Ikanos Communications Announces Results for the Fiscal Third Quarter of 2013

Ikanos Communications Announces Results for the Fiscal Third Quarter of 2013 
FREMONT, CA -- (Marketwired) -- 10/29/13 --  Ikanos Communications,
Inc. (NASDAQ: IKAN) 
Q3 Highlights:  


 
--  Revenue of $16.9 million
--  GAAP Gross Profit of 51%
--  GAAP Operating Expenses of $17.0 million
--  Cash, Cash Equivalents and Short-Term Investments of $25.6 million

  
Ikanos Communications, Inc. (NASDAQ: IKAN), a leading provider of
advanced broadband semiconductor and integrated software products for
the digital home, today announced its financial results for the
fiscal third quarter of 2013 ended September 29, 2013. 
"Ikanos achieved better than expected third quarter results, with
gross profits exceeding our target, while revenue ended near the
mid-range of our guidance," said Dennis Bencala, chief financial
officer and vice president of finance at Ikanos. "We achieved revenue
of $16.9 million, with a GAAP gross profit of 51%, well above our
guidance of 47% to 49%. We also sequentially reduced operating
expenses for the fourth consecutive quarter, with OPEX down to $17.0
million and below our guidance of $17.5 to $18.5 million.
Additionally, quarter-end inventory was managed to $1.6 million,
while meeting customer demand and contributing to a quarter-ending
cash and short-term investments balance of $25.6 million." 
"While we continued to grow our opportunity pipeline with a number of
new design wins in Q3, we also took a significant step forward in
securing Ikanos' position in the emerging FTTdp market," said Omid
Tahernia, president and CEO at Ikanos. "This was accomplished through
the introduction of our single-port CO processor, the
Velocity(TM)-Uni, which was formally launched at the Broadband World
Forum (BBWF) conference in Amsterdam last week. Also at the
conference, we were quite pleased to be selected as the recipient of
InfoVision's "Best Broadband Enabler" award this year, with our
Velocity(TM)-3 taking the top spot in recognition of its technical
excellence." 
"While we continue to navigate through the current transition in our
business, we remain positive on the outlook," continued Tahernia. "We
see the additional design wins, the expansion of our TAM with new
products such as inSIGHT and Velocity(TM)-Uni, and the early custome
r
demand for our next-generation G.fast platform, creating tremendous
market momentum and future growth potential for our overall
business." 
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 Ikanos 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 Third Quarter 2013 Results
 Revenue for the third quarter of
2013 was $16.9 million, compared to revenue of $31.4 million for the
third quarter of 2012 and revenue of $19.1 million for the second
quarter of 2013. GAAP gross profit for the third quarter of 2013 was
51%, compared to a GAAP gross profit of 47% for the third quarter of
2012 and GAAP gross profit of 49% for the second quarter of 2013.  
Non-GAAP gross profit for the third quarter of 2013 was 52%, compared
to a non-GAAP gross profit of 48% for the third quarter of 2012 and
non-GAAP gross profit of 49% for the second quarter of 2013. 
GAAP operating expenses for the third quarter of 2013 were $17.0
million, compared to operating expenses of $21.1 million for the
third quarter of 2012 and operating expenses of $17.5 million for the
second quarter of 2013. 
Non-GAAP operating expenses for the third quarter of 2013 were $16.0
million, compared to non-GAAP operating expenses of $20.2 million for
the third quarter of 2012 and non-GAAP operating expenses of $16.5
million for the second quarter of 2013.  
GAAP net loss for the third quarter of 2013 was $(8.7) million, or a
loss of $(0.12) per share on 71.7 million weighted average shares
outstanding. This compares with a net loss of $(6.4) million, or a
loss of $(0.09) per share on 69.8 million weighted average shares
outstanding for the third quarter of 2012 and a GAAP net loss of
$(8.7) million, or a loss of $(0.12) per share on 71.2 million
weighted average shares outstanding for the second quarter of 2013.  
Non-GAAP net loss for the third quarter of 2013 was $(7.5) million,
or a loss of $(0.11) per share on 71.7 million weighted average
shares outstanding compared to a non-GAAP net loss of $(5.1) million,
or a loss of $(0.07) per share on 69.8 million weighted average
shares outstanding for the third quarter of 2012, and a non-GAAP loss
of $(7.5) million, or a loss of $(0.11) per share on 71.2 million
weighted average shares outstanding for the second quarter of 2013.  
Cash, cash equivalents and short-term investments at the end of third
quarter of 2013 were $25.6 million, compared to $27.3 million at the
end of the second quarter of 2013.  
Additionally, at the end of the third quarter of 2013 inventory was
$1.6 million compared to $4.0 million at the end of the second
quarter of 2013. Current liabilities at the end of the third quarter
of 2013 were $25.8 million, compared to $21.1 million at the end of
the second quarter of 2013.  
Outlook 
 Revenue is expected to be between $17.0 million and $19.0
million for the fiscal fourth quarter of 2013. 
GAAP gross profit for the fiscal fourth 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 fourth quarter of 2013. 
GAAP operating expenses for the fiscal fourth quarter of 2013 are
expected to be in the range of $17.0 million to $18.0 million. On a
non-GAAP basis operating expenses are expected to be in the range of
$16.0 million to $17.0 million for the fourth quarter of 2013.  
GAAP net loss for the fiscal fourth quarter of 2013 is expected to be
in the range of approximately $(7.5) million to $(9.9) million, or a
GAAP loss per share of $(0.10) to $(0.14). Non-GAAP net loss for the
fiscal fourth quarter of 2013 is expected to be in the range of
approximately $(6.5) million to $(8.6) million, or a non-GAAP loss
per share of $(0.09) to $(0.12).  
Third Quarter Conference Call
 Management will review the third
quarter financial results and its expectations for subsequent periods
on a conference call on Tuesday, October 29, 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) 428-9490 or (719) 325-2432 and
enter conference ID 8616859. 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 January 27,
2014 by dialing (888) 203-1112 or (719) 457-0820 and entering
conference ID 8616859. 
About Ikanos Communications, Inc.
  Ikanos Communicati
ons, Inc.
(NASDAQ: IKAN) is a leading provider of advanced broadband
semiconductor and integrated software 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 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. 
Safe Harbor Statement 
Some of the statements included in this press release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You should not place undue
reliance on these statements. These forward-looking statements
include statements that reflect the current views of our senior
management with respect to our financial performance and future
events with respect to our business and our industry in general.
Statements that include the words "expect," "intend," "plan,"
"believe," "anticipate," "estimate," and similar statements of a
future or forward-looking nature identify forward-looking statements. 
Forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors
that could cause our actual results to differ materially from those
indicated in these statements. We believe that these factors include,
but are not limited to, the following: our ability to reduce or
maintain operating expenses at current levels; our ability to
successfully complete the public offering as described in our
Registration Statement on Form S-1 filed on August 23, 2013; our
ability to translate customer demand into revenue; our ability to
deliver full production releases of our newer products and the
acceptance of those products by our customers and telecommunications
service providers; that not all design wins nor successful lab or
field trials will result in revenue for us; macroeconomic conditions
which may cause our customers to defer purchasing plans or cancel any
purchasing plans altogether despite successful design wins; that
production ramps by our customers will continue at the same rate or
at all; the continued demand by telecommunications service providers
for our specific xDSL semiconductor products; our ability to maintain
an adequate cash and short-term investment balance; our ability to
comply with the financial covenants in our credit agreement; the
failure of telecommunications service providers to implement
deployment plans on schedule, or at all, despite positive engagements
or successful lab or field trials; 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; our reliance on third parties to manufacture
the products we sell; competition in the markets in which we operate;
risks associated with doing business abroad, including foreign
currency risks; the fact that the products we sell may not satisfy
shifting customer demand or compete successfully with our
competitors' products; that our offering of standalone software,
selling directly to telecommunications service providers, will
generate any revenue for us or result in significant or any
operational costs savings for the telecommunications service
providers; and unexpected future costs, expenses, and financing
requirements. For a more detailed discussion of how these and other
risks and uncertainties could cause our actual results to differ
materially from those indicated in our forward-looking statements,
see our reports filed with SEC (available at www.sec.gov), including
our Annual Report on Form 10-K for the fiscal year ended December 30,
2012, our Quarterly Report on Form 10-Q for the second quarter ended
June 30, 2013, and our Registration Statement on Form S-1 filed on
August 23, 2013. Ikanos undertakes no obligation to update or revise
these forward-looking statements to reflect events or circumstances
subsequent to date of this press release. 


 
                                                                            
                        IKANOS COMMUNICATIONS, INC.                         
         Unaudited Condensed Consolidated Statements of Operations          
                   (In thousands, except per share data)                    
                                                                            
                         Three Months Ended           Nine Months Ended     
                     --------------------------  -------------------------- 
                       September     September     September     September  
                       29, 2013      30, 2012      29, 2013      30, 2012   
                     ------------  ------------  ------------  ------------ 
                                                                            
Revenue              $     16,900  $     31,375  $     62,167  $     94,190 
Cost of revenue             8,263        16,620        30,272        48,274 
                     ------------  ------------  ------------  ------------ 
    Gross profit            8,637        14,755        31,895        45,916 
                     ------------  ------------  ------------  ------------ 
Operating expenses:                                                         
  Research and                                                              
   development             12,455        16,581        38,572        43,423 
  Selling, general                                                          
   and                                                                      
   administrative           4,589         4,507        14,227        13,835 
  Restructuring                 -             -             -         1,062 
                     ------------  ------------  ------------  ------------ 
    Total operating                                                         
     expenses              17,044        21,088        52,799        58,320 
                     ------------  ------------  ------------  ------------ 
Loss from operations       (8,407)       (6,333)      (20,904)      (12,404)
                                                                            
Interest income and                                                         
 other, net                  (147)           61          (507)         (251)
                     ------------  ------------  ------------  ------------ 
  Loss before income                                                        
   taxes                   (8,554)       (6,272)      (21,411)      (12,655)
Provision for income                                                        
 taxes                        111            85           343           406 
                     ------------  ------------  ------------  ------------ 
  Net loss           $     (8,665) $     (6,357) $    (21,754) $    (13,061)
                     ============  ============  ============  ============ 
                                                                            
Net loss per share                                                          
  Basic and diluted  $      (0.12) $      (0.09) $      (0.31) $      (0.19)
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 number of shares                                                           
  Basic and diluted        71,662        69,788        71,086        69,555 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                        IKANOS COMMUNICATIONS, INC.                         
         Unaudited Condensed Consolidated Statements of Operations          
                   (In thousands, except per share data)                    
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                September 29,     June 30,    September 30, 
                                     2013           2013           2012     
                                -------------  -------------  ------------- 
                                                                            
Revenue                         $      16,900  $      19,115  $      31,375 
Cost of revenue                         8,263          9,813         16,620 
                                -------------  -------------  ------------- 
    Gross profit                        8,637          9,302         14,755 
                                -------------  -------------  ------------- 
Operating expenses:                                                         
  Research and development             12,455         12,599         16,581 
  Selling, general and                                                      
   administrative                       4,589          4,866          4,507 
  Restructuring                             -              -              - 
                                -------------  -------------  ------------- 
    Total operating expenses           17,044         17,465         21,088 
                                -------------  -------------  ------------- 
Loss from operations                   (8,407)        (8,163)        (6,333)
                                                                            
  Interest income and other,                                                
   net                                   (147)          (442)            61 
                                -------------  -------------  ------------- 
Loss before income taxes               (8,554)        (8,605)        (6,272)
  Provision for income taxes              111             68             85 
                                -------------  -------------  ------------- 
Net loss                        $      (8,665) $      (8,673) $      (6,357)
                                =============  =============  ============= 
                                                                            
Basic and diluted net loss per                                              
 share                          $       (0.12) $       (0.12) $       (0.09)
                                =============  =============  ============= 
Weighted average outstanding                                                
 shares:                                                                    
  Basic and diluted                    71,662         71,182         69,788 
                                =============  =============  ============= 
                                                                            
                                                                            
                        IKANOS COMMUNICATIONS, INC.                         
     Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated    
                         Statements of Operations                           
                   (In thousands, except per share data)                    

 
                                                                            
                                    Three Months Ended September 29, 2013   
                                  ----------------------------------------- 
                                                 Non-GAAP                   
                                  As Reported  Adjustments        Non-GAAP  
                                  -----------  -----------      ----------- 
Revenue                           $    16,900  $         -      $    16,900 
Cost of revenue                         8,263           (2) (a)       8,141 
                                                      (120) (b)             
                                                                            
                                  -----------  -----------      ----------- 
    Gross profit                        8,637         (122)           8,759 
                                  -----------  -----------      ----------- 
                                                                            
Operating expenses:                                                         
  Research and development             12,455         (673) (a)      11,782 
                                                                            
  Selling, general and                                                      
   administrative                       4,589         (250) (a)       4,255 
                                                       (84) (b)             
  Restructuring                             -            -                - 
                                  -----------  -----------      ----------- 
    Total operating expenses           17,044       (1,007)          16,037 
                                  -----------  -----------      ----------- 
Loss from operations                   (8,407)       1,129           (7,278)
  Interest income and other, net         (147)           -             (147)
                                  -----------  -----------      ----------- 
Loss before income taxes               (8,554)       1,129           (7,425)
Provision for income taxes                111            -              111 
                                  -----------  -----------      ----------- 
Net loss                          $    (8,665) $     1,129      $    (7,536)
                                  ===========  ===========
      =========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted               $     (0.12)                  $     (0.11)
                                  ===========                   =========== 
                                                                            
Weighted average outstanding                                                
 shares:                                                                    
  Basic and diluted                    71,662                        71,662 
                                  ===========                   =========== 
                                                                            
 
                                                                            
                                    Three Months Ended September 30, 2012   
                                  ----------------------------------------- 
                                                 Non-GAAP                   
                                  As Reported  Adjustments        Non-GAAP  
                                  -----------  -----------      ----------- 
Revenue                           $    31,375  $         -      $    31,375 
Cost of revenue                        16,620            4  (a)      16,171 
                                                      (453) (b)             
                                                                            
                                  -----------  -----------      ----------- 
    Gross profit                       14,755         (449)          15,204 
                                  -----------  -----------      ----------- 
                                                                            
Operating expenses:                                                         
  Research and development             16,581         (514) (a)      16,067 
                                                                            
  Selling, general and                                                      
   administrative                       4,507         (209) (a)       4,173 
                                                      (125) (b)             
  Restructuring                             -            -                - 
                                  -----------  -----------      ----------- 
    Total operating expenses           21,088         (848)          20,240 
                                  -----------  -----------      ----------- 
Loss from operations                   (6,333)       1,297           (5,036)
  Interest income and other, net           61            -               61 
                                  -----------  -----------      ----------- 
Loss before income taxes               (6,272)       1,297           (4,975)
Provision for income taxes                 85            -               85 
                                  -----------  -----------      ----------- 
Net loss                          $    (6,357) $     1,297      $    (5,060)
                                  ===========  ===========      =========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted               $     (0.09)                  $     (0.07)
                                  ===========                   =========== 
                                                                            
Weighted average outstanding                                                
 shares:                                                                    
  Basic and diluted                    69,788                        69,788 
                                  ===========                   =========== 
                                                                            
                                                                            
Notes:                                                Three Months Ended    
                                                 ---------------------------
                                                 September 29, September 30,
                                                      2013          2012    
                                                 ------------- -------------
  (a) Stock-based compensation                   $         925 $         719
  (b) Amortization of acquired intangible assets           204           578
                                                 ------------- -------------
  Total non-GAAP adjustments                     $       1,129 $       1,297
                                                 ============= =============
                                                                            
                                                                            
                        IKANOS COMMUNICATIONS, INC.                         
    Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated     
                          Statements of Operations                          
                   (In thousands, except per share data)                    
                                                                            
                                    Three Months Ended June 30, 2013        
                            ----------------------------------------------- 
                                              Non-GAAP                      
                             As Reported    Adjustments          Non-GAAP   
                            -------------  -------------      ------------- 
Revenue                     $      19,115  $           -      $      19,115 
Cost of revenue                     9,813             (2) (a)         9,692 
                                                    (119) (b)               
                                                                            
                            -------------  -------------      ------------- 
    Gross profit                    9,302           (121)             9,423 
                            -------------  -------------      ------------- 
                                                                            
Operating expenses:                                                         
  Research and development         12,599           (551) (a)        12,048 
                                                                            
  Selling, general and                                                      
   administrative                   4,866           (337) (a)         4,404 
                                                    (125) (b)               
  Restructuring                         -              -                  - 
                                                                            
                            -------------  -------------      ------------- 
    Total operating                                                         
     expenses                      17,465         (1,013)            16,452 
                            -------------  -------------      ------------- 
Loss from operations               (8,163)         1,134             (7,029)
  Interest income and                                                       
   other, net                        (442)             -               (442)
                            -------------  -------------      ------------- 
Loss before income taxes           (8,605)         1,134             (7,471)
Provision for income taxes             68              -                 68 
                            -------------  -------------      ------------- 
Net loss                    $      (8,673) $       1,134      $      (7,539)
                            =============  =============      ============= 
                                                                            
Net loss per share:                                                         
  Basic and diluted         $       (0.12)                    $       (0.11)
                            =============                     ============= 
                                                                            
Weighted average                                                            
 outstanding shares:                                                        
  Basic and diluted                71,182                            71,182 
                            =============                     ============= 
                                                                            
Notes:                                                                      
                                            Three Months                    
                                               Ended                        
                                           June 30, 2013            
        
                                           -------------                    
  (a) Stock-based                                                           
   compensation                            $         890                    
  (b) Amortization of                                                       
   acquired intangible                                                      
   assets                                            244                    
                                           -------------                    
  Total non-GAAP                                                            
   adjustments                             $       1,134                    
                                           =============                    
                                                                            
                                                                            
                         IKANOS COMMUNICATIONS, INC.                        
     Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated    
                          Statements of Operations                          
                    (In thousands, except per share data)                   
                                                                            
                                       Nine Months Ended September 29,      
                                                     2013                   
                                 ------------------------------------------ 
                                                Non-GAAP                    
                                 As Reported   Adjustments        Non-GAAP  
                                 -----------  ------------      ----------- 
Revenue                          $    62,167  $          -      $    62,167 
Cost of revenue                       30,272            (5) (a)      29,908 
                                                      (359) (b)             
                                 -----------  ------------      ----------- 
    Gross profit                      31,895          (364)          32,259 
                                 -----------  ------------      ----------- 
                                                                            
Operating expenses:                                                         
  Research and development            38,572        (1,795) (a)      36,777 
                                                                            
  Selling, general and                                                      
   administrative                     14,227          (850) (a)      13,044 
                                                      (333) (b)             
                                                                            
  Restructuring                            -             -                - 
                                 -----------  ------------      ----------- 
    Total operating expenses          52,799        (2,978)          49,821 
                                 -----------  ------------      ----------- 
Loss from operations                 (20,904)        3,342          (17,562)
                                                                            
  Interest income and other, net        (507)            -             (507)
                                 -----------  ------------      ----------- 
Loss before income taxes             (21,411)        3,342          (18,069)
Provision for income taxes               343             -              343 
                                 -----------  ------------      ----------- 
Net loss                         $   (21,754) $      3,342      $   (18,412)
                                 ===========  ============      =========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted              $     (0.31)                   $     (0.26)
                                 ===========                    =========== 
                                                                            
Weighted average outstanding                                                
 shares:                                                                    
  Basic and dilluted                  71,086                         71,086 
                                 ===========                    =========== 
 
                         IKANOS COMMUNICATIONS, INC.                        
     Unaudited Reconciliation of GAAP to Non-GAAP Condensed Consolidated    
                          Statements of Operations                          
                    (In thousands, except per share data)                   
                                                                            
                                       Nine Months Ended September 30,      
                                                     2012                   
                                 ------------------------------------------ 
                                                Non-GAAP                    
                                 As Reported   Adjustments        Non-GAAP  
                                 -----------  ------------      ----------- 
Revenue                          $    94,190  $          -      $    94,190 
Cost of revenue                       48,274             2  (a)      46,823 
                                                    (1,453) (b)             
                                 -----------  ------------      ----------- 
    Gross profit                      45,916        (1,451)          47,367 
                                 -----------  ------------      ----------- 
                                                                            
Operating expenses:                                                         
  Research and development            43,423        (1,450) (a)      41,973 
                                                                            
  Selling, general and                                                      
   administrative                     13,835          (569) (a)      12,891 
                                                      (375) (b)             
                                                                            
  Restructuring                        1,062        (1,062) (c)           - 
                                 -----------  ------------      ----------- 
    Total operating expenses          58,320        (3,456)          54,864 
                                 -----------  ------------      ----------- 
Loss from operations                 (12,404)        4,907           (7,497)
                                                                            
  Interest income and other, net        (251)            -             (251)
                                 -----------  ------------      ----------- 
Loss before income taxes             (12,655)        4,907           (7,748)
Provision for income taxes               406             -              406 
                                 -----------  ------------      ----------- 
Net loss                         $   (13,061) $      4,907      $    (8,154)
                                 ===========  ============      =========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted              $     (0.19)                   $     (0.12)
                                 ===========                    =========== 
                                                                            
Weighted average outstanding                                                
 shares:                                                                    
  Basic and dilluted                  69,555                        
 69,555 
                                 ===========                    =========== 
                                                                            
Notes:                                                Nine Months Ended     
                                                 ---------------------------
                                                 September 29, September 30,
                                                      2013          2012    
                                                 ------------- -------------
  (a) Stock-based compensation                   $       2,650 $       2,017
  (b) Amortization of acquired intangible assets           692         1,828
  (c) Restructuring                                          -         1,062
                                                 ------------- -------------
  Total non-GAAP adjustments                     $       3,342 $       4,907
                                                 ============= =============
                                                                            
                                                                            
                         IKANOS COMMUNICATIONS, INC.                        
               Unaudited Condensed Consolidated Balance Sheets              
                               (In thousands)                               
                                                                            
                                   September 29,    June 30,    December 30,
                                        2013          2013          2012    
                                   ------------- ------------- -------------
              Assets                                                        
Current assets:                                                             
  Cash, cash equivalents and                                                
   short-term investments          $      25,645 $      27,321 $      31,176
  Accounts receivable                     13,843        12,091        15,748
  Inventory                                1,571         4,037         8,122
  Prepaid expenses and other                                                
   current assets                          3,640         4,035         5,892
                                   ------------- ------------- -------------
    Total current assets                  44,699        47,484        60,938
Property and equipment, net                8,775         8,925         8,769
Intangible assets, net                       837         1,040         1,529
Other assets                               2,250         2,482         2,612
                                   ------------- ------------- -------------
                                   $      56,561 $      59,931 $      73,848
                                   ============= ============= =============
                                                                            
   Liabilities and Stockholders'                                            
               Equity                                                       
Current liabilities:                                                        
  Revolving line                   $      10,800 $       7,500 $       5,000
  Accounts payable                         6,206         5,081         5,679
  Accrued liabilities                      8,771         8,532        13,688
                                   ------------- ------------- -------------
    Total current liabilities             25,777        21,113        24,367
Other liabilities                          2,105         2,459         2,854
                                   ------------- ------------- -------------
    Total liabilities                     27,882        23,572        27,221
Stockholders' equity                      28,679        36,359        46,627
                                   ------------- ------------- -------------
                                   $      56,561 $      59,931 $      73,848
                                   ============= ============= =============

  
Media Contact: 
Gary Good
Trainer Communications
707-837-1718
Ikanos@trainercomm.com 
Investor Relations Contact:
MKR Group, Inc.
Todd Kehrli or Jim Byers
(323) 468-2300
ikan@mkr-group.com