WEB NEWS Comments & Business Outlook
Third Quarter 2019 Financial Results
Q3 2019 total revenues were $13.1 million, compared to $52.1 million in the corresponding period of 2018.
Q3 2019 basic net loss per share was $0.06, compared to basic net income per share of $0.06 for the corresponding period in 2018.
UTStarcom’s Chief Executive Officer Mr. Tim Ti commented, "Third quarter results were mixed, reflecting the competitive environment and activities in advance of the transition to 5G. We achieved excellent gross margin from a favorable product mix and tightly controlled ongoing operating expenses. However, operating profit and net income were adversely affected due to an accounts receivable reserve for one of our major customers, a state owned enterprise in India.”
Ti elaborated, “We are confident that we will be paid, because the Indian Government has publicly committed to a $10 billion revival plan for this state-owned enterprise. However, the precise timing of payment is uncertain. To be prudent and consistent, we continue to reserve in accordance with our receivable reserve policy based on aging.”
Ti continued, “Looking ahead, we are excited by the number and size of the opportunities related to 5G and this will continue to be our main focus. However, our optimism is guarded as the India situation and the network transition at our Japan customer create uncertainties. There is plenty of work to be done over the next few quarters, which we believe will lead to attractive and sustained longer-term growth."
Outlook
For the fourth quarter of 2019, the Company expects to generate revenue in the range of $12 to $15 million. While revenue is anticipated to be similar to the third quarter, the mix is unlikely to match that of the third quarter and may affect the level of profitability.
Comments & Business Outlook
First Quarter 2019 Financial Results
Q1 2019 total revenues were $24.7 million, compared to $22.6 million in the corresponding period in 2018.
Q1 2019 basic net income per share was $0.01, compared to $0.11 for the corresponding period in 2018.
UTStarcom’s Chief Executive Officer Mr. Tim Ti commented, “We are off to a solid start to 2019. Revenue was at the higher end of expectations and we returned to profitability. We have made significant operating progress in the last few months. Our latest 5G optical backhaul solution performed very well in the laboratory evaluation by a major telecom carrier in China. Additionally, we launched a goBox product designed to target the ‘Unattended Retail’ market and commenced cross-selling activities in key geographies with our strategic partner TongDing.”
Ti continued, “Momentum is building in our business and we are driving that by investing in R&D to develop new products that capitalize on important new trends in technology. As we look ahead to the remainder of 2019, we will drive more product development and marketing, which we believe positions us for strong growth in the next several years.”
Outlook
For the second quarter of 2019, the Company expects to generate revenue in the range of $13 to $17 million. The Company’s quarterly revenue pattern is typically uneven due to the timing of large project fulfillment.
Comments & Business Outlook
Fourth Quarter 2018 Financial Results
Q4 2018 total revenues were $12.7 million, compared to $18.2 million in the corresponding period in 2017.
Q4 2018 net loss attributable to shareholders was $1.0 million, compared to net loss of $3.6 million in the corresponding period in 2017. Q4 2018 basic EPS was $(0.03), compared to basic EPS $(0.10) for the corresponding period in 2017.
UTStarcom’s Chief Executive Officer Mr. Tim Ti commented, “We are pleased with our strong execution in 2018. We achieved year-over-year revenue growth of 18%, maintained profitability in a competitive environment, secured key project wins in India and introduced advanced products that have strengthened our competitive position. Fourth quarter revenue was within our guidance, and gross margin increased more than 20 percentage points, driven by favorable product and geographic mix.”
Ti continued, “We are committed to investing in R&D to develop new products, enabling network operators to meet the challenges of growing network traffic generated by new technology trends such as internet of things and 5G mobile data. We are especially excited about the 5G opportunity, as network operators around the globe begin this massive rollout, which will require wholesale upgrades of network architectures. UTStarcom is positioned to benefit from 5G. In 2019, we will drive more product development and marketing effort, which will set us up for solid growth in 2020 and beyond.”
Outlook
For the first quarter of 2019, the Company expects to generate revenue in the range of $20 to $25 million. The Company’s quarterly revenue pattern is typically uneven due to the timing of project fulfillments.
Comments & Business Outlook
HONG KONG, Feb. 13, 2019 (GLOBE NEWSWIRE ) -- UTStarcom (“UT” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today announced that its strategic partner Tongding Interconnection Information Co., Ltd. (“TDI”) intends to further increase its ownership stake in UT to approximately 36% through the purchase (by related entities) of 9.2 million shares from certain current shareholders of the Company. The sale is subject to approval by relevant US and Chinese authorities. TDI will pay about $5.35 per share, for a total investment of approximately $49.2 million at the closing of the transaction.
UTStarcom's Chief Executive Officer Mr. Tim Ti commented, “TDI is already one of our largest shareholders, and we are pleased that their growing confidence in our outlook is leading to larger ownership position. As our strategic partner, we believe both of us have substantial business opportunities together that can drive growing shareholder value. Because they are paying a substantial premium to UT’s share price at current levels, we see this as a vote of confidence in these business prospects.”
The selling shareholders are entities related to Shah Capital Opportunity Fund LP and Mr. Hong Liang Lu.
The closing of the transaction is subject to customary closing conditions, including the obtaining of all necessary authorizations and approvals of The Committee on Foreign Investment in the United States (the “CFIUS Approval”) and (i) completing filing with and/or obtaining approval by the National Development and Reform Commission of the People's Republic of China ("PRC"), (ii) completing filing with and/or obtaining approval by the Ministry of Commerce of the PRC, and (iii) completing registration with a commercial bank supervised by the State Administration of Foreign Exchange of the PRC.
As announced in September 2018, UTStarcom formed a strategic partnership with TDI to jointly market and distribute the respective companies’ products and services in China and international markets. With the strategic relationship established, UT and TDI's initial thrust is focused on developing the optical fiber cable businesses in India as well as marketing and selling UTStarcom’s flagship PTN and SyncRing products in China.
Acquisitions
HONG KONG, Jan. 21, 2019 (GLOBE NEWSWIRE ) -- UTStarcom (“UT” or “the Company”) (NASDAQ:UTSI), a global telecommunications infrastructure provider, today announced that its strategic partner Tongding Interconnection Information Co., Ltd. (“TDI”) increased its ownership stake in UT to 9.9% through a series of transactions executed late in 2018. TDI paid approximately USD $4.54 per share of UT, an approximately 30% premium over UT’s average share price for the past three months.
UTStarcom's Chief Executive Officer Mr. Tim Ti commented, “We are pleased to further strengthen ties with our strategic partner TDI. The fact that TDI increased its position in UT, paying a substantial premium to market, is an indication of their confidence in our shared prospects.”
Ti continued, “We expect TDI’s strategic investment in our company to result in compelling benefits from a market and product standpoint. Our technology and service expertise in overseas markets, especially Asia-Pacific, can significantly enhance their competitive position. Furthermore, together we can capture additional 5G network opportunities. Our technical strength in optical networking will help TDI further expand its presence in the network transmission markets, including mobile backhaul, and metro transmission.”
As announced in September 2018, UTStarcom formed a strategic partnership with TDI to jointly market and distribute the respective companies’ products and services in China and international markets. With the strategic relationship established, UT and TDI's initial thrust is focused on developing the optical fiber cable businesses in India as well as marketing and selling UTStarcom’s flagship PTN and SyncRing products in China.
Comments & Business Outlook
HONG KONG, Jan. 14, 2019 (GLOBE NEWSWIRE ) -- UTStarcom (“UT” or “the Company”) (NASDAQ:UTSI), a global telecommunications infrastructure provider, today announced two significant Wi-Fi project wins in India with Bharat Sanchar Nigam Limited (“BSNL”), a large public sector company that provides a comprehensive range of telecom services in India. BSNL is one of the Company’s major customers in the region.
Internet Connectivity for Over 1,000 Village clusters Across 7 States
UTStarcom is assisting BSNL in providing high-speed data services to over 1,000 remote village clusters in Northern and North Eastern India. Using a combination of satellite links and Wi-Fi hotspots mainly powered by solar, hundreds of thousands of residents will soon have modern broadband internet access. This project is one of the first to bring modern telecom infrastructure to remote locations and is a showcase example for developing the government’s “Digital India Program”.
UTStarcom will provide all of the Wi-Fi equipment for the project, including Wireless Access Points, Power over Ethernet (PoE) Switches, Wireless Controllers and other related components and services.
Large-scale Rural Public Wi-Fi Hotspot Network
Through the partnership with ITI Limited, a government-owned manufacturer of telecommunications equipment in India, UTStarcom is also assisting BSNL in implementing a massive public hotspot network in rural India. Utilizing their existing network of rural telephone exchanges, BSNL will install 25,000 Wi-Fi hotspots across wide areas of rural India. The network is designed to provide inexpensive data services to the rural population in underserved regions and is another showcase project for implementing Digital India.
Wi-Fi equipment will be supplied by several vendors, including UTStarcom. UT will again provide Wireless Access Points, Power over Ethernet (PoE) Switches, Wireless Controllers and other related components and services.
UTStarcom Chief Executive Officer Mr. Tim Ti commented, “These project wins demonstrate our technology leadership and strong competitive advantage in wireless networking. Our partnership with BSNL as they implement these types of projects makes India a very attractive market for us. We have made significant investments in the region, compiling a great track record of assisting our customers in achieving their objectives. We have a strong team in India and our products and services continue to help our customers meet evolving technical requirements in a cost-effective manner.”
Mr. Anupam Shrivastava, Chairman & Managing Director of BSNL, commented, “As one of the leading telecom service providers in India, BSNL is also involved in the implementation of various Government initiatives to drive Digital India progress, thus helping to make access to modern telecommunications services available to citizens across India. Providing Wi-Fi services in rural areas, remote locations and across tough terrains are just few of such initiatives. Naturally, such projects are sensitive and require from us and our partners the highest level of responsibility in order to meet technical and timeframe requirements. Based on our long-term experience with UTStarcom, we see the company as a reliable technology partner in this type of project.”
Comments & Business Outlook
Third Quarter 2018 Financial Results
Q3 2018 total revenues were $52.1 million, compared to $26.0 million in the corresponding period in 2017.
Q3 2018 net income attributable to shareholders was $2.1 million, compared to net income of $2.2 million in the corresponding period in 2017. Q3 2018 basic net income per share was $0.06, compared to basic net income per share of $0.06 for the corresponding period in 2017.
UTStarcom’s Chief Executive Officer Mr. Tim Ti commented, “Third quarter revenue of $52 million far exceeded expectations, as we continued our penetration of the India market. Our customer relationships are strong and in particular this quarter we were fulfilling a large order for a top customer building out a major project. Gross profit of $10 million was up sequentially, reflecting increased revenue from India. We exercised disciplined expense control, resulting in significant operating income growth.”
Ti continued, “Innovation is our core competency and we remain committed to technology leadership through continuing investments in our R&D capabilities. We are excited about the opportunity presented by the worldwide transition to 5G. Our steadily expanding product portfolio positions us well to capture market share and drive growth in the quarters ahead.”
Outlook
For the fourth quarter, the Company expects to generate revenue in the range of $10 million to $15 million. The Company’s quarterly revenue pattern is naturally uneven due to the timing of large project fulfillment.
HONG KONG, Nov. 09, 2018 (GLOBE NEWSWIRE ) -- UTStarcom (“UT” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today introduced the SyncRing XGM30, the latest product offering in its SyncRing family of network synchronization equipment. The XGM30 was showcased at the International Timing & Sync Forum (ITSF) in Bucharest, Romania. ITSF is the largest specialist time and sync conference in the world, covering a number of emerging applications across various industry sectors including telecommunication, finance, energy, transport, broadcast and defense.
Designed as a robust IP65-compliant compact outdoor device, the XGM30 uses the GNSS satellite signal as a primary time reference. It supports PTP IEEE 1588-2008 (1588V2) and SyncE technologies to deliver highly accurate frequency and time synchronization. The XGM30 supports various installation scenarios and has several advanced features including:
Concurrent multi-GNSS multi-channel reception for highly improved timing accuracy and availability
In addition to the XGM30 introduction, UTStarcom utilized the ITSF conference to highlight its position as an industry leader in synchronization products. ITSF is an ideal forum for UT to build recognition of its technical leadership. Highlighting the key theme “Time as a key enabler for SMART infrastructures”, the four-day event features expert keynote speakers across different sectors and represents an opportunity for network operators, standards organizations, end users and vendors to discuss future requirements, challenges and solutions.
Notably, the Company delivered a keynote address, “Sync over Packet for the 5G Era.” UT’s Senior Marketing Manager, Mr. Sergiy Bityukov discussed the challenges related to the cost-effectiveness of highly accurate synchronization in mobile networks and outlined a strategy to achieve accuracy in meeting the technical requirements of 4G and 5G networks based on the clustered distributed timing architecture.
Mr. Tim Ti, UTStarcom's Chief Executive Officer, commented, “We are excited to participate in ITSF 2018, where we can share insights with experts and key members of the entire value chain on the latest trends and future requirements in their respective sectors. Furthermore, we are thrilled to introduce our SyncRing XGM30 product. This product launch marks a key milestone in our strategy to focus on the evolution of network infrastructure towards 5G. The 5G network highly advanced in terms of network and user throughput, latency, availability, capacity and energy efficiency. The industry is actively preparing for 5G migration and we are excited to be a leading force in this evolution.”
UTStarcom develops advanced product solutions for its customers designed to optimize their telecom infrastructure for 5G networks and various challenging applications including Internet of Things (IoT), Machine-to-Machine (M2M), Vehicle-to-Everything (V2X), autonomous driving, augmented reality (AR), etc.. UTStarcom's latest product portfolio includes SkyFlux routing platform based on the Segment Routing technology, SOO Station centralized SDN controller as well as the SyncRing solution, which implements the clustered distributed timing architecture and enables highly accurate timing delivery over packet networks.
Joint Venture
HONG KONG, Sept. 12, 2018 (GLOBE NEWSWI RE) -- UTStarcom (“UTStarcom” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today announced that the Company has formed a strategic partnership with Tongding Internet Information Co., Ltd. (“TD” or “the Partner”), a Shenzhen Stock Exchange listed company since October 2010, to jointly market and distribute the respective companies’ products and services in China and international markets.
Based in Wujiang, China, Tongding Internet Information Co., Ltd. specializes in the research and development, manufacturing, sales and distribution of communication cables and optical fibers. TD’s main products include optical fibers, urban communication cables, communication optical cables, railway signal cables, rail transit cables, radio frequency (RF) cables, optical instruments, electromechanical communication equipment, and ancillary products. TD is also involved in mobile internet and Internet of Things application.
Upon the formation of this strategic partnership, UTStarcom and TD intend to focus on developing their optical fiber cable businesses in India as well as marketing and selling UTStarcom’s flagship PTN and SyncRing products in China.
UTStarcom’s CEO, Mr. Tim Ti commented, “We are excited to partner with Tongding to further capture our business opportunities around the world. The partnership enables both companies to fully leverage our combined sales channels, market presence, customer base and an expanded portfolio of products. We look forward to building a long and productive relationship with Tongding.”
Comments & Business Outlook
Second Quarter 2018 Financial Results
Q2 2018 total revenues were $28.5 million, compared to $31.5 million in the corresponding period of 2017.
Q2 2018 net loss attributable to shareholders was $0.1 million, compared to net income of $2.4 million in the corresponding period in 2017. Q2 2018 basic net loss per share was $0.00, compared to basic net income per share of $0.07 for the corresponding period of 2017.
UTStarcom’s Chief Executive Officer Tim Ti commented, “Second quarter results met our expectations. Revenue was at the high end of guidance due to the initiation of two large projects in India. Despite a gross margin decrease from a year ago due to changes in product and geographic mix, we achieved positive operating income for the quarter. Importantly, our financial position remains strong, with over $80 million in cash.”
Tim continued, “Innovation is our strength and we are committed to technology leadership through continuing investments in our R&D capabilities. We are excited about the opportunities presented by the worldwide transition to 5G wireless network and are positioning our product portfolio accordingly. For instance, we are an early entrant in SRv6 routing platforms, as well as offering leading synchronization and software-defined network products. Our new product offerings enable network operators to meet the challenges of the rapidly escalating network traffic generated by new trends such as internet of things and 5G mobile data.”
Outlook
Earnings results in the third quarter will be driven by the ongoing fulfillment of large projects in India. These projects should result in strong revenue growth, but at reduced gross margin relative to the second quarter of 2018. For the third quarter, the Company expects to generate revenue in the range of $38 million to $43 million.
Comments & Business Outlook
HONG KONG, July 19, 2018 (GLOBE NEWSWIRE ) -- UTStarcom (“UT” or “the Company”) (NASDAQ:UTSI), a global telecommunications infrastructure provider, announced that it is participating in the Softbank World 2018 conference on July 19-20 at the Prince Park Tower in Tokyo, Japan. SoftBank World, one of the largest corporate events in Japan, is focused on the latest trends in IT technology.
The technology industry is being influenced by a number of emerging trends, including IoT (“Internet of Things”), AI (“Artificial Intelligence”), smart robots, and 5G mobile data. These technologies not only enable new product and service offerings and enhance user experience, but will likely transform different industry sectors and societies. Optimizing these technologies requires from telecom infrastructure significantly larger network capacity and reconfiguration of network architectures and technologies to enable intelligence, agility, scalability, performance, and efficiency.
To help organizations address these challenges through the power of technology, UTStarcom offers its latest solutions based on cutting-edge technologies including SDN, Segment Routing (SRv6), Clustered Distributed Timing over packet and others. The Company will showcase a number of its newest products at Softbank World 2018. Highlights of products to be showcased at the show include next-generation SRv6-based routing platforms - SkyFlux UAR400 and UAR500; 5G-ready timing solution "SkyRing XGM30"; SDN platform "SOO Station"; intelligent customer edge "VBG-M7105" and smart commercial refrigerator "GoBox."
The new addition to the UT's smart retail platform - the smart commercial display refrigerator "GoBox"- smoothly integrates with the Company's cloud platform and uses image recognition, sensors and big data for a streamlined automated shopping experience. This new retail product is being shipped and commercially used by several high-profile customers.
Additionally, UTStarcom’s executive management team will deliver two keynote addresses at this year’s SoftBank World. In the “Getting Ready for 5G” presentation, Steven Chen, Senior Vice President of Product & Technology, will outline the opportunities and challenges and present the Company’s view on optimal networking solutions to facilitate the 5G deployment and operation. Separately, Doctor Lingrong Lu, Vice President of Research and Development, will elaborate on the time synchronization evolution and design solution in the “Time Synchronization for 5G & IoT Applications” keynote presentation. Mr. Tim Ti, UTStarcom's Chief Executive Officer, commented, “We are very excited to again participate in SoftBank World. As one of the world's largest information technology events, it brings together industry leaders to share insights on the latest trends in digital innovation and showcase their latest products and technologies.”
Ti continued, “New technologies continue to emerge, requiring larger network capacity and more complex network architectures to enable scalability, performance, and efficiency. We believe we are well-positioned to continue developing innovative solutions that would meet the need for increased network traffic. Our products fully align with the vision of our slogan: ‘Enabling Network Evolution’.”
Comments & Business Outlook
First Quarter 2018 Financial Results
Q1 2018 total revenues were $22.6 million, essentially flat when compared to the corresponding period of 2017.
Q1 2018 net income attributable to UTStarcom’s shareholder was $4.0 million, compared to $5.9 million for the corresponding period in 2017. Q1 2018 basic net income per share was $0.11, compared to $0.17 for the corresponding period of 2017.
UTStarcom’s Chief Executive Officer Tim Ti commented, “First quarter results reinforce our confidence in the long-term outlook for UT. Financial results were solid, with revenue at the higher end of expectations and gross margin over 40%, resulting in a return to profitability. We increased our investment in R&D when compared to last year while maintaining a strong balance sheet.”
Tim continued, “Our commitment to R&D is starting to show promising results. We generated meaningful revenue in Taiwan. Orders are flowing in from India, and we expect substantial revenue from there for the balance of the year. We are also strengthening our product portfolio with high-performance, high value products such as the newly introduced SRv6 router. Finally, we see a multitude of opportunities in new applications like retail automation, and are pursuing those with key partnerships such as the recently announce uSTAR joint venture.”
Outlook
For the second quarter of 2018, the Company expects to generate revenue in the range of $23 million to $28 million.
Comments & Business Outlook
HONG KONG, April 19, 2018 (GLOBE NEWSWIRE ) -- UTStarcom (“UTStarcom” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today announced a ‘POC-ready’ release of its newest break-through platform: the SkyFlux UAR series of routers, which are based on Segment Routing over IPv6 data plane (“SRv6”) technology tightly integrated with the Company’s SDN platform SOO Network.
UTStarcom's Chief Executive Officer Tim Ti commented, “UTStarcom takes pride in effectively addressing the evolving needs of our customers as well as the expectations of the telecom market in general. With this major milestone, we are introducing to complex telecom networks a highly efficient networking platform that delivers all the benefits of SDN, including high agility and automation, while significantly reducing network complexity and optimizing operation and maintenance efforts and costs.”
The benefits of SRv6 technology include:
Significant reduction of network complexity
SRv6 forwarding plane, support of SRH, programming etc.
Prior to the live demo in Paris, UTStarcom joined a range of interoperability tests with a number of vendors during a hot staging lab testing event organized by EANTC that took place in Berlin from March 5 to 16. UTStarcom participated in tests that covered several areas of interest:
IPv6 segment routing (SRv6) – SRv6 Data Plane, L3VPN over SRv6 Core
Comments & Business Outlook
Fourth Quarter 2017 Financial Results
Q4 2017 total GAAP revenues were $18.2 million, a decrease of 33.8 % from $27.5 million for the corresponding period of 2016. GAAP and Non-GAAP revenues are essentially the same.
Q4 2017 Non-GAAP net loss attributable to UTStarcom’s shareholders was $3.3 million, compared to Non-GAAP net loss attributable to UTStarcom’s shareholders of $1.7 million for the corresponding period in 2016. Q4 2017 Non-GAAP basic net loss per share was $0.09, compared to Non-GAAP basic net loss per share of $0.05 for the corresponding period of 2016.
UTStarcom’s Chief Executive Officer Tim Ti stated, “Our performance in 2017 was excellent. This is the second consecutive year that we delivered operating profits. Revenue growth was in the double digits, gross margin expanded and non-GAAP EPS was up 200%. We exceeded our financial goals and continue to invest aggressively in R&D to develop and introduce new and improved products to strengthen our competitive position. Although fourth quarter revenue was lower than anticipated, this does not diminish the outstanding performance we delivered for the year, as the fourth quarter revenue was simply impacted by the timing of order delivery.”
Tim continued, “We are confident that our technologies, product solutions and geographic coverage provide the foundation for a solid future. We are seeing strength in India, and early traction in South America and Taiwan. We have introduced important new products, specifically SyncRing, and see other opportunities developing, such as in retail store automation. Our operating achievements in 2017 position us well for future growth. We have a dedicated, talented team in place to deliver long-term value to our shareholders.”
Outlook
For Q1 2018, the Company expects to generate non-GAAP revenue in the range of $18 million to $23 million.
Comments & Business Outlook
HONG KONG, March 08, 2018 (GLOBE NEWSWIRE ) -- UTStarcom (“UTStarcom” or “the Company”) (UTSI), a global telecommunications infrastructure provider, announced today that it has signed an agreement to form a joint venture with a leading Zhejiang-based developer and manufacturer of refrigerators in China. The JV will develop commercial “Smart shopping machines” for retail stores.
UTStarcom’s Chief Executive Officer Tim Ti stated, “UT is in the process of leveraging our communications and IT infrastructure expertise to enter new and exciting growth markets. Retail store automation is an especially fertile opportunity, and we are moving into it aggressively. We are already field-testing a broad-based automation platform product with one of China’s largest e-Commerce companies. This new JV will offer individual ‘smart appliances’ that further capitalize on our IT expertise while expanding the market opportunity.”
In addition to the development of smart refrigerators, the new JV will provide a comprehensive retail automation solution for the fast-growing Chinese smart retail store market. The product line includes smart shopping machines with hardware and software support. Smart retail solutions are expected to enhance the customer experience and save operating costs. The product utilizes integrated technologies such as facial recognition, image analysis, behavior identification, load sensor, RFID, and mobile payment. Moreover, the cloud-based operations center will offer various types of value-added services, enabling the real-time interaction of people, products and localities.
HONG KONG, March 08, 2018 (GLOBE NEWSWIRE ) -- UTStarcom (“UTStarcom” or “the Company”) (NASDAQ:UTSI), a global telecommunications infrastructure provider, announced today that it has signed an agreement to form a joint venture with a leading Zhejiang-based developer and manufacturer of refrigerators in China. The JV will develop commercial “Smart shopping machines” for retail stores.
UTStarcom’s Chief Executive Officer Tim Ti stated, “UT is in the process of leveraging our communications and IT infrastructure expertise to enter new and exciting growth markets. Retail store automation is an especially fertile opportunity, and we are moving into it aggressively. We are already field-testing a broad-based automation platform product with one of China’s largest e-Commerce companies. This new JV will offer individual ‘smart appliances’ that further capitalize on our IT expertise while expanding the market opportunity.”
In addition to the development of smart refrigerators, the new JV will provide a comprehensive retail automation solution for the fast-growing Chinese smart retail store market. The product line includes smart shopping machines with hardware and software support. Smart retail solutions are expected to enhance the customer experience and save operating costs. The product utilizes integrated technologies such as facial recognition, image analysis, behavior identification, load sensor, RFID, and mobile payment. Moreover, the cloud-based operations center will offer various types of value-added services, enabling the real-time interaction of people, products and localities.
Comments & Business Outlook
HONG KONG, Dec. 18, 2017 (GLOBE NEWSWIRE ) -- UTStarcom (“UTStarcom” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today announced significant milestones in its effort to develop its business in India, including important customer wins and outsourcing of product manufacturing to local manufacturer.
UTStarcom's Chief Executive Officer Tim Ti commented, “Demand is rising rapidly for modern broadband services in the Indian telecom market. This demand is fueling healthy competition, which drives continuous modernization and the use of innovative yet cost-effective solutions. We believe our recent contract wins in India demonstrate that we are recognized for our high quality products and cost-effective carrier-grade telecom solutions. We are pleased that BSNL and other customers also recognize our long-term commitment to their market, which ensures them a steady flow of technically advanced products for years to come.”
Tim continued, “Our commitment goes beyond just selling in India, to outsourced manufacturing in India. We fully embrace the ‘Make in India’ campaign, and are excited to be partnering with local manufacturing firms to produce our equipment in India.”
The company’s major recent wins include several projects with its major strategic customer, Bharat Sanchar Nigam Limited (“BSNL”). BSNL is one of the largest public sector companies providing a comprehensive range of telecom services in India. The project wins with BSNL include:
BSNL’s nationwide Wi-Fi hotspot network including Wi-Fi offload - UTStarcom will supply major components of the Carrier Wi-Fi network to Himachal Futuristic Communications Ltd. (HFCL), which is the System Integrator to BSNL in this project
Mr. Anupam Srivastava, Chairman and Managing Director of BSNL, commented: “UTStarcom is a strong player in the India telecom market with a solid product portfolio that is suited to our core business. Most importantly, as we witnessed over the course of many years of cooperation, UTStarcom is a reliable partner that comes with cost effective and good quality solutions which fits into the business needs of BSNL. We wish UTStarcom be partner in realizing long term vision of BSNL.”
Going Private News
HONG KONG, Oct. 25, 2017 (GLOBE NEWSWIRE ) -- UTStarcom Holdings Corp. (UTSI) (“UTStarcom”, “we” or the “Company”) today announced that the special committee of the Company’s board of directors (the “Board”) has received a notice from Shah Capital Opportunity Fund LP, Himanshu H. Shah, Hong Liang Lu and certain of his affiliates and Tenling Ti (collectively, the “Consortium”) to withdraw the preliminary non-binding take-private proposal letter dated March 31, 2017 from the Consortium to the Board.
Mr. Ti, the Company’s Chief Executive Officer, stated that, “The strong performance of our stock price over the past few months reflects our solid operating performance and promising outlook. Our shareholders are being rewarded for the financial success of the Company. We have worked hard to satisfy demands of our customers, while introducing new products like SyncRing in Japan and further expanding our market penetration in India. We are confident in the future of the Company, and are pleased that the capital markets are acknowledging our growth prospects.
As always, we are committed to maximizing shareholder value, and look forward to reporting more achievements in the quarters ahead.”
Comments & Business Outlook
HONG KONG, Oct. 16, 2017 (GLOBE NEWSWIRE ) -- UTStarcom (“UTStarcom” or “the Company”) (UTSI), a global telecommunications infrastructure provider, today reported its unaudited financial results for the six months ended June 30, 2017.
Total revenues for the first half of 2017 were $54.0 million, an increase of 26.9% from $42.6 million for the corresponding period of 2016.
Non-GAAP net income attributable to UTStarcom’s shareholders for the first half of 2017 was $8.7 million, compared to $5.7 million for the corresponding period in 2016. Non-GAAP basic net income per share for the first half of 2017 was $0.25, compared to $0.16 for the corresponding period of 2016.
TStarcom’s Chief Executive Officer Tim Ti stated, “We achieved strong gross and operating margins in the first half, which was a result of our continued focus on high-margin product revenues, operational efficiencies, and overall cost control. Revenue came in ahead of expectations for the first half, largely due to higher sales in Japan and India, including our new SyncRing product sales in Japan. Additionally, we delivered strong cash flow, resulting in an increase in our cash balance of over 10% when compared to the end of 2016.”
Tim continued, “While we achieved good operating results in the first half, we expect our business to slightly moderate in the third quarter reflecting our normal seasonal sales pattern. More importantly, we continue to believe we have the right strategy: investing in research and development and strengthening our product portfolio with high-value, high-margin product solutions. We are confident that the diversity in our product solutions and geographic coverage is a solid foundation for continuing profitable growth.”
Outlook
For the third quarter of 2017, the Company expects to generate non-GAAP revenue in the range of $23 million to $25 million. The sequential slight decline follows the Company’s normal seasonal pattern.
13D and 13G Activity
UTSI ($2.88) - According to the 13D/A filing this morning, the more than 10% owner of UTSI , Shanghai Phicomm Communication Co., Ltd. (controlled by Gu Guoping), issued a legal letter to oppose the Buyer Consortium’s proposed non-binding go private offer of $2.15 per share. This proposal was to acquire the shares that are not owned by the buyers and was announced on March 31, 2017. In the meantime, the entity filing jointly with Shanghai Phicomm, Talent Transmission Limited (TTL), has purchased 1.33 million shares in the open market since September 14, 2017. Currently, the activist investors have 5 million shares in total, accounting for about 14.1% of the total outstanding shares of UTSI.
Auditor trail
HONG KONG, Sept. 12, 2017 (GLOBE NEWSWIRE ) -- UTStarcom (UTSI) (the “Company”), a global telecommunications infrastructure provider, today announced that it has dismissed Crowe Horwath LLP (“Crowe”) and appointed Grant Thornton in China as the Company’s independent registered public accounting firm effective September 1, 2017. Grant Thornton in China is the Chinese member firm of Grant Thornton International Limited and is one of the leading “full service” accounting firms in China. The Company appointed Crowe in February 2017 after GHP Horwath, P.C. (“GHP”)’s partners and employees joined Crowe. The Company’s Audit Committee and Board of Directors participated in and approved this change.
“We appreciate the interim effort of Crowe Horwath and thank their team for their support during our engagement,” said Tim Ti, CEO of UTStarcom. “We are happy to now have put in place a permanent solution to our audit needs. Grant Thornton is an outstanding choice for UTStarcom due to its international recognition and ability to respond to our needs.”
Since Crowe’s engagement in February 2017 and through the date of this announcement, there were no (i) disagreements with Crowe on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to its satisfaction would have caused Crowe to make reference in its reports on the Company’s consolidated financial statements for such years to the subject matter of the disagreement, or (ii) “reportable events,” as such term is defined in Item 16F(a)(1)(v) of Form 20-F, except that (a) prior to its dismissal, Crowe and the Company were in the process of performing procedures on (1) accounting treatment with respect to deferred revenues and the costs of certain divested businesses, and (2) accounting policies with respect to certain contracts primarily in India, including multiple-element arrangements, customer acceptance provisions, accounting for long-term contracts, accounting for service contracts, and accounting for performance security deposits, each of which resulted in an actual, or planned, expansion of audit scope by Crowe, and (b) material weaknesses in internal control over financial reporting were communicated to the Company related to the Company having insufficient resources with an appropriate level of knowledge and experience in U.S. GAAP to properly account for complex accounting issues, including investment accounting and revenue recognition. The Company’s Audit Committee and Board of Directors discussed with Crowe the subject matter of these disagreements and internal controls over financial reporting matters. The Company dismissed Crowe prior to concluding on the items listed above and prior to Crowe issuing any audit reports on the Company’s consolidated financial statements. The Company has authorized Crowe to respond fully to the inquiries of Grant Thornton concerning these matters.
The Company plans to file its annual report on Form 20-F for the year ended 2016 on or around November 15, 2017. In addition, the Company expects to announce its unaudited financial results for the first three quarters of 2017 as soon as possible after the completion of the third quarter of 2017.
Going Private News
HONG KONG, March 31, 2017 (GLOBE NEWSWIRE ) -- UTStarcom Holdings Corp. (UTSI) (the “Company” or “UTStarcom”) today announced that its board of directors (the “Board”) has received a preliminary non-binding proposal letter, dated March 31, 2017, from Shah Capital Opportunity Fund LP, Himanshu H. Shah (together with Shah Capital Opportunity Fund LP, the “Shah Parties”), Hong Liang Lu and his affiliates (the “Lu Parties”) and Tenling Ti (“Mr. Ti”, collectively with the Shah Parties and the Lu Parties, the “Consortium Members”), to acquire all of the outstanding ordinary shares of the Company not owned by the Consortium Members, for US$2.15 in cash per ordinary share. A copy of the proposal letter is attached hereto as Exhibit A. The Board has formed a special committee consisting of two independent and disinterested directors, Sean Shao and Xiaoping Li (the “Special Committee”), to consider the proposal.
The Company cautions its shareholders and others considering trading its securities that the Board has just received the proposal letter and neither the Board nor the Special Committee has had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Comments & Business Outlook
Fourth Quarter 2016 Financial Results
Total revenues for the fourth quarter of 2016 were $21.2 million, a decrease of 18.6% from $26.1 million for the corresponding period of 2015.
UTStarcom’s Chief Executive Officer Tim Ti stated, “We continue to execute our stated strategy to streamline our product lines focusing on high margin products in support of our valued customers while controlling our costs. This strategy had a positive impact on our financial results in 2016. We achieved positive Non GAAP Operating Income in Q4 and full-year 2016 as well as a positive Net Profit for 2016. We also continued to invest in research and development, strengthening our product portfolio with high-value, high-margin product solutions that will drive future growth.”
Ti continued, “We expect 2017 to be challenging as we upgrade and align our main product line to support next generation networks. We are investing in R&D to ensure timely product transitions. We will continue to prudently manage our P&L and maintain our balance sheet strength. We believe this will position us for profitable growth over the next few years.”
Auditor trail
HONG KONG, Feb. 06, 2017 (GLOBE NEWSWIRE ) -- UTStarcom (the “Company”) (UTSI), a global telecommunications infrastructure provider, today announced that it appointed Crowe Horwath LLP as its new independent auditor to complete the fiscal year 2016 audit.
On January 19, 2017, UTStarcom announced that it ceased its relationship with its previous independent auditor, GHP Horwath, P.C. (“GHP”). The relationship was concluded at the request of GHP as its partners and employees have joined Crowe Horwath LLP.
Auditor trail
HONG KONG, Jan. 19, 2017 (GLOBE NEWSWIRE ) -- UTStarcom (NASDAQ:UTSI), a global telecommunications infrastructure provider, today announced that it ceased its relationship with its current auditor, GHP Horwath, P.C. (�GHP�). The relationship was concluded at the request of GHP as its partners and employees have joined another accounting firm, Crowe Horwath LLP.
Eric Lam, UTStarcom�s Vice President of Finance, commented, �We thank the team at GHP for their support during our engagement. We want to emphasize that this change is due to GHP partners and employees joining another accounting firm, and GHP will not be providing accounting services in the future.�
Both the Company and GHP stated that there are no disagreements regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
The Company intends to announce the appointment of a new auditor for fiscal 2016 in the near future.
CFO Trail
HONG KONG, Nov. 08, 2016 (GLOBE NEWSWIRE ) -- UTStarcom (UTSI), a global telecommunications infrastructure provider, today announced that Mr. Min Xu, the company’s Chief Financial Officer, has resigned to accept a position with another company. Mr. Xu will continue in his role at the Company until November 11, 2016 and will remain available in an advisory capacity until May 2017.
The company also announced that Mr. Eric Lam joined the company as the Vice President of Finance, reporting to the Chief Executive Officer. Mr. Lam is a seasoned technology and finance executive with nearly 40 years of business experience. Prior to rejoining UTStarcom, he served as a special advisor to Shanghai Phicomm Communications. Before that, he served at UTStarcom for eight years in a variety of senior roles. He was educated in the United States, with a B.A. from Tufts University and an M.B.A. from Columbia University Business School.
“On behalf of the entire company and our Board of Directors, we thank Min for his valuable service, and wish him well in his future endeavors,” said Mr. Tim Ti, UTStarcom's Chief Executive Officer. “Min built a strong financial team. We are confident that Eric has the skill and experience to lead our financial function through UTStarcom’s future growth.”
Mr. Min Xu commented, “I want to thank the team at UTStarcom for this opportunity to impact operations over the past few years. The improvement in operations this year shows that the Company’s new strategic direction is gaining traction, and the outlook is bright. As I move on to a new personal opportunity, I am confident that Tim and the team will achieve great success in the years ahead.”
Comments & Business Outlook
Third Quarter 2016 Financial Results
Third quarter 2016 GAAP revenues were $16.4 million, a decrease of 40.0% from $27.3 million for the corresponding period of 2015. Third quarter 2016 Non-GAAP revenues were $16.4 million, a decrease of 38.9% from $26.8 million for the corresponding period of 2015.
Third quarter 2016 Non-GAAP basic net loss per share was $0.04, compared to basic net loss per share of $0.13 for the corresponding period of 2015.
UTStarcom’s Chief Executive Officer Tim Ti stated, “The third quarter was transitional for us, as we progress from the strong demand environment in the first half of the year, to the ramp of exciting new growth opportunities in 2017. During the quarter we introduced our newest SyncRing product, which provides critical functionality for next generation mobile backhaul networks. Our PTN product line is poised to benefit next year from a rollout of 100G metro networks in our prime geographies, such as Japan. We believe that our new strategy is the right one, with a tight focus on a small set of markets in which we can add the most value for our customers. We are seeing the payoff from this strategy, with stable revenue and higher margins.”
Mr. Min Xu, UTStarcom’s Chief Financial Officer, commented, “Although financial results were not as robust as in the first half of the year, we remain on track to realize the financial benefits of the new strategic plan we initiated last year. Revenue was within our guidance range, which reflected our anticipation of slower demand in the second half of the year. Gross margin improved from last year, due to our focus on our higher-value, higher margin products. We continue to demonstrate outstanding expense discipline, bringing down our operating expenses by almost $1 million from the second quarter level. This effort resulted in meaningful operating cash flow improvement, enabling us to repurchase shares while maintaining our balance sheet strength.”
Outlook
For the fourth quarter of 2016, the Company expects to generate non-GAAP revenue in the range of $15 million to $20 million.
Mr. Ti concluded, “We continue to focus foremost on profitability and cash flow. With our business model stabilized and supported by a strong balance sheet, we can focus on our key market opportunities to drive growth in 2017. At the same time, we intend to reward shareholders with a return of capital via share repurchases, and will continue the current buyback program for another two years. In the long run, we believe that the stock market will recognize and reward solid fundamentals and our respect for shareholders, who are the owners of this business.”
Comments & Business Outlook
Second Quarter 2016 Financial Results
Second quarter 2016 GAAP revenues were $20.0 million, a decrease of 35.0% from $30.8 million for the corresponding period of 2015. Second quarter 2016 Non-GAAP revenues were $20.0 million, an increase of 19.9% from $16.7 million for the corresponding period of 2015.
Second quarter 2016 GAAP basic income per share was $0.13, compared to basic net income per share of $0.08 for the corresponding period of 2015. Second quarter 2016 Non-GAAP basic net income per share was $0.15, compared to basic net loss per share of $0.02 for the corresponding period of 2015.
Mr. Min Xu, UTStarcom�s Chief Financial Officer, commented, �We are pleased to see our focus on margin resulted in positive operating income and net profitability during the quarter. Our cash balance was higher than previous quarter with help from strong Japanese Yen.�
Mr. Tim Ti, UTStarcom�s Chief Executive Officer, stated, �We are glad to report a solid quarter with revenues at the high end of our expectations, gross margin above forty percent, and non-GAAP net profitability. We expect relatively soft demand in second half of 2016 due to seasonality but continue to see healthy deal pipelines for our PTN products.�
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (�GAAP�), the Company also provides non-GAAP financial measures which better reflect the Company�s core business status and the development trend. A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP comparative balances can be found at the end of this release.
Business Outlook
The company will continue its focus on profitability and operating cash flow. The Company believes that the improvement in business fundamentals is the necessary first step to achieve sustainable future growth in the long run.
For the third quarter of 2016, the Company expects to generate non-GAAP revenue in the range of $15 million to $20 million.
Mr. Ti concluded, �We continue to strike a balance between investment in existing product lines and new products for data center and smart city markets. We believe we will continue to capture opportunities in PTN markets and improve our profitability. Meanwhile, we are building a solid foundation for future growth.�
Comments & Business Outlook
SANTA CLARA, Calif., July 18, 2016 (GLOBE NEWSWIRE ) -- Applied Micro Circuits Corporation (AMCC), a global leader in computing and connectivity solutions, and UTStarcom (UTSI), a global telecommunications infrastructure provider, today announced that UTStarcom has chosen AppliedMicro’s X-Weave® Smart PHY for UTStarcom’s next generation Packet Optical Transport Solution TN705 platform.
“AppliedMicro’s X-Weave X120 solution enables us to offer our customers a new level of cost effectiveness, agility and scalability that will allow them to address the challenges of today’s telecom and enterprise network market,” said Steven Chen, vice president, product and technology at UTStarcom. “Our solution serves various applications where efficiency, reliability, scalability and availability of telecom carrier-grade features are critical.”
“UTStarcom’s decision to use our X-Weave X120 solution in its TN705 PTN platform further validates our leadership in high speed PHY technology,” said Omar Hassen, associate vice president, connectivity products at AppliedMicro. “AppliedMicro’s X-Weave Smart PHY products deliver up to 240Gbps capacity in a single device and enable high density 100G, 40G and 10G line card solutions.”
X120/X240 Smart PHYs Overview
X12/X120 and X24/X240 are sampling now. For more information, please visit AppliedMicro’s website here.
Comments & Business Outlook
First Quarter of 2016 Financial Results
Total revenues for the first quarter of 2016 were $22.6 million, a decrease of 31.6% from $33.0 million for the corresponding period of 2015.
Non-GAAP basic net income per share was $0.01, compared to basic net loss per share of $0.14 for the corresponding period of 2015.
Mr. Tim Ti, UTStarcom’s Chief Executive Officer, stated, “We are pleased to report a solid quarter with revenues exceeding our initial expectations, gross margin in high twenties percentage, and non-GAAP net profitability. We continue to see healthy demand of our PTN products and benefits from our streamlined business model.”
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company also provides non-GAAP financial measures which better reflect the Company’s core business status and the development trend. A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP comparative balances can be found at the end of this release.
Mr. Min Xu, UTStarcom’s Chief Financial Officer, commented, “We are glad to see our focus on profitability resulted in a high twenties percentage gross margin and non-GAAP net profitability in the quarter. We achieved positive operating cash flow and continue to strengthen our cash balance. ”
Business Outlook
The company will continue its focus on profitability and operating cash flow. The Company believes that the improvement in business fundamentals is the necessary first step to achieve sustainable future growth in the long run.
For the second quarter of 2016, the Company expects to generate non-GAAP revenue in the range of $15 million to $20 million.
Mr. Ti concluded, “We are seeing good results from our business transformation. We continue to invest in data center and smart city markets. The establishment of ICI group allows us to focus our resources on the fast growing markets. We are confident that UTStarcom will emerge as a market leader across the globe in our evolving and dynamic industry.”
Comments & Business Outlook
Fourth Quarter 2015 Financial Results
Total revenues for the fourth quarter of 2015 were $26.1 million, a decrease of 20.7% from $32.9 million for the corresponding period in 2014.
Non-GAAP basic net loss per share for the fourth quarter of 2015 was $0.37, compared to Non-GAAP basic net loss per share of $0.36 for the corresponding period of 2014.
Mr. Tim Ti, UTStarcom’s Chief Executive Officer, stated, “We made good progress in transforming our business in 2015. We brought discipline and efficiency to our business, improved gross margin, and maintained a strong balance sheet. We restructured our business to be more focused and more nimble going forward. We continued to invest in research and development as well as important client relationships, evolving our product mix to increase the weight of high margin product offerings. We further streamlined our operational efficiencies while investing in technologies and future growth.”
Business Outlook
The company will continue to execute the strategic transformation that was announced in June 2015 which focused on profitability and operating cash flow. The Company believes that the improvement in business fundamentals is the necessary first step to achieve sustainable future growth in the long run.
For the first quarter of 2016, the Company expects to generate non-GAAP revenue in the range of $15 million to $20 million.
Mr. Ti concluded, “2016 is a transition year for UTStarcom. We will continue to focus on delivering top notch products and services to our customers and exploring opportunities in new markets. We strongly believe our effort will result in a profound transformation and lead to profitable growth.”
Comments & Business Outlook
HONG KONG, Jan. 15, 2016 (GLOBE NEWSWIRE ) -- UTStarcom (UTSI), a global telecommunications infrastructure provider, announced today that it had promoted Dr. Zhaochen Huang to Chief Operating Officer, effective immediately.
Dr. Zhaochen Huang will oversee Global Sales and Business Development as well as Global Operations, which includes Manufacturing, Quality Assurance, Procurement, and Information Technologies.
Dr. Huang brings more than twenty-five years of business and management expertise to the Company. He previously served as the Vice-President, Global Operations, at UTStarcom and General Manager of UTStarcom India. Prior to that, Dr. Huang served various positions at Soliton Systems, K.K. including General Manager of Soliton Systems USA and VP of Research and Development of Soliton Systems Shanghai. Prior to that, Dr. Huang served at SECOM Co., LTD. and Nanjing Institute of Solid Device. He received a Doctor of Engineer�s degree in Electrical and Electronics from Tokyo Institute of Technology.
�We are thrilled to promote Zhaochen to Chief Operating Officer,� stated Mr. Tim Ti, UTStarcom�s Chief Executive Officer. �Zhaochen has tremendous amount of international experience having worked in China, Japan, United States, and India. Since he joined the Company in 2011, Zhaochen has proved his capability to solve complex business problems and deliver results. Zhaochen�s leadership, acumen, and work ethic will continue to be a positive asset for our Company.�
Comments & Business Outlook
HONG KONG, Jan. 11, 2016 (GLOBE NEWSWIRE ) -- UTStarcom (UTSI), a global telecommunications infrastructure provider, today named Mr. Tim Ti as the Company�s new Chief Executive Officer (CEO) and announced changes to the board of directors, effective immediately.
Mr. Ti brings more than twenty years of business and management expertise to the Company. He previously served as the CEO of Virtual Gateway Labs, Inc., a subsidiary of UTStarcom. Prior to that, Mr. Ti served various roles at UTStarcom, including Senior Vice-President of Advanced Network Architecture Technologies, Senior Vice-President of Research & Development, and General Manager of the Broadband Business Unit. Before joining UTStarcom, Mr. Ti was the Director of Application & Marketing of Advanced Communication Devices Corporation, which was acquired by UTStarcom in 2001. He received a Master of Science degree in Computer Engineering from Santa Clara University in 1993.
�I am honored to have been given this opportunity to lead UTStarcom at an exciting juncture for the Company. UTStarcom has a talented and proven R&D and business development team that I have been privileged to lead for many years,� said Mr. Ti. �I am confident that together our team can deliver new and exciting products to meet fast and growing demand from our current and future customers.�
The Board has appointed Mr. Guoping Gu as a new director, effective January 11, 2016. Mr. William Wong has resigned from the Board. Mr. Wong has served as the CEO and as a director since August 2012.
Mr. Gu brings more than seventeen years of business and management expertise to UTStarcom's Board of Directors. He currently serves as the Chairman of the Board of Shanghai Phicomm Communication Co., Ltd. On December 4, 2015, Smart Soho, an investment holding company led by Mr. Gu, acquired 5,000,000 ordinary shares of UTStarcom and plans to acquire additional 6,739,932 ordinary shares in the first half of 2016.
�I appreciate the opportunity to serve as a member of the board of directors of UTStarcom,� said Mr. Gu. �The telecom and networking industry is undergoing rapid changes. I am very excited about the promising opportunities in front of us and have full confidence in the future growth of UTStarcom. Phicomm is a R&D oriented high technology company offering software and hardware solutions and products in cloud computing and data communication. I firmly believe the collaboration between UTStarcom and Phicomm will create a win-win situation for both companies.�
�I am very pleased to welcome Mr. Gu to our Board. UTStarcom looks forward to work closely with Phicomm to explore exciting opportunities around the globe,� said Mr. Himanshu Shah, chairman of the Board of UTStarcom. �Furthermore, Tim has demonstrated his leadership in his fourteen year tenure in various senior positions at UTStarcom and we could not be more pleased to appoint an executive of Tim�s experience and caliber to lead UTStarcom through its next stage of growth and achievement. I would also like to take this opportunity to thank William for his contribution to the company. Without his leadership, UTStarcom would not have completed its restructuring and built a solid foundation for future growth.�
Comments & Business Outlook
Third Quarter 2015 Financial Results
Total revenues for the third quarter of 2015 were $27.3 million, a decrease of 15.5 % from $32.3 million for the corresponding period of 2014.
Third quarter 2015 GAAP basic loss per share was $0.14, compared to basic net loss per share of $0.22 for the corresponding period of 2014. Third quarter 2015 Non-GAAP basic net loss per share was $0.13, compared to basic net loss per share of $0.20 for the corresponding period of 2014.
Mr. Min Xu, UTStarcom�s Chief Financial Officer, commented, �We are glad to see ongoing benefits from the transformative initiatives we have undertaken. The streamlined business model allows us to be more efficient and the cost reduction actions we implemented in previous quarters continue to have a positive impact. As we navigate through the transformation, we remain focused on both managing our cost base and investing in our most profitable products, all in order to ensure UTStarcom�s transition into a more focused and profitable business.�
Mr. William Wong, UTStarcom�s Chief Executive Officer, stated, �We are pleased to have exceeded our initial expectations for the third quarter, delivering better than expected revenue results with sequential improvement in gross margin as well. This was achieved due to the ongoing aggressive realignment of our business towards the higher end of the market. Our high-margin products continue to be in solid demand, particularly in our key markets such as Japan and certain emerging markets. Our focus on the streamlined business model is achieving positive top-line results. This coupled with a vigilant focus on operational excellence is driving operating margin improvement.�
�Looking to the balance of the year, we will remain focused on the acceleration of our transformation and we have every confidence that our progress will continue. We believe that based on our broadening global reach, the increasing breadth of our evolving product offerings, and a healthier business foundation, we will continue to drive growth and profitability improvements while generating value for both our customers and our shareholders.�
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (�GAAP�), the Company also provides non-GAAP financial measures which better reflect the Company�s core business status and the development trend. A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP comparative balances can be found at the end of this release.
Business Outlook
In terms of the near-term outlook, the effects of the strategic transformation that was announced in June 2015 will impact the Company�s revenue profile and alter its financial goals for the remainder of 2015. The Company believes that the aggressive transformation efforts underway will ultimately yield a stronger, more competitive and profitable business in the long-term.
For the fourth quarter, the Company expects to generate non-GAAP revenue in the range of $18 million to $22 million.
Mr. Wong concluded, �We are confident that our business transformation is progressing well and will allow UTStarcom to drive long-term value for the business and our shareholders. We will focus on the higher end of the market and will continue to make our business stronger, resulting in a profound transformation. We firmly believe that this will position UTStarcom to emerge as a market leader across the globe in our evolving and dynamic industry.
Comments & Business Outlook
HONG KONG, Oct. 30, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (UTSI), a global telecommunications infrastructure provider, announced today that revenue for the third quarter ended September 30, 2015 is expected to exceed original expectations.
The Company currently expects third quarter 2015 revenues to be between $25 million and $27 million, compared with previous guidance of $18 million to $22 million.
Comments & Business Outlook
Second Quarter 2015 Financial Results
GAAP revenues were $30.8 million, a decrease of 3.4% from $31.9 million for the corresponding period of 2014. Second quarter 2015 Non-GAAP revenues were $16.7 million, a decrease of 47.6% from $31.9 million for the corresponding period of 2014.
Non-GAAP basic net loss per share was $0.02, compared to $0.11 for the corresponding quarter of 2014.
Mr. William Wong, UTStarcom�s Chief Executive Officer, stated, �We are pleased that our results for the second quarter were in line with the expectations we laid out when we announced the recalibration of our go forward strategy in June. We believe this is quite a positive start in our stated effort to focus on more quickly making our business more nimble, efficient and profitable. In particular, although several new products are still in the early stages of their product life cycle, we are delighted that in the second quarter we experienced good momentum with respect to demand for the innovative, high-margin products that we intend to bring to market in key markets such as Japan, the U.S. and emerging countries. We believe this bodes well for us and we expect to see a corresponding positive impact on our financial performance over time.�
�As we move into the second half of the year, we will remain singularly focused on executing the more aggressive business transformation that we described at the end of the first quarter. As planned, we will continue to streamline our business model and focus on growing only the most profitable broadband products and markets, all to support the most promising assets in our pipeline and to reach the customers who will fully appreciate our offering. At the same time, we will continue to drive down our cost base in order to deliver operating leverage and create a stronger overall foundation for the business. We believe our efforts to strengthen the fundamentals of our business will start to pay off and will ideally position us for future growth.�
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (�GAAP�), the Company also provides below non-GAAP financial measures which better reflect the Company�s core business status and the development trend. A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP comparative balances can be found at the end of this release.
Mr. Min Xu, UTStarcom�s Chief Financial Officer, commented, �In the second quarter, we concentrated on further streamlining our business and achieving higher efficiency in our operations, all as part of our accelerated strategic transformation. We also continued to invest in the development of our high margin products and sales capabilities in order to push forward the transformation of our business and to ultimately generate long-term shareholder value.�
Business Outlook
In terms of the near-term outlook, the effects of the strategic adjustment to the Company�s business strategy that was announced in June 2015 will impact the Company�s revenue profile and alter its financial goals for the remainder of 2015. The Company believes that the more aggressive transformation efforts underway will ultimately yield a stronger, more competitive and more profitable business in the long-term.
For the third quarter, the Company expects to generate non-GAAP revenue in the range of $18 million to $22 million.
Mr. Wong concluded, �Looking ahead, we are committed to innovative product development as well as further cost reduction and we believe this is in the best interest of our business. We remain resolutely focused on developing the best technology in the market and delivering value for our customers as well as long-term value for our shareholders. We are confident that we have made the right decisions regarding the strategic direction of the Company and look forward to the positive impact this will have in the medium and long-term.�
Comments & Business Outlook
HONG KONG, Aug. 13, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (NASDAQ:UTSI), a global telecommunications infrastructure provider, announced today that on June 30, 2015, it launched a new standalone entity, Virtual Gateway Labs (VGL).
VGL is a spin-off of UTStarcom�s virtual broadband gateway business, focusing on enterprise customers in the U.S. market. UTStarcom will own 75% of VGL and VGL employees will own the remaining 25%. VGL will have employees in both San Jose, California and Hangzhou, China. UTStarcom believes that creating a separate streamlined entity will allow VGL to focus on niche offerings and achieve success in the U.S. at an accelerated pace.
VGL develops products that allow seamless access and aggregation at the edge of the network. VGL�s platform will help fuel tomorrow�s open access network when broadband will be more than just the Internet, and offering a new variety of virtual services such as emergency communications, interactive entertainment, home automation, smart grid and connected sensor systems.
As testament to VGL�s early success, it recently launched its first virtual broadband gateway product and has already received its first purchase order from a U.S. customer.
Mr. William Wong, UTStarcom�s Chief Executive Officer, stated, "As part of our business transformation, we have been working to identify the optimal structure of our business. As a result, we decided to establish VGL in conjunction with a group of our employees. We believe that by creating a standalone company with employee ownership, we will be able to create a startup environment for our product development. As the majority shareholder in VGL, we are committed to investing in its development and long-term success. We are encouraged by the demand we are already seeing for VGL�s offerings and it is our belief that this new entity will ultimately generate tremendous value for our business.�
Mr. Tim Ti, VGL�s Chief Executive Officer, stated, �We are very excited to have this opportunity to launch the VGL startup and we look forward to delivering innovative products and cutting edge service to the market.�
Comments & Business Outlook
HONG KONG, July 30, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (NASDAQ:UTSI), a global telecommunications infrastructure provider, announced today the formal release of its new Layer3 solution with SDN/NFV enabling that implements L3 VPN service over Packet Optical Transport network, which is an integral part of its Software-defined Open Optical (�SOOTM �) network solution introduced earlier this year. This is the second major SOOTM service the Company brings to the market following the introduction of uFlex BoD SOOTM Service at the 2015 Optical Fiber Communications Conference (OFC) and Exhibition in Los Angeles in March.
Software Defined Network (SDN) and Network Function Virtualization (NFV) technologies help telecom operators to create much more agile networks with advanced automation features and extended set of services, which enables them to respond faster to evolving market demands and optimize their capital and operating expenses. The newly launched Layer3 solution with SDN/NFV enabling is the latest demonstration of UTStarcom�s �simple Network, Simple Operation" philosophy and further demonstrates its efforts to strengthen its Packet Optical Transport and SDN/NFV portfolio.
The solution is integrated with the centralized SDN Controller SOOTM Station that provides Network-on-Demand (NoD) and automation functionality and SOOTM Sub Controller that serves as a L3 NFV Controller and interfaces with UTStarcom's advanced NetRing TN700 Series of Packet Optical Transport network.
It is released together with the new version of UTStarcom's SDN Controller SOOTM Station that delivers a number of L3 features like L3 routing over L2 transport, IPv4/v6 support, and most importantly introduces the support of Layer 3 Virtual Private Network (L3 VPN) service over Packet Optical Transport network. The Layer3 solution with SDN/NFV enabling is essential for the targeted customers with the needs of next generation mobile backhaul, IoT and other applications.
The Layer3 solution with SDN/NFV enabling builds on the benefits that UTStarcom�s SDN/NFV-enabled network infrastructure offers, including:
Extended range of Layer 3 services that were not previously available on Layer 2 networks
CAPEX and OPEX savings
Ease of implementation, no changes to the underlying physical network. Powerful integrated L2 to L3VPN bridging facilitating smooth migration of existing PTN networks to L3 support
Flexibility with support of both IPv4/v6
Simple L3 network planning
Scalability
"We continue to expand SOOTM SDN product lines demonstrating our ability to be a leading provider of advanced efficient and reliable broadband infrastructure solutions," said William Wong, UTStarcom's Chief Executive Officer. "We are seeing growing demand from the market and have an aggressive plan to further develop our Layer3 solution with SDN/NFV enabling by incorporating new features that are desirable to carriers and will continue to deliver innovative solutions to the market with the major focus on various automation features that are going to bring many advantages to network operators."
Comments & Business Outlook
First Quarter 2015 Financial Results
Total revenues for the first quarter of 2015 were $33.0 million, an increase of 2.2% from $32.3 million for the corresponding period in 2014.
First quarter 2015 GAAP basic net loss per share was $0.14, compared to $0.09 for the corresponding quarter of 2014. First quarter 2015 Non-GAAP basic net loss per share was $0.14, compared to $0.08 for the corresponding quarter of 2014.
Mr. Min Xu, UTStarcom's Chief Financial Officer, commented, "In the first quarter, we continued our focus on executing with strong operational and financial discipline. Also, while we remained focused on tightly managing our cost structure, we realigned our organization in order to reinforce the strength of our core business which will drive our future performance. We will continue our aggressive efforts to generate a profitable revenue stream, effectively manage our operations and overall cost structure, and improve margins and profitability."
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We again delivered a better than expected top line performance and also began to drive incremental improvements in our gross margin compared to the same period in last year. Although several new products are still in the early stages of their product life cycle and we await their positive impact on the top and bottom line, at the same time, new contract wins have been strong which we believe is a positive sign about our product development efforts."
"In relation to this continued focus on securing profitable revenue, moving forward, we intend to shift most of our resources to the further development and sales of our higher margin product lines to ensure we fully capitalize on the demand in certain key geographies that are responsive to our improving offerings. Moreover, we are aware that we need to respond to a need to make our business much more nimble, efficient and profitable, which also will mean smaller, so we are taking steps to further fine-tune our business model and reduce our cost structure as we enter the balance of fiscal 2015. As we progress through the year, we will remain steadfast in our commitment to executing a comprehensive and successful business transformation that benefits UTStarcom and all of its stakeholders."
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), the Company also provides below non-GAAP financial measures which better reflect the Company's core business status and the development trend. A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP comparative balances can be found at the end of this release.
Near-Term Outlook
In terms of the near-term outlook, the effects of this recalibration of the existing strategy will be apparent starting in the second quarter. For the second quarter, the Company expects to generate revenue in the range of $15 million to $20 million.
Given the aforementioned transition that is underway, the Company is currently planning to provide an update on annual revenue and bottom line expectations later in the year.
Mr. Wong concluded, "While the strategic adjustment to our business strategy will impact our revenue profile and alter our financial targets for 2015, we are confident that it will allow UTStarcom to be a more efficient player in the higher end of the market in the key global locations that are welcoming to our innovative products. This should help us to more quickly achieve margin expansion and sustainable long-term profits for the Company. We remain focused on creating value for our customers, partners and shareholders."
Comments & Business Outlook
HONG KONG, May 19, 2015 (GLOBE NEWSWIRE ) -- UTStarcom ("UTStarcom" or "the Company") (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that it filed its Annual Report on Form 20-F for the year ended December 31, 2014 with the Securities and Exchange Commission on May 19, 2015.
The Company is announcing that it expects first quarter 2015 GAAP and non-GAAP revenues to be in the range of $32 million to $33 million. This exceeds the original expectations outlined in the Company's business outlook when it reported fourth quarter and full year 2014 results in March 2015. Non-GAAP revenues exclude discontinued China IPTV revenues during the first quarter
Joint Venture
HONG KONG, May 13, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that its partner, aioTV has received a new critical patent from the U.S. Patent and Trademark Office. This latest patent, in addition to aioTV's other granted patents, is indicative of its growing capabilities to enable video providers to create channels and packages from a blend of VOD, linear and Internet video within a common experience.
The patent covers, among other things, the normalization of disparate metadata sources, associated packaging and video playback. It helps to solve the common challenge for large content owners and MVPD's to enhance their middleware platforms and custom client experiences in order to dealing with the massive amount of disparate metadata.
"As the largest shareholder in aioTV, we congratulate the Company on securing yet another key patent. With this development, aioTV further strengthens its position in the market as a leader in the creation and delivery of multi-sourced content in a unified customer experience," said Mr. William Wong, UTStarcom's Chief Executive Officer. "We believe that aioTV is uniquely positioned to lead the way in revolutionizing new media through its cutting-edge and innovative technologies. We are committed to supporting aioTV as it grows its business."
UTStarcom invested in aioTV in 2012 as part of a strategy to expand into value-added media and operational support services to sell to its core broadband infrastructure customers.
aioTV is a global provider of back-office tools for video service providers. aioTV offers a commercial platform that leverages existing infrastructure, providing the tools and functionality to easily package and deliver OTT content and advanced IP services � unified with core multi-channel service in a single experience. aioTV has several global Tier 1 video service providers deploying this solution.
The patent is listed in the United States Patent and Trademark Office under the Patent 9,027,065.
Contract Awards
HONG KONG, April 30, 2015 (GLOBE NEWSWIRE) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that the Company has been awarded a significant contract to support a major Carrier Wi-Fi system integration for Banglalion Communications Ltd. (Banglalion Communications), a leading WiMAX (Wireless Interoperability for Microwave Access) 4G operator in Bangladesh. This partnership further complements UTStarcom's efforts to expand its global footprint and will allow the Company to enter a new growth market.
As part of the contract, UTStarcom will supply the Carrier Wi-Fi solution to Banglalion Communications within Bangladesh. It will also include the Access Controller, Access Point and EMS management system. UTStarcom will also supply and integrate the Carrier Wi-Fi system equipped with a TD-LTE service and this will enable the operator to unify user and billing management.
Banglalion is currently using WiMAX technology, having recently obtained a nationwide license from BTRC to deploy the more advanced 4G LTE (Long Term Evolution) network. This will allow them to offer enhanced broadband wireless access services. Banglalion will modernize and expand its Wi-Fi network using UTStarcom's technology. As a result, customers will be able to use the very latest wireless broadband technology at a much more competitive rate in key public locations including hospitals, educational institutions and shopping centers.
"Banglalion Communications is a very important new customer for UTStarcom as we expand our global presence to include Bangladesh," said William Wong, Chief Executive Officer of UTStarcom. "We look forward to working in partnership with Banglalion Communications as they enhance the data connectivity for their end-users. This is a major advancement for UTStarcom as we expand our market share in the managed Carrier Wi-Fi market. We are now firmly established as a market leader in this space, not just in Japan but in other markets around the globe."
UTStarcom Carrier Wi-Fi product portfolio consists of a full range of access points, centralized wireless network control system and services management solution. UTStarcom Carrier Wi-Fi solution is a platform which will enable operators to add additional features and applications in the future, giving the operators a scalable solution to meet their evolving business needs.
This is an initial project for UTStarcom in Bangladesh and the first time UTStarcom Carrier Wi-Fi solution is going to be adopted by another operator, having successfully piloted the product with Softbank in Japan. UTStarcom co-developed this Carrier Wi-Fi solution with Softbank and it focuses on the end-user experience and large scale deployment thereby offering both greater efficiencies and high performance at a reasonable cost.
Contract Awards
HONG KONG, April 7, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that the company has been awarded a significant three year contract extension to support a major network enhancement for the largest national wireline carrier in India, Bharat Sanchar Nigam Ltd. (BSNL). This reinforces the strength of UTStarcom's advanced efficient and reliable broadband infrastructure solutions.
This is an extension order for maintenance of BSNL broadband services with UTStarcom supplied products including B1000 IPDSLAM, RPR, EMS, LAN switches, BNGs, and various applications like AAA, SSSC and SSSS. UTStarcom will supply and maintain BSNL Multiplay, the broadband triple play network for the next three years till 2018.
"We are delighted to build on the success of our partnership with BSNL, and we are excited to play a key role in an effort to support the rollout of its "Multiplay" broadband Internet service, by offering our robust portfolio of advanced yet affordable telecom infrastructure solutions," said William Wong, UTStarcom's Chief Executive Officer. "As a leading telecom infrastructure provider, we plan to extend our efforts significantly in the year 2015 and will work with Indian telecom operators, system integrators and the government to address the needs of Indian government's initiatives to build up Digital India."
"We are dedicated to serve our customers by providing affordable and innovative telecom services," said Mr. N.K.Gupta, Board Director (Consumer Fixed and Mobility) of BSNL. "We value this opportunity to further deepen our relationship with our decade old partner "UTStarcom" that enable us to continue the transformation of our broadband & fixed line network for next few years."
UTStarcom has become a broadband equipment service supplier of BSNL for years. In March 2014, UTStarcom won multi-service access network (MSAN) equipment and support design, engineering and installation for BSNL, helping the service provider to upgrade its network to offer Next Generation Multi-Media Services to its customers.
This is the latest project for UTStarcom in India, a market where it already holds about 35% share for broadband Internet network equipment. This contract shows the competitiveness of UTStarcom's broadband technology, and bolsters UTStarcom's strong position in India, which has always been an important market for UTStarcom and its market-leading broadband equipment. Recently, UTStarcom showcased its advanced broadband and optical network infrastructure technologies offering at Convergence India and announced its plan to support government initiatives like Smart Cities, NOFN, and Wi-Fi deployments with UTStarcom's transport, aggregation and access networking solutions.
Comments & Business Outlook
Fourth Quarter 2014 Financial Results
Total revenues for the fourth quarter of 2014 were $32.9 million, a decrease of 14.1% from $38.3 million for the corresponding period in 2013
Net loss per share attributable to UTStarcom Holdings of $ (0.37) vs last years same quarterly loss of $ (0.41). Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We are pleased that we continued to make progress in the transformation of our business during 2014, despite various market challenges and headwinds. Throughout the year we consistently exceeded revenue expectations, brought further discipline and efficiency to our business, and maintained a very strong balance sheet. Further, we made significant progress in further building out our business to enable and support stronger and more effective growth going forward. Specifically, we appointed a number of experienced executives to aggressively drive our go-to-market strategies, continued to evolve our product mix to include higher margin offerings that our customers are planning to adopt, extended important client relationships and made great strides in our aggressive geographic expansion in target markets including India, North America, and Japan. We continued to streamline our operational efficiencies and achieved over a 30% reduction in expenses. While we continue to move through the transition of our business, we are confident that we have put in place a very strong foundation for future growth. Our full Board and management team are solely focused on maximizing the opportunities for global growth that are ahead of us in our dynamic industry."
Business Outlook
While the business transformation will continue in 2015, the Company continues to strongly believe it has stabilized operations, significantly strengthened the business, and set a strong foundation for growth in what is a dynamic and growing industry.
Looking ahead, the Company is fully committed to broadband as the driver of the business and primary revenue contributor going forward. As mentioned last quarter, new higher quality and higher margin products are still in early stages of their product life cycle and given a relative decline in carrier capital expenditures in 2014, including with the Company's core customers, the uptake of these higher-end products has shifted from 2014 into the second half of 2015.
With respect to 2015 revenue results, the Company currently expects to generate total revenue in the range of $25 million to $30 million in the first quarter of 2015 and anticipates double-digit growth in non-GAAP revenue for the full year.
At the same time, the Company will continue to work to mitigate the pressure on gross margin that exists due to the headwinds from the depreciation of the Japanese yen against the U.S. dollar. Further, it will maintain a tight focus on financial controls as it has consistently throughout since its restructuring efforts. With all of this said, the Company believes that in 2015 it will deliver incremental improvements in non-GAAP operating income compared to 2014.
Mr. Wong concluded, "We believe we have taken the aggressive steps required to position us for improved performance as we enter 2015. The fact that we have market leading products coming to market, strong and growing client relationships around the world, and significantly improved global sales and marketing efforts gives us confidence that we are on the right track to monetize the initiatives that have been part of our transformation. In return, we intend to deliver value to our customers, partners and shareholders."
Comments & Business Outlook
HONG KONG, Jan. 29, 2015 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, participated in the 23rd Convergence India Exhibition and Conference in New Delhi, India in 21-23 January 2015. The Company showcased its advanced broadband and optical network infrastructure technologies offering to the Indian market and mapped out its operating strategy to serve the rapidly growing demand in the market for bandwidth from cloud-based services, mobile, streaming, and other applications.
This year's exhibition, "Connecting India", was inaugurated by the Minister of Communications and Information Technology, the Honourable Shri Ravi Shankar Prasad, in the presence of more than 1,200 conference delegates.
UTStarcom announced its plans to support government initiatives including Smart Cities, NOFN, and Wi-Fi deployments, and the aggressive strategy on its Carrier Wi-Fi solution.
During the conference, Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "The Telecommunications sector in India is experiencing a transition unlike anything we have seen before. We believe that it is critical that India develop a superior digital highway to drive its future economic growth. UTStarcom, with its robust portfolio of advanced yet affordable telecom infrastructure solutions, is ideally placed to support this transition and transformation. We are closely following various government initiatives which are currently underway including the Smart City, the optical NOFN Program deployment plans, and public Wi-Fi deployments. We are committed to growing our presence in India and we look forward to supporting the Government, the telecom operators, and system integrators as India realizes its digital potential."
UTStarcom's delegation was represented by Mr. William Wong, UTStarcom's Chief Executive Officer, Mr. Shalin Y. Shah, Co-General Manager of India Operation, Mr. Rahul Pandey, Director of India Sales & Marketing, Mr. Steven Chen, Vice President of Product Development, and Mr. Aman Sehgal, Head of Wi-Fi Product Planning and Head of Sales and Business Development of North America.
UTStarcom's exhibit showcased its latest developments in its core product lines including SDN/NFV, Packet Optical Transport, and Carrier Wi-Fi. The Company expects these to be the most beneficial products for the Indian market and various related government initiatives.
Notable Share Transactions
HONG KONG, Nov. 14, 2014 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, announced that its Board of Directors has approved a share repurchase program of up to $40 million of its outstanding shares over the next 24 months. The share repurchase program was approved by UTStarcom's Board of Directors and became effective on November 12, 2014.
During the repurchase program period, the Company will also maintain the flexibility to turn the program to an accelerated repurchase program and/or a cash tender offer. UTStarcom expects to implement this share repurchase program in a manner consistent with market conditions and the interests of the shareholders. The repurchase program does not obligate UTStarcom to make repurchases at any specific time or situation. UTStarcom's Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size accordingly. In addition, UTStarcom plans to fund any share repurchases made under this program from the Company's available cash balance. As of September 30, 2014, UTStarcom's cash and cash equivalents totaled $90.5 million.
Mr. Himanshu Shah, Chairman of UTStarcom's Board of Directors, stated, "Our commitment to an aggressive share repurchase program reflects the Board's confidence in the Company and our determination to deliver enhanced value for UTStarcom's shareholders. We believe that this buy back also represents an effective use of the Company's cash and we look forward to delivering enhanced value to our shareholders."
Comments & Business Outlook
Third Quarter 2014 Financial Results
Revenues were $32.3 million, exceeding the Company's previously provided expectations for $25 million to $30 million, and improved from $31.9 million sequentially.
Basic net loss per share was $0.22. After taking out the $4.3 million investment impairment loss, basic net loss per share was $0.10, compared to basic net income per share of $0.01 for the
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We delivered a solid third quarter and this is attributed to the strength of our core broadband business as well as our aggressive business transformation that we have been focused on executing. During the third quarter, revenues results exceeded expectations and we had a sequential improvement in gross margin, which demonstrates the positive progress we are making in driving our business forward. In addition to contract wins, we also expanded our global marketing and sales initiatives and appointed two executives to our global leadership team, all of which will help us greatly strengthen our go-to-market strategy in our three key regions, namely Japan, the US and India. Our management team and Board of Directors continue to work closely together to drive our progress and success in the business. We believe we are nearing the end of our transition and transformation and we are optimistic about the future as we see continued demand for the innovative technologies we are bringing to the market."
Mr. Min Xu, UTStarcom's Chief Financial Officer, commented, "We are pleased to report better than expected revenues and sequential improvement in gross margin. It's also encouraging that we achieved positive operating cash flow and maintained strong balance sheet. With $90.5 million in cash and no debt, we are confident that we have adequate liquidity to fund our future business growth. Going forward, we will keep our vigilant focus on topline stabilization, cost control and mitigating the pressure on gross margin."
Business Outlook
The Company is still in the process of a post-restructuring transition. However, it is confident it has stabilized operations, significantly strengthened its business, and set a strong foundation for growth in what is a dynamic and growing global industry. Further, there is enhanced visibility regarding business prospects and topline trends and opportunities.
Looking at the remainder of 2014, the Company is fully committed to broadband as the driver of the business and primary revenue contributor now and going forward. While many of the latest initiatives for the broadband business have significant momentum, new products are still in early stages of their product life cycle. With a relative decline in carrier capital expenditures, including among the Company's core customers, in the latter half of this year, the Company expects a partial delay in the uptake of some of these higher-end products and this will result in a shift of expected new revenue into the second half of 2015. With respect to the revenue expectations, the Company anticipates total revenues in the fourth quarter of 2014 to be in the range of $25 million to $30 million. Looking ahead to 2015, the Company currently expects to achieve double-digit growth in revenue for the full year. This will be driven by demand from the Company's existing and new customers for new and higher margin optical transport products together with WiFi and SDN products which is expected to result in significant revenue contribution beginning in the second half of 2015.
At the same time, the Company will continue to mitigate the pressure on gross margin and expects that future gross margin will be dependent on the operating environment, the new product contribution shift, and the macro-economic factors like the Yen depreciation. The Company will maintain a tight focus on cost control as it has consistently throughout the restructuring period and to the present. As a result of the foregoing, the Company expects that its overall performance for 2014 will be relatively stable or slightly below 2013.
Mr. Wong concluded, "We are confident that we are moving in the right direction. The year-to-date period and all of 2014 is extremely important as we have been and will be building a strong foundation, developing the right products, growing our customer base, and expanding our geographical focus on three key growth markets: Japan, the US and India. Overall, we strongly believe that our business is in very good shape, our customers have expressed strong interest and support for our new products, and we expect a stronger operating environment and incremental improvement in financial performance in 2015."
Comments & Business Outlook
HONG KONG, Oct. 29, 2014 (GLOBE NEWSWIRE ) -- UTStarcom ("UTStarcom" or "the Company") (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that its partner, aioTV, has received a second critical patent from the U.S. Patent and Trademark Office.
The patent covers, among other things, methods and systems for delivering video content from multiple platforms to subscribers.
This announcement comes just a few weeks after aioTV's first patent award for technology that enables unified service creation from multiple sources of live, on demand and/or freely available internet content. Taken together, the receipt of these patents allows aioTV to advance its core mission, which is to give consumers a greater range of options to combine multiple sources of live, on demand and freely available internet content into a single experience that consumers can use to access their video from one place.
"On the heels of receiving its first patent, we congratulate once again our partner, aioTV, on securing a second patent for technology that will further cement its competitive advantage in a quickly expanding marketplace," said Mr. William Wong, UTStarcom's Chief Executive Officer. "aioTV is now firmly on its way to becoming a market leader with the ability to create and deliver multi-sourced content in a single experience, changing the way we experience video content. As the single largest shareholder of the company, we continue to support the management of aioTV on this upward trajectory."
UTStarcom is the single largest shareholder of aioTV having originally invested in aioTV in 2012 as part of a strategy to expand into value-added media operational support services to sell to broadband infrastructure customers.
aioTV offers a commercial platform that leverages existing infrastructure, providing the tools and functionality to easily package and deliver OTT content and advanced IP services � including 4K unified with core multi-channel service in a single experience. aioTV has several global Tier 1 video service providers deploying this solution.
The patent is listed in the United States Patent and Trademark Office under the Patent 8,869,207 B1.
Joint Venture
HONG KONG, Oct. 21, 2014 (GLOBE NEWSWIRE ) -- UTStarcom ("UTStarcom" or "the Company") (UTSI), a global telecommunications infrastructure provider, today announced that the company has won an expansion of a contract originally awarded in 2013 to provide packet optical transport technology to Chunghwa Telecom Co., Ltd. ("Chunghwa" or "CHT"). Through this expanded contract, UTStarcom further strengthens its relationship with Chunghwa, a leading integrated telecommunications service provider in Taiwan, to enhance their mobile backhaul network.
The 4G LTE infrastructure upgrade is part of CHT's continuing effort to utilize the most advanced technologies to launch better and faster broadband service experience for the growing mobile users in Taiwan.
UTStarcom's NetRing(R) TN735 provides a unified platform to provide Legacy TDM and new data services over an all packet transport. TN735, together with other products in the TN portfolio, provide optimal network solutions at the aggregation and core layers of a mobile backhaul network and substantially reduce the operational cost.
"We are upgrading our LTE network to meet the ever-increasing expectations of our 10 million mobile subscribers," said Mr. Ruei-Chang Hsu, Vice President of Chunghwa Telecom. "Having a reliable vendor like UTStarcom with innovative leading-edge products that support our ambitious expansion plan is crucial for us."
"With the deployment of our TN735 and TN703, CHT will be able to launch new service to increasingly more subscribers with high-demand on mobility and provide them with a faster and more reliable mobile experience," said William Wong, Chief Executive Officer of UTStarcom. "Chunghwa Telecom is a very important customer for us, and we value the long-standing partnership with Chunghwa Telecom."
UTStarcom became an optical transport equipment supplier for Chunghwa in 2004 and has continued to improve the quality and stability of NetRing series products for Chunghwa annually. In October 2011, UTStarcom won multi-service transfer platform (MSTP) and first packet transport network commercial trial contract from Chunghwa, helping the service provider to better support its broadband service in Taiwan. In October 2012, the Company won a SDH and OXC network equipment and installation contract from Chunghwa to provide enhanced broadband services including NetRing(R) 40K Platform in Taiwan.
Comments & Business Outlook
HONG KONG, Oct. 13, 2014 (GLOBE NEWSWIRE ) -- UTStarcom ("UTStarcom" or "the Company") (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that revenue for the third quarter ended September 30, 2014 is expected to exceed original expectations.
The Company currently expects third quarter 2014 revenues to slightly exceed the top end of the previously provided range of $25 � $30 million. In addition, the Company expects to report a sequential improvement in its gross margin versus the second quarter of 2014.
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We are very pleased to announce that we expect to exceed our previously provided revenue expectations and believe this, along with an anticipated sequential increase in gross margin, highlights the positive progress we are making in driving our business forward. Importantly, this also follows other significant announcements such as the appointment of our new Chief Financial officer, the opening of our new Silicon Valley office and R&D test center, and the successful launch of various new products. Together, these various business developments should allow us to continue to make substantive improvements in our overall performance and generate positive results for our investors."
The Company intends to release its full third quarter 2014 financial results on Friday, November 14, 2014 and further detail on this will be provided in the coming weeks.
Comments & Business Outlook
HONG KONG, Oct. 10, 2014 (GLOBE NEWSWIRE ) -- UTStarcom ("UTStarcom" or "the Company") (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced that its partner, aioTV, has recently secured a patent grant for a key piece of technology that will enhance its competitiveness and leadership in the growing market for customized video entertainment.
The patent covers technology that advances the core mission of aioTV, which is to give consumers a greater range of options to combine multiple sources of live, on demand and freely available Internet content into a single experience that consumers can use to access their video from one place.
"As the largest single investor in aioTV, UTStarcom congratulates the firm and its team on the award of this patent," said Mr. William Wong, UTStarcom's Chief Executive Officer. "This is truly a groundbreaking milestone and it serves as further recognition of the firm's ability to develop innovative technologies and stay ahead of competitors. It increases the value of aioTV to its core clients as it provides the basis for a new generation of program guide. It also will have a great impact for Cable MSO and OTT service providers as they seek to offer more compelling content options and retain customers. Being a key strategic partner, we continue to support the management of aioTV on its journey and we are excited to see the firm grow, challenge convention and achieve new heights of success."
UTStarcom invested in aioTV in 2012 as part of a strategy to expand into value-added media operational support services to sell to its core broadband infrastructure customers. UTStarcom is the single largest shareholder of aioTV.
The patent is listed in the United States Patent and Trademark Office under the Patent No. 8826347.
Comments & Business Outlook
Second Quarter of 2014 Financial Results
Second quarter 2014 revenues were $31.9 million, exceeding the Company's previously provided expectations for $25 million to $30 million.
Second quarter 2014 basic net loss per share was $0.12, compared to basic net loss per share of $0.05 for the corresponding quarter of 2013.
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We are pleased with our performance in the second quarter as well as with the ongoing progress we are making in the aggressive transformation of UTStarcom. During the quarter we exceeded our expectations for the topline, continued to drive costs out of our business, and made a great many strategic moves that will help us propel the transition of our Company forward. More specifically, we staged a global launch of our carrier-class Wi-Fi solution, strengthening our product portfolio with key customers. Further, we pushed more aggressively into key markets, as highlighted by our opening of a new product testing and demonstration lab in the U.S., and we believe these global expansion efforts will drive significant improvement in top and bottom line growth. Lastly, we reduced the size of the Board, appointed a new Chairman, and together we are driving for higher efficiency and stronger governance. The management team and Board of Directors are working closely together to drive progress and success in the business. All in, the second quarter was a critical period for UTStarcom and proves that we are fully on the right track to compete more aggressively on a global stage going forward."
Mr. Robert Pu, UTStarcom's Chief Financial Officer, commented, "In the second quarter, we achieved better than expected revenue growth and sequential improvement in our gross margin despite the depreciation of Japanese yen. As we move into the second half of the year, we are particularly pleased with our improved underlying financial position and with the strength of our balance sheet. With $95.1 million in cash and no debt, we have ample liquidity to fund our investments in future business growth. In the quarters ahead, the Company will continue to keep its vigilant focus on topline growth, cost control, and cash generation. We will work diligently towards the goal of delivering increased sales, generating operating cash flow, and further improving overall finance performance."
Business Outlook
The Company is still moving through a transition post-restructuring. However, it is confident it has stabilized operations, significantly strengthened its business, and set a strong foundation for growth in what is a dynamic and growing global industry. Further, there is enhanced visibility regarding business prospects and topline trends and opportunities.
Looking at the remainder of 2014, the Company is fully committed to broadband as the driver of the business and primary revenue contributor now and going forward. While many of the latest initiatives for the broadband business have significant momentum, new products are still in early stages of their product life cycle. Together with the new customer wins that are currently in project deployment phases, these new products are expected to become significant revenue contributors beginning in the later part of 2014. With respect to short-term revenue expectations, the Company anticipates total revenues in the third quarter of 2014 to be in the range of $25 million to $30 million.
At the same time, the Company will continue to work to mitigate the pressure on gross margin and expect that it will remain relatively stable through the remainder of the year. Further, it will maintain a tight focus on cost control as it has consistently throughout the restructuring period and through to the present time. As a result of the foregoing, the Company believes it will deliver incremental improvements in financial performance compared to 2013.
Mr. Wong concluded, "We firmly believe that we are on exactly the right track to achieve our near and long-term strategic goals. As we emerge from the significant transformation we have undergone over the past two years, we have a much healthier underlying business and we are extremely excited about the future as we are experiencing increasing demand for the innovative technologies we are bringing to key markets all around the world. We are confident that this will translate into improved top and bottom line performance in the near future as well as significantly increased long-term value for all our current and future shareholders."
CFO Trail
HONG KONG, Aug. 12, 2014 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, today announced the appointment of Mr. Min Xu as Chief Financial Officer of the Company, effective August 21 , 2014. Mr. Xu will replace Mr. Robert Pu who has resigned for personal reasons but will remain with the Company for six months as a consultant to help ensure a smooth transition.
Mr. Xu has fifteen years of professional experience, with a focus on finance, equity research, marketing, and engineering. He will bring to UTStarcom a unique and relevant blend of financial and capital markets experience gained during his time as a senior sell-side analyst covering a wide variety of companies listed in the U.S., deep industrial expertise in areas such as technology and telecommunications, and strong hands-on technical engineering experience from his initial career as a software engineer.
Mr. Xu was most recently a senior equity research analyst at Roth Capital. Prior to that, he was an equity research analyst with various firms, including Wedbush Securities, Jefferies & Co., Piper Jaffray & Co., and Stanford Group Company. In these positions, Mr. Xu covered a variety of companies listed in the U.S., including many growth stocks in the technology, energy and solar spaces. Earlier in his career, Mr. Xu worked for seven years as a technical marketing engineer as well as a senior software engineer with Cisco Systems, Inc. in Research Triangle Park, North Carolina.In this role Mr. Xu had operational responsibilities, including conducting competitive analysis and forecasting as well as collaborating with cross-functional teams on a variety of critical projects.
Mr. Xu received an MBA from The Fuqua School of Business at Duke University in 2005, a Master of Science degree in electrical engineering from Purdue University in 1999, a Master of Science degree in physics from Colorado State University in 1998, and a Bachelor of Science degree in physics from Peking University in 1996.
The Company also announced an additional important promotion within the finance team. Mr. Bill Lou, who joined the Company in April 2002 and presently serves as financial controller of the company, has been promoted to Vice President of Finance. Given his 12 year tenure with the Company's finance team, Mr. Lou, has in-depth experience in the financial management and internal controls of UTStarcom. He will fill a key senior management role on the finance team and will work very closely with Mr. Xu to help propel this important business function forward to new levels of sophistication.
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "Today's announcement underscores our commitment to continuing to work aggressively to transform UTStarcom and create the strongest possible teams to support the significant global growth that is planned. We are delighted to welcome Min to UTStarcom and are confident that he will have a positive impact on our finance function and will be a great addition to our senior management team. In addition to his deep and relevant financial and technical expertise, we believe his long career in equity research will benefit our efforts to drive greater and better interaction with our investors and prospective shareholders. I am excited to work closely with Min and Bill on many important initiatives that will drive our transformation forward."
Mr. Wong concluded, "We are very pleased that Robert will continue to be actively involved in the business as a consultant in the near-term, helping ensure a smooth transition and assisting with a variety of strategic initiatives that are underway. In his nearly two years as Chief Financial Officer and approximately three years as a Board member of UTStarcom, Robert did a tremendous job helping shepherd the Company through a major transformation. On behalf of all of us at the Company, I thank him very much for his many years of service and his numerous contributions during an important period in the Company's history."
Comments & Business Outlook
HONG KONG, July 3, 2014 (GLOBE NEWSWIRE ) -- UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, announced today the completion of a successful proof of concept test of its Software Defined Networking solution, a ground-breaking capability that will radically improve network operations through automation and delivery of valuable new services for telecom and mobile operators.
UTStarcom conducted the proof of concept (PoC) of this new technology, trademarked SOOTM for Software Defined Open Packet Optical Network, with major Tier-1 operators in Tokyo, Japan on May 29-30, 2014. The PoC demonstrated the ability of SOOTM to enable dynamic as well as pre-planned bandwidth on demand provisioning in addition to the provisioning of standard MEF Ethernet services and full Layer 3 IP-VPN service provision.
SOOTM is the result of a dedicated effort by UTStarcom's research and development team to create a suite of products based on Software Defined Network (SDN) technology. The company initially unveiled and demonstrated SOOTM at the Optical Fiber Conference in San Francisco earlier in the year. The version used in the PoC included newly added SDN applications such as SDN provisioning of IPv4 and IPv6 Layer 3 IP-VPN services.
"The completion of the proof of concept is a clear demonstration of the fundamental and disruptive changes in network operations and service capabilities enabled through SDN technology," said Mr. William Wong, UTStarcom's chief executive officer. "This technology allows network operators to better monetize their network assets by offering new value-add and dynamic services."
Comments & Business Outlook
HONG KONG, June 4, 2014 (GLOBE NEWSWIRE ) --UTStarcom (Nasdaq:UTSI), a global telecommunications infrastructure provider, announced today that it will market to a global customer base its carrier-class multi-service gateway technology, MSG10K, that combines routing, switching, WLAN gateway and access controller functionalities into a unified multi-core system. The MSG10K helps telecommunications carriers to meet with the skyrocketing customer demand for mobile data and deliver the best mobile experience with the lowest possible capital and operating costs.
UTStarcom's advanced wireless broadband access technology complements its growing portfolio of MPLS-TP and Carrier Ethernet-based packet optical transport products by providing a greater range of products that simplify the process of network planning and deployment. This complementary Wi-Fi data offload technology, enables large-scale mobile operators to integrate of Wi-Fi with the mobile network to realize seamless Wi-Fi and 4G/LTE internetworking. Its capacity to support up to 120,000 access points within one single chassis is unrivaled in the market.
The technology is already in commercial deployment on the network of Softbank Mobile in Japan, but UTStarcom is now marketing it to carriers worldwide as demand for it is poised to grow rapidly. According to Infonetics, the global mobile data traffic is surging at a 92% compound annual growth rate, and the global carrier Wi-Fi equipment market is expected to grow at a high double-digit percentage annually at least through 2016 to hit $2.1 billion.
"This is a major step forward for UTStarcom's platform of wireless broadband access products and shows how we are leading the industry in wireless broadband technology development. This positions us as a category leader leading a high-growth segment of the market," said William Wong, UTStarcom's Chief Executive Officer.
Comments & Business Outlook
First Quarter 2014 Financial Results
Total revenues for the first quarter of 2014 were $32.3 million, a decrease of 13.0% from $37.2 million for the corresponding period in 2013.
First quarter 2014 basic net loss per share was $0.09, compared to basic net loss per share of $0.13 for the corresponding quarter of 2013.
Mr. Robert Pu, UTStarcom's Chief Financial Officer, commented, "In the first quarter, we significantly reduced operating expenses year over year and continued to narrow the operating loss, with a heightened focus on both growing our core broadband business and generating operating efficiency. We ended this quarter with $100.3 million in cash and no debt on our balance sheet and will continue to invest in our planned global growth strategies. Furthermore, we continue to expect to achieve incremental improvements in overall financial performance compared to 2013."
Business Outlook
The Company is still moving through a transition post-restructuring. However, it is confident it has stabilized operations, significantly strengthened its business, and set a strong foundation for growth in what is a dynamic and growing global industry. Further, there is enhanced visibility regarding business prospects and topline trends and opportunities.
Looking at the remainder of 2014, the Company is fully committed to broadband as the driver of the business and primary revenue contributor now and going forward. While many of the latest initiatives for the broadband business have significant momentum, new products are in early stages of their product life cycle. Together with the new customer wins that are currently in project deployment phases, these new products are expected to become significant revenue contributors beginning in the later part of 2014. With respect to near-term revenue expectations, the Company anticipates total revenues in the second quarter of 2014 to be in the range of $25 million to $30 million.
At the same time, the Company will continue to work to mitigate the pressure on gross margin that exists due to the headwinds from the depreciation of the Japanese yen against the U.S. dollar. Further, it will maintain a tight focus on financial controls as it has consistently throughout the restructuring over the last twenty one months. As a result of the foregoing, the Company believes it will deliver additional incremental improvements in overall financial performance compared to 2013.
Mr. Wong concluded, "We are excited about the prospects for our business and believe that we are in a better position than ever before in light of the new products we have just launched and the new markets that we are entering into. Our SDN product and WiFi solution are well received by our customers. Further, our new TN broadband products are going through customer deployment and we expect they will bring sales and margin improvement starting in the later part of 2014. The underlying foundation of our business is very strong and continuing to improve and we believe this will enable us to deliver significant, long-term value to our shareholders."
Comments & Business Outlook
UTSTARCOM HOLDINGS CORP.
Years ended December 31,
2013 2012 2011
(In thousands, except per share amounts)
Net sales
Products
$ 141,138 $ 160,688 $ 285,493
Services
23,301 26,040 35,083
164,439 186,728 320,576
Cost of net sales
Products
99,888 95,854 178,463
Services
24,331 22,716 27,779
Gross profit
40,220 68,158 114,334
Operating expenses:
Selling, general and administrative
37,626 52,457 63,857
Research and development
14,520 28,131 30,123
Amortization of intangible assets
— 516 1,239
Restructuring
— 358 2,386
Net loss (gain) on divestitures
1,307 16,239 (4,546 )
Total operating expenses
53,453 97,701 93,059
Operating income (loss)
(13,233 ) (29,543 ) 21,275
Interest income
511 2,612 2,313
Interest expense
(151 ) (240 ) (252 )
Other income (expense), net
11,480 (2,973 ) (8,165 )
Equity pick up of losses of an associate
(9,586 ) — —
Investment Impairment
(9,400 ) (3,043 ) (476 )
Income (loss) before income taxes
(20,379 ) (33,187 ) 14,695
Income tax expense
(2,351 ) (2,392 ) (2,918 )
Net income (loss)
(22,730 ) (35,579 ) 11,777
Net loss attributable to noncontrolling interests
9 1,194 1,610
Net income (loss) attributable to UTStarcom Holdings Corp.
$ (22,721 ) $ (34,385 ) $ 13,387
Net income (loss) per share attributable to UTStarcom Holdings Corp.—Basic(1)
$ (0.58 ) $ (0.71 ) $ 0.26
Net income (loss) per share attributable to UTStarcom Holdings Corp.—Diluted(1)
$ (0.58 ) $ (0.71 ) $ 0.26
Weighted average shares outstanding—Basic
39,127 48,513 51,491
Weighted average shares outstanding—Diluted
39,127 48,513 51,641
Other comprehensive (loss) Income, net of tax
Foreign currency translation adjustment
(13,759 ) (3,272 ) 13,470
Other comprehensive (loss) Income, net of tax
(13,759 ) (3,272 ) 13,470
Comprehensive income (loss)
(36,489 ) (38,851 ) 25,247
Comprehensive loss attributable to noncontrolling interests
9 1,194 1,610
Comprehensive income (loss) attributable to UTStarcom Holding Corp.
$ (36,480 ) $ (37,657 ) $ 26,857
Management Discussion and Analysis
Fiscal 2013 vs. 2012
Net sales decreased by 11.9% to $164.4 million for 2013 compared to $186.7 million for 2012. The decrease mainly resulted from a $19.6 million decline in equipment sales which was primarily due to (i) a $25.5 million decrease in sales from the IPTV business, which was disposed in August 2012 and had contributed $26.9 million equipment sales in 2012 compared to $1.4 million in 2013 (further discussion of the divestiture can be found in Note 3 to our Consolidated Financial Statements included under Part III, Item 18 of this Annual Report on Form 20-F and (ii) a $17.6 million decrease in the revenues from PTN and MSAN products due to the depreciation of Japanese yen against the U.S. dollar, partially offset by a $17.8 million increase in sales of WiFi and value-added resell products.
Sales from equipment-based services was $23.3 million for 2013, a decrease of $2.5 million compared to $25.8 million for 2012, mainly due to a $2.6 million decrease related to the divestiture of the IPTV business as noted above.
Fiscal 2013
Equity losses of an associate were $9.6 million for 2013, due to the losses from our 49% equity investment in iTV Media.
We held a controlling interest in iTV Media from October 2010 to June 2012 and consolidated its results during that period. Upon a third party's exercise of share repurchase rights in June 2012, our investment in iTV Media decreased to only non-controlling preference shares in iTV Media. At that point, we deconsolidated iTV Media and accounted for the investment using the cost method starting from June 2012, as the preference shares of iTV Media owned by us were not considered as in-substance common stock.
In January 2013, we invested in an additional $5.0 million in convertible bonds issued by iTV Media. The issuance of these additional convertible bonds triggered a reassessment of the accounting treatment for our investment in the preference shares. Due to the additional convertible bond investment and the decreasing fair value of the ordinary shares of iTV Media in relation to the total fair value of iTV Media, we determined that the preference shares of iTV Media owned by us now substantively participated in the risks and rewards of iTV Media, irrespective of the liquidation preferences, and were considered as in-substance common stock. Therefore, we concluded that the equity method criteria had been met and equity accounting for ITV Media commenced in the first quarter of 2013. As a result, the Company recorded total $9.6 million losses for the equity invested in 2013 equivalent to 49% of iTV Media's losses for the year. As of December 31, 2013, the remaining balance in the preferred stock is $5.3 million.
In the second quarter of 2013, we further invested in an additional $15.0 million convertible bond issued by iTV Media with a maturity date of May 31, 2014. In the fourth quarter of 2013, we further invested in an additional $12.1 million convertible bond issued by iTV Media, of which $5.0 million was invested through cash with a maturity date of August 31, 2014 and $7.1 million through the conversion of outstanding receivables with a maturity date of December 31, 2015. No significant gain or loss was generated from the conversion of receivables to convertible bonds because it was converted at the book value of the receivables. Through December 31, 2013, we have invested $20.0 million in preference shares and $35.1 million convertible bonds in iTV Media. If converted, these investments represent approximately 73% of the equity of iTV Media. Nevertheless, we do not have control over iTV Media because the founder and CEO of iTV Media retains the right to elect three of the five board members of iTV Media unless the voting interests controlled by him falls below 10% of the total voting interests of iTV Media. As iTV Media's board of directors has the power to elect or dismiss officers, approve the budget, make strategic decisions and evaluate possible merger and acquisition opportunities for iTV Media, the founder and CEO of iTV Media controls it. iTV Media is considered as a Variable Interest Entity because it is thinly capitalized. Management has concluded the founder and CEO of iTV Media was the primary beneficiary of iTV Media for the year ended December 31, 2013, because he has meets the power criterion and loss/benefits criterion in accordance to ASC 81010-25. For the above reasons, the company did not consolidate iTV Media as for the year ended December 31, 2013. After taking $9.1 million impairment charge in 2013, the convertible bond investments balance at December 31, 2013 was $26.0 million. If iTV Media could not get funding that are more senior than the convertible bonds from other parties, once the preferred shares book value is reduced to zero due to 49% equity loss pick up, the Company will recognize 100% of iTV Media's losses until its convertible bond investment balance has been depleted.
Comments & Business Outlook
Third Quarter 2013 Financial Results
Total revenues for the third quarter of 2013 were $41.2 million, an increase of 2.2% from $40.3 million for the corresponding period in 2012.
Non-GAAP net income attributable to UTStarcom's shareholders was $0.4 million and non-GAAP basic net income per share was $0.01 for the third quarter of 2013, compared to non-GAAP net loss attributable to UTStarcom's shareholders of $0.17 million and non-GAAP basic net loss per share of $nil for the third quarter of 2012.
"We are pleased to report strong financial results for the third quarter of 2013 which further validate the healthy trends in our underlying business," said Mr. William Wong, UTStarcom's President and Chief Executive Officer. "Our top line performance improved year over year, and we continued our effective cost control and productivity measures, which helped to drive positive operating cash flow during the quarter. Moreover, in this quarter we launched a series of new product innovations that deliver on UTStarcom's vision of providing 'simple network, simple operation' to our customers. In addition, we continued to grow and diversify the customer base for our broadband business, notching new customer wins with large local incumbent service providers in Taiwan, Indonesia and Brazil. We believe our aggregate year-to-date results showcase the improvements in our business and are a testament to the strategic plan and quality of the new management team that is charged with its execution. Going forward, the Company is committed to continuing to execute the strategic plan to transform UTStarcom into a higher-growth, more profitable business focused on providing next generation media services and broadband equipment products. We expect this will enable us to drive profitable growth and deliver sustained shareholder value over the long term."
Mr. Robert Pu, UTStarcom's Chief Financial Officer, commented, "We delivered a strong quarter of bottom line improvement, driven by growth on the top line and continued progress in lowering operating expenses through our focused cost reduction efforts and leaner, more efficient operations. Moreover, we delivered another quarter of positive operating cash flow which again demonstrates the operational efficiency improvements across our business. Looking ahead, we will keep our focus on vigilant cost control, cash generation and executing our new strategic initiatives. We will continue to use our strong cash position of approximately $120.4 millionto invest in our growth plan designed to increase shareholder value."
Business Outlook
While overarching trends in the first nine months of the year have indicated healthy and improving trends in the underlying business, the Company continues to view 2013 as a year of investment and continued transition.
The Company is reiterating its expectations for the full year 2013. Unprofitable revenues that were removed with the IPTV divestiture will need to be replaced and as a result, total revenues for 2013 are expected to decrease from 2012 while revenue sources are in transition. Additionally, gross margin may continue to experience some headwinds from the depreciation of the Japanese yen against the U.S. dollar as sales in Japan account for a large portion of the Company's total revenues. However, if Japanese yen exchange rates remain the same as they are now and the Company successfully continues to generate efficiencies from operations, the Company still expects that for 2013 it will achieve a degree of incremental improvement in overall financial performance compared to 2012.
Please note that the Company's current outlook is based on Japanese yen exchange rates remaining the same as they are now.
From a long-term perspective, the Company expects that its balanced focus on strategic initiatives and continuing investment in its value-added broadband business will result in a more profitable and competitive business model. The Company continues to expect profit from the new TV over IP services to become the major contributor for UTStarcom by 2015, as the new TV over IP business is expected to have gross margin exceeding 50%.
Mr. Wong concluded, "As we move into the end of 2013, we remain comfortable with our operating expectations for full year 2013. In addition, we remain optimistic about the long-term opportunities before us. We are confident that while it will take time and hard work, our clearly defined strategy positions us very well in the quickly changing and diverse media environment. Our board of directors and the management team will work closely together to drive our strategic plan forward and to explore all appropriate opportunities to maximize value for all our shareholders."
Comments & Business Outlook
Second Quarter 2013 Financial Results
Non-GAAP revenues in the second quarter of 2013 were $47.4 million, a 19.0% increase from $39.9 million in the second quarter of 2012.
GAAP gross margin for the second quarter of 2013 was 20.0%, compared to 38.5% for the second quarter of 2012, mainly due to the depreciation of the Japanese yen and additional loss provision in India due to an increase in the estimated cost to complete a project resulting from a cost increase by a service provider in conjunction with its final contract renewal.
Non-GAAP gross margin for the second quarter of 2013 was 20.1%, compared to 32.3% for the second quarter of 2012, mainly due to the depreciation of the Japanese yen and additional loss provision in India due to an increase in the estimated cost to complete a project resulting from a cost increase by a service provider in conjunction with its final contract renewal.
Non-GAAP net loss attributable to UTStarcom's shareholders was $2.1 million and non-GAAP basic loss per share was $0.05for the second quarter of 2013, compared to non-GAAP net loss attributable to UTStarcom's shareholders of $7.3 million and non-GAAP basic loss per share of $0.15 for the second quarter of 2012.
Mr. Robert Pu, UTStarcom's Chief Financial Officer, commented, "We delivered relatively solid financial results in the second quarter. Despite the loss in India and depreciation of the Japanese yen that impacted the gross margin for the second quarter, our non-GAAP revenues increased year over year and we continued to make substantial progress in lowering operating expenses through our focused cost reduction efforts and our leaner, more efficient operations. Moreover, we are very encouraged that the Company generated positive operating cash flow in the second quarter. Lastly, our balance sheet remains strong with a cash position of approximately $124.7 million as of June 30, 2013. We will continue to use this liquidity to invest in our growth plan and other initiatives designed to increase shareholder value."
"We are reasonably pleased with our overall results in the second quarter of 2013," said Mr. William Wong, UTStarcom's President and Chief Executive Officer. "The improvement in non-GAAP topline performance, continued progress in lowering operating expenses and our positive operating cash flow are collectively indicative of the healthy trends in our underlying business. Moreover, during the quarter we continued to execute the strategic initiatives that we launched late last year. We made additional investment in iTV Media to further expand that strategic partnership and we divested non-strategic assets to streamline our value-added broadband business, turning it into a niche and targeted line of business. Furthermore, we launched a series of new product innovations that deliver on UTStarcom's vision of 'simple network, simple operation.' Going forward, we expect that our balanced focus on aggressively driving new strategic initiatives and continuing investment in our streamlined and value-added broadband business will enable us to deliver enhanced value to our shareholders."
Business Outlook
While overarching trends in the first half of the year have indicated healthy and improving trends in the underlying business, the Company continues to view 2013 as a year of investment and continued transition.
Unprofitable revenues that were removed with the IPTV divestiture will need to be replaced and as a result, total revenues for 2013 are expected to decrease from 2012 while revenue sources are in transition. Additionally, gross margin may continue to experience some headwinds from the depreciation of the Japanese yen against the U.S. dollar as sales in Japan account for a large portion of the Company's total revenues. However, if Japanese yen exchange rates remain the same as they are now and the Company successfully continues to generate efficiencies from operations, the Company still expects that for 2013 it will achieve a degree of incremental improvement in overall financial performance compared to 2012. Furthermore, the Company expects to build on those gains and to see higher rates of growth take hold beginning in 2014.
Please note that the Company's current outlook is based on Japanese yen exchange rates remaining the same as they are now.
From a long-term perspective, the Company expects that its balanced focus on strategic initiatives and continuing investment in its value-added broadband business will result in a more profitable and competitive business model. The Company continues to expect profit from the new TV over IP services to become the major contributor for UTStarcom by 2015, as the new TV over IP business is expected to have gross margin exceeding 50%.
Mr. Wong concluded, "Looking ahead, we currently remain comfortable with our operating expectations for full year 2013. We are confident that our current strategy and proactive moves to strengthen our business will enable us to capture many long-term opportunities that will translate into significant overall improvement in the Company's performance and we remain committed to delivering enhanced shareholder value over the long-term."
Comments & Business Outlook
BEIJING , Aug. 15, 2013 /PRNewswire/ -- UTStarcom Holdings Corp ("UTStarcom" or the "Company") (NASDAQ: UTSI), a leading provider of media operational support services and broadband equipment products and services, today announced the launch of a new architecture for its PTN (Packet Transport Network) Network Management System ("NMS").
This reaffirms UTStarcom's commitment to its broadband business and sharpens the focus on providing customers with a "simple network, simple operation" to meet their increasingly sophisticated needs. In alignment with this philosophy, the new NMS architecture announced today augments UTStarcom's market-leading suite of next generation broadband transport solutions and allows customers to expand the capacity of their existing PTN networks and aggregate the management of large-scale networks.
One of the top telecommunications operators worldwide has already deployed this new NMS architecture. The full market for the new NMS architecture spans the Asia Pacific region, where PTN products are broadly deployed. UTStarcom has strong existing relationships with telecom and broadband service providers across the region, having been a leading broadband equipment provider for many of them.
Specifically, the design of the NMS architecture allows the following:
Improved scalability: the number of PTN nodes managed under one network is significantly enhanced, extending the industry average of 10,000 to 50,000 PTN nodes by up to five times.
Greater capacity: MPLS-TP service management capacity volume increases by fifteen times, substantially improving managed services like Pseudo Wire and Label Switching Path.
Enhanced efficiency: with the capability to migrate up to 50,000 PTN nodes onto one network, customers can improve capacity distribution and lower operating costs.
"UTStarcom is one of the first broadband equipment providers to offer a PTN NMS architecture uniquely tailored to the needs of customers managing large-scale PTN networks," said Mr. William Wong , Chief Executive Officer of UTStarcom. "This is one of several new broadband product launches that we anticipate this year and we are confident that we will continue to grow our value-added, higher margin broadband business. We will continue to leverage our success, proven technologies, and high customer satisfaction as we expand our footprint across the Asia Pacific region."
Going Private News
BEIJING, April 26, 2013 /PRNewswire / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (NASDAQ: UTSI), a leading provider of media operational support services and broadband equipment products and services, today announced that a special committee of independent directors of the Company's board of directors (the "Special Committee") has selected Citigroup Global Markets Inc. as its financial advisor.
As previously announced, the Company's board of directors formed the Special Committee to consider a "going-private" transaction (the "Transaction") for $3.20 in cash per ordinary share, proposed by one of the directors of the Company, Mr. Hong Liang Lu and his affiliates, and Shah Capital Opportunity Fund LP and Himanshu H. Shah, in a preliminary non-binding proposal letter, dated March 27, 2013.
Citigroup Global Markets Inc. will assist the Special Committee in its work in connection with the Transaction. No decisions have been made by the Special Committee with respect to the Company's response to the Transaction. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Share Structure
BEIJING , Jan. 30, 2013 /PRNewswire / -- UTStarcom Holdings Corp. (Nasdaq: UTSI) ("UTStarcom" or the "Company"), a leading provider of media operational support services and broadband equipment products and services, today announced that it will hold an extraordinary general meeting of its shareholders (the "EGM") on Thursday, March 21, 2013, at 1:00 p.m., Beijing time, to seek approval for a previously announced 3-for-1 reverse share split. UTStarcom's Board of Directors believes that implementing a reverse share split is likely to improve the marketability and liquidity of UTStarcom's ordinary shares.
The meeting will be held at UTStarcom's offices located at Room 303, Building H, Phoenix Place, No. A5 Shuguangxili, Chaoyang District, Beijing, P.R. China , 100028. Shareholders of record as of the close of business on February 5, 2013, are entitled to notice of and vote at the EGM. If approved, the reverse share split will become effective immediately upon approval by the Company's shareholders. Upon becoming effective, every three outstanding and authorized ordinary shares of UTStarcom as of the effective date will be automatically combined into one issued and outstanding ordinary share.
Notable Share Transactions
BEIJING , November 1, 2012 /PRNewswire / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (NASDAQ: UTSI), today provided an update on its monthly share repurchase activity under its ongoing $20 million share repurchase program that was launched in August 2011 .
During October 2012 , the Company repurchased $1.2 million of its ordinary shares, bringing the cumulative total under the current program to approximately $14.2 million , which represents 71% of the amount authorized by the Board. There is approximately $5.8 million remaining under the current share repurchase program, which the Board extended through February 15, 2013 .
Mr. William Wong , UTStarcom's Chief Executive Officer, stated, "Our continued commitment to our share repurchase program reflects management's long-term confidence in the Company and our determination to deliver enhanced value for UTStarcom's long-term shareholders. We remain on track to buy back shares at the maximum rate allowed under the current program, and we believe that this represents an effective use of our cash at this time."
Comments & Business Outlook
CALIFORNIA, October 18, 2012 /PRNewswire/ -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (NASDAQ: UTSI), a leading provider of broadband equipment and solutions, today announced that it has recently won a Synchronous Digital Hierarchy (SDH) and Optical Cross-Connect (OXC) network equipment and installation contract from Chunghwa Telecom Co., Ltd. ("Chunghwa"), a leading integrated telecommunications service provider in Taiwan. Specifically, UTStarcom will provide its transport network solution NetRing® 40K products to deliver high-speed broadband services to Chunghwa subscribers across Taiwan beginning in the first quarter of 2013.
"We are very pleased to be able to provide additional value to Chunghwa, a long-standing customer," said William Wong, Chief Executive Officer of UTStarcom. "This agreement for additional products and services reaffirms our focus on IP-based services and key infrastructure products in the Asia Pacific market. Taiwan is an important market for UTStarcom, and we will continue to leverage our success and high customer satisfaction in neighboring markets like Japan as we look to expand our presence in Taiwan and across the region more broadly. We believe this expanded partnership with Chunghwa will help us develop additional customer relationships in the Asia Pacific region."
UTStarcom became an optical transport equipment supplier for Chunghwa in 2004 and has continued to improve the quality and stability of NetRing series products for Chunghwa annually. In October 2011, UTStarcom won multi-service transfer platform (MSTP) and first packet transport network (PTN) commercial trial contract from Chunghwa, helping the service provider to better support its broadband service in Taiwan.
The NetRing® 40K Platform is a versatile, next-generation optical platform designed to simplify service provider networks by combining functions of several different legacy products into a single platform. Capable of supporting up to 40G interfaces, this platform can dramatically reduce capital and operational expenses for service providers.
CFO Trail
BEIJING, October 12, 2012 /PRNewswire / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (NASDAQ: UTSI), a leading provider of broadband equipment and solutions, today announced that it has appointed Mr. Tianruo (Robert) Pu, Chairman of the Company's Audit Committee and an independent director of the Board, as the Company's Chief Financial Officer, effective immediately. Mr. Pu replaces Ms. Jin Jiang, who has resigned to pursue other opportunities.
Mr. William Wong, UTStarcom's Chief Executive Officer, stated, "We are very pleased to welcome Mr. Pu to the management team. He brings to UTStarcom more than 15 years of financial and public company experience and has a proven track record of leading and enhancing companies' financial strategies. In addition, he has demonstrated his extensive financial expertise and strategic insight as the Chairman of the Audit Committee and a Board member of UTStarcom. His experience, leadership, and familiarity with our business make him an ideal choice to help lead UTStarcom as we move on to the next phase of our transformation."
Notable Share Transactions
BEIJING , October 1, 2012 /PRNewswire-FirstCall / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (NASDAQ: UTSI), today provided an update on its third quarter share repurchase activity under its ongoing $20 million share repurchase program that was launched in August 2011 .
During the third quarter of 2012, the Company repurchased $3.48 million of its ordinary shares, bringing the cumulative total under the current program to approximately $13.0 million , which represents 65% of the amount authorized by the Board. There is approximately $7.0 million remaining under the current share repurchase program, which the Board extended through February 15, 2013 .
Mr. William Wong , UTStarcom's Chief Executive Officer, stated, "We remain committed to our share repurchase program as an important and effective way to enhance shareholder value. Our cash position allows the Company to be well on track with executing the share repurchase program and we continue to buy back shares at the maximum rate allowed under the current program. I will continue to work with the Board and management team to design and roll out other strategic initiatives that will move the Company on to the next phase of our transformation, and I look forward to delivering greater value to our shareholders."
Notable Share Transactions
BEIJING, August 29, 2012 /PRNewswire-Asia / -- UTStarcom Holdings Corp. ("UTStarcom" or "the Company") (NASDAQ: UTSI), today provided an update on its ongoing $20 million share repurchase program that was launched in August 2011.
For the period between July 1 and August 28, 2012, the Company repurchased an additional $2.2 million of its ordinary shares, bringing the cumulative total under the current program to $11.8 million, which represents more than half of the amount authorized by the Board. There is $8.2 million remaining under the current share repurchase program, which the Board recently extended through February 15, 2013.
Mr. Xiaoping Li, Lead Independent Director, commented, "As our business evolves with the pending IPTV divestiture and other strategic initiatives, we remain committed to our stock buyback program as an important way to enhance shareholder value. Moreover, our belief in UTStarcom's long-term prospects gives us the confidence that this is an efficient use of cash, and we continue to buy back stock at the maximum rate allowed under the current program."
Contract Awards
BEIJING , May 29, 2012 /PRNewswire-Asia / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (Nasdaq: UTSI), a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators, announced today that it has won an expansion tender from Beijing Television ("BTV") to enhance the capabilities of BTV's existing IPTV broadcasting control platform ("IBCP"). The expanded platform will feature a new IP-based safe distribution system that will improve BTV's IPTV content-management and distribution capabilities. UTStarcom built BTV's existing IBCP in 2010 and this contract represents the first IBCP expansion project awarded to the Company.
"Our expansion project with BTV further solidifies our leading position in China 's IPTV market," said UTStarcom's President and Chief Executive Officer Mr. Jack Lu . "Over the past year, we have worked together with BTV to examine its service experience in order to design an enhanced service platform that better suits the needs of the operator. As a result, the expanded platform will feature a new IP-based safe distribution system that can monitor content distribution issues in real time, as well as automatically replace weak signals whenever a problem is identified. Expansion contracts similar to this one with BTV are typically larger in scale than the initial IBCP contracts we have signed. Not only will we continue to capitalize on opportunities to build additional IBCPs, but we also anticipate similar IBCP expansion contracts in the near future."
Since 2010, UTStarcom has built ten IBCPs across China , specifically in Beijing , Chongqing , Hainan , Hubei , Hunan , Shandong , Shenzhen , Sichuan , Tianjin , and Zhejiang .
Comments & Business Outlook
Fourth Quarter 2011 Results
Fourth quarter 2011 total revenues increased 9.6% year over year to $83.5 million
Fourth quarter 2011 gross profit increased 254.0% year over year to $28.6 million
Fourth quarter 2011 net income attributable to UTStarcom's shareholders was $4.1 million , or basic and diluted earnings per share of $0.03 , compared to a loss of $23.0 million , or a loss of $0.15 per share, for the corresponding period of 2010
"We finished the year 2011 with a strong financial performance, exceeding the financial targets we set at the beginning of last year," said UTStarcom President and Chief Executive Officer Jack Lu . "We achieved annual revenues of $320.6 million and net income of $13.4 million primarily through a strong contribution from our traditional equipment business. Our efforts to streamline our corporate structure, prudently manage costs and build more profit-driven employee incentives have all contributed to stronger year-over-year sales and a profitable 2011. We are especially encouraged by the steady progress made in our cable business, which experienced improvements in gross margin and overall product mix in China ."
Mr. Lu continued, "In 2012, we continue to capitalize on China 's push toward triple network convergence and pursuing future opportunities related to the 42 trial cities recently announced. Along with continuing efforts to enhance profitability in our traditional business, we are also developing new initiatives to expand our operating support services business as we strive for ongoing sustainable profitability."
Comments & Business Outlook
BEIJING , February 10, 2012 /PRNewswire-Asia-FirstCall / -- UTStarcom Holdings Corp. ("UTStarcom" or the "Company") (Nasdaq: UTSI) a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators today announced that it has won two new contracts to support IPTV network expansion with Fujian Telecom and Zhejiang Telecom, provincial subsidiaries of China Telecom. As part of the Zhejiang Telecom contract, UTStarcom will build new IPTV 2.0 platforms in two Zhejiang cities, Wenzhou and Taizhou.
The Company will expand Fujian and Zhejiang Telecom's simultaneous network capacities and storage capacities for their IPTV systems. Currently, UTStarcom serves nearly one million IPTV users in Fujian and approximately 650,000 IPTV users in Zhejiang .
"We are excited to have won these two contracts after a rigorous nationwide testing and bidding process," UTStarcom President and CEO Mr. Jack Lu said. "We will continue to execute against our growth strategy of serving China 's telecommunications and cable customers in tandem. We are confident our IPTV platform will provide a solid foundation for the large scale deployment of China Telecom's IPTV 3.0 standard and better server the newly announced 42 three network convergence trial cities in 2012."
UTStarcom's IPTV broadcasting control platform can support the content distribution functions of IPTV, iDTV and Internet TV in a secure environment. In 2010, the Company built six IPTV broadcast control platforms, one in each of Sichuan , Shenzhen , Beijing , Hubei , Hunan and Shandong which were successfully connected with the central-level platform.
Joint Venture
BEIJING , December 6, 2011 /PRNewswire-Asia-FirstCall / -- UTStarcom, Inc. ("UTStarcom" or the "Company") (NASDAQ: UTSI) a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators today announced that it has entered into a strategic cooperation agreement with Beijing BDA Network and Information Co., Ltd. ("BBNI"？？？to provide broadband solutions and comprehensive telecom technology services for a new affordable housing development in Beijing .
UTStarcom President and CEO Mr. Jack Lu stated, "Beijing E-town's affordable housing development marks our first project with BBNI, which has shown full confidence in our solution-development and delivery capabilities given our considerable experience serving telecom and cable operators in China . The local Beijing government believes it is important to continue investing in the modernization of infrastructure and residential developments and we are pleased to be a part of that process.
"Our solutions will enhance Beijing E-town's telecommunications network by expanding functionality at a low cost of entry. The success of this project will further strengthen our relationships and presence in China ," added Mr. Lu.
The affordable housing development area spans a total of 12 square kilometers. Phase I construction of approximately 3.9 square kilometers, which is scheduled to begin in early 2012, will comprise 160 residential buildings with a capacity of 18,387 households. The rest of the area is expected to be fully developed with a mix of residential and commercial buildings in the coming years. UTStarcom will mainly provide Ethernet Passive Optical Network ("EPON") solutions, Packet Transport Network ("PTN") solutions and set-top boxes to support the construction of a high-quality and reliable communications network to enable users to enjoy audio, broadband and potentially even IPTV services.
BBNI was established by the Beijing Municipality to manage and operate broadband networks and telecommunication infrastructure construction of large-scale industrial projects and high-tech developments of the Beijing E-town area.
Comments & Business Outlook
Third Quarter 2011 Results
Total revenues increased 35.7% year-over-year to $83.3 million in the third quarter of 2011 from $61.4 million for the corresponding period of 2010.
Gross profit increased 164.2% year-over-year to $31.9 million in the third quarter of 2011 from $12.1 million for the corresponding period of 2010.
Gross profit as a percentage of net sales, or gross margin, was 38.4% in the third quarter of 2011, compared to 19.7% in the third quarter of 2010 and 37.6% in the second quarter of 2011.
Operating income was $14.2 million in the third quarter of 2011, compared to an operating loss of $23.3 million for the corresponding period of 2010.
Net income attributable to UTStarcom's shareholders was $8.0 million , or basic earnings per share of $0.05 , in the third quarter of 2011, compared to a net loss of $17.2 million , or basic loss per share of $0.13 , for the corresponding period of 2010.
"Sustained profitability remains as one of the principal goals for the Company," said UTStarcom President and Chief Executive Officer Jack Lu . "Our cost restructuring efforts continue to show encouraging results as we recorded our second consecutive profitable quarter. In the third quarter of 2011, we announced the completion of our first end-to-end Internet TV solution for a cable TV network customer and launched five new products at the Beijing Telecommunications EXPO. Customers will look to us because of our ability to develop customized solutions that will enhance the subscriber experience. As we look to the quarters ahead, demand for our solutions and services is healthy and our focus will be on execution and expanding our revenue contribution from higher value-added solutions."
UTStarcom Vice President and Chief Financial Officer Jin Jiang added, "We reiterate our confidence in achieving our revenue, expense control and profitability guidance for 2011. We were able to improve our gross margin in the third quarter both year-over-year and sequentially, which contributed to bottom-line profitability this quarter. In regards to our new OSS business, we have experienced some delays as we are being very prudent in our due diligence and valuation process of potential acquisition targets and revenue sharing partners. We continue to believe our OSS business will play an integral role as we aspire to achieve sustainable long-term profitability."
Business Outlook
The Company reiterates the following outlook for fiscal year 2011:
Total revenues to be in the range of $300.0 million to $320.0 million , which includes PAS deferred revenue through the end of 2011 at the rate of $23.0 million per quarter.
Annualized operating expenses to be less than $100.0 million .
Break even in 2011 on a full-year basis.
The previously announced goal of generating 10.0% of total sales in 2011 from the new OSS business was based on a level of progress in organic growth and acquisition activities. The Company has strategically undertaken a cautious and deliberate approach in identifying acquisition targets and revenue sharing partners to find the most suitable target at the right valuation. The Company's rigorous due diligence and valuation process has impacted the Company's ability to achieve this target for the full year 2011. The Company maintains its belief that the OSS business will play an important role for the Company's future growth and profitability.
Comments & Business Outlook
BEIJING , September 23, 2011 /PRNewswire-Asia-FirstCall / -- UTStarcom Holdings Corp. ("UTStarcom" or "the Company") (NASDAQ: UTSI) a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators, today announced that it successfully completed construction on its previously announced end-to-end Internet TV platform. The platform will be deployed for the newly established Network Television Station, which launched on September 1, 2011 .
UTStarcom employed its core RollingStream® technology system to develop a customized platform. The end-to-end Internet TV platform will give the new radio and television organization the ability to provide a full package of value-added services to its subscribers, including high-definition interactive digital TV, video-on-demand, online gaming, shopping, education and many other services under one subscription.
"We believe our end-to-end Internet platform can further increase the new TV station's revenue opportunities through an enhanced subscriber experience," said UTStarcom President and CEO Jack Lu . "This announcement reflects our ability to design customized solutions that meet the increasingly sophisticated demands of our customers. While the cable industry in China continues to develop with a clear trend towards network convergence, we are confident that our IP-based network solutions in iDTV, IPTV and Internet TV will allow us to capture significant business opportunities in the coming quarters."
Comments & Business Outlook
BEIJING , September 22, 2011 /PRNewswire-Asia-First Call/ -- UTStarcom Holdings Corp. ("UTStarcom" or "the Company") (NASDAQ: UTSI) a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and broadband for cable and telecom operators, today announced that it has won an Ethernet Passive Optical Network ("EPON") contract to strengthen Ningxia Electric Power Company's ("Ningxia Electric") integrated electric distribution system and communication platform.
Since 2010, Ningxia Electric has accelerated the construction of its integrated electric distribution system and communication platform as the Chinese government spurs the development of smart grid networks across the country. By 2012, Ningxia Electric expects the integrated electric distribution system and communication platform to be operational in five cities within Ningxia province.
"Our EPON solution enhances Ningxia Electric's distribution system and communication platform, integrating more functionality at a low cost of entry," said UTStarcom Chief Executive Officer Jack Lu . "We are encouraged by the new contract and are confident we will be able to capitalize on similar opportunities in the future as China 's government continues to promote the digitalization and automation of the state grid network."
UTStarcom's EPON solution helps electric companies build high-quality and reliable communication channels. In addition, it collects data and provides optical fiber to end users to meet the various business needs of customers. The Company plans on booking this equipment-based sale in the third quarter of 2011.
CFO Trail
BEIJING ,
August 26, 2011 /
PRNewswire-Asia-FirstCall / -- UTStarcom Holdings Corp. ("UTStarcom" or "the Company") (Nasdaq: UTSI) a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and Broadband for cable and telecom operators today announced additional information on the appointment of
Jin Jiang as Chief Financial Officer of the Company. Ms. Jiang's appointment is effective as of
September 1, 2011 when she will replace
Edmond Cheng , who has decided to leave UTStarcom to pursue other opportunities.
Contract Awards
BEIJING, June 14, 2011 /PRNewswire-Asia / -- UTStarcom, Inc. ("UTStarcom" or "the Company") (Nasdaq: UTSI), a leading provider of interactive, IP-based network solutions in iDTV, IPTV, Internet TV and Broadband for cable and telecom operators, announced today that it received a final acceptance certificate ("FAC") on a US$10 million contract of next generation core telecoms network ("NGN") from Jersey Telecom Limited ("JT").
UTStarcom and JT have been working together since year 2008 to implement a new core infrastructure for JT and its affiliated companies. UTStarcom is the supplier of JT's NGN infrastructure, which coupled with JT's world leading "Gigabit Isles" fiber, is used in the home roll-out program to enable every household and business in Jersey to have fiber into their premises within approximately 5 years. The UTStarcom NGN product provides customers, such as JT, with advanced technology and services, including the fastest possible broadband speeds within the Channel Islands.
"We are encouraged to receive the FAC on this sizable contract from Jersey Telecom, one of our important customers," said Jack Lu, Chief Executive Officer of UTStarcom. "JT has demonstrated its outstanding growth potential to us and we will continue to further improve our long-term, mutually beneficial relationship."
In addition, UTStarcom and JT signed a Memorandum of Understanding in which the companies agreed to work together to develop a research and development laboratory in Jersey, which in the future can also be used for training. UTStarcom will be able to test new products and services in the Jersey Lab and develop cutting edge services for Jersey's residents and businesses.
"I am delighted to sign this Memorandum on behalf of JT," commented Mr. Dave Newbold, Chief Operations and Technical Officer of JT. "JT and UTStarcom have been steadily building a powerful relationship since 2008. This Memorandum pays tribute to the strength of the relationship. We'll be working closely with UTStarcom to develop new products and services, which will benefit all our customers on both a local and global basis."
UTStarcom's mSwitch™ NGN solution is a flexible IP-based platform designed to provide voice communications over an IP network. It carries more than 500 billion minutes of usage (MoU), representing a sizable share of global Voice over IP ("VoIP") transfer. The Company was among the few to pioneer the MPLS based Telecom transport technology.
Comments & Business Outlook
First Quarter Results :
Net sales for the first quarter of 2011 were $61.3 million as compared to $80.8 million in the first quarter of 2010.
Gross margin for the first quarter of 2011 was 31% as compared to 34% in the first quarter of 2010 and 11% in the fourth quarter of 2010. Gross profit was $19.1 million in the first quarter of 2011 compared to $27.2 million in the corresponding period of 2010.
First quarter 2011 operating expenses were $30.2 million compared to $46.0 million in the same period of 2010.
The net loss attributable to UTStarcom for the first quarter of 2011 was $10.3 million or a loss of $0.07 per share, as compared to a loss of $16.0 million, or a loss of $0.12 per share in the first quarter of 2010.
"We continued to make progress in improving our cost structure during the first quarter ," said Jack Lu, President and CEO of UTStarcom, "and our gross profit margin increased from the previous quarter, in part due to significant sales for our market-leading PTN product. We remain confident that we will achieve our full year financial targets ."
Aiming to achieve total revenue for the year in the range of $300-$320 million , which includes PAS deferred revenue through the end of 2011 at the rate of $23 million per quarte
