Centillium Communications Announces Fourth Quarter and Fiscal Year 2002 Results.Business Editors/High-Tech Writers FREMONT Fremont (frē`mŏnt). 1 City (1990 pop. 173,339), Alameda co., W Calif., on San Francisco Bay; inc. 1956. Long an agricultural center, with champagne vineyards founded (1870) by Leland Stanford, it still ships fruits and vegetables. , Calif.--(BUSINESS WIRE)--Feb. 4, 2003 Centillium Communications, Inc. (Nasdaq:CTLM CTLM Imaging Computed tomography laser mammography A diagnostic technique using lasers to produce a 3-D cross-sectional image of the breast without x-rays. See Mammography. ), innovator of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry , today reported its fourth quarter and fiscal year 2002 results. Revenues for the quarter ended December December: see month. 31, 2002 were $24.7 million, a decrease of 28.4% from revenues of $34.5 million for the fourth quarter of 2001, and a 6.1% increase from the $23.3 million of revenues for the third quarter of 2002. Revenues for the year ended December 31, 2002 were $105.0 million, compared with revenues of $159.5 million for the year ended December 31, 2001. Under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), the net loss for the fourth quarter of 2002 was $10.4 million, or $0.30 per share, compared with a net loss of $4.2 million, or $0.12 per share, for the fourth quarter of 2001. The net loss for fiscal 2002 was $33.3 million, or $0.96 per share, compared with a net loss of $19.7 million, or $0.59 per share for fiscal 2001. The pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the fourth quarter of 2002 was $3.3 million, or $0.09 per share, compared with a pro forma net loss of $5.6 million, or $0.16 per share, for the third quarter of 2002 and pro forma net income of $200,000, or $0.01 per share, for the fourth quarter of 2001. Pro forma net loss for fiscal 2002 was $20.6 million, or $0.59 per share, compared with pro forma net income of $7.4 million, or $0.20 per share for 2001. Pro forma results exclude purchased in-process research and development, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill, recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. deferred stock compensation, certain other stock compensation and payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. expense related to employee stock option exercises, amortization of acquisition related intangibles, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs, a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain related to the sale of a non-current investment and certain charges for inventory obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. . "The DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary services market in Japan added approximately 1.4 million new subscribers in the fourth quarter, compared with 922,000 new subscribers in the third quarter, bringing the total number of DSL subscribers in Japan to 5.6 million," commented Faraj Aalaei, Chief Executive Officer and co-founder of Centillium. "The availability and adoption of higher bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz services, based on Centillium's eXtremeDSL technology, has contributed to the accelerated deployment of DSL in Japan. The rollout of these services, providing Internet access See how to access the Internet. at speeds up to 12 megabits, began in earnest ear·nest 1 adj. 1. Marked by or showing deep sincerity or seriousness: an earnest gesture of goodwill. 2. Of an important or weighty nature; grave. See Synonyms at serious. in the fourth quarter in Japan, helping to drive both subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. adds and equipment upgrades," concluded Aalaei. A conference call discussing the fourth quarter and fiscal year 2002 results will follow this release today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). An audio webcast of the call will be available simultaneously on Centillium's website under investor relations Investor relations The process by which the corporation communicates with its investors. at www.centillium.com. A replay will also be available on the above website approximately two hours after the conclusion of the conference call. About Centillium Communications Centillium Communications, Inc. combines technical innovation and customer commitment to make broadband communications -- in business and at home -- a practical reality. The Company designs and markets communications chipsets for Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL) central office and customer premises equipment See CPE. and for carrier- and enterprise-class Voice over Packet (VoP) gateways and switches. The Centillium Communications headquarters are located at 47211 Lakeview There are a number of cities, towns, and regions known as Lakeview: Canada
Forward Looking Statements The statements in this press release that refer to plans and expectations are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Actual results may differ materially from those indicated by such forward-looking statements based on a variety of risks and uncertainties, including without limitation the risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc rate and breadth of deployment of broadband access See broadband and wireless broadband. in general and Centillium's DSL technology solutions in particular; the effects of the introduction of additional DSL standards in Japan, including whether the version of DSL employed by the Company will remain dominant; Centillium's ability to continue and expand on its relationships with communications equipment manufacturers; and the successful development and market acceptance of Centillium's new products. The Company assumes no obligation to update these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . Information about potential factors that could affect Centillium's financial results is included in Centillium's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. and other documents on file with the Securities and Exchange Commission. Centillium Communications, eXtremeDSL and the Centillium Logo are trademarks of Centillium Communications, Inc.
Centillium Communications, Inc.
Condensed Consolidated Statements of Operations -- Unaudited
(In thousands, except per share data)
For the Three For the Twelve
Months Ended Months Ended
--------------------------- -------------------
12/31/02 9/30/02 12/31/01 12/31/02 12/31/01
-------- -------- --------- --------- ---------
Net revenues $24,689 $23,264 $34,477 $104,972 $159,507
Cost of revenues 13,602 12,549 16,716 59,500 79,781
-------- -------- --------- --------- ---------
Gross profit 11,087 10,715 17,761 45,472 79,726
Operating expenses:
Research and
development 11,442 11,343 14,979 50,754 59,034
Sales and
marketing 2,738 2,943 4,107 14,686 17,953
General and
administrative 1,914 2,202 2,784 9,660 13,879
Amortization of
goodwill and other
acquisition related
intangibles 42 42 821 167 3,285
Impairment of
goodwill 5,835 - - 5,835 -
In-process
research and
development - - - - 7,422
-------- -------- --------- --------- ---------
Total operating
expenses 21,971 16,530 22,691 81,102 101,573
-------- -------- --------- --------- ---------
Operating loss (10,884) (5,815) (4,930) (35,630) (21,847)
Interest and other,
net 339 443 615 1,794 3,544
Gain (loss) on non-
current investment - - - 440 (990)
-------- -------- --------- --------- ---------
Loss before income
taxes (10,545) (5,372) (4,315) (33,396) (19,293)
Provision (benefit)
for income taxes (152) 6 (120) (95) 400
-------- -------- --------- --------- ---------
Net loss $(10,393) $(5,378) $(4,195) $(33,301) $(19,693)
======== ======== ========= ========= =========
Basic and diluted net
loss per share $(0.30) $(0.15) $(0.12) $(0.96) $(0.59)
======== ======== ========= ========= =========
Weighted average
shares of common
stock outstanding
used in computing
basic and diluted
net loss per share 34,967 34,765 33,995 34,641 33,495
======== ======== ========= ========= =========
Centillium Communications, Inc.
Pro Forma Condensed Consolidated Statements of Operations -- Unaudited
(In thousands, except per share data)
For the Three For the Twelve
Months Ended Months Ended
--------------------------- -------------------
12/31/02 9/30/02 12/31/01 12/31/02 12/31/01
-------- -------- --------- --------- ---------
Net revenues $24,689 $23,264 $34,477 $104,972 $159,507
Cost of revenues 13,531 12,521 15,873 56,528 78,265
-------- -------- --------- --------- ---------
Gross profit 11,158 10,743 18,604 48,444 81,242
Gross profit % 45% 46% 54% 46% 51%
Operating
expenses:
Research and
development 10,629 11,327 13,411 48,235 50,884
Sales and
marketing 2,695 3,581 3,666 14,613 15,472
General and
administrative 1,610 1,903 2,062 8,072 9,591
-------- -------- --------- --------- ---------
Total operating
expenses 14,934 16,811 19,139 70,920 75,947
-------- -------- --------- --------- ---------
Operating income
(loss) (3,776) (6,068) (535) (22,476) 5,295
Interest and
other, net 339 443 615 1,794 3,544
Loss on long-term
investment - - - - (990)
-------- -------- --------- --------- ---------
Income (loss)
before income
taxes (3,437) (5,625) 80 (20,682) 7,849
Provision (benefit)
for income taxes (152) 6 (120) (95) 400
-------- -------- --------- --------- ---------
Pro forma net
income (loss) $(3,285) $(5,631) $200 $(20,587) $7,449
======== ======== ========= ========= =========
Pro forma diluted
earnings (loss) per
common share (a) $(0.09) $(0.16) $0.01 $(0.59) $0.20
======== ======== ========= ========= =========
Weighted average
common shares
outstanding,
assuming dilution 34,967 34,765 35,243 34,641 36,411
======== ======== ========= ========= =========
(a) Pro forma net loss per share does not consider the impact of
common stock equivalents.
Pro forma results exclude purchased in-process research and
development, impairment of goodwill, recurring deferred stock
compensation, certain other stock compensation and payroll tax expense
related to employee stock option exercises, the amortization of
acquisition related intangibles, restructuring costs, a one time-gain
related to the sale of a non-current investment, and certain charges
for inventory obsolescence. This pro forma information is not prepared
in accordance with generally accepted accounting principles.
Centillium Communications, Inc.
Reconciliation of Pro Forma Adjustments -- Unaudited
(In thousands)
For the Three For the Twelve
Months Ended Months Ended
--------------------------- -------------------
12/31/02 9/30/02 12/31/01 12/31/02 12/31/01
-------- -------- --------- --------- ---------
Pro forma net
income (loss) $(3,285) $(5,631) $200 $(20,587) $7,449
======== ======== ========= ========= =========
Amortization of
deferred stock
compensation (1,106) 890 (2,587) (3,419) (15,346)
Amortization of
goodwill and
other acquisition
related
intangibles (42) (42) (821) (167) (3,285)
Purchased in-
process research
and development -- -- -- -- (7,422)
Inventory
obsolescence -- -- (681) (2,700) (681)
Stock based
compensation
and payroll
tax expense on
option exercises -- (70) (81) (383) (183)
Reduction in
force and
restructuring (125) (525) (225) (650) (225)
Gain on non-
current
investment -- -- -- 440 --
Impairment of
goodwill (5,835) -- -- (5,835) --
-------- -------- --------- --------- ---------
GAAP net loss $(10,393) $(5,378) $(4,195) $(33,301) $(19,693)
======== ======== ========= ========= =========
Centillium Communications, Inc.
Summary Financial Data - Unaudited
(In thousands)
December December
31, 31,
Balance Sheet Data: 2002 2001
--------- ---------
Cash, cash equivalents and short-term
investments $102,002 $110,853
Accounts receivable, net 2,864 4,042
Inventories 4,130 9,356
Other assets 13,443 19,957
--------- ---------
Total assets $122,439 $144,208
========= =========
Accounts payable $8,485 $7,854
Accruals and other current liabilities 19,338 14,881
Other long-term liabilities 793 315
--------- ---------
Total liabilities 28,616 23,050
Total stockholders' equity 93,823 121,158
--------- ---------
Total liabilities and stockholders' equity $122,439 $144,208
========= =========
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