Stratex Networks Announces Q1 Fiscal 2006 Financial Results
Eclipse Revenue Up 65 Percent; Gross Margins Expand
SAN JOSE, Calif., Aug 03, 2005 /PRNewswire-FirstCall via COMTEX/ -- Stratex Networks, Inc. (Nasdaq: STXN), a leading provider of wireless transmission solutions, today reported financial results for the first quarter fiscal year 2006, ended June 30, 2005.
Revenues in the first quarter of fiscal 2006 were $54.9 million, compared with $41.1 million in the prior quarter and $46.0 million in the year ago period. Revenues include $4.4 million of previously deferred revenues from one customer of legacy products in which revenue was recognized upon receipt of cash.
The net loss in the first quarter of fiscal 2006 was $4.2 million, or a loss per share of $0.04. This compares to a net loss of $13.3 million, or a loss per share of $0.14 in the prior quarter, and a loss of $8.0 million, or a loss per share of $0.09, in the year ago period.
Total cash and short-term investments at the end of the June quarter was $45.5 million compared with $48.7 million in the prior quarter.
Stratex Networks received $47.1 million in new orders during the first quarter of fiscal 2006. This includes approximately $27 million of orders for the new Eclipse(TM) product line. Eclipse revenue continued its growth during the quarter, increasing sequentially by more than 65 percent to $24.8 million. The backlog for all product lines totaled $56.2 million as of June 30, 2005. The Company includes orders expected to ship within 12 months in its backlog.
"As we begin our fiscal year, we are gratified that we met or exceeded all of our guidance targets. This includes the solid expansion of our gross margin which reached 23 percent, continuing the margin improvement trend and achieving the highest level in eight quarters," said Chuck Kissner, chairman and chief executive officer of Stratex Networks, Inc. "The continued acceptance of Eclipse as a highly competitive and cost-effective solution for voice and data-centric applications is reflected in the strong order patterns. We remain confident in the long-term success of our strategy to deliver our customers a value-added wireless platform, and to achieve profitability for Stratex Networks."
Outlook and Guidance
The following forecasts are based on current expectations. These statements are forward-looking, and actual results may differ materially. Please see the Safe Harbor Statement in this release for a description of certain important risk factors that could cause actual results to differ, and refer to the company's reports on file with the Securities and Exchange Commission (SEC) for a more complete description of the risks.
"Demand for our Eclipse wireless platform remains strong and is expected to increase for the fifth consecutive quarter. Based on order patterns for our non-Eclipse, legacy products, we expect gross margins to increase while total product revenue is forecast to moderate in the second quarter. Given our confidence level in Eclipse, we continue to expect to achieve profitability no later than the December quarter of this year," said Kissner.
Second Quarter Fiscal Year 2006 (ending September 30, 2005)
* Revenue is expected to range between $46 million and $49 million;
* Gross margin is expected to be between 25 percent and 27 percent;
* Loss per share is expected to be in the range of $0.02 to $0.03.
Conference Call
Stratex Networks management will hold a conference call to discuss the company's financial results today, at 5:00 p.m. Eastern Time. Those wishing to join should dial 706-634-7168 (password: Stratex) at approximately 4:50 p.m. A replay of the call will be available starting one hour after the completion of the call until August 10, 2005. To access the replay, dial 706-645-9291 (pass code: 7677450). A live and an archived webcast of the conference call will also be available via the company's Web site at www.stratexnet.com.
Upcoming Conferences
Stratex Networks management will be presenting at the San Francisco Techfest 2005 on August 10 in San Francisco, and the Merriman Curhan Ford & Co. Annual Investor Summit on September 19 in San Francisco. Those wishing to listen to management's presentation can hear a live and/or an archived webcast of these available events at www.stratexnet.com.
About Stratex Networks
With headquarters in San Jose, California, Stratex Networks, Inc. is one of the world's leading providers of high-speed wireless transmission solutions. Since it was founded in 1984, Stratex Networks has achieved international recognition for quality, innovation, and technical superiority in delivering data, voice, and video communication systems, including comprehensive service and support. Stratex Networks, with its broad product offering and worldwide sales and support organization, is strategically positioned to serve its customers' needs in wireless high-capacity transmission technology. Additional information is available at www.stratexnet.com.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, March 31,
2005 2005
Assets
Cash and short-term investments $45,463 $48,691
Accounts receivable, net 36,237 35,084
Inventories 30,990 36,780
Other current assets 11,647 10,572
Total current assets 124,337 131,127
Property & equipment, net 26,765 28,228
Other assets 954 1,276
Total assets 152,056 $160,631
Liabilities and Stockholders' Equity
Accounts payable $28,951 $34,472
Other current liabilities 36,311 33,951
Total current liabilities 65,262 68,423
Other long-term liabilities 29,685 32,185
Total liabilities 94,947 100,608
Stockholders' equity 57,109 60,023
Total liabilities and stockholders' equity $152,056 $160,631
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
June 30,
2005 2004
Net sales $54,872 $46,041
Cost of sales 42,271 39,115
Gross profit 12,601 6,926
Operating expenses:
Research and development 3,701 4,364
Selling, general and administrative 11,994 9,630
Amortization of intangible assets -- 395
Total operating expenses 15,695 14,389
Operating loss (3,094) (7,463)
Other income (expense) (795) (370)
Loss before income taxes (3,889) (7,833)
Provision for income taxes 277 151
Net loss $(4,166) $(7,984)
Basic and diluted loss per share $(0.04) $(0.09)
Basic and diluted weighted average shares
outstanding 94,942 84,127
SOURCE Stratex Networks, Inc.
Mary McGowan of Summit IR Group Inc., +1-408-404-5401, or mary@summitirgroup.com, for Stratex Networks, Inc. |
