Exhibit 99.1
Contact:
Dan Madden
VP Finance & Investor Relations
+1-408-428-7929
dmadden@symmetricom.com
Symmetricom Reports Third Quarter
Fiscal 2011 Financial Results
Strong profit and higher quarter-over-quarter revenue from improving manufacturing supply
| • | Net revenue of $51.2 million for the third quarter of fiscal 2011 |
| • | Non-GAAP income from continuing operations of $5.3 million, or $0.12 per share, compared to $1.4 million, $0.03 per share in the second quarter of fiscal 2011 |
| • | Income from continuing operations of $3.0 million, or $0.07 per share, compared to a loss from continuing operations of $3.5 million, or $0.08 per share in the second quarter of fiscal 2011 |
SAN JOSE, Calif. — April 21, 2011 — Symmetricom, Inc. (NASDAQ:SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its third quarter of fiscal 2011, ended March 27, 2011.
Net revenue for the third quarter of fiscal 2011 was $51.2 million, up $9.4 million, or 22.5%, compared to the second quarter of fiscal 2011, driven by an increase in the company’s manufacturing supply. Symmetricom reported income from continuing operations of $3.0 million, or $0.07 per share, for the third quarter of fiscal 2011, compared to a loss from continuing operations of $3.5 million, or $0.08 per share, in the second quarter of fiscal 2011. The income from continuing operations for the third quarter of fiscal 2011 included $0.2 million of restructuring charges, as compared to $3.9 million of restructuring charges for the second quarter of fiscal 2011.
Non-GAAP income from continuing operations for the third quarter of fiscal 2011 was $5.3 million, or $0.12 per share, compared to $1.4 million, or $0.03 per share, reported for the second quarter.
Net revenue for the third quarter of fiscal 2011 was down $5.3 million or 9.4% compared to the $56.5 million reported for the year ago third quarter of fiscal 2010. Income from continuing operations was down $0.7 million, or 19.1% compared to the $3.7 million, or $0.08 per share, reported for the year ago third quarter of fiscal 2010. The decrease in revenue is due to product supply and fulfillment delays associated with the company’s transition to an outsourced manufacturing and logistics model.
Cash, cash equivalents and short-term investments totaled $75.3 million as of March 27, 2011, a decrease of $3.2 million from the $78.5 million reported as of December 26, 2010. Net cash used in operating activities in the third quarter was $1.1 million and property, plant and equipment purchases were approximately $0.9 million, resulting in free cash outflow of approximately $2.0 million.
Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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“We made significant progress on our manufacturing transition, resulting in higher sequential revenue and earnings,” said Dave Côté, President and Chief Executive Officer of Symmetricom. “We expect to continue this momentum in the fourth quarter as we strengthen customer confidence, further improve our manufacturing capability and restore our product flow.
“In addition, we moved forward on multiple key growth initiatives. Our PackeTime products continued to gain traction, and we introduced our SyncWorldTM Ecosystem program. We also launched some important new products – the TimeProvider 1500 primary reference source, and our groundbreaking Quantum™ Chip-Scale Atomic Clock (CSAC). These products build on our core strengths and leadership position and support our expansion into new applications and markets,” said Côté.
Business Results
Revenue in the Communications Business in the third quarter of fiscal 2011 was $30.4 million, compared to $35.3 million reported in the same period last year and $20.4 million in the second quarter of this fiscal year. Revenue in the Government Business in the third quarter of fiscal 2011 was $20.8 million, compared to $21.2 million reported in the same period last year and $21.5 million in the second quarter of this fiscal year.
Fourth Quarter 2011 Guidance
Symmetricom’s guidance for the fourth quarter of fiscal 2011 is as follows:
| • | Net revenue is expected to be in the range of $52 million to $62 million |
| • | GAAP earnings per share from continuing operations is expected to be in the range of $0.01 to $0.08 |
| • | Non-GAAP earnings per share from continuing operations is expected to be in the range of $0.07 to $0.13 |
A reconciliation of GAAP and non-GAAP guidance is provided at the end of this press release.
Investor Conference Call
As previously announced, management will hold a conference call to discuss these results today, at 1:30 p.m. Pacific Time. Investors are invited to join the conference call by dialing +1-312-470-7356 and referencing “Symmetricom.” A live webcast will also be available on the investor relations section of the company’s website atwww.symmetricom.com. An audio replay will be available for one week and can be accessed by dialing +1-203-369-3888.
About Symmetricom, Inc.
Symmetricom, a world leader in precise time solutions, sets the world’s standard for time. The company generates, distributes and applies precise time for the communications, aerospace/defense, IT infrastructure and metrology industries. Symmetricom’s customers, from communications service providers and network equipment manufacturers to governments and their suppliers worldwide, are able to build more reliable networks and systems by using the company’s advanced timing technologies, atomic clocks, services and solutions. All products support today’s precise timing standards, including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol (NTP), Synchronous Ethernet and DOCSIS(R) timing. Symmetricom is based in San Jose, California, with offices worldwide. For more information, visit: http://www.symmetricom.com.
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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Non-GAAP Information
Certain non-GAAP financial information is included in this press release. In the reconciliation of GAAP to non-GAAP results, Symmetricom excludes certain items related to non-cash equity-based compensation, amortization of intangible assets, restructuring charges, manufacturing transition costs and non-cash interest expense charges that the company does not consider indicative of its ongoing performance. The income tax effect after these non-GAAP adjustments is determined based upon Symmetricom’s estimate of its annual non-GAAP effective tax rate excluding these non-GAAP adjustments. Symmetricom believes that excluding such items provides investors, analysts and management with a representation of the Company’s core operating performance and with information useful in assessing, in conjunction with GAAP results, underlying trends in operating performance. Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information 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 financial schedules portion of this press release.
Free cash flow is defined as net cash provided by or used in operating activities minus purchases of property, plant and equipment. Symmetricom believes this metric provides useful information to its investors, analysts, and management about the level of cash generated by normal business operations, including the use of cash for the purchase of property, plant and equipment. Management also views it as a measure of cash available to pay debt and return cash to stockholders. Free cash flow is not a GAAP financial measure and should not be considered superior to or a substitute for operating cash flow or other cash flow data prepared in accordance with GAAP.
Safe Harbor
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. These forward-looking statements include statements concerning fourth quarter fiscal 2011 guidance and future performance, expectations regarding strengthening customer confidence, further improvements to manufacturing capabilities and restoration of product flows, as well as the information regarding the usefulness of the non-GAAP financial information. The statements in this press release are made as of the date of this press release, even if subsequently made available by Symmetricom on its website or otherwise. Symmetricom expressly disclaims any obligation to update or revise any forward-looking statement contained herein, whether as a result of a change in its expectations, a change in any events, conditions or circumstances on which a forward-looking statement is based, or otherwise. Symmetricom’s actual results could differ materially from those projected or suggested in these forward-looking statements. Factors that could cause future actual results to differ materially from the results projected in or suggested by such forward-looking statements include: reduced rates of demand for telecommunication products, cable products or test and measurement products, reduced rates or changes in government spending patterns, customers’ ability and need to upgrade existing equipment, the company’s ability to fulfill delayed shipments, complications or difficulties in its transition to an outsourced manufacturing and logistics model, the company’s ability to maintain or reduce manufacturing and operating costs, timing of orders, cancellation or delay of customer orders, loss of customers, customer acceptance of new products, recessionary pressures, geopolitical risks such as terrorist acts and the risk factors listed from time to time in Symmetricom’s reports filed with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year ended June 27, 2010 and subsequent Form 10-Q’s and 8-K’s. SYMM-F
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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SYMMETRICOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| March 27, 2011 | December 26, 2010 | March 28, 2010 | March 27, 2011 | March 28, 2010 | ||||||||||||||||
Net revenue | $ | 51,234 | $ | 41,844 | $ | 56,526 | $ | 147,457 | $ | 165,656 | ||||||||||
Cost of sales: | ||||||||||||||||||||
Cost of products and services | 26,778 | 23,222 | 28,367 | 76,606 | 88,788 | |||||||||||||||
Amortization of intangible assets | 260 | 267 | 278 | 814 | 1,014 | |||||||||||||||
Restructuring charges | 1,330 | 3,910 | 448 | 8,987 | 2,241 | |||||||||||||||
Total cost of sales | 28,368 | 27,399 | 29,093 | 86,407 | 92,043 | |||||||||||||||
Gross profit | 22,866 | 14,445 | 27,433 | 61,050 | 73,613 | |||||||||||||||
Gross margin | 44.6 | % | 34.5 | % | 48.5 | % | 41.4 | % | 44.4 | % | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 6,717 | 6,738 | 5,684 | 20,061 | 17,511 | |||||||||||||||
Selling, general and administrative | 13,592 | 13,596 | 14,385 | 39,987 | 42,183 | |||||||||||||||
Amortization of intangible assets | 60 | 61 | 62 | 183 | 219 | |||||||||||||||
Restructuring charges | (1,142 | ) | 38 | 998 | (1,985 | ) | 2,009 | |||||||||||||
Total operating expenses | 19,227 | 20,433 | 21,129 | 58,246 | 61,922 | |||||||||||||||
Operating income (loss) | 3,639 | (5,988 | ) | 6,304 | 2,804 | 11,691 | ||||||||||||||
Interest income, net of amortization (accretion) of premium (discount) on investments | 441 | 331 | 350 | 664 | 1,316 | |||||||||||||||
Interest expense | — | — | (1,318 | ) | (55 | ) | (3,862 | ) | ||||||||||||
Income (loss) from continuing operations before taxes | 4,080 | (5,657 | ) | 5,336 | 3,413 | 9,145 | ||||||||||||||
Income tax provision (benefit) | 1,095 | (2,181 | ) | 1,648 | 810 | 3,018 | ||||||||||||||
Income (loss) from continuing operations | 2,985 | (3,476 | ) | 3,688 | 2,603 | 6,127 | ||||||||||||||
Income (loss) from discontinued operations, net of tax | 19 | (49 | ) | 804 | 97 | 38 | ||||||||||||||
Net income (loss) | $ | 3,004 | $ | (3,525 | ) | $ | 4,492 | $ | 2,700 | $ | 6,165 | |||||||||
Earnings (loss) per share - basic: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.07 | $ | (0.08 | ) | $ | 0.08 | $ | 0.06 | $ | 0.14 | |||||||||
Income (loss) from discontinued operations | — | — | 0.02 | — | — | |||||||||||||||
Net income (loss) | $ | 0.07 | $ | (0.08 | ) | $ | 0.10 | $ | 0.06 | $ | 0.14 | |||||||||
Weighted average shares outstanding - basic | 43,153 | 43,272 | 43,438 | 43,285 | 43,309 | |||||||||||||||
Earnings (loss) per share - diluted: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.07 | $ | (0.08 | ) | $ | 0.08 | $ | 0.06 | $ | 0.14 | |||||||||
Income (loss) from discontinued operations | — | — | 0.02 | — | — | |||||||||||||||
Net income (loss) | $ | 0.07 | $ | (0.08 | ) | $ | 0.10 | $ | 0.06 | $ | 0.14 | |||||||||
Weighted average shares outstanding - diluted | 43,859 | 43,272 | 43,934 | 43,853 | 43,828 | |||||||||||||||
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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SYMMETRICOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
| March 27, 2011 | June 27, 2010 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 28,383 | $ | 21,794 | ||||
Short-term investments | 46,959 | 53,825 | ||||||
Accounts receivable, net | 36,778 | 40,075 | ||||||
Inventories | 45,049 | 37,229 | ||||||
Prepaids and other current assets | 14,227 | 15,108 | ||||||
Total current assets | 171,396 | 168,031 | ||||||
Property, plant and equipment, net | 22,728 | 23,077 | ||||||
Intangible assets, net | 2,749 | 3,745 | ||||||
Deferred taxes and other assets | 37,217 | 36,534 | ||||||
Total assets | $ | 234,090 | $ | 231,387 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 15,700 | $ | 6,768 | ||||
Accrued compensation | 12,607 | 18,731 | ||||||
Accrued warranty | 1,587 | 2,900 | ||||||
Other accrued liabilities | 14,061 | 10,506 | ||||||
Total current liabilities | 43,955 | 38,905 | ||||||
Long-term obligations | 4,533 | 8,296 | ||||||
Deferred income taxes | 334 | 334 | ||||||
Total liabilities | 48,822 | 47,535 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 200,793 | 202,450 | ||||||
Accumulated other comprehensive income (loss) | 17 | (356 | ) | |||||
Accumulated deficit | (15,542 | ) | (18,242 | ) | ||||
Total stockholders’ equity | 185,268 | 183,852 | ||||||
Total liabilities and stockholders’ equity | $ | 234,090 | $ | 231,387 | ||||
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| March 27, 2011 | December 26, 2010 | March 28, 2010 | March 27, 2011 | March 28, 2010 | ||||||||||||||||
Reconciliation from GAAP to Non-GAAP | ||||||||||||||||||||
GAAP Income (loss) from continuing operations | $ | 2,985 | $ | (3,476 | ) | $ | 3,688 | $ | 2,603 | $ | 6,127 | |||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Equity-based compensation expense: | ||||||||||||||||||||
Cost of products and services | $ | 253 | 230 | 176 | 506 | 648 | ||||||||||||||
Research and development | 240 | 184 | 228 | 562 | 656 | |||||||||||||||
Selling, general and administrative | 1,055 | 704 | 776 | 2,050 | 1,670 | |||||||||||||||
Total equity-based compensation expense | 1,548 | 1,118 | 1,180 | 3,118 | 2,974 | |||||||||||||||
Amortization of intangible assets: | ||||||||||||||||||||
Cost of products and services | 260 | 267 | 278 | 814 | 1,014 | |||||||||||||||
Operating expenses | 60 | 61 | 62 | 183 | 219 | |||||||||||||||
Total amortization of intangible assets | 320 | 328 | 340 | 997 | 1,233 | |||||||||||||||
Restructuring charges | 188 | 3,948 | 1,446 | 7,002 | 4,250 | |||||||||||||||
Manufacturing Transition costs | 798 | 2,041 | — | 2,839 | — | |||||||||||||||
Non-cash interest expense on convertible notes | — | — | 812 | — | 2,345 | |||||||||||||||
Income tax effect of Non-GAAP adjustments | (586 | ) | (2,551 | ) | (1,035 | ) | (4,314 | ) | (3,565 | ) | ||||||||||
Non-GAAP income from continuing operations | $ | 5,253 | $ | 1,408 | $ | 6,431 | $ | 12,245 | $ | 13,364 | ||||||||||
Earnings (loss) per share - diluted: | ||||||||||||||||||||
GAAP income (loss) from continuing operations | $ | 0.07 | $ | (0.08 | ) | $ | 0.08 | $ | 0.06 | $ | 0.14 | |||||||||
Non-GAAP income from continuing operations | $ | 0.12 | $ | 0.03 | $ | 0.15 | $ | 0.28 | $ | 0.30 | ||||||||||
Weighted average shares outstanding - diluted | 43,859 | 43,972 | 43,934 | 43,853 | 43,828 | |||||||||||||||
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
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SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| March 27, 2011 | December 26, 2010 | March 28, 2010 | March 27, 2011 | March 28, 2010 | ||||||||||||||||||||||||
GAAP Revenue |
| $ | 51,234 | $ | 41,844 | $ | 56,526 | $ | 147,457 | $ | 165,656 | |||||||||||||||||
Reconciliation from GAAP to Non-GAAP Gross Profit from continuing operations: |
| |||||||||||||||||||||||||||
GAAP Gross profit |
| (A | ) | $ | 22,866 | $ | 14,445 | $ | 27,433 | $ | 61,050 | $ | 73,613 | |||||||||||||||
GAAP Gross margin |
| 44.6 | % | 34.5 | % | 48.5 | % | 41.4 | % | 44.4 | % | |||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||
Equity-based compensation expense |
| 253 | 230 | 176 | 506 | 648 | ||||||||||||||||||||||
Amortization of intangible assets |
| 260 | 267 | 278 | 814 | 1,014 | ||||||||||||||||||||||
Restructuring charges |
| 1,330 | 3,910 | 448 | 8,987 | 2,241 | ||||||||||||||||||||||
Manufacturing transition costs |
| 798 | 2,041 | — | 2,839 | — | ||||||||||||||||||||||
Non-GAAP Gross profit |
| (B | ) | $ | 25,507 | $ | 20,893 | $ | 28,335 | $ | 74,196 | $ | 77,516 | |||||||||||||||
Non-GAAP Gross margin |
| 49.8 | % | 49.9 | % | 50.1 | % | 50.3 | % | 46.8 | % | |||||||||||||||||
Reconciliation from GAAP to Non-GAAP Operating Expense from continuing operations: |
| |||||||||||||||||||||||||||
GAAP Operating expenses |
| (C | ) | $ | 19,227 | $ | 20,433 | $ | 21,129 | $ | 58,246 | $ | 61,922 | |||||||||||||||
Operating expense % to revenue |
| 37.5 | % | 48.8 | % | 37.4 | % | 39.5 | % | 37.4 | % | |||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||
Equity-based compensation expense |
| (1,295 | ) | (888 | ) | (1,004 | ) | (2,612 | ) | (2,326 | ) | |||||||||||||||||
Amortization of intangible assets |
| (60 | ) | (61 | ) | (62 | ) | (183 | ) | (219 | ) | |||||||||||||||||
Restructuring charges |
| 1,142 | (38 | ) | (998 | ) | 1,985 | (2,009 | ) | |||||||||||||||||||
Non-GAAP operating expenses |
| (D | ) | $ | 19,014 | $ | 19,446 | $ | 19,065 | $ | 57,436 | $ | 57,368 | |||||||||||||||
Non-GAAP operating expenses % to revenue |
| 37.1 | % | 46.5 | % | 33.7 | % | 39.0 | % | 34.6 | % | |||||||||||||||||
Reconciliation from GAAP to Non-GAAP | ||||||||||||||||||||||||||||
GAAP Operating income (loss) |
| (A | ) - (C) | $ | 3,639 | $ | (5,988 | ) | $ | 6,304 | $ | 2,804 | $ | 11,691 | ||||||||||||||
Operating income (loss)% to revenue |
| 7.1 | % | -14.3 | % | 11.2 | % | 1.9 | % | 7.1 | % | |||||||||||||||||
Non-GAAP Operating income |
| (B | ) - (D) | $ | 6,493 | $ | 1,447 | $ | 9,270 | $ | 16,760 | $ | 20,148 | |||||||||||||||
Operating income % to revenue |
| 12.7 | % | 3.5 | % | 16.4 | % | 11.4 | % | 12.2 | % | |||||||||||||||||
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Symmetricom Reports Third Quarter Fiscal 2011 Financial Results
April 21, 2011
Page 8 of 8
SYMMETRICOM, INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR GAAP REVENUE AND EPS
TO NON-GAAP GUIDANCE FOR REVENUE AND EPS
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ending July 3, 2011 | ||||||||||||||||
| Revenue | Earnings Per Share from Continuing Operations | |||||||||||||||
| From | To | From | To | |||||||||||||
GAAP Guidance | $ | 52,000 | $ | 62,000 | $ | 0.01 | $ | 0.08 | ||||||||
Estimated Non-GAAP Adjustments | ||||||||||||||||
Equity-based compensation expense | 0.03 | 0.03 | ||||||||||||||
Amortization of intangible assets | 0.01 | 0.01 | ||||||||||||||
Restructuring charges | 0.04 | 0.03 | ||||||||||||||
Income tax effect of non-GAAP adjustments | (0.02 | ) | (0.02 | ) | ||||||||||||
Total Non-GAAP Adjustments | 0.06 | 0.05 | ||||||||||||||
Non-GAAP Guidance | $ | 52,000 | $ | 62,000 | $ | 0.07 | $ | 0.13 | ||||||||
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