Tekelec Announces Second Quarter 2011 Operating Results
-- Revenues of $96.8 Million; -- Orders of $65.3 Million; -- GAAP Gross Margin of 54%, and Non-GAAP Gross Margin of 63% (as Reconciled Below); -- GAAP Operating Margin of (5%), and Non-GAAP Operating Margin of 11% (as Reconciled Below); -- GAAP Loss per Share of ($0.09), and Non-GAAP Diluted EPS of $0.08 per Share (as Reconciled Below);
(firmenpresse) - MORRISVILLE, NC -- (Marketwire) -- 08/04/11 -- Tekelec (NASDAQ: TKLC), the mobile broadband solutions company, today announced earnings for second quarter 2011.
Revenue for the second quarter 2011 was $96.8 million, down 12% compared to $109.5 million for the second quarter 2010. Orders were $65.3 million for the quarter, down 9% from the same period in 2010, primarily due to a 25% year-over-year decline in orders for the Company's Eagle 5 solution. This decline was partially offset by an over 90% increase from the second quarter 2010 for the Company's data and video centric next-generation session, policy and subscriber data management solutions. As of June 30, 2011, backlog was $271.8 million compared to $338.8 million as of December 31, 2010.
GAAP gross margins for second quarter 2011 were 54% compared to 63% in second quarter 2010. Non-GAAP gross margins for second quarter 2011 were 63% compared to 67% for second quarter 2010. Gross margins were negatively impacted in second quarter 2011 by approximately $2.5 million of charges associated with warranty-related items related to certain customer contracts and inventory write-downs in certain acquired product lines. Please refer to the attached reconciliations of the non-GAAP financial measures referred to in this release to the most directly comparable GAAP measures.
On a GAAP basis, the Company reported a net loss for second quarter 2011 of $6.5 million, or ($0.09) per share, compared to earnings in second quarter 2010 of $9.4 million, or $0.14 per diluted share. GAAP operating margins were (5%) for second quarter 2011 down from 12% for second quarter 2010. Included in the Company's second quarter 2011 GAAP operating results is a restructuring charge of $2.0 million.
On a non-GAAP basis, the Company reported net income for second quarter 2011 of $5.8 million, or $0.08 per diluted share, compared to net income of $17.4 million, or $0.25 per diluted share, for second quarter 2010. Non-GAAP operating margins for second quarter 2011 were 11% compared to 23% for second quarter 2010.
Ron de Lange, President and CEO, commented: "We are encouraged by the progress we are making in our business transformation, the level of customer engagement, and our strategic new customer wins. Orders for our data and video solutions more than doubled during the first half of 2011. In addition, we generated strong cash flows from operations and exited the quarter with a strong balance sheet."
For the first six months of 2011, revenue was $204.6 million, down 9% compared to $225.5 million for the first six months of 2010. For the first six months of 2011, the Company's orders were $134.8 million, an increase of 5% compared to the $128.8 million for the first six months of 2010.
On a GAAP basis, the Company reported a net loss of $22.5 million, or ($0.33) per share, for the first six months of 2011, compared to $23.1 million, or $0.34 per diluted share, for the first six months of 2010. GAAP operating margins were (15%) and 15% for the six months ended June 30, 2011 and 2010, respectively.
On a non-GAAP basis, net income for the first six months of 2011 was $11.5 million, or $0.17 per diluted share, compared to $35.4 million, or $0.51 per diluted share, for the first six months of 2010. Non-GAAP operating margins for the first six months of 2011 were 8% compared to 23% for the first six months of 2010.
As of June 30, 2011, the Company's consolidated cash and cash equivalents totaled $262.8 million compared to $220.9 million at December 31, 2010. Cash flows from operations in second quarter 2011 were $24.2 million, compared to $6.4 million in second quarter 2010. For the six months ended June 30, 2011 the Company generated $48.6 million in cash flows from operations, compared to $21.2 million during the first six months of 2010. Working capital at June 30, 2011 decreased to $280.1 million from $286.9 million at December 31, 2010.
The Company believes that full year 2011 revenues will range between $360 million and $400 million and non-GAAP gross margins will range between 59% and 62%. The Company expects that the non-GAAP EPS range will be between $0.22 and $0.32 per diluted share and the range for GAAP EPS will be between a loss of $0.48 and a loss of $0.58 per share.
Tekelec will host a live webcast of its conference call on Thursday, August 4, 2011, at 8:00 a.m. ET to discuss second quarter results and certain forward-looking information concerning management's outlook for the business. To access the webcast, visit Tekelec's web site located at , enter the Investor Relations section and click on the webcast icon. A webcast replay will be available at approximately 11:00 a.m. ET on Thursday, August 4, 2011, and for 90 days thereafter. The Company also plans to provide on its web site immediately prior to the commencement of the call certain GAAP and non-GAAP information (including GAAP to non-GAAP reconciliations) and other financial information for the quarterly and full year periods.
A telephone replay of the call will also be available for one week after the live webcast by calling either (855) 859-2056 or (404) 537-3406, and entering the conference ID #83907352.
Certain non-GAAP financial measures are included in this press release. In the calculation of these measures, Tekelec generally excludes certain items such as amortization of acquired intangibles, restructuring and other charges, non-cash stock-based compensation charges, and unusual, non-recurring gains and charges. Tekelec believes that excluding such items provides investors and management with a representation of the Company's core operating performance and with information useful in assessing its prospects for the future and underlying trends in Tekelec's operating expenditures and continuing operations. Management uses such non-GAAP measures to (i) evaluate financial results, (ii) manage the Company's operations, and (iii) establish operational goals. Further, non-GAAP measures are utilized by the Company's management and board of directors to assist in determining incentive compensation and evaluating key trends within the business. In addition, since the Company has historically reported non-GAAP measures to the investment community, the Company believes the inclusion of this information provides consistency in our financial reporting. The release and the attachments to this release provide a reconciliation of each of the non-GAAP measures referred to in this release to the most directly comparable GAAP measure. The non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial measures.
Certain statements made in this press release, including 2011 Guidance and statements regarding our 2011 restructuring activities, are forward-looking, reflect the Company's current intent, belief or expectations and involve certain risks and uncertainties. The Company's actual future performance may differ materially from such expectations as a result of important risk factors, which include, in addition to those identified in the Company's 2010 Form 10-K, 2011 First and Second Quarter Forms 10-Q and its other filings with the Securities and Exchange Commission, the effects on our revenue performance of our year-over-year decline in orders in 2010 and the increasing portion of our orders that are for newer products with longer order-to-revenue conversion cycles and lower margins on initial sales; our increasing dependence on next generation products with which we have less experience forecasting, building, and selling and for which the markets are less mature and more subject to demand and technology changes and increased competition; the effects of an increase in cost associated with selling our next-generation products including the cost associated with customer trials and lab systems, the risk that we may experience detrimental effects, such as employee distraction and litigation, from our 2011 restructuring activities, or may not realize the benefits of such activities, including as a result of delays resulting from the Company's complying with and undertaking, or its noncompliance with, any necessary individual and collective employee information and consultation obligations; the difficulty we may have in transitioning from a hardware-centric to a software-centric business; the uncertainty associated with the appointment of our new CEO and the resignations of our former EVP of Global Sales and Chief Marketing Officer and subsequent changes in the sales organization; any adverse outcome from or effects of the securities litigations we currently have filed against us or other current or threatened litigation; the current or further detrimental changes in general economic, social, or political conditions in the countries in which we operate including the impact of credit availability and other economic factors on overall capital spending by our customers and resulting pressure on us to lower our prices; the rate and size of decline in demand for our older SS7-based products from which we still derive a substantial portion of our revenues; our ability to compete with other manufacturers that have lower cost bases than ours, are partially supported by foreign governments, and/or employ unfair trade practices; risks related to our international sales, markets and operations, including but not limited to: import regulations, limited intellectual property protection (including protection of our software source code), increased costs and potential liabilities related to compliance with current and future security provisions in customer contracts and regulations, and security, access, and other regulatory requirements imposed by governments, including in particular the government of India; exposure to increased bad debt expense and product and service disputes as a result of general economic conditions; the timeliness and functional competitiveness of our product releases, the timing and size of any increase in demand for our performance management, SIP, Diameter, policy and subscriber database products; the risk of infringing on, and litigating with others regarding their, intellectual property rights; the timing of our recognition of revenues; the extent to which any customer outsourcing to our competitors or supplier consolidation increases the influence of competitors on our customers' purchases; our ability to protect intellectual property rights; our ability to maintain OEM, partner, reseller, and vendor support and supply relationships; and changes in the market price of the Company's common stock. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Tekelec connects people and devices to the mobile Internet. Our portfolio's unique layer of network intelligence allows service providers to both manage and monetize the exponential growth in mobile web, video and applications traffic. Tekelec has more than 25 offices around the world serving customers in more than 100 countries. For more information, please visit .
Kyle Macemore
Vice President Finance and Investor Relations
(o) +1.919.380.6148
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Datum: 04.08.2011 - 04:00 Uhr
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