HTSX Reports Q3 Fiscal 2008 Results
Non-GAAP Summary:
- Revenue up 21% over Q3 Fiscal 2007
- Gross margins at 31%
- Operating income $16.5 million
- Net income $11.9 million ($0.20 per share)
Harris Stratex Networks Reports Q3 Fiscal 2008 Financial Results
Tuesday April 29, 4:01 pm ET
RESEARCH TRIANGLE PARK, N.C., April 29 /PRNewswire-FirstCall/ -- Harris Stratex Networks, Inc. (Nasdaq: HSTX - News), the leading independent supplier of turnkey wireless transmission solutions, today reported financial results for the third quarter of fiscal 2008, which ended March 28, 2008.
Revenue for the third quarter of fiscal 2008 was $178.2 million. GAAP net income was $7.3 million or $0.09 per diluted share, which includes $7.3 million in pre-tax charges associated with the merger transaction, integration and stock compensation expense.
Non-GAAP Financial Results
On a non-GAAP basis, the third quarter revenue of $178.2 million was an increase of 21 percent compared with $146.8 million in the prior year quarter. Non-GAAP gross margin was 31 percent in the third quarter of fiscal 2008, operating income was $16.5 million, and net income was $11.9 million or $0.20 per diluted share.
A reconciliation of GAAP to non-GAAP financial measures is provided on Tables 4 and 6 along with the accompanying notes.
In its seasonally softest quarter, North America microwave grew 16 percent year-over-year with revenue of $56.9 million. This compares with $63.8 million in the prior quarter.
International revenue of $117.1 million grew 6 percent from the prior quarter and increased 27 percent compared with the year-ago period. Growth was led by revenue from Africa at $55.9 million, which increased 36 percent sequentially, and 49 percent when compared with the year-ago quarter, reflecting a rebound in capital investment following a series of operator consolidations. Revenue in Europe, the Middle East and Russia was $39.2 million, a sequential increase of 23 percent and an increase of 17 percent compared with the year-ago period. Combined Q3 revenues for Latin America and Asia Pacific were $22.0 million, compared with $37.8 million in the prior quarter and $21.4 million in the year-ago period. Network Operations revenue was $4.2 million compared with $6.5 million in the prior quarter and $5.2 million in the year-ago period.
"I am pleased with our 21 percent year-over-year revenue improvement. In particular, I am pleased with the rebound in Africa as shipments to major operators gained traction," said Harald Braun, president and chief executive officer of Harris Stratex Networks.
"During the quarter we took remedial steps to improve logistics issues, and we renegotiated our freight costs, the benefits of which should be realized in future quarters," added Braun. "I am encouraged to see the integration successes as the company continues to capture cost synergies from the merger. I have already formed a team to address the areas where additional costs can be removed to both improve gross margins and reduce operating expenses."
Outlook and Guidance
Based on the strength of its revenue momentum exiting Q3, the company now believes revenue for fiscal 2008 will be at the high end of prior guidance. Due to continued pressure on gross margin, non-GAAP earnings for fiscal 2008 are expected to be at the low end of prior guidance. This excludes transition costs related to the company's management changes in the fourth quarter, which will be included in non-GAAP results.
"We enter our fourth quarter with a positive book to bill driven by orders in North America and Africa," said Braun. "While our near term cost issues are challenging, the opportunity in our market is sizeable and we plan to compete aggressively and improve our financial performance."
Conference Call
Harris Stratex Networks will host a conference call today to discuss the company's financial results at 5:30 p.m. Eastern Time. Those wishing to join the call should dial 303-262-2175 (no pass code required) at approximately 5:20 p.m. A replay of the call will be available starting one hour after the call's completion until May 6. To access the replay, dial 303-590-3000 (pass code: 11111496 #). A live and archived webcast of the conference call will also be available via the company's Web site at www.HarrisStratex.com/investors/conference-call.
Non-GAAP Measures and Comparative Financial Information
Harris Stratex Networks, Inc. and the Microwave Communications Division of Harris Corporation report information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The GAAP information presented in this press release consists of the results of operations, cash flows and financial position of Harris Stratex Networks, Inc. for the quarter and three quarters ended March 28, 2008 and March 30, 2007. On January 26, 2007, the Microwave Communications Division of Harris Corporation and Stratex Networks, Inc. merged into Harris Stratex Networks, Inc. and became one reporting entity. Accordingly, management of Harris Stratex Networks will monitor revenues, cost of product sales and services, research and development expenses, selling and administrative expenses, operating income or loss, tax expense or benefit, net income or loss, and net income or loss per share for the new combined entity for planning and forecasting results in future periods, and may use these measures for some management compensation purposes. As such, historical non-GAAP combined information has been included in this press release for comparative purposes. These measures exclude certain costs and expenses as discussed herein. As a result, management is presenting these non-GAAP measures in addition to results reported in accordance with GAAP to better communicate underlying operational and financial performance in each period. Management believes these non-GAAP measures provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any given period. Management also believes that these non-GAAP measures enhance the ability of an investor to analyze trends in Harris Stratex Networks' business and to better understand our performance.
Harris Stratex Networks management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Harris Stratex Networks presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's financial performance. Reconciliations of these non- GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are included in the tables below.
About Harris Stratex Networks
Harris Stratex Networks, Inc. (Nasdaq: HSTX - News) is the world's leading independent supplier of turnkey wireless transmission solutions. The company offers reliable, flexible and scalable wireless network solutions, backed by comprehensive professional services and support. Harris Stratex Networks serves all global markets, including mobile network operators, public safety agencies, private network operators, utility and transportation companies, government agencies and broadcasters. Customers in more than 135 countries depend on Harris Stratex Networks to build, expand and upgrade their voice, data and video solutions. Harris Stratex Networks is recognized around the world for innovative, best-in-class wireless networking solutions and services. For more information, visit www.HarrisStratex.com. |
