Slide 1: Full Year and Fourth Quarter 2010 Earnings Call Presentation
1 Full Year and Fourth Quarter 2010 Earnings Call Presentation Jack Lu, CEO Edmond Cheng, CFO NASDAQ: UTSI March 2011
Slide 2: Disclosure & Forward Looking Statements
2 Disclosure & Forward Looking Statements This investor presentation contains forward-looking statements, including statements regarding the Company's expectation regarding its new services business, ability to successfully compete to supply GEPON broadband products, expected benefits of a joint ven
Slide 3: Agenda
3 Agenda 2010 Full Year Highlights 1 Financial Overview Growth Strategy & Market Dynamics 2 3 Financial Outlook 4
Slide 4: 2010 Full Year Highlights
4 2010 Full Year Highlights Full year total revenues were $291.5 million; exceeding our adjusted revenue target of $ 270-280 million Positive operational cash flow in the fourth quarter of 2010 Improved management structure to better support our three strategic shifts and further align the Company f
Slide 5: China's Three Network Convergence: a growth catalyst for UTStarcom
5 China’s Three Network Convergence: a growth catalyst for UTStarcom Three Network Convergence related market is expected to reach RMB 688B over the next three years, including RMB 249B on equipment and network build out and RMB 439B from interactive media user demand. By the end of year 2010, there
Slide 6: Internet TV Platform and Operational Support Services
6 Operational Support Services Content Producers /Providers Ad Management Solutions VAS Solutions IPTV/iDTV Subscriber Base Content Distribution RollingStream Video Platform Internet TV Subscriber Base Mobile TV Subscriber Base Operational Support Services (OSS) business revenue targeted to reach 10
Slide 7: Fourth Quarter Achievement - China
Fourth Quarter Achievement - China Contract won from Sichuan Province for a Packet Transit Network Contracts won from both cable and telecom operators in Zhejiang, Fujian, Anhui and Shenzhen to expand IPTV system The 6 IPTV broadcast control platforms successfully connected with the central-level pl
Slide 8: Fourth Quarter Achievement - Other Asian Markets
8 Fourth Quarter Achievement - Other Asian Markets First purchase order of IPTV system from TOT Thailand: Japan: Focused on Broadband Preferred PTN supplier of next generation IP transmission equipment for SBB Expect booking to be increased in 2011 India: Focused on IPTV and Broadband IPTV purchase
Slide 9: Financial Highlights - Revenue
9 Financial Highlights - Revenue Q4 2010,GAAP revenues: $76.1 million, compared to $116.3 million in Q4 2009 Net sales in 2010 exceeded the adjusted guidance; reached $291.5 million. Sales driver: increase in multimedia product related revenue as telecom operators strove to improve their infrastruct
Slide 10: Gross Profit
10 Financial Highlights – Gross Profit Gross profit in Q4 2010 was $8.1 million, or 11% of total revenue, which includes the following items: $3.3 million in loss contract reserve $9.9 million inventory write-down Gross profit for the year 2010 was $70.2 or 24%, which included the following signific
Slide 11: OPEX
11 Financial Highlights – OPEX US$ (mm) US$ (mm) Q4 2010 GAAP operating expense decreased 54.1% year-over-year FY 2010 GAAP operating expense decreased 49.3% year-over-year 75,577 34,672 20,000 35,000 50,000 65,000 80,000 Q4 2009 Q4 2010 283,667 143,960 100,000 150,000 200,000 250,000 300,000 FY 200
Slide 12: Bottom Line
12 Financial Highlights – Bottom Line Q4 2010 Q4 2009 FY 2010 FY 2009 Operating Loss $26.6M $40.6M $73.7M $218.7M Net Loss $23.0M $39.4M $65.1M $225.7M Weighted Average Shares 152.7M 128.6M 137.1M 127.3M Net Loss per Share $0.15 $0.31 $0.48 $1.77
Slide 13: By Segment
13 Financial Highlights – By Segment Deferred revenue related to PAS through the end of 2011 at the rate of $23 million per quarter. Gross margin associated with the PAS deferred revenue are approximately 35%. -19% 82% $102.0M $6.5M Handset FY 2010 FY 2009 FY 2010 FY 2009 Revenue Gross Margin Multim
Slide 14: Bookings
14 Without the PAS deferred revenue, our book-to-bill ratio for the fourth quarter was 0.98. With the PAS deferred revenue, our book-to-bill ratio was 0.68. Bookings reached a high for the year in the fourth quarter of 2010. Financial Highlights – Bookings
Slide 15: Balance Sheet & Cash Flow
15 Strong cash balance of $352 million in cash, cash equivalents and short-term investment an increase of $14 million from the prior quarter Zero debt Q4 2010 saw positive operational cash flow of 5.2 million on GAAP basis; an improvement from Q3 2010 of - $12.4 million Financial Highlights – Balanc
Slide 16: 2011 Financial Outlook
16 2011 Financial Outlook Total revenue targeted to be within the range of $300 – 320 million (includes PAS deferred revenue) New services business revenue targeted to reach 10% of total sales in 2011 Targeting annualized operating expenses of less than $100 million Targeting breakeven in year 2011
Slide 17: Investor Relations Contact
17 Investor Relations Contact UTStarcom, Investor Relations: Ms. Jing Ou-Yang T: + 8610 8520 5153 E: jouyang@utstar.com Kreab Gavin Anderson, external advisor: In Asia: In the US: Brion Tingler Judi Flynn Echeverria T: + 8610 6535 3567 T: + 1 212 515 1855 E: btingler@kreabgavinanderson.com E: jflynn