SAN JOSE, Calif. — April 28, 2005 — Symmetricom, Inc. (NASDAQ:SYMM), a leading worldwide supplier of network synchronization and timing solutions, today reported results for its fiscal third quarter ended March 31, 2005.
Fiscal third quarter revenue was $43.8 million, a decrease of $4.1 million, or 8.7 percent, from prior quarter revenue of $48.0 million, and flat with the same period last year. For the nine months ended March 31, 2005, revenue was $143.7 million, an increase of $20.6 million, or 16.7 percent, over the prior year period.
Net earnings from continuing operations for the fiscal third quarter were $2.8 million, or $0.06 per share on a fully diluted basis, compared to $4.6 million, or $0.10 per share, in the prior quarter. In the same period of the prior year, the company reported net earnings from continuing operations of $1.8 million, or $0.04 per share. For the nine months ended March 31, 2005, net earnings from continuing operations were $11.9 million, or $0.26 per share on a fully diluted basis, compared to a net loss from continuing operations for the same period in the prior year of $4.4 million, or $(0.10) per share.
Non-GAAP net earnings for the fiscal third quarter, which excludes certain items related to non-cash compensation, amortization of acquired intangibles, integration and restructuring charges and unusual and non-recurring items, were $4.3 million, or $0.09 per share on a fully diluted basis. This compares to non-GAAP net earnings of $2.6 million, or $0.06 per share, in the third quarter of fiscal year 2004. For the nine months ended March 31, 2005, non-GAAP net earnings were $14.8 million or $0.32 per share on a fully diluted basis, compared to non-GAAP net earnings for the same period of the prior year of $2.9 million, or $0.07 per share.
“Revenue for the quarter met our expectations, while earnings were higher than expected,” said Thomas Steipp, president and CEO of Symmetricom. “We are pleased to report that we have been selected as a provider at three major wireline customers that have completed their RFPs and we are now in the process of completing contracts. Once the contracts are completed, we expect the resumption of more normalized purchase levels and the opportunity to participate in the build-out of next-generation networks by these customers. This represents a critical milestone in our focused sales efforts to take part in the build-out of next-generation networks at some of our largest customers.”
Telecom Solution Division revenue for the quarter was $29.1 million, a decrease of $3.3 million, or 10.3 percent over the prior quarter and a decrease of $2.1 million, or 6.7 percent over the same period last fiscal year. Timing, Test & Measurement Division revenue for the quarter was $14.7 million, a decrease of $0.8 million, or 5.3 percent, over the prior quarter and up $2.1 million, or 17.1 percent, over the same period last fiscal year.
Outlook for Q4 FY05
Symmetricom expects fourth quarter FY05 revenue to be between $43 million and $48 million. The company expects earnings to be between $0.04 and $0.08 per share.
Investor Conference Call
As previously announced, management will hold a conference call to discuss these results today, April 28 at 1:30 p.m. Pacific Time. Those wishing to join should dial 712-923-4251, passcode “Symmetricom.” Please reference the conference leader: Thomas Steipp. A live webcast of the conference call will also be available via the company’s website at
www.symmetricom.com or
www.vcall.com. A replay of the call will be available for one week. To access the replay, please dial 203-369-0286.
About Symmetricom Inc. As a worldwide leader in precise time and frequency products and services, Symmetricom provides “Perfect Timing” to customers around the world, including communications service providers, network equipment manufacturers, U.S. Department of Defense (DOD), aerospace contractors, enterprises, governments and research facilities. Since 1985, the company’s timing, frequency and synchronization solutions have helped define the world’s standards, delivering precision, reliability and efficiency to wireless and wireline networks, instrumentation and testing applications and network time management. Deployed in more than 90 countries, products include atomic clocks, cesium and rubidium standards, VME, crystal oscillators, PCI cards and Global Positioning System (GPS) solutions for instrumentation applications, as well as network time servers for Network Time Protocol (NTP) synchronization and time synchronization solutions. In 2002, Symmetricom acquired TrueTime and Datum, strengthening its leading position in the world time and frequency markets. Symmetricom is based in San Jose, Calif., with offices worldwide. For more information, visit
www.symmetricom.com.
Non-GAAP Information
Certain non-GAAP financial information is included in this press release. In the non-GAAP Statements of Operations, Symmetricom excludes certain items related to non-cash compensation, amortization of acquired intangibles, integration and restructuring charges and unusual and non-recurring items. Symmetricom believes that excluding such items provides investors and management with a representation of the company’s core operating performance and with information useful in assessing our prospects for the future and underlying trends in Symmetricom’s operating performance. Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information is not determined using GAAP and should not be considered superior to or as a substitute for data prepared in accordance with GAAP. A reconciliation of the non-GAAP results to the GAAP results is provided in the “Consolidated Statements of Operations (non-GAAP)” schedule provided in the press release.
Safe Harbor
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. These forward-looking statements include statements concerning estimates of future revenue and earnings, pending RFPs, as well as the information regarding the usefulness of the non-GAAP financial information. Symmetricom's actual results could differ materially from those projected or suggested in these forward-looking statements. Factors that could cause future actual results to differ materially from the results projected in or suggested by such forward-looking statements include: reduced rates of demand for telecommunication products or test and measurement products, our customers’ ability and need to upgrade existing equipment, our ability to negotiate contracts with our customers, our ability to maintain gross margins, timing of orders, cancellation or delay of customer orders, loss of customers, difficulties in manufacturing products to specification or customer volume requirements, challenges in integrating businesses, customer acceptance of new products, geopolitical risks such as terrorist acts and the risk factors listed from time to time in Symmetricom's reports filed with the Securities and Exchange Commission, including the report on Form 10-K for the year ended June 30, 2004 and subsequent Form 10-Q and Form 8-K filings.
Note: Financial schedules attached.
Notes to Consolidated Statements of Operations (000’s) Three Months ended March 31
(a) The above non-GAAP Statements of Operations exclude the effects of the following:
- For the three months ended March 31, 2005 and March 31, 2004 the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax and the HP Communications Synchronization Business, which amounted to $971 and $978, respectively (from cost of goods);
- For the three months ended March 31, 2005 and March 31, 2004 the amortization of stock based compensation of $953 and $69, respectively;
- For the three months ended March 31, 2005 and March 31, 2004 amortization of other intangibles related to the Datum and TrueTime acquisitions of $89 and $127, respectively (from operating expenses);
- For the three months ended March 31, 2005, a benefit of expense reductions for $125 for recovery of bad debts due to collection of old Datum receivables; and
- For the three months ended March 31, 2004 the impact of discontinued operations for the Trusted Time Division.
(b) The above non-GAAP Statements of Operations assume a quarterly effective income tax rate of 23.9% and 25.3% for three months ended March 31, 2005 and 2004 respectively.
Notes to Consolidated Statements of Operations (000’s) Nine Months ended March 31
(c) The above non-GAAP Statements of Operations exclude the effects of the following:
- For the nine months ended March 31, 2005 and March 31, 2004 the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax and the HP Communications Synchronization Business, which amounted to $2,930 and $2,940, respectively (from cost of goods);
- For the nine months ended March 31, 2004, integration and restructuring charges related to the Datum, TrueTime, Net Monitor and the HP Communications and Synchronization Business acquisitions of $7,531, of which $5,641 was excluded from cost of goods and $1,890 (from operating expenses);
- For the nine months ended March 31, 2005 and March 31, 2004 the amortization of stock based compensation of $1,581 and $182, respectively;
- For the nine months ended March 31, 2005 and March 31, 2004 amortization of other intangibles related to the Datum and TrueTime acquisitions of $267 and $381, respectively (from operating expenses). For the nine months ended March 31, 2005, a benefit of expense reductions for $485 for recovery of bad debts due to collection of old Datum receivables and an expense reduction of $368 for an adjustment for a reserve for repayment to a bankrupt customer of a collected receivable; and.
- For the nine months ended March 31, 2005 and March 31, 2004 the impact of discontinued operations for the Trusted Time Division.
The above non-GAAP Statements of Operations assume a year to date effective income tax rate of 25.8% and 33.9% for the nine months ended March 31, 2005 and 2004, respectively.
