Utstarcom Holdings Corp · NASDAQ:UTSI
Utstarcom — Q2 2005 Earnings Presentation
25 slides from Utstarcom's earnings presentation, August 2005
Slide 1: Mike Sophie, Chief Operating Officer
Mike Sophie Chief Operating Officer
Slide 2: Safe Harbor
Safe Harbor Some information we will discuss during this presentation is forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. To understand the risks that could cause results to differ, please refer to the
Slide 3: Who We Are
Who We Are The Global Leader in Integrated, End-to-End IP – Based Broadband and Mobile Solutions for Carriers around the World. – Over 300 customers worldwide – Over 70 million ports deployed worldwide – Shipped over 30 million handsets in 2003/2004 – The largest Softswitch deployment in the world –
Slide 4: Q2 Highlights
Q2 Highlights • Revenues: $723.0 million – Handsets: $490.7M (PCD $342.3M) – Wireless: $158.1M – Broadband: $74.2M • Gross Margins: 15.1% – Handsets: PAS:15.7% PCD: 4.7% – Wireless: 29.0% – Broadband: 33.5% • Net Loss: $74.7 million, or ($0.65) loss per share – Loss Includes: $20.7M, or ($0.16) rest
Slide 5: Q2 Key Messages
Q2 Key Messages • Stabilization of China Market – PAS Revenues tracking to a 50% decline over 2004 as-anticipated – Subscriber additions remain strong at approximately 2M per month – Expect accelerated growth in broadband and 3G markets in 2006 • Continued Expansion of Customer Base & Increased Trac
Slide 6: UTStarcom's Strengths
UTStarcom’s Strengths • History as Disruptive Technology Innovator – PAS, GE-PON, IPTV, F1000 Wi-Fi handset, IP DSLAM – Experienced R&D engineers in China, India, Korea & U.S. • Strong Presence in China with Large-Scale Network Deployments – Low-cost, high-volume manufacturing, R&D – Nationwide IP n
Slide 7: Key Challenges
Key Challenges • Complete Restructuring in Q3 • Consistent Revenue Growth Outside of China • Improve Sales Mix – Lumpiness in Revenue Recognition • Continued Gross Margin Improvements
Slide 8: Strategy
Strategy Capitalize On Three Major Trends In Telecom Spending UTStarcom FROM TO SOLUTIONS Voice: Wireline Wireless PAS, CDMA & 3G Data: Narrowband Broadband DSLAM, GE-PON, MSTP Switch: Circuit (TDM) Packet (IP) Softswitch
Slide 9: Unified IP Core Network
Unified IP Core Network Control / Service Level IN/VAS/App Server OSS/NMS DNS, DHCP Server, Call Server HLR/AuC VLR CG SNMP, Radius Server IP Core Switch Managed IP Network IP-Core (IP-Based Core Switching) MediaSwitch UT AMG UT WMG UT SG UT TMG UT 3G MG+ Access Layer IP-DSLAM PBX iPAS SS7/CAP/MAP 2
Slide 10: Global Wireless and Broadband Market Opportunities
Global Wireless and Broadband Market Opportunities $29.9 $30.0 $25.0 $23.2 $18.7 Dollars In Billions $20.0 $15.8 $14.0 $15.0 Wireless Broadband $9.5 $10.0 $7.4 $6.0 $4.8 $5.0 $3.6 $0.0 2004 2005 2006 2007 2008 _______________________________________ Source: Gartner, IDC, Infonetics, Wall Street Rese
Slide 11: Global Handset Market Opportunity
Global Handset Market Opportunity Leverage our Expertise in Handset Design and Cost –Effective Manufacturing in China 879.8 829.9 Shipments in Millions of Units 900.0 771.9 800.0 169.8 121.9 620.2 80.9 700.0 526.8 600.0 44.3 500.0 20.9 480.0 490.1 481.9 400.0 382.2 331.2 300.0 200.0 144.7 166.7 191.
Slide 12: Diversification of Product Portfolio
Diversification of Product Portfolio In the Last 12 Months We Have Launched a Number of New Products Broadband GE-PON IP DSLAM mVision iAN-8000 NetRing Wireless MovingMedia 2000 CDMA2000 MovingMedia 8000 WCDMA Terminals PAS, GSM, CDMA, WCDMA, Wi-Fi
Slide 13: Product Portfolio Life Cycle
Product Portfolio Life Cycle We Are Well Positioned With Several Innovative Products Entering the High-Growth Phase Invest Maximize Market Share Maximize Returns/ Reduce Costs CDMA Handsets PAS CPE IP-DSLAM NGN MSTP Market Size GE-PON MovingMedia 8000 mVision IPTV Wifi HS MovingMedia 2000 WCDMA HS E
Slide 14: End-to-End Solutions – Wireless Portfolio
End-to-End Solutions – Wireless Porftolio PAS / iPAS CDMA/CDMA2000 3G Wireless Mobile Voice and End-to-End Solution Voice and Data Enhanced Data for W-CDMA, Services with City- Applications For 2G and TD-SCDMA wide Mobility and 3G CDMA networks Networks Operator • Easy Migration • Investment Protect
Slide 15: End-to-End Solutions – Broadband Portfolio
End-to-End Solutions – Broadband Portfolio IP-DSLAM/ Multi- mSwitch GE-PON and MSTP Service Platform High-performance Next Generation IP- Carrier-Class Optical IP Solution for based Voice and Edge Aggregation Broadband and Data Services for and Transport Multimedia Wireline and Services Wireless ope
Slide 16: End-to-End Solution: Handsets & CPE Portfolio
End-to-End Solution: Handsets & CPE Portfolio Dual-Mode GSM and PAS Handsets CDMA Handsets CPE Wide Range of Innovative and Fully Integrated End- Handsets and FSU Feature-rich Dual- user Broadband, for Voice and Data Mode GSM and Wireless and Applications CDMA Handset Multimedia Access Portfolio Ope
Slide 17: Technology and Industry Leadership
Technology and Industry Leadership Wireless #1 Market Share Worldwide in PAS/iPAS #1 Market Share Worldwide in CDMA PDSN Wireline #1 Market Share Worldwide in Media Gateways #2 Market Share Worldwide in SoftSwitch #2 Market Share Worldwide in IP-DSLAM Source: Infonetics Research Inc., Synergy Resear
Slide 18: Customer Diversification
Customer Diversification We Have Won A Number of New Global Customer Accounts Asia Pacific EMEA Americas
Slide 19: Historical Financial Results - Annual
Historical Financial Results - Annual Revenue Gross Margins 3000 (in millions) $2,703.6 40% 35% 36% 35% 2500 32% 35% $1,965..2 30% 2000 22% 25% PCD 1500 20% International $981.8 China 15% 1000 $626.8 10% $368.6 500 5% 0% 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 $1,250 Backlog 1200 $1,000
Slide 20: Historical Financial Results – Q2
Historical Financial Results – Q2 Revenue Gross Margins 800 (in millions) $723.0 $689.6 40% 36% 37% 700 35% 32% 35% 600 30% 25.6% 500 $405.8 PCD 25% 400 International 20% 15.1% 300 $231.5 China $140.0 15% 200 $80.0 10% 100 5% 0 Q2 Q2 Q2 Q2 Q2 Q2 0% 2000 2001 2002 2003 2004 2005 Q2 2000 Q2 2001 Q2 20
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights Selected Balance Sheet Items Jun. 30, Mar. 31, Dec. 31, $ Millions 2005 2005 2004 Cash & ST Investments $382 $389 $699 Accounts Receivable 851 907 806 Inventory, Net 536 602 591 Inventory at Customer Sites 215 183 198 Other Current Assets 205 304 358 PP&E 273 278 269 Goodwil
Slide 22: Product Segment Analysis
Product Segment Analysis Wireless PAS market in China declining 50%, but still a large piece of the business ~ $1B in 2005 CDMA shipments ramping in 2005, with interest in Europe, Asia and the U.S. WCDMA revenue opportunities in China beginning in 2006 Broadband Our fastest growing product group, wi
Slide 23: Target Business Model
Target Business Model Broadband Infrastructure Wireless Infrastructure • Approximately 25% of revenues • Approximately 25% of revenues • Gross Margins 40-45% • Gross Margins 35-40% PCD – Handsets UTSI Terminals (handsets/CPE) • Approximately 25% of revenues • Approximately 25% of revenues • Gross Ma
Slide 24: Focus Going Forward
Focus Going Forward • Position for Growth in Broadband and 3G in China in 2006 • Continued Expansion of Customer Base & Increased Traction with New Products • Complete Corporate Restructuring • Continue Internal Infrastructure and Processes Improvements • Return to Financial Predictability Consisten
Slide 25: Thank You
Thank You 4+itih | BL GRR UTStarcom ®