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UTStarcom Releases Financial Results for the First Quarter of 2008
 
ALAMEDA, Calif.
(Map)
-
(Logo: http://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO) Net sales for the first quarter of 2008 were The significant items in the first quarter 2008 net income include:
-- A gain on sale of investments of $48.3 million including Gemdale and
Infinera
-- A net $8.5 million tax benefit in China primarily due to a change in
withholding tax laws
Cash, cash equivalents and short term investments was "During the first quarter we made progress in moving the company forward
in terms of both financial and operational results. Our core areas of
Multimedia Communications and Broadband continued to win new business in key
markets while the Personal Communications Division's results benefited from
the introduction of new high end products."
Q2 2008 Guidance
-- Revenue is expected to be in the range of $580 - $610 million which
would represent a growth of 8% - 13% above the same period last year
-- Overall gross margins in the second quarter is expected to be
approximately 14% depending upon the mix of business between our core
and Personal Communications business segments
-- Operating expenses are expected to range between $118-$123 million
including the cost of certain external professional services
Conference Call The company will host a conference call to discuss the results. The call
will take place at A replay of the call will be available for 30 days. The conference call
replay numbers are as follows: Investors will also have the opportunity to listen to the conference call and the replay over the Internet through the investor relations section of UTStarcom's Web site at: http://www.utstar.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, and to download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will also be available on this site. About UTStarcom, Inc. UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company develops, manufactures and
markets its broadband, wireless, and terminal solutions to network operators
in both emerging and established telecommunications markets worldwide.
UTStarcom enables its customers to rapidly deploy revenue-generating access
services using their existing infrastructure, while providing a migration path
to cost-efficient, end-to-end IP networks. UTStarcom was founded in 1991 and
is headquartered in For more information about UTStarcom, please visit the UTStarcom Web site at http://www.utstar.com. Forward-Looking Statements This release includes forward-looking statements, including the foregoing statements regarding the company's guidance for the second quarter of 2008, including anticipated revenue, gross margins, operating expenses and cash flow from operations and anticipated realization of operational improvements, these statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially. These risks include the ability of the company to realize anticipated results of operational improvements and execute on its liquidity plans as well as risk factors identified in its latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission.
UTStarcom, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
March 31, December 31,
2008 2007
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $305,119 $503,078
Accounts and notes receivable, net 269,701 343,525
Inventories and deferred costs 521,794 524,727
Prepaids and other current assets 156,600 121,636
Total current assets 1,253,214 1,492,966
Long-term assets:
Property, plant and equipment, net 210,336 209,094
Long-term deferred costs 164,922 164,766
Other long-term assets 121,181 117,762
Total assets $1,749,653 $1,984,588
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $214,263 $148,440
Short-term debt 35,907 322,829
Customer advances 244,947 229,050
Deferred revenue 108,068 100,502
Other current liabilities 274,688 302,395
Total current liabilities 877,873 1,103,216
Long-term liabilities:
Long-term debt 267 333
Long-term deferred revenue and other
liabilities 254,486 259,358
Total liabilities 1,132,626 1,362,907
Minority interest in consolidated
subsidiaries 806 3,705
Total stockholders' equity 616,221 617,976
Total liabilities, minority
interest and stockholders' equity $1,749,653 $1,984,588
UTStarcom, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three months ended March 31
2008 2007
Net sales $585,989 $475,902
Cost of net sales 493,910 400,617
Gross profit 92,079 75,285
Operating expenses:
Selling, general and administrative 79,744 79,837
Research and development 41,400 43,662
Amortization of intangible assets 1,824 4,046
Total operating expenses 122,968 127,545
Operating loss (30,889) (52,260)
Interest expense, net (3,254) (1,815)
Other income, net 53,970 3,970
Income (loss) before income taxes and
minority interest 19,827 (50,105)
Income taxes 5,020 (4,341)
Minority interest in losses of
consolidated subsidiaries 510 464
Net income (loss) $25,357 $(53,982)
Income (loss) per share - Basic $0.21 $(0.45)
Income (loss) per share - Diluted $0.21 $(0.45)
Weighted average shares used in per
share calculation:
- Basic 122,096 120,900
- Diluted 123,098 120,900
UTStarcom, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three months ended March 31,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $25,357 $(53,982)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 10,112 14,744
Gain on sale of investments and
liquidation of ownership interest in a
variable interest entity (47,848) -
Net loss (gain) on sale of fixed assets 8 (2,699)
Stock-based compensation expense 4,795 2,755
Recovery of doubtful accounts (680) (5,281)
Provision for (recovery of) deferred
costs reserves 320 (1,504)
Deferred income taxes (11,708) -
Other (343) 266
Changes in operating assets and liabilities:
Accounts receivable 75,177 60,296
Inventories 7,650 (2,422)
Deferred costs 8,028 (5,222)
Other assets (19,588) (31,433)
Accounts payable 64,287 (41,324)
Income taxes payable 1,414 5,969
Customer advances 19,902 44,298
Deferred revenue (5,771) (11,790)
Other current liabilities (34,404) (79,336)
Net cash provided by (used in)
operating activities 96,708 (106,665)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and
equipment (7,630) (5,221)
Proceeds from the disposition of
(purchase of) an investment interest (1,949) 1,800
Proceeds from repayment of loan by a
variable interest entity 7,728 -
Change in restricted cash (4,517) 10,365
Purchase of short-term investments (6,578) (15,576)
Proceeds from sale of short-term
investments 58,740 10,483
Other 96 (70)
Net cash provided by investing
activities 45,890 1,781
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 64,621
Payments on borrowings (288,861) (64,676)
Other 2,473 (654)
Net cash used in financing activities (286,388) (709)
Effect of exchange rate changes on cash
and cash equivalents 4,823 2,120
Net decrease in cash and cash
equivalents (138,967) (103,473)
Cash and cash equivalents at beginning of
period 437,449 661,623
Cash and cash equivalents at end of period $298,482 $558,150
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