Slide 1: Fourth Quarter and Full Year 2017 Results
UTStarcom Holdings Corp. Fourth Quarter and Full Year 2017 Results Mr. Tim Ti, CEO Mr. Eric Lam, VP of Finance March 9, 2018
Slide 2: Disclosure & Forward Looking Statements
Disclosure & Forward Looking Statements This investor presentation contains forward-looking statements, including statements regarding the Company's expectation regarding its strategic initiatives and business outlook. Forward-looking statements are based on current expectations, estimates, forecast
Slide 3: Highlights
UTStarcom Confidential 3 Highlights Generated operating profits consecutively for 2 years Full Year 2017 • Exceeded financial goals - Grew revenue by double digits - Expanded gross margin - Increased net income substantially • Strengthened competitive position - Invest in new product development and
Slide 4: Smart Store Initiative
UTStarcom Confidential Smart Store Initiative Retail Store Automation Joint Venture • JV with leading Chinese refrigerator manufacturer • First will develop commercial “Smart Merchandising Machines” • Later a comprehensive retail automation solution • Platform will integrate leading-edge technologie
Slide 5: Other New Products
UTStarcom Confidential Other New Products SkyFlux • Addresses key customer needs - Service agility - Automation - Efficiency • Based on new cutting-edge forwarding mechanism • Designed to better accommodate Software Defined Networks • Devices support carrier-class features such as - High-speed inter
Slide 6: Non-GAAP Revenue
UTStarcom Confidential U Non-GAAP Revenue • 2017 full year growth driven by Japan and India • Q4 2017 revenue decline due to timing of order delivery US$ in millions 35 31.5 30 27.5 26.0 25 22.3 22.5 20.0 20 18.2 16.4 15 10 5 0 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Rev
Slide 7: Non-GAAP Gross Profit
UTStarcom Confidential Non-GAAP Gross Profit • 2017 gross profit growth driven by revenue growth • Q4 2017 gross profit decline due to lower revenue US$ in millions 12 10.1 10.6 10 9.1 8.3 8.9 8 6.1 6 4.6 4.0 4 2 0 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 GP: $33.2 M vs.
Slide 8: Non-GAAP Gross Margin
UTStarcom Confidential entail Non-GAAP Gross Margin • 2017 gross margin up due to better product mix • Q4 2017 gross margin down due to lower revenue 45.0% 41.2% 40.4% 40.6% 40.0% 36.5% 35.0% 30.0% 27.2% 28.3% 24.4% 25.1% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017
Slide 9: Non-GAAP Operating Expenses
Non-GAAP Operating Expenses • 2017 OPEX up due to R&D, privatization and auditor change costs • Q4 2017 OPEX essentially flat as 2016 US$ in millions 8.0 7.1 7.2 7.0 6.6 6.4 6.3 6.3 6.0 5.1 5.2 5.0 4.0 3.0 2.0 1.0 0.0 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 OPEX: $25.8 M
Slide 10: Non-GAAP Operating Income (Loss)
Non-GAAP Operating Income (Loss) • 2017 operating profit at $7.4M, the second consecutive year of profitability • Q4 2017 operating loss due to timing of order delivery US$ in millions 5.0 3.7 3.9 4.0 3.3 3.0 1.9 1.8 2.0 1.0 0.0 -1.0 -0.6 -1.1 -2.0 -1.7 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q
Slide 11: Non-GAAP Net Income (Loss)
Non-GAAP Net Income (Loss) • 2017 net income increased $5M+ or 200%+ over 2016 • Q4 2017 net loss due to timing of order delivery US$ in millions 8.0 6.2 6.0 5.5 4.0 2.5 2.5 2.0 0.3 - -2.0 -1.5 -1.7 -4.0 -3.3 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Net income: $7.8 M vs.
Slide 12: Cash Flow
Cash Flow $80 million cash/equivalents at end of 2017, compared to $84 million at end of 2016 • Annual cash flow key changes: • $6 million increased from operations • $6 million to restricted cash to support projects • $3 million to term deposit to optimize interest income • Q4 cash flow key changes
Slide 13: 2017 and 4Q17 GAAP and Non-GAAP Financials
2017 and 4Q17 GAAP and Non-GAAP Financials 2017 GAAP Y/Y Change* 2017 Non-GAAP Y/Y Change* Revenue $98.3 +13.6% $98.3 +14.0% Gross Margin 33.7% +90 bps 33.7% +80 bps Operating Expenses $26.6 -0.1% $25.8 +5.6% Operating Income/(Loss) $6.5 +$4.8 $7.4 +$3.4 Net Income/(Loss) $7.0 +$6.7 $7.8 +$5.3 Basic
Slide 14: Appendix
Appendix
Slide 15: New Integrated Smart Retail Solution
New Integrated Smart Retail Solution 15
Slide 16: SkyFlux
SkyFlux Service Network Orchestrator Analytics SkyFlux Area A Programmable agile network Seamless SDN integration L2VPN/L3VPN services, 100GE support Carrier-class feature set (<5Oms protection, OAM, TE, QoS) Reliable modular hardware platform 16
Slide 17: SyncRing
SyncRing 4G/5G-ready - ti‘ “SN . a SyncRing XGM synchronization ® Grand Master — ‘ Sync requirement: ; 4 +1.5ps 4 5o99 aad SyncRing XBC510 Boundary Clock/ Transparent Clock oS ey W aniss antenna Core = IP Network SyncE/PTP support Netman 6000 OMC-O | Ffonthaul 5 Centralized network | i management |
Slide 18: Investor Relations Contacts
18 Investor Relations Contacts For investor and media inquiries, please contact: UTStarcom Holdings Corp. Tel: +852-3951-9757 Fei Wang, Director of Investor Relations Email: fei.wang@utstar.com Ning Jiang, Investor Relations Email: njiang@utstar.com In the United States: The Blueshirt Group Ralph Fo
Slide 19: Thank you!
Thank you!