SAN JOSE, Calif. — May 2, 2007 — Symmetricom, Inc. (NASDAQ:SYMM), a leading worldwide supplier of network synchronization and timing solutions, today reported financial results for its fiscal 2007 third quarter ended March 31, 2007.
Fiscal third quarter revenue was $51.9 million from continuing operations, an increase of $10.4 million, or 25.1 percent from revenue of $41.5 million in the third quarter of the prior year. For the nine-month period ended March 31, 2007, revenue was $151.0 million, an increase of $21.6 million, or 16.7 percent, from revenue of $129.4 million in the same period of the prior year.
Net earnings from continuing operations in the fiscal third quarter were $2.1 million or $0.05 per share on a fully diluted basis. In the third fiscal quarter a year ago, net losses from continuing operations were $(5.7) million, or $(0.12) per share. For the nine-month period ended March 31, 2007, net earnings from continuing operations were $7.9 million or $0.17 per share on a fully diluted basis, compared with net losses of $(2.1) million, or $(0.05) per share, in the same period of the prior year.
In the fiscal third quarter Symmetricom’s “other revenue” segment, which consisted of manufacturing performed in our Puerto Rico plant for third parties, ceased operations. The results for this segment are now reported as discontinued operations. The consolidated statements of operations for all periods were adjusted to reflect the change for discontinued operations. Net losses from discontinued operations in the fiscal third quarter were $(0.3) million, or $(0.01) per share on a fully diluted basis. For the nine-month period ended March 31, 2007, net earnings from discontinued operations were $0.4 million, or $0.01 per share on a fully diluted basis. The exit from this business was originally announced in Symmetricom’s Form 8-K filing on April 28, 2006.
Non-GAAP net earnings, which exclude discontinued operations, certain items related to non-cash compensation, amortization of acquired intangibles and other non-recurring charges, were $4.3 million, or $0.09 per share on a fully diluted basis, compared with non-GAAP net earnings of $2.3 million, or $0.05 per share, in the third quarter a year ago. For the nine-month period ended March 31, 2007, non-GAAP net earnings from continuing operations were $13.6 million, or $0.29 per share on a fully diluted basis, compared with non-GAAP net earnings from continuing operations for the same period of the prior year of $9.6 million, or $0.21 per share.
Telecom Solutions Division revenue was $34.2 million in the quarter, an increase of $6.0 million, or 21.4 percent, from the $28.2 million in revenue reported in the prior year period. Revenue for the nine-month period ended March 31, 2007, was $99.1 million, an increase of $14.9 million, or 17.7 percent, from revenue of $84.2 million in the same period of the prior year.
Timing, Test & Measurement Division revenue in the quarter was $17.4 million, an increase of $4.0 million, or 30.1 percent, from revenue of $13.3 million in the same period of the prior year. Revenue for the nine-month period ended March 31, 2007, was $51.5 million, an increase of $6.3 million, or 14.0 percent, from revenue of $45.2 million in the same period of the prior year.
Revenue for the QoE Assurance Division, formed after the acquisition of QoSmetrics in the current fiscal quarter, was $0.4 million.
“We saw some level of upgrade activity from both AT&T and Verizon in the quarter, which helped propel our wireline revenues up 27 percent from the third quarter of the prior year and improve our overall gross margin due to favorable sales mix impact,” said Thomas Steipp, president and CEO of Symmetricom. “Additionally, we started shipping TimeCreator™ to cable equipment manufacturers and service providers for lab and field trials. In the quarter, we also saw a solid level of evaluations, trials and interest in solutions from our newly formed QoE Assurance Division.”
Outlook for Q4 FY07
Symmetricom expects fourth quarter FY07 revenue to be in the range of $53.0 million to $58.0 million. GAAP earnings are expected to be between $0.02 and $0.06 per share on a fully diluted basis. Non-GAAP earnings are expected to be between $0.07 and $0.11 per share on a fully diluted basis.
Investor Conference Call
Management will hold a conference call to discuss these results today, May 2 at 1:30 p.m. Pacific Time. Those wishing to join should dial 1-210-234-0000 and reference the passcode “Symmetricom.” A live webcast of the conference call will also be available via the company’s web site at www.symmetricom.com. A replay of the call will be available until May 9 at 11:59 p.m. Pacific Time. To access the replay, please dial 1-203-369-3901.
Non-GAAP Information
Certain non-GAAP financial information is included in this press release. In the “Reconciliation of GAAP to Non-GAAP Results” schedules included in this press release, Symmetricom excludes certain items related to non-cash compensation, amortization of acquired intangibles, impairment of goodwill and other 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.
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, 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, 2006, and subsequent filings with the SEC. Forward-looking statements are made as of the date of this press release and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
Note: Financial schedules attached.
