First Quarter Highlights
- Revenue of $10.2 million
- GAAP net loss of $(12.0) million, or $(0.77) per share
- Ending cash and cash equivalents of $13.0 million
Ikanos Communications, Inc. (
"First quarter revenue was $10.2 million, with a GAAP gross profit of 49%, which due to a favorable product mix exceeded our gross-profit guidance," said Dennis Bencala, CFO of Ikanos. "During the first quarter, we worked to manage our business and cash position, with operating expenses of $16.8 million, and the completion of a common stock rights offering in which the Company raised approximately $12.4 million, before expenses, resulting in a cash and short-term investments of $13.0 million at the end of the first quarter." Bencala continued, "We also signed the definitive collaboration agreement with Alcatel-Lucent after the quarter closed, allowing us to draw down on the previously agreed-to $10 million loan."
"I'm pleased to report significant progress in executing our gigabit strategy. We are on track for second-generation G.fast product sample availability to alpha customers in the third quarter," said Omid Tahernia, president and CEO of Ikanos. "In addition, we achieved a significant milestone in Japan and Korea, establishing Ikanos as the only company that has demonstrated over 1 gigabit performance on copper at a distance of 100 meters in OEM lab testing."
Tahernia continued, "While the majority of our R&D investment is focused on successful execution of our gigabit strategy, we are also putting significant effort into driving revenue ramp with key customers rolling out new products this year, based on our Vx500 gateway processors, Velocity-3 in China, and inSIGHT software. In the last two years, we have gained significant design win momentum, increasing the life-time value of our design win pipeline by a factor of 10 from 2013 to 2014. We continued this momentum last quarter by securing two additional gateway opportunities. In addition, as already announced, we have extended the capabilities of our inSIGHT analytics beyond copper networks, thereby significantly expanding inSIGHT's market opportunity to cover all broadband access. This includes cable and mobile operators, as well as residential fiber deployments." Tahernia concluded, "While our short-term revenue outlook remains stable, we are optimistic about our future revenue trends, based on new customers' progress towards production ramp later this year, our established leadership and eco-system partnerships in ultra-broadband, and the significant market interest in our gigabit products and strategy."
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 2015 Results
Revenue for the first quarter of 2015 was $10.2 million, compared to revenue of $14.5 million for the first quarter of 2014 and revenue of $11.5 million for the fourth quarter of 2014. GAAP gross profit for the first quarter of 2015 was 49%, which is consistent with GAAP gross profit for the first quarter of 2014 and the fourth quarter of 2014.
Non-GAAP gross profit for the first quarter of 2015 was 50%, which is consistent with non-GAAP gross profit for the first quarter of 2014 and the fourth quarter of 2014.
GAAP operating expenses for the first quarter of 2015 were $16.8 million, compared to operating expenses of $17.5 million for the first quarter of 2014 and operating expenses of $15.7 million for the fourth quarter of 2014.
Non-GAAP operating expenses for the first quarter of 2015 were $15.8 million, compared to non-GAAP operating expenses of $16.5 million for the first quarter of 2014 and non-GAAP operating expenses of $14.7 million for the fourth quarter of 2014.
GAAP net loss for the first quarter of 2015 was $(12.0) million, or a loss of $(0.77) per share on 15.6 million weighted average shares outstanding, compared to a GAAP net loss of $(10.3) million, or $(1.04) per share on 9.9 million weighted average shares outstanding, for the first quarter of 2014 and a GAAP net loss of $(10.4) million, or $(0.75) per share on 13.9 million weighted shares outstanding, for the fourth quarter of 2014.
Non-GAAP net loss for the first quarter of 2015 was $(10.8) million, or a loss of $(0.69) per share on 15.6 million weighted average shares outstanding, compared to a non-GAAP net loss of $(9.2) million, or $(0.93) per share on 9.9 million weighted average shares outstanding, for the first quarter of 2014 and a non-GAAP loss of $(9.3) million, or $(0.67) per share on 13.9 million weighted average shares outstanding, for the fourth quarter of 2014.
Cash and cash equivalents and short-term investments at the end of the first quarter of 2015 were $13.0 million, compared to $15.7 million at the end of the fourth quarter of 2014. Our year-end cash included proceeds of $16.3 million from our September 29, 2014 private equity placement. Additionally, at the end of the first quarter of 2015, inventory was $2.1 million, compared to $2.0 million at the end of the fourth quarter of 2014. Current liabilities at the end of the first quarter of 2015 were $18.1 million, compared to $22.4 million at the end of the fourth quarter of 2014. For both the first quarter of 2015 and fourth quarter of 2014, current liabilities included an accounts receivable-backed revolving line of credit advance of $5.0 million and $10.8 million, respectively.
For a more complete review of our first quarter 2015 results please see the attached financial schedules.
Outlook
Revenue is expected to be between $10.0 million and $12.0 million for the second quarter of 2015.
GAAP gross profit for the second quarter of 2015 is expected to be between 55% and 57%. Non-GAAP gross profit is expected to be between 56% and 58%. GAAP operating expenses for the second quarter of 2015 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. GAAP net loss for the second quarter of 2015 is expected to be in the range of approximately $(10.8) million to $(13.1) million, or a GAAP loss per share of $(0.63) to $(0.76). Non-GAAP net loss is expected to be in the range of approximately $(9.6) million to $(12.0) million, or a non-GAAP loss per share of $(0.56) to $(0.70).
First Quarter Conference Call
Management will review the first quarter financial results and its expectations for subsequent periods at a conference call on May 4, 2015 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) 455-2308 and enter conference ID 7925677. 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 August 2, 2015 by dialing (888) 203-1112 or (719) 457-0820 and entering conference ID 7925677.
About Ikanos Communications, Inc.
Ikanos Communications, Inc. (
© 2015 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.
