MICROSEMI FREQUENCY AND TIME CORP 
By SAN JOSE, Calif., Aug. 7, 2013 /PRNewswire/ -- Symmetricom, Inc. (NASDAQ:SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its fourth quarter and fiscal year ended June 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20110829/AQ59077LOGO)
Net revenue for the fourth quarter of fiscal 2013 was $52.1 million, compared to $62.6 million reported for the fourth quarter of fiscal 2012. Symmetricom reported a net loss of $1.5 million, or $0.04 per share, for the fourth quarter of fiscal 2013, compared to net income of $4.0 million, or $0.09 per share, in the fourth quarter of fiscal 2012.
Non-GAAP net income for the fourth quarter of fiscal 2013 was $3.0 million, or $0.07 per share, compared to $5.2 million, or $0.12 per share, reported for the fourth quarter of fiscal 2012.
Net revenue for fiscal 2013 was $211.0 million, compared to $237.7 million for fiscal 2012. Symmetricom reported a net loss of $2.7 million, or $0.07 per share, in fiscal 2013, compared to net income of $11.4 million, or $0.27 per share, in fiscal 2012. Non-GAAP net income for fiscal 2013 was $7.7 million, or $0.19 per share, compared to $16.8 million, or $0.39 per share, reported for the prior year.
Cash, cash equivalents and short-term investments totaled $75.5 million as of June 30, 2013 compared to $69.7 million reported as of March 31, 2013. Net cash provided by operating activities in the fourth quarter was $7.8 million, and property, plant and equipment purchases were approximately $2.0 million, resulting in free cash flow of $5.8 million. Free cash flow for fiscal 2013 was $12.8 million.
The Company is executing on its strategic restructuring plan, announced on June 18, 2013, to improve operational and financial efficiency while maximizing resources to support its growth initiatives. The plan is expected to be fully implemented by December 2013 and will reduce the workforce by approximately 12%. The Company will also further reduce the size of its facilities presence. The Company expects to incur total restructuring charges in the range of $7.5 million to $8.0 million in connection with the plan, and recorded $3.2 million of such charges in the fourth quarter of fiscal 2013. Upon completion, the Company expects these restructuring actions to reduce annual costs by approximately $13 million.
"Symmetricom is a great company with best-in-class technology and products, a blue-chip customer base and talented employees," said Liz Fetter, recently appointed chief executive officer of Symmetricom. "My focus is to drive the business to sustainable and profitable growth. We took significant action in June to restructure the Company which we believe will position us to deliver higher profitability in fiscal 2014. We are intensely focused on the execution of our business plan and the key initiatives for enhancing our competitive position and driving growth."
Business Segment Revenue Results
Revenue in the Communications Business in the fourth quarter of fiscal 2013 was $28.5 million, compared to $32.8 million reported in the fourth quarter of fiscal 2012. Revenue in the Government and Enterprise Business in the fourth quarter of fiscal 2013 was $23.6 million, compared to $29.8 million reported in the fourth quarter of fiscal 2012.
First Quarter 2014 Guidance
Symmetricom's guidance for the first quarter of fiscal 2014 is as follows:
-- Net revenue is expected to be in the range of $44 million to $49 million
-- GAAP loss per share is expected to be in the range of $0.02 to $0.07
-- Non-GAAP earnings per share is expected to be in the range of $0.00 to
$0.04
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 +1-212-547-0198 and referencing "Symmetricom." A live webcast will also be available on the investor relations section of the Company's website at www.symmetricom.com. An audio replay will be available for one week and can be accessed by dialing +1-203-369-0139.
About Symmetricom, Inc.
Symmetricom (NASDAQ:SYMM), 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® timing. Symmetricom is based in San Jose, California, with offices worldwide. For more information, visit: http://www.symmetricom.com or join the dialogue at http://www.twitter.com/symmetricom.
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, acquisition-related costs, amortization of intangible assets, restructuring charges, executive transition costs and off-shore development transition costs 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 or used in 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 estimates of restructuring charges and annual cost savings, first quarter fiscal 2014 guidance and future performance and growth 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, but are not limited to, the risk that the costs associated with the restructuring plan exceeds current estimates or that the Company is unable to recognize anticipated cost savings associated with the plan, the extent and magnitude of customer orders received and shipped within the same quarter, risks relating to general economic conditions in the markets we address and the telecommunications and government markets in general, risks related to the development of our new products and services, reliance on our contract manufacturer, the effects of increasing competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws or misappropriation of intellectual property, developments in and expenses related to litigation, the inability to obtain sufficient amounts of key components, the rescheduling or cancellation of key customer orders, the loss of a key customer, the effects of new and emerging technologies, the risk that excess inventory may result in write-offs, price erosion and decreased demand, fluctuations in the rate of exchange of foreign currency, changes in our effective tax rate, market acceptance of our new products and services, technological advancements, undetected errors, design flaws, defects in our products or start-up manufacturing difficulties, the risks associated with our international sales, potential short-term investment losses and other risks due to credit market dislocation, geopolitical risks and risk of terrorist activities, the risks associated with attempting to integrate other companies and businesses we acquire, 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 July 1, 2012 and subsequent Forms 10-Q and 8-K.
SYMM-F
Contact:
Justin Spencer
Chief Financial Officer
+1-408-428-7801
jspencer@symmetricom.com
SYMMETRICOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three months ended Twelve months ended
------------------ -------------------
June 30, March 31, July 1, June 30, July 1,
2013 2013 2012 2013 2012
---- ---- ---- ---- ----
Net revenue $52,099 $53,349 $62,606 $210,990 $237,716
Cost of
sales:
Cost of
products
and
services 27,538 28,654 34,214 115,953 131,907
Amortization
of purchased
technology
and related
costs 475 237 174 1,194 619
Restructuring
charges 572 375 22 943 1,178
--- --- --- --- -----
Total cost
of sales 28,585 29,266 34,410 118,090 133,704
------ ------ ------ ------- -------
Gross profit 23,514 24,083 28,196 92,900 104,012
Gross margin 45.1% 45.1% 45.0% 44.0% 43.8%
Operating
expenses:
Research and
development 7,975 8,291 7,385 32,384 27,960
Selling,
general and
administrative 15,119 14,593 14,966 60,717 58,921
Amortization
of
intangible
assets 87 87 86 346 242
Restructuring
charges 2,650 947 (78) 4,798 45
----- --- --- ----- ---
Total
operating
expenses 25,831 23,918 22,359 98,245 87,168
------ ------ ------ ------ ------
Operating
income
(loss) (2,317) 165 5,837 (5,345) 16,844
Interest
income, net
of
amortization
(accretion)
of premium
(discount)
on
investments 204 98 287 444 282
--- --- --- ---
Income
(loss)
before
income
taxes (2,113) 263 6,124 (4,901) 17,126
Income tax
provision
(benefit) (567) (556) 2,167 (2,196) 5,771
---- ---- ----- ------ -----
Net income
(loss) $(1,546) $819 $3,957 $(2,705) $11,355
======= ==== ====== ======= =======
Earnings
(loss) per
share:
Basic $(0.04) $0.02 $0.10 $(0.07) $0.27
Diluted $(0.04) $0.02 $0.09 $(0.07) $0.27
Shares used
in
computing
earnings
(loss) per
share:
Weighted
average
shares
outstanding
-basic 40,661 40,502 41,152 40,509 41,981
====== ====== ====== ====== ======
Weighted
average
shares
outstanding
-diluted 40,661 40,956 41,927 40,509 42,697
====== ====== ====== ====== ======
SYMMETRICOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
June 30, July 1,
2013 2012
---- ----
ASSETS
Current assets:
Cash and cash equivalents $29,358 $27,659
Short-term investments 46,131 39,280
Accounts receivable, net 38,756 45,952
Inventories, net 44,516 47,618
Prepaids and
other
current
assets 18,389 16,943
------ ------
Total current assets 177,150 177,452
Property, plant and equipment,
net 23,869 22,702
Intangible assets, net 2,958 3,458
Deferred taxes and other assets 26,951 27,413
Total assets $230,928 $231,025
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,813 $9,300
Accrued compensation 13,702 14,574
Accrued warranty 1,550 1,722
Other accrued liabilities 12,483 11,841
------ ------
Total current liabilities 35,548 37,437
Long-term obligations 5,264 5,472
Deferred income taxes 334 334
Total liabilities 41,146 43,243
Stockholders' equity:
Common stock 198,227 193,478
Accumulated
other
comprehensive
loss (276) (232)
Accumulated deficit (8,169) (5,464)
------ ------
Total stockholders' equity 189,782 187,782
------- -------
Total
liabilities
and
stockholders'
equity $230,928 $231,025
====== ======
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
Three months ended Twelve months
ended
------------------ --------------
June 30, March 31, July 1, June 30, July 1,
2013 2013 2012 2013 2012
---- ---- ---- ---- ----
Reconciliation from GAAP to
Non-GAAP
GAAP Net
income
(loss) $(1,546) $819 $3,957 $(2,705) $11,355
Add Non-GAAP adjustments:
Equity-based compensation
expense:
Cost of
products
and
services 222 274 261 1,037 867
Research and
development 219 304 287 1,200 1,183
Selling,
general and
administrative 1,425 1,212 1,013 4,878 4,092
----- ----- ----- ----- -----
Total
equity-
based
compensation
expense 1,866 1,790 1,561 7,115 6,142
Amortization of intangible
assets:
Cost of
products
and
services 475 237 174 1,194 619
Operating
expenses 87 87 86 346 242
--- --- --- --- ---
Total
amortization
of
intangible
assets 562 324 260 1,540 861
Restructuring
charges 3,222 1,322 (56) 5,741 1,223
Executive
transition
costs 1,376 - - 1,376 -
Off-shore
development
transition
costs - - - 729 -
Income tax
effect of
Pretax Non-
GAAP
adjustments (2,452) (1,429) (511) (6,105) (2,774)
------ ------ ---- ------ ------
Non-GAAP
Net income $3,028 $2,826 $5,211 $7,691 $16,807
====== ====== ====== ====== =======
Earnings (loss) per share-
diluted:
GAAP income
(loss) $(0.04) $0.02 $0.09 $(0.07) $0.27
Non-GAAP
income $0.07 $0.07 $0.12 $0.19 $0.39
Weighted
average
shares
outstanding
-diluted 41,015 40,956 41,927 41,319 42,697
SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
Three months ended Twelve months
ended
------------------ --------------
June 30, March 31, July 1, June 30, July 1,
2013 2013 2012 2013 2012
---- ---- ---- ---- ----
GAAP Revenue $52,099 $53,349 $62,606 $210,990 $237,716
Reconciliation from GAAP to Non-GAAP Gross
Profit:
GAAP Gross profit (A) $23,514 $24,083 $28,196 $92,900 $104,012
GAAP Gross margin 45.1% 45.1% 45.0% 44.0% 43.8%
Non-GAAP adjustments:
Equity-based compensation expense 222 274 261 1,037 867
Amortization of
purchased
technology and
related costs 475 237 174 1,194 619
Restructuring charges 572 375 22 943 1,178
--- --- --- --- -----
Non-GAAP Gross profit (B) $24,783 $24,969 $28,653 $96,074 $106,676
===
Non-GAAP Gross margin 47.6% 46.8% 45.8% 45.5% 44.9%
Reconciliation from GAAP to Non-GAAP
Operating Expense:
GAAP Operating expenses (C) $25,831 $23,918 $22,359 $98,245 $87,168
Operating expense % to revenue 49.6% 44.8% 35.7% 46.6% 36.7%
Non-GAAP adjustments:
Equity-based compensation expense (1,644) (1,516) (1,300) (6,078) (5,275)
Amortization of intangible assets (87) (87) (86) (346) (242)
Restructuring charges (2,650) (947) 78 (4,798) (45)
Executive transition costs (1,376) - - (1,376) -
Off-shore development transition costs - - - (729) -
--- --- --- ---- ---
Non-GAAP operating expenses (D) $20,074 $21,368 $21,051 $84,918 $81,606
===
Non-GAAP operating expenses % to revenue 38.5% 40.1% 33.6% 40.2% 34.3%
Reconciliation from GAAP to Non-GAAP
Operating Income:
GAAP Operating income (A) - (C) $(2,317) $165 $5,837 $(5,345) $16,844
========
Operating income % to revenue -4.4% 0.3% 9.3% -2.5% 7.1%
Non-GAAP Operating income (B) - (D) $4,709 $3,601 $7,602 $11,156 $25,070
======
Non-GAAP Operating income % to revenue 9.0% 6.7% 12.1% 5.3% 10.5%
SYMMETRICOM, INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE
FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE AND EPS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ending September 29, 2013
--------------------------------------
Revenue Income (Loss) Per Share
from
Continuing Operations
From To From To
GAAP Guidance $44,000 $49,000 $(0.07) $(0.02)
Estimated Non-GAAP Adjustments
Equity-based compensation expense 0.04 0.04
Amortization of intangible assets 0.01 0.01
Restructuring charges 0.05 0.04
Income tax effect of non-GAAP adjustments (0.03) (0.03)
----- -----
Total Non-GAAP
Adjustments - - 0.07 0.06
Non-GAAP
Guidance $44,000 $49,000 - $0.04
======= ======= === =====
SOURCE Symmetricom, Inc.
