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HANGZHOU, China, Oct. 30, 2020 (GLOBE NEWSWIRE) -- UTStarcom (“UT” or the “Company”) (NASDAQ: UTSI), a global telecommunications infrastructure provider, today reported its unaudited financial results for the six months ended June 30, 2020.
Business Update
UTStarcom’s acting Chief Executive Officer Dr. Zhaochen Huang commented, “Our results for the first half of 2020 were negatively impacted by the COVID-19 pandemic. While we continue to navigate this challenging macro environment, we are focused on developing new products that capitalize on important technology trends and engaging with network operators to address and support their requirements.”
First Half 2020 Financial Results
Summary of 1H 2020 Key Financials
| 1H 2020 | 1H 2019 | Y/Y Change | |
| Revenue | $13.7 | $38.6 | -64.5% |
| Gross Profit | $2.6 | $12.0 | -78.2% |
| Operating Expenses | $11.9 | $14.4 | -17.1% |
| Operating Loss | ($9.3) | ($2.3) | -$7.0 |
| Net Income/Loss | ($12.0) | $2.1 | -$14.2 |
| Basic EPS | ($0.34) | $0.06 | -$0.40 |
| Cash Balance (including Restricted Cash) | $48.6 | $55.1 | -11.7% |
* Dollar comparisons are used where percentage comparisons are not meaningful.* All the numbers in U.S. Dollars are in millions except for Earnings Per Share (EPS)
Total Revenues
Total revenues for the first half of 2020 were $13.7 million, compared to $38.6 million in the corresponding period in 2019.
Gross Profit
Gross profit was $2.6 million, or 19.1% of net sales, for the first half of 2020, compared to $12.0 million, or 31.2% of net sales, in the corresponding period in 2019.
Operating Expenses
Operating expenses for the first half of 2020 were $11.9 million, compared to $14.4 million in the corresponding period in 2019.
Operating Loss
Operating loss for the first half of 2020 was $9.3 million, compared to $2.3 million in the corresponding period in 2019.
Interest Income, Net
Net interest income for the first half of 2020 was $0.5 million, compared to $0.6 million in the corresponding period in 2019.
Other Income (Expenses), Net
Net other expense for the first half of 2020 was $3.1 million, compared to net other income of $4.8 million in the corresponding period in 2019. Other expense for the first half of 2020 was mainly due to foreign exchange losses resulting from the devaluation of Indian Rupee against the U.S. dollar.
Net Income (Loss)
Net loss attributable to shareholders for the first half of 2020 was $12.0 million, compared to net income of $2.1 million in the corresponding period in 2019. Basic net loss per share for the first half of 2020 was $0.34, compared to basic net income per share of $0.06 for the corresponding period in 2019.
Cash Flow
Cash used in operating activities in the first half of 2020 was $0.8 million, cash generated from investing activities was $2.0 million, and cash used in financing activities was $0.2 million. As of June 30, 2020, UTStarcom had cash, cash equivalent and restricted cash of $48.6 million.
About UTStarcom Holdings Corp.
UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan and India. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.
Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the Company’s strategic initiatives and the Company’s business outlook. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially and adversely from the Company’s current expectations. These include risks and uncertainties related to, among other things, the effect of the COVID-19 pandemic on the Company’s business, changes in the financial condition and cash position of the Company, changes in the composition of the Company’s management and their effect on the Company, the Company’s ability to realize anticipated results of operational improvements and benefits of the divestiture transaction, the ability to successfully identify and acquire appropriate technologies and businesses for inorganic growth and to integrate such acquisitions, the ability to internally innovate and develop new products, assumptions the Company makes regarding the growth of the market and the success of the Company’s offerings in the market and the Company’s ability to execute its business plan and manage regulatory matters. The risks and uncertainties also include the risk factors identified in the Company’s latest annual report on Form 20-F and current reports on Form 6-K as filed with the Securities and Exchange Commission. The Company is in a period of strategic transition and the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, which may change and the Company assumes no obligation to update any such forward-looking statements.
For investor and media inquiries, please contact:
UTStarcom Holdings Corp.Tel: +86 571 8192 8888Ms. Ning Jiang, Investor RelationsEmail: utsi-ir@utstar.com/ njiang@utstar.com /
In the United States:The Blueshirt Group Mr. Ralph FongTel: +1 (415) 489-2195Email: ralph@blueshirtgroup.com
UTStarcom Holdings Corp.Unaudited Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||
| 2020 | 2019 | |||||
| (In thousands) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 33,011 | $ | 34,966 | ||
| Short-term investments | — | 2,095 | ||||
| Accounts and notes receivable, net | 64,157 | 77,831 | ||||
| Inventories and deferred costs | 7,289 | 6,655 | ||||
| Short-term restricted cash | 11,257 | 10,007 | ||||
| Prepaid and other current assets | 4,158 | 5,524 | ||||
| Total current assets | 119,872 | 137,078 | ||||
| Long-term assets: | ||||||
| Property, plant and equipment, net | 842 | 1,092 | ||||
| Operating lease right-of-use assets, net | 1,869 | 2,860 | ||||
| Long-term restricted cash | 4,377 | 3,634 | ||||
| Other long-term assets | 6,614 | 6,639 | ||||
| Total long-term assets | 13,702 | 14,225 | ||||
| Total assets | $ | 133,574 | $ | 151,303 | ||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 28,187 | $ | 30,875 | ||
| Customer advances | 217 | 160 | ||||
| Deferred revenue | 1,208 | 1,320 | ||||
| Income tax payable | 7,198 | 7,480 | ||||
| Operating lease liabilities, current | 1,700 | 1,595 | ||||
| Other current liabilities | 6,600 | 7,603 | ||||
| Total current liabilities | 45,110 | 49,033 | ||||
| Long-term liabilities: | ||||||
| Operating Lease liabilities, non-current | 589 | 1,364 | ||||
| Long-term deferred revenue and other liabilities | 1,411 | 1,718 | ||||
| Total liabilities | 47,110 | 52,115 | ||||
| Total equity | 86,464 | 99,188 | ||||
| Total liabilities and equity | $ | 133,574 | $ | 151,303 | ||
UTStarcom Holdings Corp.Unaudited Condensed Consolidated Statements of Operations
| Six months ended June 30, | ||||||
| 2020 | 2019 | |||||
| (In thousands, except per share data) | ||||||
| Net sales | $ | 13,708 | $ | 38,562 | ||
| Cost of net sales | 11,094 | 26,548 | ||||
| Gross profit | 2,614 | 12,014 | ||||
| 19.1 | % | 31.2 | % | |||
| Operating expenses: | ||||||
| Selling, general and administrative | 7,549 | 6,983 | ||||
| Research and development | 4,355 | 7,368 | ||||
| Total operating expenses | 11,904 | 14,351 | ||||
| Operating loss | (9,290 | ) | (2,337 | ) | ||
| Interest income, net | 493 | 587 | ||||
| Other income (expense), net | (3,103 | ) | 4,754 | |||
| Income (loss) before income taxes | (11,900 | ) | 3,004 | |||
| Income tax expense | (142 | ) | (880 | ) | ||
| Net Income (loss) attributable to UTStarcom Holdings Corp. | $ | (12,042 | ) | $ | 2,124 | |
| Net Income (loss) per share attributable to UTStarcom Holdings Corp.—Basic | $ | (0.34 | ) | $ | 0.06 | |
| Weighted average shares outstanding—Basic | 35,692 | 35,350 | ||||
UTStarcom Holdings Corp.Unaudited Condensed Consolidated Statements of Cash Flows
| Six months ended June 30, | ||||||
| 2020 | 2019 | |||||
| (In thousands) | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net Income (loss) | $ | (12,042 | ) | $ | 2,124 | |
| Depreciation | 295 | 327 | ||||
| Provision for doubtful accounts | 2,477 | 1,260 | ||||
| Stock-based compensation expense | 497 | 757 | ||||
| Net gain on disposal of assets | — | (5 | ) | |||
| Gain on release of tax liability due to expiration of the statute of limitations | — | (1,128 | ) | |||
| Deferred income taxes | 116 | 4 | ||||
| Gain on write-off long-term account payable due to expiration of the statute of limitations | — | (3,161 | ) | |||
| Changes in operating assets and liabilities | 7,826 | (18,308 | ) | |||
| Net cash used in operating activities | (831 | ) | (18,130 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Additions to property, plant and equipment | (85 | ) | (296 | ) | ||
| Purchase of short-term investment | — | (41 | ) | |||
| Proceeds from short-term investments | 2,095 | — | ||||
| Net cash provided by (used in) investing activities | 2,010 | (337 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from exercise of stock options | — | 56 | ||||
| Repurchase of ordinary share | (157 | ) | (850 | ) | ||
| Net cash used in financing activities | (157 | ) | (794 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | (984 | ) | 658 | |||
| Net increase (decrease) in cash and cash equivalents | 38 | (18,603 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period | 48,607 | 73,699 | ||||
| Cash, cash equivalents and restricted cash at end of period | $ | 48,645 | $ | 55,096 | ||
