Symmetricom Reports Third Quarter Fiscal Year 2013 Financial Results

SAN JOSE, Calif., April 24, 2013 /PRNewswire/ -- Symmetricom, Inc. (NASDAQ:SYMM), a worldwide leader in precision time and frequency technologies, today reported financial results for its third quarter of fiscal year 2013 ended March 31, 2013.

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Net revenue for the third quarter of fiscal 2013 was $53.3 million, compared to the $60.4 million reported for the third quarter of fiscal 2012.  Symmetricom reported net income of $0.8 million, or $0.02 per share, for the third quarter of fiscal 2013, compared to net income of $2.2 million, or $0.05 per share in the third quarter of fiscal 2012. On a sequential basis, revenue, net income and earnings per share increased from the second quarter of fiscal 2013.    

Non-GAAP net income for the third quarter of fiscal 2013 was $2.8 million, or $0.07 per share, compared to $3.3 million, or $0.08 per share, reported for the third quarter of fiscal 2012.  Non-GAAP net income increased sequentially by $2.5 million, or $0.06 per share, from the second quarter of fiscal 2013.

Cash, cash equivalents and short-term investments totaled $69.7 million as of March 31, 2013 compared to $70.8 million reported as of December 30, 2012. Net cash provided by operating activities in the third quarter was $1.3 million, and property, plant and equipment purchases were approximately $2.1 million, resulting in free cash outflow of ($0.8) million.

"Symmetricom delivered improved results compared to last quarter, with revenue at the high end of our expectations.  Profitability also improved sequentially, reflecting higher revenue, improved CSAC margins and the benefits from our ongoing savings efforts," said Dave Cote, president and chief executive officer of Symmetricom. "We continue to focus on driving our key growth initiatives, including the Quantum Chip Scale Atomic Clock, PackeTime and Government Programs. With our solid competitive position, a suite of leading solutions, and a healthy balance sheet, we remain well-positioned for the future."

Business Segment Revenue Results
Revenue in the Communications Business in the third quarter of fiscal 2013 was $30.0 million, compared to $32.6 million reported in the third quarter of fiscal 2012.  Revenue in the Government and Enterprise Business in the third quarter of fiscal 2013 was $23.3 million, compared to $27.8 million reported in the third quarter of fiscal 2012.  Revenue in both segments increased from the second quarter of fiscal 2013, with the larger increase in the Communications segment.

Fourth Quarter 2013 Guidance
Symmetricom's guidance for the fourth quarter of fiscal 2013 is as follows:

• Net revenue is expected to be in the range of $51 million to $57 million
• GAAP earnings (loss) per share is expected to be in the range of $0.00 to $0.05
• Non-GAAP earnings per share is expected to be in the range of $0.05 to $0.10

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 [phone] 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 [phone].

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, power 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 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 fourth quarter fiscal 2013 guidance and future performance 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 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.

Contact:
Justin Spencer
Chief Financial Officer
[phone]
[e-mail]

SYMM-F

 

SYMMETRICOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
		Three months ended						Nine months ended
		March 31,		December 30,		April 1,		March 31,		April 1,
		2013		2012		2012		2013		2012
Net revenue		$  53,349		$        49,151		$  60,438		$  158,891		$  175,110
Cost of sales:
Cost of products and services		28,654		27,861		35,638		88,415		97,693
Acquisition-related costs		237		248		74		719		445
Restructuring charges		375		41		65		371		1,156
Total cost of sales		29,266		28,150		35,777		89,505		99,294
Gross profit		24,083		21,001		24,661		69,386		75,816
Gross margin		45.1%		42.7%		40.8%		43.7%		43.3%
Operating expenses:
Research and development		8,291		7,805		7,129		24,409		20,575
Selling, general and administrative		14,593		14,778		14,281		45,598		43,955
Amortization of intangible assets		87		86		52		259		156
Restructuring charges		947		1,146		(76)		2,148		123
Total operating expenses		23,918		23,815		21,386		72,414		64,809
Operating income (loss)		165		(2,814)		3,275		(3,028)		11,007
Interest income, net of amortization (accretion) of premium (discount) on investments		98		178		225		240		(5)
Income (loss) before taxes		263		(2,636)		3,500		(2,788)		11,002
Income tax provision (benefit)		(556)		(861)		1,296		(1,629)		3,604
Net income (loss)		$      819		$         (1,775)		$   2,204		$    (1,159)		$     7,398
Earnings (loss) per share:
Basic		$     0.02		$           (0.04)		$     0.05		$      (0.03)		$       0.18
Diluted		$     0.02		$           (0.04)		$     0.05		$      (0.03)		$       0.17
Shares used in computing earnings (loss) per share:
Weighted average shares outstanding - basic		40,502		40,356		41,795		40,456		42,258
Weighted average shares outstanding - diluted		40,956		40,356		42,615		40,456		42,937

 

SYMMETRICOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
				March 31,		July 1,
				2013		2012
ASSETS
Current assets:
	Cash and cash equivalents			$  22,371		$  27,659
	Short-term investments			47,351		39,280
	Accounts receivable, net			38,870		45,952
	Inventories			47,195		47,618
	Prepaids and other current assets			17,379		16,943
	Total current assets			173,166		177,452
Property, plant and equipment, net				23,148		22,702
Intangible assets, net				3,519		3,458
Deferred taxes and other assets				28,898		27,413
	Total assets			$228,731		$231,025
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$  10,343		$    9,300
	Accrued compensation			11,923		14,574
	Accrued warranty			1,455		1,722
	Other accrued liabilities			10,748		11,841
	Total current liabilities			34,469		37,437
Long-term obligations				4,938		5,472
Deferred income taxes				334		334
	Total liabilities			39,741		43,243
Stockholders' equity:
	Common stock			195,821		193,478
	Accumulated other comprehensive loss			(208)		(232)
	Accumulated deficit			(6,623)		(5,464)
	Total stockholders' equity			188,990		187,782
	Total liabilities and stockholders' equity			$228,731		$231,025

 

SYMMETRICOM, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share amounts)
(unaudited)
	Three months ended						Nine months ended
	March 31,		December 30,		April 1,		March 31,		April 1,
	2013		2012		2012		2013		2012
Reconciliation from GAAP to Non-GAAP
GAAP Net income (loss)	$      819		$        (1,775)		$2,204		$  (1,159)		$  7,398
Non-GAAP adjustments:
Equity-based compensation expense:
Cost of products and services	274		250		272		815		606
Research and development	304		316		312		981		896
Selling, general and administrative	1,212		1,121		1,154		3,453		3,079
Total equity-based compensation expense	1,790		1,687		1,738		5,249		4,581
Acquisition-related costs and amortization of intangible assets:
Cost of products and services	237		248		74		719		445
Operating expenses	87		86		52		259		156
Total acquisition-related costs and amortization of intangible assets	324		334		126		978		601
Restructuring charges	$   1,322		$         1,187		$    (11)		$   2,519		$  1,279
Off-shore development transition costs	-		-		-		729		-
Income tax effect of Non-GAAP adjustments	(1,429)		(1,154)		(793)		(3,653)		(2,263)
Non-GAAP Net income	$   2,826		$           279		$3,264		$    4,663		$11,596
Earnings (loss) per share - diluted:
GAAP Net income (loss)	$     0.02		$         (0.04)		$  0.05		$    (0.03)		$    0.17
Non-GAAP Net income	$     0.07		$          0.01		$  0.08		$      0.11		$    0.27
Weighted average shares outstanding - diluted	40,956		41,464		42,615		41,396		42,937

 

	SYMMETRICOM, INC.
	RECONCILIATION OF GAAP TO NON-GAAP RESULTS
	(In thousands, except per share amounts)
	(unaudited)
			Three months ended						Nine months ended
			March 31,		December 30,		April 1,		March 31,		April 1,
			2013		2012		2012		2013		2012
GAAP Revenue			$  53,349		$        49,151		$  60,438		$  158,891		$  175,110
Reconciliation from GAAP to Non-GAAP Gross Profit:
GAAP Gross profit		(A)	$  24,083		$        21,001		$  24,661		$   69,386		$   75,816
	GAAP Gross margin		45.1%		42.7%		40.8%		43.7%		43.3%
Non-GAAP adjustments:
	Equity-based compensation expense		274		250		272		815		606
	Acquisition-related costs		237		248		74		719		445
	Restructuring charges		375		41		65		371		1,156
Non-GAAP Gross profit		(B)	$  24,969		$        21,540		$  25,072		$   71,291		$   78,023
	Non-GAAP Gross margin		46.8%		43.8%		41.5%		44.9%		44.6%
Reconciliation from GAAP to Non-GAAP Operating Expense:
GAAP Operating expenses		(C)	$  23,918		$        23,815		$  21,386		$   72,414		$   64,809
	Operating expense % to revenue		44.8%		48.5%		35.4%		45.6%		37.0%
Non-GAAP adjustments:
	Equity-based compensation expense		(1,516)		(1,437)		(1,466)		(4,434)		(3,975)
	Amortization of intangible assets		(87)		(86)		(52)		(259)		(156)
	Restructuring charges		(947)		(1,146)		76		(2,148)		(123)
	Off-shore development transition costs		-		-		-		729		-
Non-GAAP operating expenses		(D)	$  21,368		$        21,146		$  19,944		$   66,302		$   60,555
	Non-GAAP operating expenses % to revenue		40.1%		43.0%		33.0%		41.7%		34.6%
Reconciliation from GAAP to Non-GAAP Operating Income (loss):
GAAP Operating income (loss)		(A) - (C)	$      165		$         (2,814)		$   3,275		$    (3,028)		$   11,007
	Operating income % to revenue		0.3%		-5.7%		5.4%		-1.9%		6.3%
Non-GAAP Operating income		(B) - (D)	$   3,601		$             394		$   5,128		$     4,989		$   17,468
	Operating income % to revenue		6.7%		0.8%		8.5%		3.1%		10.0%

 

	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 June 30, 2013
		Revenue			Earnings / (Loss) Per Share from Continuing Operations
		From	To		From	To
GAAP Guidance		$51,000	$57,000		$0.00	$0.05
Estimated Non-GAAP Adjustments
	Equity-based compensation expense				$0.04	$0.04
	Amortization of intangible assets				$0.01	$0.01
	Integration and restructuring charges				$0.02	$0.02
	Income tax effect of non-GAAP adjustments				($0.02)	($0.02)
	Total Non-GAAP Adjustments				$0.05	$0.05
Non-GAAP Guidance		$51,000	$57,000		$0.05	$0.10

SOURCE Symmetricom, Inc.

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