Somera Communications (NASDAQ:SMRA)
Historical Stock Chart
From Sep 2019 to Sep 2024
DALLAS, Nov. 2 /PRNewswire-FirstCall/ -- Somera Communications (NASDAQ:SMRA), a global provider of telecommunications equipment, asset management, and recovery services, today announced financial results for the quarter ended September 30, 2005.
Total revenue for the third quarter of 2005 was $21.8 million, compared with $18.7 million in the second quarter of 2005. This also compares with $22.7 million in the third quarter of 2004.
Net loss was $4.2 million, or ($0.08) per share, for the third quarter of 2005, compared with a net loss of $7.9 million, or ($0.16) per share, for the second quarter of 2005. This also compares to a net loss of $8.5 million, or ($0.17) per share, for the third quarter of 2004.
David Heard, CEO of Somera, commented on the third quarter results, "We are very pleased that we were able to meet our top- and bottom-line financial targets in the third quarter, which is typically a period in which seasonality tends to apply downward pressure on our top line. We successfully increased our penetration into major carriers for our brokerage business, and also increased revenues driven by our asset management services, highlighted by our RecoveryPLUS program. Additionally, through tighter business execution, we have increased our gross profit by almost twice the level it was in the third quarter of 2004.
"We also continued to streamline our operations by completing the transition of our corporate headquarters to Dallas and consolidating our European facilities. We believe these actions, as well as other expense reduction initiatives, have reduced our breakeven level to approximately $30 million in revenue per quarter, and solidified our drive to profitability," said Mr. Heard.
Third Quarter Financial Highlights
Gross margin for the third quarter of 2005 was 33.0% and in line with the Company's expectations. This compares with a gross margin of 33.6% in the second quarter of 2005 and 17.2% in the third quarter of 2004.
Operating expenses for the third quarter of 2005 were $11.5 million, compared with $14.1 million in the second quarter of 2005 and $12.6 million in the third quarter of 2004. The reduction in operating expenses from the prior year is primarily attributable to a reduction in General and Administrative expenses, partially offset by continued investment in Sales and Marketing to drive further growth in the business.
Somera's balance sheet at September 30, 2005 included $22.5 million in cash, cash equivalents, and short-term investments, a current ratio of 1.9 and no long-term debt.
Outlook
In the fourth quarter of 2005, Somera expects to generate continued sequential quarter revenue growth and further reduce its net loss to a range of a net loss of ($0.04) to ($0.07) per share.
Mr. Heard commented on the outlook for Somera, "We expect our fourth quarter revenue to be positively impacted by a growing pipeline of brokerage opportunities, our improved inventory position, at least one new RecoveryPLUS implementation, and the typical seasonal strength that we experience at the end of the year."
Conference Call and Webcast
Management will hold a teleconference with simultaneous webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss third quarter results. Please dial 800-240-2134 for domestic callers, or 303-262-2194 for international callers. The call will be webcast on the Investor Relations page of the Somera web site at http://www.somera.com/. Listeners will need to have Microsoft Media Player installed on their computers. A telephonic replay will be available from one hour after the call ends through November 9, 2005, at 800-405-2236 for domestic callers, or 303-590-3000 for international callers, passcode 11041276.
About Somera
Somera Communications is a telecom asset management firm that assists service providers generate greater value from their network assets in the form of lower operating costs, longer product life, higher productivity, and real measurable savings. Somera provides immediate availability of quality, warranted new and refurbished equipment at savings of 25% to 60%. Extending these benefits is Somera RecoveryPLUS(TM), which deploys knowledgeable personnel, proven processes and proprietary software to each client location to provide professional discovery, valuation and asset cataloging, thereby enhancing ongoing network efficiency while improving the accuracy and quality of reports required of today's regulatory environment. In addition, Somera offers outsourced network operations, logistics, and technical service, as well as comprehensive repair services for wireless, wireline, and data products -- all at significant savings and reduced cycle times. Founded in 1995, Somera has developed an impressive base of over 1,100 customers worldwide, including the industry leaders from each segment of the telecommunications market. Visit Somera on the web at http://www.somera.com/.
This news release contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements about Somera's expected revenue and net loss per share levels for the fourth quarter of 2005, Somera's brokerage and services businesses, inventory position, and expected seasonality in the fourth quarter of 2005. Actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements contained in this release, including, but not limited to, general economic conditions particularly affecting the telecommunications industry; capital equipment spending levels in the telecommunications industry, including the risk of continued customer spending delays associated with carrier consolidation; the impact of competition in the market for supplying equipment and equipment lifecycle management services to telecommunications operators; the risk of potential shortage of product supply; and Somera's ability to build its lifecycle management services capabilities; and other factors fully described in the company's reports to the Securities and Exchange Commission (SEC), including but not limited to, the Annual Report on Form 10-K for the fiscal year ended December, 31, 2004, and Quarterly Reports on Form 10-Q. The company does not undertake to update any forward-looking statements that may be made by or on behalf of the company. Copies of Somera's Securities & Exchange Commission filings may be obtained by contacting Financial Relations Board at 617-520-7064 or by visiting the Investor section of Somera's web site at http://www.somera.com/.
Contact:
Jim Gardner
Vice President, Marketing
Somera Communications
972-304-5660, ext. 317
SOMERA COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 30, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $3,926 $7,654
Short-term investments 18,600 32,757
Accounts receivable, net of allowance for
doubtful accounts of $454 and $574 at
September 30, 2005 and December 31, 2004,
respectively 17,379 16,217
Inventories, net 13,847 10,027
Other current assets 1,535 1,876
Total current assets 55,287 68,531
Property and equipment, net 4,109 4,600
Other assets 3,413 148
Goodwill -- 1,760
Intangible assets, net -- 50
Total assets $62,809 $75,089
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $15,761 $12,396
Accrued compensation 2,439 2,503
Other accrued liabilities 9,418 11,139
Deferred revenue 1,416 723
Total current liabilities 29,034 26,761
Commitments and Contingencies
Stockholders' equity:
Preferred stock ($0.001 par value per
share; authorized 20,000 shares,
no shares issued)
Common stock ($0.001 par value per share;
authorized 200,000 shares, shares issued
and outstanding: 50,331 and 49,872 at
September 30, 2005 and December 31,
2004, respectively) 50 49
Additional paid-in capital 75,230 74,652
Unearned stock-based compensation (203) (72)
Accumulated other comprehensive
income (loss) 192 (191)
Accumulated deficit (41,494) (26,110)
Total stockholders' equity 33,775 48,328
Total liabilities and stockholders' equity $62,809 $75,089
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenues:
Equipment revenue $18,832 $20,736 $53,837 $66,496
Service and program revenue 2,945 1,957 7,155 10,352
Total revenues 21,777 22,693 60,992 76,848
Cost of revenues:
Equipment cost of revenue 12,902 17,346 35,960 51,935
Service and program cost
of revenue 1,683 1,455 3,882 7,554
Total cost of revenues 14,585 18,801 39,842 59,489
Gross profit 7,192 3,892 21,150 17,359
Operating expenses:
Sales and marketing 6,896 5,288 19,527 16,847
General and administrative 4,521 7,309 13,817 16,932
Impairment of goodwill -- -- 1,760 --
Other operating expenses 102 17 1,306 50
Total operating expenses 11,519 12,614 36,410 33,829
Loss from operations (4,327) (8,722) (15,260) (16,470)
Other income (expense), net 163 241 (87) 91
Loss before income taxes (4,164) (8,481) (15,347) (16,379)
Income tax provision 13 8 37 42
Net loss (4,177) (8,489) (15,384) (16,421)
Net loss per share: basic
and diluted $(0.08) $(0.17) $(0.31) $(0.33)
Weighted average shares:
basic and diluted 50,301 49,808 49,973 49,695
DATASOURCE: Somera Communications
CONTACT: Jim Gardner, Vice President, Marketing of Somera
Communications, +1-972-304-5660, ext. 317,
Web site: http://www.somera.com/