Sunrise Telecom® Reports Third Quarter 2010 Results
- $0.3 million of EBITDA for trailing twelve months
- Continued focus on retooling sales and distribution channels
- Strong product pipeline
SAN JOSE, Calif.--(BUSINESS WIRE)-- Sunrise Telecom® Incorporated (Pink Sheets: SRTI) today posted its financial results for the quarter ended September 30, 2010.
Sunrise Telecom reported revenue of $8.0 million for the quarter, compared to revenue of $9.6 million for the third quarter of 2009. EBITDA for the quarter was $(0.7) million, up significantly from EBITDA of $(4.5) million in the third quarter of 2009, which was negatively impacted by one-time charges. Operating costs declined 34 percent in the third quarter to $5.7 million, from $8.6 million for the third quarter of 2009.
Third quarter net loss was $(1.0) million, or $(0.02) per share, an 84 percent improvement from a net loss of $(6.1) million or $(0.12) per share in the third quarter of 2009. Over the 12 months ended September 30, the company generated positive EBITDA of $0.3 million.
During the third quarter, Sunrise Telecom continued to focus on strengthening its sales organization and expanding its distribution network. The company recently added regional sales managers for Latin America and Eastern Europe. At the start of the fourth quarter, Sunrise Telecom engaged Rep Channel Management, LLC to manage the company’s indirect sales channel in the United States and Canada. Rep Channel Management is expected to complement, strengthen and expand Sunrise Telecom’s ability to reach more key customers and to compete more effectively in the important North American market.
During the quarter, Sunrise Telecom received follow-on orders for its XTT 5000 (10GigE) product from a tier 1 European carrier and continued seeing increased momentum for its service assurance business with cable operators.
Sunrise Telecom continued to enrich its product pipeline with the debuts of its SunLite UDSL service verification product, its CM3800 cable modem analyzer and AT2500 digital proof of performance feature. A new platform packed with innovative capabilities such as centralized workflow optimization, ultra-modular test applications, smartbook functionality, anytime/anywhere/any device access and an ultra-smart GUI is currently in the Sunrise Telecom product pipeline.
“Despite soft business in Europe, we are encouraged by the fact that overall bookings increased during the third quarter, both year-over-year and sequentially,” said Bahaa Moukadam, chief executive officer. “We continue to introduce new products directly driven by our customers’ need to control expenses while addressing the growing technical complexity of their networks and services. In the current economic environment, cable operators and telecom service providers are looking to Sunrise Telecom as a partner to help boost their productivity and better differentiate their services now and in the future,” Mr. Moukadam continued.
About Sunrise Telecom Incorporated
Sunrise Telecom develops and delivers high-quality communications test and measurement solutions for telecom, cable and wireless networks. The Company's robust portfolio of feature-rich, easy-to-use products enables service providers to deliver premium voice, video, data and next-generation digital multimedia services quickly, reliably, and cost-effectively. Based in San Jose, California, Sunrise Telecom distributes its products through a direct sales force and a global network of sales representatives and distributors.
Sunrise Telecom makes available on or through its website its press releases and its annual, quarterly and other reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with PinkSheets.com. Sunrise Telecom’s website may be found at www.sunrisetelecom.com. Sunrise Telecom files with PinkSheets.com yearly financial statements audited by independent auditor, Armanino McKenna LLP. Its quarterly financial statements are unaudited and unreviewed by Armanino McKenna LLP.
For more information, visit http://www.sunrisetelecom.com or email info@sunrisetelecom.com.
Use of Non-GAAP Financial Measures
Sunrise Telecom reports financial information in accordance with generally accepted accounting principles (GAAP). Management utilizes EBITDA as a supplemental performance measure because it believes that EBITDA, while it is a non-GAAP financial measure, is a useful measure of the company's performance because it excludes charges that may obscure the company's operating results. Management uses EBITDA to manage and assess the profitability of the company’s business.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, including, but not limited to, expectations related to the reorganization of the Sunrise Telecom sales channel, material contained in quotations and statements related to the expected release of new products. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those projected. Specific factors that may cause results to differ include the following: a lack of acceptance or slower than anticipated acceptance for Sunrise Telecom's new or enhanced products and modules; slower than anticipated product development or introduction into the marketplace; unanticipated delays in product delivery schedules; lower than anticipated end-user demand for telecommunications services and a corresponding cutback in spending by customers; unexpected difficulties in developing sales channels; and increased competitive pressures, including from former employees. These and other risks and uncertainties are described in more detail in Sunrise Telecom's reports including, but not limited to, its Annual Report for the year ended December 31, 2009 and its quarterly reports for the periods ended March 31 and June 30, 2010 filed with Pink Sheets. Sunrise Telecom assumes no obligation to update the forward-looking statements included in this press release.
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except share data) | ||||||||
| September 30, | December 31, | |||||||
| 2010 | 2009 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ 7,320 | $ 7,744 | ||||||
| Held-to-maturity investments | 1,542 | - | ||||||
| Accounts receivable, net of allowances of $430 and $665, respectively | 5,591 | 11,714 | ||||||
| Inventories | 7,768 | 7,948 | ||||||
| Prepaid expenses and other assets | 1,273 | 2,946 | ||||||
| Total current assets | 23,494 | 30,352 | ||||||
| Property and equipment, net | 16,121 | 17,354 | ||||||
| Restricted cash | 68 | 117 | ||||||
| Held-to-maturity investments | 1,031 | - | ||||||
| Other assets | 386 | 496 | ||||||
| Total assets | $ 41,100 | $ 48,319 | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term borrowings and current portion of notes payable | $ 17 | $ 2,000 | ||||||
| Accounts payable | 1,910 | 2,407 | ||||||
| Other accrued liabilities | 4,400 | 6,710 | ||||||
| Income taxes payable | 307 | 341 | ||||||
| Deferred revenue | 109 | 1,484 | ||||||
| Total current liabilities | 6,743 | 12,942 | ||||||
| Income taxes payable | 1,386 | 1,795 | ||||||
| Other non-current liabilities | 17 | - | ||||||
| Total liabilities | 8,146 | 14,737 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.001 par value per share; 10,000,000 | ||||||||
| shares authorized, none issued and outstanding | - | - | ||||||
| Common stock, $0.001 par value per share; 175,000,000 | ||||||||
| shares authorized; 51,345,270 and 51,349,058 shares outstanding | ||||||||
| as of September 30, 2010 and December 31, 2009, respectively | 51 | 51 | ||||||
| Additional paid-in capital | 78,822 | 78,270 | ||||||
| Accumulated deficit | (45,909 | ) | (44,632 | ) | ||||
| Accumulated other comprehensive loss | (10 | ) | (107 | ) | ||||
| Total stockholders’ equity | 32,954 | 33,582 | ||||||
| Total liabilities and stockholders’ equity | $ 41,100 | $ 48,319 | ||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales | $ 7,972 | $ 9,606 | $ 27,388 | $ 36,863 | ||||||||||||
| Cost of sales | 3,506 | 6,874 | 11,046 | 18,674 | ||||||||||||
| Gross profit | 4,466 | 2,732 | 16,342 | 18,189 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,498 | 3,032 | 7,397 | 8,671 | ||||||||||||
| Selling and marketing | 2,195 | 2,935 | 7,474 | 10,613 | ||||||||||||
| General and administrative | 1,032 | 2,017 | 3,163 | 6,777 | ||||||||||||
| Restructuring charges | - | 766 | (40 | ) | 1,031 | |||||||||||
| Total operating expenses | 5,725 | 8,750 | 17,994 | 27,092 | ||||||||||||
| Operating loss | (1,259 | ) | (6,018 | ) | (1,652 | ) | (8,903 | ) | ||||||||
| Other income (expense), net | 184 | (163 | ) | 85 | (722 | ) | ||||||||||
| Loss before income taxes | (1,075 | ) | (6,181 | ) | (1,567 | ) | (9,625 | ) | ||||||||
| Income tax expense (benefit) | (32 | ) | (61 | ) | (290 | ) | 508 | |||||||||
| Net loss | (1,043 | ) | (6,120 | ) | (1,277 | ) | (10,133 | ) | ||||||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ (0.02 | ) | $ (0.12 | ) | $ (0.02 | ) | $ (0.20 | ) | ||||||||
| Shares used in computing net loss | ||||||||||||||||
| per share: Basic and diluted | 51,345 | 51,349 | 51,345 | 51,349 | ||||||||||||
CONTACT:
Sunrise Telecom Incorporated
Lyron Bentovim, +1-408-363-8000
Chief Operating Officer/Chief Financial Officer
KEYWORDS: United States North America California
INDUSTRY KEYWORDS: Technology Networks Audio/Video Telecommunications Other Technology Mobile/Wireless VoIP
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