Ikanos Communications Announces Results for the Fiscal First Quarter of 2013

Ikanos Communications Announces Results for the Fiscal First Quarter of 2013 
FREMONT, CA -- (Marketwired) -- 04/25/13 --  Ikanos Communications,
Inc. (NASDAQ: IKAN) 
Recent Highlights:  


 
--  Revenue of $26.2 million
--  GAAP Net Loss of $(4.4) million or $(0.06) per share
--  Cash, Cash Equivalents and Short-Term Investments $31.6 million

  
Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of
advanced broadband semiconductor and integrated firmware products for
the digital home, today announced its financial results for the
fiscal first quarter of 2013 ended March 31, 2013.  
"Ikanos achieved first quarter results within guidance with revenue
of $26.2 million and GAAP gross profit of 53%. Additionally we
effectively reduced operating expenses to $18.3 million and improved
our cash and short-term investments position to $31.6 million," said
Dennis Bencala, chief financial officer and vice president finance of
Ikanos.  
Omid Tahernia, president and CEO, said, "We are very encouraged by
some of the recent announcements in Australia and Germany regarding
plans for deployments of vectored VDSL in those markets. We believe
these and other similar announcements earlier by large global
carriers such as AT&T and Deutsche Telecom are indicative of the
increasing momentum behind the adoption of vectoring technology as a
key enabler for carriers to bring 100 Mbps DSL services to their
subscribers." Mr. Tahernia added, "Following the successful launch of
our NodeScale(TM) Vectoring Velocity-3 chipset at BBWF last October,
we have completed several lab trials at top tier carriers and OEMs
with very positive results, putting the Velocity-3 in an excellent
position as the industry transition to VDSL2 and vectoring continues
to gain momentum." 
"We are also excited about the adoption of our Fusiv(R) family of CPE
products by leading global carriers, as indicated by the recent
launch of Orange Livebox Play service based on our Vx185 integrated
broadband and gateway processor," said Mr. Tahernia. "While the major
revenue ramp for the Fusiv(R) family has been delayed to second half
of the year due in large part to our customers' inventory issues, we
are encouraged by the design-win traction the product line is seeing
in the market."  
Financial Highlights 
 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, non-GAAP operating expenses and non-GAAP
earnings per share, where applicable, exclude the income statement
effects of stock-based compensation, restructuring charges and
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. 
Fiscal First Quarter 2013 Results
 Revenue for the first quarter of
2013 was $26.2 million compared to revenue of $30.8 million for the
first quarter of 2012 and revenue of $31.8 million for the fourth
quarter of 2012. GAAP gross profit for the first quarter of 2013 was
53% compared to a GAAP gross profit of 52% for the first quarter of
2012 and GAAP gross profit of 48% for the fourth quarter of 2012.  
Non-GAAP gross profit for the first quarter of 2013 was 54% compared
to a non-GAAP gross profit of 54% for the first quarter of 2012 and
non-GAAP gross profit of 49% for the fourth quarter of 2012. 
GAAP operating expenses for the first quarter of 2013 were $18.3
million, compared to operating expenses of $19.8 million for the
first quarter of 2012 and operating expenses of $19.3 million for the
fourth quarter of 2012. 
Non-GAAP operating expenses for the first quarter of 2013 were $17.3
million, compared to non-GAAP operating expenses of $17.8 million for
the first quarter of 2012 and non-GAAP operating expenses of $18.4
million for the fourth quarter of 2012.  
GAAP net loss for the first quarter of 2013 was $(4.4) million, or a
loss of $(0.06) per share on 70.4 million weighted average shares
outstanding. This compares with a net loss of $(3.7) million, or a
loss of $(0.05) per share on 69.3 million weighted average shares
outstanding for the first quarter of 2012 and a net loss of $(4.5)
million, or a loss of $(0.06) per share on 70.1 million weighted
average shares outstanding for the fourth quarter of 2012.  
Non-GAAP net loss for the first quarter of 2013 was $(3.3) million,
or a loss of $(0.05) per share on 70.4 million weighted average
shares outstanding compared to a non-GAAP net loss of $(1.2) million,
or a loss of $(0.02) per share on 69.3 million weighted average
shares outstanding for the first quarter of 2012, and to a non-GAAP
loss of $(3.4) million, or $(0.05) per share on 70.1 million weighted
average shares outstanding in the fourth quarter of 2012.  
Cash, cash equivalents and short-term investments at the end of first
quarter of 2013 were $31.6 million compared to $31.2 million at the
end of the fourth quarter of 2012.  
Additionally, at the end of the first quarter of 2013 inventory was
$7.4 million compared to $8.1 million at the end of the fourth
quarter of 2012. Current liabilities at the end of the first quarter
of 2013 were $19.3 million compared to $24.4 million at the end of
the fourth quarter of 2012.  
Outlook 
 Revenue is expected to be between $19 million and $21
million for the fiscal second quarter of 2013. 
GAAP gross profit for the fiscal second quarter of 2013 is expected
to be between 49% and 51%. Non-GAAP gross profit is expected to be
between 50% and 52% for the second quarter of 2013. 
GAAP operating expenses for the fiscal second quarter of 2013 are
expected to be in the range of $17.5 million to $18.5 million. On a
Non-GAAP basis operating expenses are expected to be in the range of
$16.5 million to $17.5 million for the second quarter of 2013.  
GAAP net loss for second quarter of 2013 is expected to be in the
range of approximately $(6.9) million to $(9.3) million, or a GAAP
loss per share of $(0.10) to $(0.13). Non-GAAP net loss is expected
to be in the range of approximately $(5.7) million to $(8.1) million,
or a non-GAAP loss per share of $(0.08) to $(0.11).  
First Quarter Conference Call
 Management will review the first
quarter financial results and its expectations for subsequent periods
on a conference call on Thursday, April 25, 2013 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) 359-3627 or (719) 325-2429 and
enter conference ID 4095161. 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 24, 2013
by dialing (888) 203-1112 or (719) 457-0820 and entering conference
ID 4095161. 
About Ikanos Communications, Inc.
 Ikanos Communications, Inc.
(NASDAQ: IKAN) is a leading provider of advanced broadband
semiconductor and integrated firmware 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.  
Copyright 2013 Ikanos Communications, Inc. All Rights Reserved.
Ikanos Communications, Ikanos, the Ikanos logo, the Bandwidth without
boundaries tagline, Fusiv, Ikanos Velocity and NodeScale Vectoring
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 
 This press release contains forward-looking statements
that are subject to risks and uncertainties concerning Ikanos
Communications, including statements regarding our outlook for the
second quarter of 2013, such as our expected revenue, gross profits,
operating expenses, the benefits of non-GAAP measures, the market for
vectored VDSL, the anticipated adoption of vectoring technology,
product testing and shipment, and anticipated benefits of our
products. Actual events or results may differ materially from those
described in this document due to a number of risks and
uncertainties. These potential risks and uncertainties include, but
are not limited to, macroeconomic conditions which may cause our
customers to defer purchasing plans, our ability to deliver full
product
ion releases of our newer products and the acceptance of those
products by our customers, the continued demand by telecommunications
service providers for specific xDSL semiconductor products, the
failure of service providers to implement deployment plans on
schedule or at all, our continued ability to obtain and deliver
production volumes of new and current products and technologies, our
ability to generate demand and close transactions for the sale of our
products, our ability to develop commercially successful products as
a result of our current research and development programs and
unexpected future costs, expenses and financing requirements. In
addition, for a more extensive discussion of such risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see the section entitled
"Risk Factors" in our Annual Report on Form 10-K for the fiscal year
ended December 30, 2012 filed with the Securities and Exchange
Commission (SEC) on February 28, 2013, as well as other reports that
Ikanos files from time to time with the SEC. Ikanos is under no
obligation to update these forward-looking statements to reflect
events or circumstances subsequent to date of this press release. 


 
                                                                            
                        IKANOS COMMUNICATIONS, INC.                         
         Una
udited Condensed Consolidated Statements of Operations          
                   (In thousands, except per share data)                    
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                  March 31,     December 30,                
                                     2013           2012      April 1, 2012 
                                -------------  -------------  ------------- 
                                                                            
Revenue                         $      26,152  $      31,758  $      30,760 
Cost of revenue                        12,196         16,476         14,653 
                                -------------  -------------  ------------- 
      Gross profit                     13,956         15,282         16,107 
                                -------------  -------------  ------------- 
Operating expenses:                                                         
    Research and development           13,518         14,120         14,000 
    Selling, general and                                                    
     administrative                     4,772          5,221          4,680 
    Restructuring                           -           
   -          1,092 
                                -------------  -------------  ------------- 
      Total operating expenses         18,290         19,341         19,772 
                                -------------  -------------  ------------- 
Loss from operations                   (4,334)        (4,059)        (3,665)
    Investment gain                         -              -              - 
    Interest income, net                   82            143             75 
                                -------------  -------------  ------------- 
Loss before income taxes               (4,252)        (3,916)        (3,590)
    Provision for income taxes            164            608            115 
                                -------------  -------------  ------------- 
Net loss                        $      (4,416) $      (4,524) $      (3,705)
                                =============  =============  ============= 
                                                                            
Basic and diluted net loss per                                              
 share                          $       (0.06) $       (0.06) $       (0.05)
                                =============  =============  ============= 
Weighted average outstanding                                                
 shares:                                                                    
  Basic and diluted                    70,413         70,136         69,335 
                                =============  =============  ============= 
                                                                             
                                                                            
                                                                            
                        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,  Three Months Ended April 1, 
                              2013                         2012             
                  ---------------------------- ---------------------------- 
                           Non-GAAP                     Non-GAAP            
                     As    Adjust-       Non-     As    Adjust-       Non-  
                  Reported  ments        GAAP  Reported  ments        GAAP  
                  -------- --------    ------- -------- --------    ------- 
Revenue           $ 26,152 $      -    $26,152 $ 30,760 $      -    $30,760 
Cost of revenue     12,196       (1)(a) 12,075   14,653       (3)(a) 14,150 
                               (120)(b)                     (500)(b)        
                                                                            
                  -------- --------    ------- -------- --------    ------- 
    Gross profit    13,956     (121)    14,077   16,107     (503)    16,610 
                  -------- --------    ------- -------- --------    ------- 
                                                                            
Operating                                                                   
 expenses:                                                                  
  Research and                                                              
   development      13,518     (571)(a) 12,947   14,000     (596)(a) 13,404 
                                                                            
  Selling,                                                                  
   general and                                                              
   administrative    4,772     (262)(a)  4,385    4,680     (195)(a)  4,360 
                               (125)(b)                     (125)(b)        
                                                                            
  Restructuring          -        -          -    1,092   (1,092)(c)      - 
                  -------- --------    ------- -------- --------    ------- 
    Total                                                                   
     operating                                                              
     expenses       18,290     (958)    17,332   19,772   (2,008)    17,764 
                  -------- --------    ------- -------- --------    ------- 
Loss from                                                                   
 operations         (4,334)   1,079     (3,255)  (3,665)   2,511     (1,154)
  Interest income                                                           
   and other, net       82        -         82       75        -         75 
                  -------- --------    ------- -------- --------    ------- 
Loss before                                                                 
 income taxes       (4,252)   1,079     (3,173)  (3,590)   2,511     (1,079)
Provision for                                                               
 income taxes          164        -        164      115        -        115 
                  -------- --------    ------- -------- --------    ------- 
Net loss          $ (4,416)$  1,079    $(3,337)$ (3,705)$  2,511    $(1,194)
                  ======== ========    ======= ======== ========    ======= 
                                                                            
Net loss per                                                                
 share:                                                                     
  Basic and                                                                 
   diluted        $  (0.06)            $ (0.05)$  (0.05)            $ (0.02)
                  ========             ======= ========             ======= 
                                                                            
Weighted average                                                            
 outstanding                                                                
 shares:                                                                    
  Basic and                                                                 
   diluted          70,413              70,413   69,335              69,335 
                  ========             ======= ========             ======= 
                                                                            
Notes:                                                    Three Months Ended
                                                         -------------------
                                                         March 31,  April 1,
                                                            2013      2012  
                                                         --------- ---------
(a)   Stock-based compensation                           $     834 $     794
(b)   Amortization of acquired intangible assets               245       625
(c)   Restructuring charges                                      -     1,
092
                                                         --------- ---------
      Total non-GAAP adjustments                         $   1,079 $   2,511
                                                         ========= =========
                                                                            
                                                                            
                                                                            
                        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 30, 2012   
                                   ---------------------------------------- 
                                                  Non-GAAP                  
                                   As Reported  Adjustments       Non-GAAP  
                                   -----------  -----------     ----------- 
Revenue                            $    31,758  $         -     $    31,758 
Cost of revenue                         16,476           (9)(a)      16,347 
                                                       (120)(b)             
                                                                            
                                   -----------  -----------     ----------- 
    Gross profit                        15,282         (129)         15,411 
                                   -----------  -----------     ----------- 
                                                                            
Operating expenses:                                                         
  Research and development              14,120         (557)(a)      13,563 
                                                                            
  Selling, general and                                                      
   administrative                        5,221         (308)(a)       4,788 
                                                       (125)(b)             
                                                                            
  Restructuring                              -            -               - 
                                   -----------  -----------     ----------- 
    Total operating expenses            19,341         (990)         18,351 
                                   -----------  -----------     ----------- 
Loss from operations                    (4,059)       1,119          (2,940)
  Interest income and other, net           143            -             143 
                                   -----------  -----------     ----------- 
Loss before income taxes                (3,916)       1,119          (2,797)
Provision for income taxes                 608            -             608 
                                   -----------  -----------     ----------- 
Net loss                           $    (4,524) $     1,119     $    (3,405)
                                   ===========  ===========     =========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted                $     (0.06)                 $     (0.05)
                                   ===========                  =========== 
                                                                            
Weighted average outstanding                                                
 shares:                                                                    
  Basic and diluted                     70,136                       70,136 
                                   ===========                  =========== 
                                                                            
                                                                            
                                                                Three Months
Notes:                                           
                  Ended    
                                                                December 30,
                                                                    2012    
                                                               -------------
(a)   Stock-based compensation                                 $         874
(b)   Amortization of acquired intangible assets                         245
                                                               -------------
      Total non-GAAP adjustments                               $       1,119
                                                               =============
                                                                            
                                                                            
                                                                            
                         IKANOS COMMUNICATIONS, INC.                        
               Unaudited Condensed Consolidated Balance Sheets              
                               (In thousands)                               
                                                                            
                                     March 31,    December 30,              
                                        2013          2012     April 1, 2012
                                   ------------- ------------- -------------
              Assets                                                        
Current assets:                                                             
  Cash, cash equivalents and                                                
   short-term investments          $      31,565 $      31,176 $      39,727
  Accounts receivable                     10,441        15,748        16,832
  Inventory                                7,375         8,122         7,755
  Prepaid expenses and other                                                
   current assets                          3,684         5,892         2,321
                                   ------------- ------------- -------------
    Total current assets                  53,065        60,938        66,635
Property and equipment, net                8,281         8,769         6,698
Intangible assets, net                     1,285         1,529         2,977
Other assets                               2,556         2,612         1,915
                                   ------------- ------------- -------------
                                   $      65,187 $      73,848 $      78,225
                                   ============= ============= =============
                                                                            
   Liabilities and Stockholders'                                            
               Equity                                                       
Current liabilities:                                                        
  Revolving line                   $       5,000 $       5,000 $           -
  Accounts payable                         3,494         5,679         7,701
  Accrued liabilities                     10,828        13,688        11,974
                                   ------------- ------------- -------------
    Total current liabilities             19,322        24,367        19,675
  Other liabilities                        2,561         2,854           739
                                   ------------- ------------- -------------
    Total liabilities                     21,883        27,221        20,414
Stockholders' equity                      43,304        46,627        57,811
                                   ------------- ------------- -------------
                                   $      65,187 $      73,848 $      78,225
                                   ============= ============= =============

  
MKR Group, Inc.
Investor Relations
Todd Kehrli or Charles Messman
323.468.2300
IKAN@mkr-group.com 
 
 
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