[May 02, 2006] |
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Occam Networks Announces Quarterly Results; Company Reports Second Consecutive Quarter of Operating Profits
SANTA BARBARA, Calif. --(Business Wire)-- May 2, 2006 -- Occam Networks Inc. (OTCBB: OCNW), a supplier of innovative Ethernet and IP-based loop carrier equipment to telecommunications service providers worldwide, today reported results for the first quarter of 2006, which ended March 31, 2006. The company reported quarterly revenue of $14.2 million, posting its second consecutive quarter with operating profit. First quarter 2006 revenues represented an increase of 10 percent over the fourth quarter of 2005, and a 105 percent increase over the same quarter a year ago. During the quarter Occam added more than 10 new customers.
"Occam's second quarter of operating profitability clearly demonstrates our ongoing commitment to solid financial performance," said Bob Howard-Anderson, president and CEO of Occam Networks. "Our ability to deliver an excellent product at an attractive price backed by outstanding customer service has enabled us to continue to win against our competitors. As we move forward in 2006, we will maintain our focus on increasing revenue and profitability by delivering superior products, adding new customers and actively managing operational and other costs. We are off to a strong start for the year."
During the first quarter of 2006 Occam completed a 1-for-40 reverse-split of its common stock and began trading under the symbol OCNW. Other highlights of the quarter included:
-- Adding several new strategic marketing partners to the company's OPAN Alliance
-- Receiving an INTERNET TELEPHONY 2005 Product of the Year Award for the BLC 6312 Blade
-- Retiring all of the company's remaining $2.6 million of debt
Occam Conference Call Scheduled to Report Q1 2006 Financial Results
Starting at 4:30 p.m. EDT (1:30 p.m. PDT) on Tuesday, May 2, 2006, Occam Networks will conduct a conference call to report the results for Q1 2006. The call, which will be open to the public, can be accessed by dialing 866-866-1333 (for U.S. callers) and asking the operator for the Occam Networks call.
Callers will be put on "music hold" until Bob Howard-Anderson, president and CEO, and Chris Farrell, CFO of Occam Networks, join the call. The first portion of the call will include a presentation of financial information for Q1 2006. Farrell will then open the call to listeners for a question-and-answer period.
For those unable to listen at the designated time, a recording of the call will be made available on the Occam Networks Web site (www.occamnetworks.com) for 72 hours after the call is completed.
OCCAM NETWORKS INC. AND SUBSIDIARY
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Three months ended
--------------------------------
March 31, Dec. 31, March 31,
2006 2005 2005
---------- ---------- ----------
Sales $ 14,210 $ 12,914 $ 6,921
Cost of sales 8,349 7,611 5,117
---------- ---------- ----------
Gross profit 5,861 5,303 1,804
Operating expenses:
Research and product development 2,364 1,923 1,569
Sales and marketing 2,170 2,135 1,606
General and administrative 892 651 728
---------- ---------- ----------
Total operating expenses 5,426 4,709 3,903
Income (loss) from operations 435 594 (2,098)
Interest expense, net (90) (43) (112)
---------- ---------- ----------
Non-GAAP income (loss) before
provision for income taxes 345 551 (2,211)
Provision for income taxes 3 - -
---------- ---------- ----------
Non-GAAP net income (loss) $ 342 $ 551 $ (2,211)
Reconciliation of non-GAAP net
income (loss) to GAAP net income
(loss) attributable to common
stockholders:
Non-GAAP net income (loss) $ 342 $ 551 $ (2,211)
Non-GAAP exclusions:
Stock-based compensation 253 108 167
Beneficial conversion feature on
series A-2 preferred stock and
warrants 3,437 - 1,787
---------- ---------- ----------
GAAP net income (loss) attributable
to common stockholders $ (3,348) $ 443 $ (4,165)
========== ========== ==========
OCCAM NETWORKS INC. AND SUBSIDIARY
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
Three months ended
---------------------------------
March 31, Dec. 31, March 31,
2006 2005 2005
---------- ---------- ----------
Sales $ 14,210 $ 12,914 $ 6,921
Cost of sales (1) 8,390 7,611 5,117
---------- ---------- ----------
Gross margin 5,820 5,303 1,804
Operating expenses (1):
Research and product development 2,490 2,023 1,712
Sales and marketing 2,217 2,143 1,628
General and administrative 931 651 730
---------- ---------- ----------
Total operating expenses 5,638 4,817 4,070
Income (loss) from operations 182 486 (2,265)
Interest expense, net (90) (43) (112)
---------- ---------- ----------
Income (loss) before income taxes 92 443 (2,378)
Provision for income tax 3 - -
---------- ---------- ----------
Net Income (loss) 89 443 (2,378)
Beneficial conversion feature (3,437) - (1,787)
---------- ---------- ----------
Net income (loss) attributable to
common stockholders $ (3,348) $ 443 $ (4,165)
========== ========== ==========
(1) Total stock-based compensation
included in:
Cost of sales $ 41 $ - $ -
Research and product development 126 100 143
Sales and marketing 47 8 22
General and administrative 39 - 2
---------- ---------- ----------
Total stock-based compensation $ 253 $ 108 $ 167
========== ========== ==========
OCCAM NETWORKS INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
March 31, Dec. 31,
2006 2005
(Unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 8,885 $ 6,571
Restricted cash 3,653 3,749
Accounts receivable, net 9,039 9,403
Inventories, net 6,683 4,448
Prepaid and other current assets 1,009 1,684
----------- -----------
Total current assets 29,269 25,855
Property and equipment, net 1,823 1,889
Other assets 183 203
----------- -----------
Total assets $ 31,275 $ 27,947
=========== ===========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 7,521 $ 4,100
Accrued expenses 3,416 4,859
Deferred revenues 2,230 1,600
Current portion of long-term debt and
capital lease obligations - 1,233
----------- -----------
Total current liabilities 13,167 11,792
Long-term debt and capital lease obligations - 1,324
----------- -----------
Total liabilities 13,167 13,116
Redeemable preferred stock:
Series A-2 convertible preferred stock,
$.001 par value, authorized 4,300 shares,
3,892 and 3,560 issued and outstanding at
March 31, 2006, and at Dec. 31, 2005,
respectively, liquidation preference of
$116,759 and $106,800 at March 31, 2006,
and Dec. 31, 2005, respectively 37,472 34,869
Series A-2 convertible preferred stock warrant 73 73
Stockholders' deficit:
Common stock, $0.001 par value, 18,750
shares authorized; 6,940 and 6,871 shares
issued and outstanding at March 31, 2006,
and Dec. 31, 2005, respectively 275 275
Additional paid-in capital 88,460 87,903
Warrants 559 559
Deferred stock compensation - (28)
Accumulated deficit (108,731) (108,820)
----------- -----------
Total stockholders' deficit (19,437) (20,111)
----------- -----------
Total liabilities, redeemable preferred stock
and stockholders' deficit $ 31,275 $ 27,947
=========== ===========
Non-GAAP Disclosure
Certain non-GAAP financial measures are included in this press release. Our GAAP results have been adjusted to exclude stock-based compensation and beneficial conversion feature charges. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance and our prospects for the future. Specifically, we believe non-GAAP measures can provide useful information to both management and investors by excluding certain non-cash expenses that are not indicative of our core operating results. Further, these non-GAAP financial measures are one of the primary indicators management uses for planning and forecasting future periods. In addition, since we have historically reported non-GAAP measures to the investment community, we believe the inclusion of non-GAAP measures provides consistency in our financial reporting. The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance with accounting principles generally accepted in the United States. A reconciliation of GAAP to non-GAAP net income and loss is included above.
Cautionary Note Concerning Forward-Looking Statements
Portions of this press release contain forward-looking statements regarding future events, Occam's future financial performance, and the performance of Occam's products. In particular, the press release contains forward-looking statements about trends in our revenue and operating margins and statements concerning product improvements and product performance issues. These statements involve numerous risks and uncertainties, which could cause actual results or events to differ materially from any future results or events suggested in these forward-looking statements. These risks include, among others, the risk that our revenues will not increase as anticipated if our BLC 6000 product does not achieve market acceptance and that any continuing product performance problems would have an adverse effect on our business, margins and operating results. Additional risks associated with our business include general market conditions affecting the decisions of communications service providers to purchase Occam's equipment, changes in service providers' business models, the rate our customers deploy their networks, our customers' ability to secure financing, the timing of order and shipments of products, mix of products sold, changes in the prices of components, Occam's ability to maintain production volumes and secure key components, and Occam's ability to develop new products. Please refer to Occam's most recent quarterly report on Form 10-Q, annual report on Form 10-K and other filings Occam makes with the SEC for additional factors that could cause actual results to differ materially from those contained in any forward-looking statements provided today.
About Occam Networks Inc.
Occam Networks Inc. develops and markets innovative Broadband Loop Carrier networking equipment that enable telephone companies to deliver voice, data and video services. Based on Ethernet and Internet Protocol (IP) technologies, Occam's equipment allows telecommunications service providers to profitably deliver traditional phone services, as well as advanced voice-over-IP, residential and business broadband and digital television services through a single, all-packet access network. Occam is headquartered in Santa Barbara, Calif. Additional information can be found at www.occamnetworks.com.
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