SYS-CON MEDIA Authors: Elizabeth White, Yeshim Deniz, Pat Romanski, Nikita Ivanov, Sean Houghton

News Feed Item

Ikanos Communications Announces Results for the First Quarter 2014

FREMONT, CA -- (Marketwired) -- 04/29/14 -- Ikanos Communications, Inc. (NASDAQ: IKAN)

First Quarter Highlights

  • Revenue of $14.5 million
  • GAAP net loss of $(10.3) million, or $(0.10) per share
  • Ending cash, cash equivalents and short-term investments of $33.7 million

Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of advanced broadband semiconductor and software products for the digital home, today announced its financial results for the first quarter of 2014, ended March 30, 2014.

"We achieved first-quarter revenue and gross profits within our guidance, with revenue of $14.5 million and a GAAP gross profit of 49%, while recording operating expenses of $17.5 million, near the mid-point of our guidance," said Dennis Bencala, CFO of Ikanos. "During the quarter, we continued to effectively manage our business and cash position, with cash totaling $33.7 million and inventory of $1.3 million at quarter end."

Omid Tahernia, president and CEO of Ikanos, said, "Our design win pipeline and new product revenue continued with positive momentum into 2014. We ended the first quarter with several new design wins for both access and gateway processors. For the first time, we have a Velocity™-3 based OEM system in a large carrier lab being qualified for deployment. We are also seeing very positive progress with our diversification strategy, winning new tenders in South America for 2014 revenue. The demand for our Vx500 gateway processor family is also on the rise. We announced our first LTE gateway design win with this new family at Mobile World Congress in February, and anticipate more OEM and ODM design activities in the second quarter."

Financial Details
Ikanos reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP) and additionally on a non-GAAP basis. Non-GAAP net income (loss), non-GAAP gross profits and non-GAAP operating expenses, where applicable, exclude the income statement effects of stock-based compensation and the amortization of intangible assets. Ikanos has provided these measures because its management believes these additional non-GAAP measures are useful to investors for performing financial analysis as these additional measures highlight Ikanos' recurring operating results. Ikanos' management uses these non-GAAP measures internally to evaluate its operating performance and to plan for its future. However, non-GAAP measures are not a substitute for GAAP reporting. For a reconciliation of GAAP versus non-GAAP financial information, please see the attached schedules.

First Quarter 2014 Results

Revenue for the first quarter of 2014 was $14.5 million, compared to revenue of $26.2 million for the first quarter of 2013 and revenue of $17.6 million for the fourth quarter of 2013. GAAP gross profit for the first quarter of 2014 was 49%, compared to a GAAP gross profit of 53% for the first quarter of 2013 and GAAP gross profit of 50% for the fourth quarter of 2013.

Non-GAAP gross profit for the first quarter of 2014 was 50%, compared to a non-GAAP gross profit of 54% for the first quarter of 2013 and 51% for the fourth quarter of 2013.

GAAP operating expenses for the first quarter of 2014 were $17.5 million, compared to operating expenses of $18.3 million for the first quarter of 2013 and operating expenses of $17.1 million for the fourth quarter of 2013.

Non-GAAP operating expenses for the first quarter of 2014 were $16.5 million, compared to non-GAAP operating expenses of $17.3 million for the first quarter of 2013 and non-GAAP operating expenses of $16.2 million for the fourth quarter of 2013.

GAAP net loss for the first quarter of 2014 was $(10.3) million, or a loss of $(0.10) per share on 98.7 million weighted average shares outstanding, compared to a GAAP net loss of $(4.4) million, or $(0.06) per share on 70.4 million weighted average shares outstanding, for the first quarter of 2013 and a GAAP net loss of $(8.6) million, or $(0.10) per share on 85.6 million weighted shares outstanding, for the fourth quarter of 2013.

Non-GAAP net loss for the first quarter of 2014 was $(9.2) million, or a loss of $(0.09) per share on 98.7 million weighted average shares outstanding, compared to a non-GAAP net loss of $(3.3) million, or $(0.05) per share on 70.4 million weighted average shares outstanding, for the first quarter of 2013 and a non-GAAP loss of $(7.6) million, or $(0.09) per share on 85.6 million weighted average shares outstanding, for the fourth quarter of 2013.

Cash and cash equivalents and short-term investments at the end of the first quarter of 2014 were $33.7 million, compared to $39.5 million at the end of the fourth quarter of 2013. Additionally, at the end of the first quarter of 2014, inventory was $1.3 million, compared to $2.0 million at the end of the fourth quarter of 2013. Current liabilities at the end of the first quarter of 2014 were $22.5 million, compared to $24.9 million at the end of the fourth quarter of 2013. For both the first quarter of 2014 and fourth quarter of 2013, current liabilities include an accounts receivable backed, revolving line of credit advance of $8.5 million and $12.0 million, respectively.

For a more complete review of our 2014 results and year-over-year comparisons please see the attached financial schedules.

Outlook

Revenue is expected to be between $11 million and $13 million for the second quarter of 2014.

"The key factor contributing to the short-term decline in overall revenue was the lower demand in certain maturing markets, namely Japan and Korea, which have had a significant impact on our legacy product revenue," said Tahernia. "Revenue in Korea in particular dropped to historic lows. This is a trend we expect to continue to see in those regions. However, we anticipate great demand for G.fast in both regions, which should present the next cycle of growth for Ikanos."

GAAP gross profit for the second quarter of 2014 is expected to be between 46% and 48%. Non-GAAP gross profit is expected to be between 47% and 49% for second quarter of 2014. GAAP operating expenses for second quarter of 2014 are expected to be in the range of $17.5 million to $18.5 million. Non-GAAP operating expenses are expected to be in the range of $16.5 million to $17.5 million for second quarter of 2014. GAAP net loss for second quarter of 2014 is expected to be in the range of approximately $(11.6) million to $(13.7) million, or a GAAP loss per share of $(0.12) to $(0.14). Non-GAAP net loss is expected to be in the range of approximately $(10.4) million to $(12.6) million, or a non-GAAP loss per share of $(0.11) to $(0.13).

First Quarter Conference Call
Management will review the first quarter financial results and its expectations for subsequent periods at a conference call on April 29, 2014 at 1:30 p.m. Pacific Time. To listen to the call, please visit http://www.ikanos.com/investor/irevents/ and click on the link provided for the webcast or dial (888) 438-5525 and enter conference ID 2023583. The webcast will be archived and available for 90 days at http://www.ikanos.com/investor/irevents/. A replay of the conference call will be accessible until July 28, 2014 by dialing (888) 203-1112 and entering conference ID 2023583.

About Ikanos Communications, Inc.
Ikanos Communications, Inc. (NASDAQ: IKAN) is a leading provider of advanced broadband semiconductor and software products for the digital home. The company's broadband DSL, communications processors and other offerings power access infrastructure and customer premises equipment for many of the world's leading network equipment manufacturers and telecommunications service providers. For more information, visit www.ikanos.com.

© 2014 Ikanos Communications, Inc. All Rights Reserved. Ikanos Communications, Ikanos and the Ikanos logo, the Bandwidth without boundaries tagline, Fusiv, inSIGHT, Neos, Ikanos Velocity, and Ikanos NodeScale are among the trademarks or registered trademarks of Ikanos Communications. All other trademarks mentioned herein are properties of their respective holders.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Some of the statements included in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current views of our senior management with respect to future events with respect to our business and our industry in general. Statements that include the words "expect," "intend," "plan," "believe," "anticipate," "estimate," and similar statements of a future or forward-looking nature identify forward-looking statements.

Forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the following: design win pipeline and new product revenue momentum may not continue as anticipated or at all; that new designs and design wins will result in sales of our products at the levels anticipated, or at all; that our lab trials will be successful and, if successful, will eventually result in field trials or market deployments; that the delays in new customer product ramps will continue longer than anticipated; that the rate of acceptance of our new and future products, including our G.fast products, by our customers and telecommunications service providers may be lower than anticipated; our ability to complete future products, including our G.fast products, when anticipated or at all; that the unfavorable trends in certain maturing markets, such as Japan and Korea, will continue longer than anticipated; that our design win pipeline will continue to expand as anticipated; macroeconomic or other conditions which may cause our customers to defer purchasing plans or cancel any purchasing plans altogether despite successful design wins or successful field trials; the continued demand by telecommunications service providers for our specific xDSL semiconductor products; our ability to continue to effectively manage our business and cash position; the failure of telecommunications service providers to implement deployment plans on schedule, or at all, despite increased performance results; our ability to generate demand and close transactions for the sale of our products; competition in the markets in which we operate; and the fact that the products we sell may not satisfy shifting customer demand or compete successfully with our competitors' products. For a more detailed discussion of how these and other risks and uncertainties could cause our actual results to differ materially from those indicated in our forward-looking statements, see our reports filed with SEC (available at www.sec.gov), including our Annual Report on Form 10-K filed on February 28, 2014.


                        IKANOS COMMUNICATIONS, INC.
         Unaudited Condensed Consolidated Statements of Operations
                   (In thousands, except per share data)

                                             Three Months Ended
                                -------------------------------------------
                                  March 30,     December 29,    March 31,
                                     2014           2013           2013
                                -------------  -------------  -------------

Revenue                         $      14,513  $      17,582  $      26,152
Cost of revenue                         7,436          8,806         12,196
                                -------------  -------------  -------------
    Gross profit                        7,077          8,776         13,956
                                -------------  -------------  -------------
Operating expenses:
  Research and development             12,676         12,503         13,518
  Selling, general and
   administrative                       4,821          4,589          4,772
                                -------------  -------------  -------------
    Total operating expenses           17,497         17,092         18,290
                                -------------  -------------  -------------
Loss from operations                  (10,420)        (8,316)        (4,334)

  Interest income and other,
   net                                    242            (71)            82
                                -------------  -------------  -------------
Loss before income taxes              (10,178)        (8,387)        (4,252)
  Provision for income taxes              127            246            164
                                -------------  -------------  -------------
Net loss                        $     (10,305) $      (8,633) $      (4,416)
                                =============  =============  =============

Basic and diluted net loss per
 share                          $       (0.10) $       (0.10) $       (0.06)
                                =============  =============  =============
Weighted average outstanding
 shares:
  Basic and diluted                    98,749         85,648         70,413
                                =============  =============  =============



                         IKANOS COMMUNICATIONS, INC.
     Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated
                           Statements of Operations
                    (In thousands, except per share data)

                                        Three Months Ended March 30, 2014
                                     --------------------------------------
                                         As       Non-GAAP
                                      Reported   Adjustments       Non-GAAP
                                     ---------  ------------      ---------
Revenue                              $  14,513  $          -      $  14,513
Cost of revenue                          7,436            (2) (a)     7,314
                                                        (120) (b)

                                     ---------  ------------      ---------
    Gross profit                         7,077          (122)         7,199
                                     ---------  ------------      ---------

Operating expenses:
  Research and development              12,676          (640) (a)    12,036

  Selling, general and
   administrative                        4,821          (347) (a)     4,474

                                     ---------  ------------      ---------
    Total operating expenses            17,497          (987)        16,510
                                     ---------  ------------      ---------
Loss from operations                   (10,420)        1,109         (9,311)
  Interest income and other, net           242             -            242
                                     ---------  ------------      ---------
Loss before income taxes               (10,178)        1,109         (9,069)
Provision for income taxes                 127             -            127
                                     ---------  ------------      ---------
Net loss                             $ (10,305) $      1,109      $  (9,196)
                                     =========  ============      =========

Net loss per share:
  Basic and diluted                  $   (0.10)                   $   (0.09)
                                     =========                    =========

Weighted average outstanding shares:
  Basic and diluted                     98,749                       98,749
                                     =========                    =========



                        IKANOS COMMUNICATIONS, INC.
    Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated
                          Statements of Operations
                   (In thousands, except per share data)

                                        Three Months Ended March 31, 2013
                                     --------------------------------------
                                         As       Non-GAAP
                                      Reported   Adjustments       Non-GAAP
                                     ---------  ------------      ---------
Revenue                              $  26,152  $          -      $  26,152
Cost of revenue                         12,196            (1) (a)    12,075
                                                        (120) (b)

                                     ---------  ------------      ---------
    Gross profit                        13,956          (121)        14,077
                                     ---------  ------------      ---------

Operating expenses:
  Research and development              13,518          (571) (a)    12,947

  Selling, general and
   administrative                        4,772          (262) (a)     4,385
                                                        (125) (b)
                                     ---------  ------------      ---------
    Total operating expenses            18,290          (958)        17,332
                                     ---------  ------------      ---------
Loss from operations                    (4,334)        1,079         (3,255)
  Interest income and other, net            82             -             82
                                     ---------  ------------      ---------
Loss before income taxes                (4,252)        1,079         (3,173)
Provision for income taxes                 164             -            164
                                     ---------  ------------      ---------
Net loss                             $  (4,416) $      1,079      $  (3,337)
                                     =========  ============      =========

Net loss per share:
  Basic and diluted                  $   (0.06)                   $   (0.05)
                                     =========                    =========

Weighted average outstanding shares:
  Basic and diluted                     70,413                       70,413
                                     =========                    =========


Notes:                                                   Three Months Ended
                                                       ---------------------
                                                        March 30,  March 31,
                                                          2014       2013
                                                       ---------- ----------
  (a)   Stock-based compensation                       $      989 $      834
  (b)   Amortization of acquired intangible assets            120        245
                                                       ---------- ----------
        Total non-GAAP adjustments                     $    1,109 $    1,079
                                                       ========== ==========



                        IKANOS COMMUNICATIONS, INC.
    Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated
                          Statements of Operations
                   (In thousands, except per share data)

                                      Three Months Ended December 29, 2013
                                     --------------------------------------
                                         As        Non-GAAP
                                      Reported   Adjustments       Non-GAAP
                                     ---------  -------------     ---------
Revenue                              $  17,582  $           -     $  17,582
Cost of revenue                          8,806             (2)(a)     8,684
                                                         (120)(b)

                                     ---------  -------------     ---------
          Gross profit                   8,776           (122)        8,898
                                     ---------  -------------     ---------

Operating expenses:
        Research and development        12,503           (640)(a)    11,863

        Selling, general and
         administrative                  4,589           (281)(a)     4,308

                                     ---------  -------------     ---------
          Total operating expenses      17,092           (921)       16,171
                                     ---------  -------------     ---------
Loss from operations                    (8,316)         1,043        (7,273)
        Interest income and other,
         net                               (71)             -           (71)
                                     ---------  -------------     ---------
Loss before income taxes                (8,387)         1,043        (7,344)
Provision for income taxes                 246              -           246
                                     ---------  -------------     ---------
Net loss                             $  (8,633) $       1,043     $  (7,590)
                                     =========  =============     =========

Net loss per share:
        Basic and diluted            $   (0.10)                   $   (0.09)
                                     =========                    =========

Weighted average outstanding shares:
        Basic and diluted               85,648                       85,648
                                     =========                    =========

Notes:                                            Three Months
                                                      Ended
                                                   December
                                                   29,2013
                                                -------------
  (a)   Stock-based compensation                $         923
  (b)   Amortization of acquired
         intangible assets                                120
                                                -------------
        Total non-GAAP adjustments              $       1,043
                                                =============



                         IKANOS COMMUNICATIONS, INC.
               Unaudited Condensed Consolidated Balance Sheets
                               (In thousands)

                                     March 30,    December 29,   March 31,
                                        2014          2013          2013
                                   ------------- ------------- -------------
              Assets
Current assets:
  Cash, cash equivalents and
   short-term investments          $      33,660 $      39,516 $      31,565
  Accounts receivable                     10,962        15,892        10,441
  Inventory                                1,314         2,017         7,375
  Prepaid expenses and other
   current assets                          3,075         3,245         3,684
                                   ------------- ------------- -------------
    Total current assets                  49,011        60,670        53,065
Property and equipment, net                8,666         8,612         8,281
Intangible assets, net                       598           718         1,285
Other assets                               1,949         1,952         2,556
                                   ------------- ------------- -------------
                                   $      60,224 $      71,952 $      65,187
                                   ============= ============= =============

   Liabilities and Stockholders'
               Equity
Current liabilities:
  Revolving line                   $       8,480 $      12,000 $       5,000
  Accounts payable                         5,919         4,692         3,494
  Accrued liabilities                      8,093         8,232        10,828
                                   ------------- ------------- -------------
    Total current liabilities             22,492        24,924        19,322
Other liabilities                          1,541         1,637         2,561
                                   ------------- ------------- -------------
    Total liabilities                     24,033        26,561        21,883
Stockholders' equity                      36,191        45,391        43,304
                                   ------------- ------------- -------------
                                   $      60,224 $      71,952 $      65,187
                                   ============= ============= =============


Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective ...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.