Slide 1: UTStarcom's First Quarter 2011 Earnings Call Presentation
UTStarcom’s First Quarter 2011 Earnings Call Presentation Jack Lu, CEO Edmond Cheng, CFO NASDAQ: UTSI May 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 launch internet TV platform, expected benefits of a joint venture and antici
Slide 3: Agenda
3 Agenda First Quarter 2011 Operational Highlights 1 Financial Overview First Quarter 2011Market Dynamics Financial Outlook 4 3 2
Slide 4: Operational Highlights - China
Won EPON/EOC contracts from cable operators in Hunan, Zhejiang and Jiangsu provinces. Received award for innovative Three Network Convergence solutions at a major China cable industry trade show. Furthered progress in improving our cost structure: OPEX decreased 34% compared to the same period last
Slide 5: Operational Highlights – Japan and India
5 Japan: Focused on Broadband opportunity Received sizable orders of PTN product from Japan following the successful completion of previously disclosed field trial in 2010 India: Focused on IPTV and Broadband opportunities Continue in negotiations to establish a JV in India with local partner Operat
Slide 6: China Market Dynamics: First Quarter 2011
6 China Market Dynamics: First Quarter 2011 iDTV Market 5 million TV households covered by two-way digital cable; total 50 million two-way digital cable TV households IPTV Market There were a total of 6.85 million IPTV subscribers in Q1 Total IPTV subscribers is expected to be 9-10 million by the en
Slide 7: Launching Internet TV platform for Chinese around the world
7 Launching Internet TV platform for Chinese around the world Q2 2011 Q3 2011 Q4 2011 New Internet TV Platform: iTV.cn Launch commercial trial launch subscription service to distribute content globally iTV.cn will be an end-to-end Internet TV platform that will offer a high-quality user experience w
Slide 8: Revenue & Booking
8 Revenue & Booking Revenue Q1 2011, revenues: $61.3 million, compared to $80.8 million in Q1 2010. The decrease was mainly driven by: 1) the wind-down of our handset business; 2) decrease in sales of MSAN product. Sales of PTN products in Japan increased significantly in the first quarter of 2011.
Slide 9: Gross Profit
9 Gross Profit Gross profit in Q1 2011 was $19.1 million or 31% compared to $27.2 million or 34% in Q1 2010 and $8.1 million, or 11% in Q4 2010 US$ (mm) 27 23 12 8 19 34% 31% 20% 11% 31% 0 5 10 15 20 25 30 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 5% 10% 15% 20% 25% 30% 35% Gross Profit Gross Margin
Slide 10: Operating Expenses
10 Operating Expenses US$ (mm) US$ (mm) Q1 2011 operating expenses decreased 34% year-over-year Q1 2011 operating expenses decreased 12.6% from Q4 2010 45,968 30,312 20,000 35,000 50,000 Q1 2010 Q1 2011 34,672 30,312 20,000 35,000 50,000 Q4 2010 Q1 2011
Slide 11: Bottom Line
11 Bottom Line Q1 2011 Q1 2010 Operating Loss $11.1M $18.8M Net Loss $10.3M $16.0M Weighted Average Shares 154.8M 129.4M Net Loss per Share $0.07 $0.12
Slide 12: Segment Reporting
12 Segment Reporting Deferred revenue related to PAS is included in equipment sales through the end of 2011 at the rate of $23 million per quarter. Gross margin associated with the PAS deferred revenue is approximately 35%. Q1 2011 Q1 2010 Q1 2011 Q1 2010 Revenue Gross Margin Equipment Sales $52.8M
Slide 13: Balance Sheet & Cash Flow
13 Strong cash balance of $310.4 million in cash, cash equivalents, and short-term investment. Zero debt Q1 2011 negative operational cash flow of $39.4 million resulted from: 1) Lower collections resulting from sales team transition 2) Seasonality, especially due to Chinese New Year 3) Restructurin
Slide 14: Reiterate 2011 Financial Outlook
14 Reiterate 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
Slide 15: Investor Relations Contacts
15 Investor Relations Contacts UTStarcom, Investor Relations: Ms. Jing Ou-Yang T: + 8610 8520 5153 E: jouyang@utstar.com Kreab Gavin Anderson, IR external advisor: In Asia: In the US: Brion Tingler Joshua Goldman-Brown T: + 8610 6535 3567 T: +1 212 515 1858 E: btingler@kreabgavinanderson.com E: jgol