | | 1,775 | | 2,147 | | 2,210 | |
Interest expense | | (1,241 | ) | (1,185 | ) | (1,195 | ) |
Earnings (loss) before income taxes | | (1,691 | ) | 480 | | (440 | ) |
Income tax provision (benefit) | | (773 | ) | 279 | | (129 | ) |
Net earnings (loss) from continuing operations | | (918 | ) | 201 | | (311 | ) |
Gain from discontinued operations, net of tax | | 7 | | 15 | | 68 | |
Net earnings (loss) | | $ | (911 | ) | $ | 216 | | $ | (243 | ) |
| | | | | | | |
Earnings (loss) per share - basic: | | | | | | | |
Earnings (loss) from continuing operations | | $ | (0.02 | ) | $ | — | | $ | (0.01 | ) |
Gain (loss) from discontinued operations | | — | | — | | — | |
Net earnings (loss) | | $ | (0.02 | ) | $ | — | | $ | (0.01 | ) |
Weighted average shares outstanding - basic | | 43,923 | | 44,532 | | 45,474 | |
| | | | | | | |
Earnings (loss) per share - diluted: | | | | | | | |
Earnings (loss) from continuing operations | | $ | (0.02 | ) | $ | — | | $ | (0.01 | ) |
Gain (loss) from discontinued operations | | — | | — | | — | |
Net earnings (loss) | | $ | (0.02 | ) | $ | — | | $ | (0.01 | ) |
Weighted average shares outstanding - diluted | | 43,923 | | 44,919 | | 45,474 | |
6
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
| | Three months ended | |
| | March 30, | | December 30, | | September 30, | |
| | 2008 | | 2007 | | 2007 | |
Reconciliation from GAAP to Non-GAAP | | | | | | | |
GAAP net earnings (loss) from continuing operations | | $ | (918 | ) | $ | 201 | | $ | (311 | ) |
| | | | | | | |
Equity-based compensation expense: | | | | | | | |
Cost of products and services | | 206 | | 183 | | 270 | |
Research and development | | 350 | | 385 | | 538 | |
Selling, general and administrative | | 813 | | 460 | | 779 | |
Total equity-based compensation expense | | 1,369 | | 1,028 | | 1,587 | |
Amortization of intangible assets: | | | | | | | |
Cost of products and services | | 832 | | 861 | | 805 | |
Operating expenses | | 232 | | 233 | | 260 | |
Total amortization of intangible assets | | 1,064 | | 1,094 | | 1,065 | |
| | | | | | | |
Integration and restructuring charges | | 454 | | 171 | | 296 | |
Gain on sale of asset | | — | | (700 | ) | — | |
Loss, other than temporary, on investments | | 1,090 | | 620 | | — | |
Cost of internal investigation | | 1,230 | | — | | — | |
Income tax effect of Non-GAAP adjustments | | (2,130 | ) | (642 | ) | (864 | ) |
Non-GAAP net earnings from continuing operations | | $ | 2,159 | | $ | 1,772 | | $ | 1,773 | |
| | | | | | | |
Earnings from continuing operations per share-diluted: | | | | | | | |
GAAP earnings (loss) from continuing operations | | $ | (0.02 | ) | $ | 0.00 | | $ | (0.01 | ) |
Non-GAAP earnings from continuing operations | | $ | 0.05 | | $ | 0.04 | | $ | 0.04 | |
Shares used in diluted shares calculation | | 44,332 | | 44,919 | | 46,068 | |
7
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands)
(unaudited)
| | Three months ended | |
| | March 30, | | December 30, | | September 30, | |
| | 2008 | | 2007 | | 2007 | |
Reconciliation from GAAP to Non-GAAP Gross Margin: | | | | | | | |
GAAP Revenue | | $ | 51,469 | | $ | 48,843 | | $ | 50,735 | |
GAAP Gross profit | | 21,970 | | 21,796 | | 21,900 | |
GAAP Gross margin | | 42.7 | % | 44.6 | % | 43.2 | % |
| | | | | | | |
Add Non-GAAP Items: | | | | | | | |
Equity-based compensation expense | | 206 | | 183 | | 270 | |
Amortization of intangible assets | | 832 | | 861 | | 805 | |
Integration and restructuring charges | | 319 | | 164 | | 3 | |
| | | | | | | |
Non-GAAP Gross profit | | $ | 23,327 | | $ | 23,004 | | $ | 22,978 | |
Non-GAAP Gross margin | | 45.3 | % | 47.1 | % | 45.3 | % |
Reconciliation from GAAP to Non-GAAP Operating Expense: | | | | | | | |
GAAP Revenue | | $ | 51,469 | | $ | 48,843 | | $ | 50,735 | |
GAAP Operating expenses | | 23,105 | | 22,358 | | 23,355 | |
Operating expenses % to revenue | | 44.9 | % | 45.8 | % | 46.0 | % |
| | | | | | | |
Add Non-GAAP Items: | | | | | | | |
Cost of internal investigation | | $ | 1,230 | | $ | — | | $ | — | |
Equity-based compensation expense | | 1,163 | | 845 | | 1,317 | |
Amortization of intangible assets | | 232 | | 233 | | 260 | |
Integration and restructuring charges | | 135 | | 7 | | 293 | |
| | | | | | | |
Non-GAAP operating expenses | | $ | 20,345 | | $ | 21,273 | | $ | 21,485 | |
Non-GAAP operating expenses % to revenue | | 39.5 | % | 43.6 | % | 42.3 | % |
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | August 1, 2008. | By: | /s/ Thomas W. Steipp |
| | | Thomas W. Steipp |
| | | President and Chief Executive |
| | | Officer |
9
