Carrier Access Corporation (NASDAQ: CACS), amanufacturer of broadband communications equipment, today reportedfirst-quarter 2006 revenue of $21.9 million, up 49% from $14.7 millionreported in the first quarter of 2005.
On a GAAP basis, net income for the first quarter of 2006 was $63,000, or$0.0 per diluted share as compared with a GAAP net loss of $5.0 million, or$(0.15) per diluted share for the first quarter of 2005. Non-GAAP netincome in the first quarter of 2006 was $1,525,500, or $0.04 per dilutedshare, compared to a non-GAAP net loss of $3,979,000 or $(0.12) per dilutedshare for the first quarter of 2005. Non-GAAP financial measures excludestock-based compensation expense, depreciation, and amortization ofpurchased intangibles, including any income tax effects.
GAAP net income for the first quarter of 2006 includes stock-basedcompensation expense related to the adoption of Statement of FinancialAccounting Statement SFAS 123® of $576,000, net of tax, or $0.02 perdiluted share. GAAP net loss for the comparative first quarter of 2005 didnot include stock-based compensation expense. Including the pro-formastock-based compensation expense previously disclosed in Carrier Access'financial statement footnotes, GAAP net loss for the first quarter of 2005would have been $(5,939,000) or $(0.17) per diluted share.
The reconciliation of the GAAP net income and per share amounts to therespective Non-GAAP amounts for the three months ended March 31, 2006 and2005 is set forth at the end of this press release.
"Wireless demand drove significant revenue growth in the first quarter forCarrier Access," said Roger Koenig, Carrier Access' president and chiefexecutive officer. "In addition, while investing heavily in R&D, weincreased our gross margin, and ended the quarter profitably, a dramaticimprovement over our financial results a year ago. We continue to believeour technology solutions for wired and wireless networks will favorablyposition us to supply the expansion of multimedia communication services."
Carrier Access will hold a conference call today, April 27, at 4:30 p.m. ETto review first quarter results. The call is open to the public. Thosewho wish to participate should dial (703) 639-1424, domestically orinternationally, at least fifteen minutes prior to the scheduled start timefor the call and reference Carrier Access First Quarter 2006 Earnings Call.The conference call will be available live via the Internet by accessingthe Carrier Access web site at http://www.carrieraccess.com under theInvestor Relations section. An online replay of the conference call, aswell as the text of the Company's earnings release, will also be availableon the Investor Relations site at http://www.carrieraccess.com. An onlinereplay of the conference call, as well as the text of the Company'searnings release, will be available on the Investor Relations site athttp://www.carrieraccess.com.
About Carrier Access Corporation
Carrier Access (NASDAQ: CACS) provides consolidated access technologydesigned to streamline the communication network operations of serviceproviders, enterprises and government agencies. Carrier Access productsenable customers to consolidate and upgrade access capacity, and implementconverged IP services while lowering costs and accelerating servicerevenue. Carrier Access' technologies help our customers do more with less.For more information, visit www.carrieraccess.com.
This press release contains forward-looking statements, within the meaningof the "safe harbor" provisions of the Private Securities Litigation ReformAct of 1995, about our improving financial performance, technologysolutions, reception of our products and technology direction, as well asour growth prospects in wireless and converged access. These statements aresubject to risks and uncertainties, including potential discrepanciesbetween management's current estimates and the final operating results for2006. Our results of operations for the first quarter and fiscal year 2006and comparative quarter over quarter and year over year revenue areunaudited and subject to change. In addition, our ability to achieveprofitability in the first quarter of 2006 is not necessarily indicative ofthe results that may be expected for any future period. We caution thatactual results may differ materially from those indicated by theseforward-looking statements as a result of various important factorsincluding, but not limited to, continuing uncertainty regarding generaleconomic conditions, changes in capital spending by carriers andtelecommunications companies, market acceptance of our products, dependenceon a single customer and other problems with or at our customers,distributors, OEM's and/or suppliers, growth rates within our industry, thefinancial stability of our customers, the introduction of new competitionand technologies, and other risks and uncertainties including those factorsdiscussed in the Company's Annual Report on Form 10-K for the year endedDecember 31, 2005, and other documents periodically filed with theSecurities and Exchange Commission. We do not undertake any obligation torevise or update any forward-looking statements, whether as a result of newinformation, future events, or otherwise.
Reconciliations to the Nearest Non-GAAP Measure (in thousands, except per share data)
Three Months Ended ------------------------ March 31, March 31, 2006 2005 --------- ---------
US GAAP: Net income (loss) reported $ 63 $ (5,010)Add back: Stock-based compensation expense 576 -Depreciation and amortization of purchased intangibles 886 1,031 --------- ---------
Non-GAAP: Net income (loss) $ 1,525 $ (3,979) ========= =========
US GAAP: Net income (loss) reported per share $ 63 $ (5,010) ========= =========Basic and diluted $ 0.00 $ (0.15) ========= =========
Non-GAAP: Net income (loss) per shareBasic $ 0.05 $ (0.12) ========= =========Diluted $ 0.04 $ (0.12) ========= =========
Use of Non-GAAP Financial Information
The presentation of non-GAAP additional information is not meant to beconsidered in isolation or as a substitute for net income (loss) or dilutednet income (loss) per share prepared in accordance with accountingprinciples generally accepted in the United States. We believe that thenon-GAAP measures information is used by and is useful to investors andother users of our financial statements in evaluating our operating resultsand comparative trends. The non-GAAP results are an indicator of ourbaseline performance before gain, losses or other charges that areconsidered by management to be outside of our core operating results andare excluded by management for purposes of evaluating performance againstinternal budgets and in making operational decisions. In addition, thesenon-GAAP results are among the primary indicators management uses as abasis for our planning and forecasting of future periods.
CARRIER ACCESS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except per share data)
March 31, December 31, 2006 2005 --------- ---------
ASSETSCurrent assets: Cash and cash equivalents $ 57,015 $ 55,279 Investments in marketable securities 54,882 53,165 Accounts receivable, net 12,755 10,922 Income tax receivable 56 56 Deferred income taxes 239 239 Inventory, net 22,557 24,506 Prepaid expenses and other current assets 2,109 2,720 --------- ---------Total current assets 149,613 146,887Property and equipment, net 10,717 11,002Goodwill 7,588 7,588Intangible assets, net 4,956 5,268 --------- --------- Total Assets $ 172,874 $ 170,745 ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities Accounts payable $ 9,148 $ 8,516 Accrued payroll and related liabilities 4,182 3,422 Other accrued liabilities 1,092 1,021 Deferred revenue 310 422 --------- ---------Total current liabilities 14,732 13,381 --------- ---------Deferred income taxes 239 239 --------- --------- Total Liabilities 14,971 13,620 --------- ---------Stockholders' Equity
Common stock 34 34Additional paid-in capital 184,708 183,995Accumulated deficit (26,480) (26,542)Cumulative other comprehensive loss (359) (362) --------- ---------Total Stockholders' Equity 157,903 157,125 --------- ---------Total Liabilities and Stockholders' Equity $ 172,874 $ 170,745 ========= =========
CARRIER ACCESS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data)
Three Months Ended ------------------------ March 31, March 31, 2006 2005 --------- ---------
Revenue, net $ 21,943 $ 14,696Cost of Sales 11,468 9,590 --------- ---------Gross profit 10,475 5,106 --------- ---------Operating Expenses Research and development 4,999 4,799 Sales and marketing 3,370 3,324 General and administrative 2,885 1,683 Bad debt expense (recoveries) (53) 328 Restructuring charges - 369 Intangible asset amortization 307 307 --------- ---------Total operating expenses 11,508 10,810 --------- ---------Loss from operations (1,033) (5,704)Interest income 1,096 694 --------- ---------Income (loss) before income taxes 63 (5,010) --------- ---------Provision for income taxes (benefit) - - --------- ---------Net income (loss) $ 63 $ (5,010) ========= =========
Income (loss) per shareBasic and diluted $ 0.00 $ (0.15) ========= =========
Weighted average common sharesBasic 33,802 34,502 ========= =========Diluted 34,558 34,502 ========= =========
CARRIER ACCESS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
Three Months Ended ------------------------ March 31, March 31, 2006 2005 --------- ---------Cash flows from operating activities Net income (loss) $ 63 $ (5,010) Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense 886 1,031 Provisions for (recoveries of) doubtful accounts (53) 328 Stock-based compensation 576 - Changes in operating assets and liabilities: Accounts receivable (1,942) (262) Income tax receivable - 75 Inventory 1,950 (1,178) Prepaid expenses and other 490 205 Accounts payable and accrued expenses 1,658 563 --------- --------- Net cash provided (used) by operating activities 3,628 (4,248) --------- ---------Cash flows from investing activities Purchase of equipment and real property (290) (619) Purchase of marketable securities (8,372) (21,632) Sales of marketable securities available for sale 6,632 21,662 --------- --------- Net cash (used in) investing activities (2,030) (589) --------- ---------Cash flows from financing activities Proceeds from exercise of stock options 138 449 --------- --------- Net cash provided by financing activities 138 449 --------- --------- Net increase (decrease) in cash and cash equivalents 1,736 (4,388) Cash and cash equivalents at beginning of the period 55,279 46,753 --------- ---------
Cash and cash equivalents at end of the period $ 57,015 $ 42,365 ========= =========
Contact:Audra Bailey(303) 218-5455
SOURCE: Carrier Access