Centillium Communications Announces Third Quarter 2002 Results.Business Editors 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)--Oct. 24, 2002 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 third quarter 2002 financial results. Revenues for the quarter ended September September: see month. 30, 2002 were $23.3 million, compared with revenues of $34.4 million for the quarter ended June June: see month. 30, 2002 and revenues of $46.8 million for the third quarter of 2001. Third quarter 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 was $5.6 million, or $0.16 per share, compared with a pro forma net loss of $3.3 million, or $0.09 per share, for the second quarter of 2002 and pro forma net income of $2.9 million, or $0.08 per share, for the third quarter of 2001. Revenues for the nine months ended September 30, 2002 were $80.3 million, compared with revenues of $125.0 million for the nine months ended September 30, 2001. The pro forma net loss for the nine-month period was $17.3 million, or $0.50 per share, compared with pro forma net income of $7.2 million, or $0.20 per share, for the same nine-month period in 2001. Pro forma results exclude purchased in-process research and development, 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, 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, the 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 product 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. . 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). ), which include these items, net loss for the third quarter of 2002 was $5.4 million, or $0.15 per share, compared with a net loss of $1.3 million, or $0.04 per share, for the third quarter of 2001, and net loss for the nine months ended September 30, 2002 was $22.9 million, or $0.66 per share, compared with a net loss of $15.5 million, or $0.47 per share, for the nine months ended September 30, 2001. "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 922,000 new subscribers in the third quarter, bringing the total number of DSL subscribers in Japan to 4.2 million," commented Faraj Aalaei, Chief Executive Officer and co-founder of Centillium. "Competition among service providers has been instrumental to the growth of DSL in Japan, driving the need for enhanced features such as increased connection rates and extended service areas. Deployment of products based on Centillium's eXtremeDSL technology has enabled the first offering of DSL services at data rates of up to 12 megabits per second (unit) megabits per second - (Mbps, Mb/s) Millions of bits per second. A unit of data rate. 1 Mb/s = 1,000,000 bits per second (not 1,048,576). E.g. Ethernet can carry 10 Mbps. , improving our partners' competitive position," continued Aalaei. "In the third quarter, our CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment customers completed the transition to our Palladia pal·la·di·a n. A plural of palladium2. family of bridge and router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals products, integrating more of Centillium's silicon value into each CPE product. Our customers also began designing with our CopperFlightLX chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). for their next generation Central Office DSL solutions to take advantage of further savings in power consumption and line card area," concluded Aalaei. 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 This press release contains 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 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, CopperFlite, eXtremeDSL, Palladia and the Centillium Logo are trademarks of Centillium Communications, Inc. All rights reserved.
Centillium Communications, Inc.
Pro Forma Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except per share data)
For the Nine Months
For the Three Months Ended Ended
-------------------------- -------------------
9/30/02 6/30/02 9/30/01 9/30/02 9/30/01
-------- -------- -------- --------- ---------
Net revenues $23,264 $34,413 $46,804 $ 80,283 $125,030
Cost of revenues 12,521 18,507 23,421 42,997 62,392
-------- -------- -------- --------- ---------
Gross profit 10,743 15,906 23,383 37,286 62,638
Gross profit % 46% 46% 50% 46% 50%
Operating expenses:
Research and
development 11,327 13,607 14,269 37,606 37,473
Sales and marketing 3,581 3,926 4,273 11,918 11,806
General and
administrative 1,903 2,113 2,513 6,462 7,529
-------- -------- -------- --------- ---------
Total operating
expenses 16,811 19,646 21,055 55,986 56,808
-------- -------- -------- --------- ---------
Operating income (loss) (6,068) (3,740) 2,328 (18,700) 5,830
Interest and other, net 443 502 830 1,455 2,929
Loss on long-term
investment -- -- -- -- (990)
-------- -------- -------- --------- ---------
Income (loss) before
income taxes (5,625) (3,238) 3,158 (17,245) 7,769
Provision for income
taxes 6 27 286 57 520
-------- -------- -------- --------- ---------
Pro forma net income
(loss) $(5,631) $(3,265) $ 2,872 $(17,302) $ 7,249
======== ======== ======== ========= =========
Pro forma diluted
earnings (loss) per
common share(a) $ (0.16) $ (0.09) $ 0.08 $ (0.50) $ 0.20
======== ======== ======== ========= =========
Weighted average common
shares outstanding,
assuming dilution 34,765 34,538 35,899 34,533 36,801
======== ======== ======== ========= =========
(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, recurring deferred stock compensation, certain other
stock compensation, 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 product 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 Nine Months
For the Three Months Ended Ended
-------------------------- -------------------
9/30/02 6/30/02 9/30/01 9/30/02 9/30/01
--------- ---------------- -------------------
Pro forma net
income (loss) $(5,631) $(3,265) $2,872 $(17,302) $7,249
========= ================ ===================
Amortization of deferred
stock compensation (890) 1,392 3,326 2,313 12,759
Amortization
of goodwill and other
acquisition related
intangibles 42 41 822 125 2,464
Purchased in-process
research and
development -- -- -- -- 7,422
Product obsolescence -- 2,700 -- 2,700 --
Stock based compensation
and payroll tax expense
on option exercises 70 6 10 383 102
Reduction in force and
restructuring 525 -- -- 525 --
Gain on non-current
investment -- -- -- (440) --
-------- -------- -------- --------- --------
GAAP net loss $(5,378) $(7,404) $(1,286) $(22,908) $(15,498)
======== ======== ======== ========= ========
Centillium Communications, Inc.
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except per share data)
For the Nine Months
For the Three Months Ended Ended
-------------------------- -------------------
9/30/02 6/30/02 9/30/01 9/30/02 9/30/01
-------- -------- -------- --------- ---------
Net revenues $23,264 $34,413 $46,804 $ 80,283 $125,030
Cost of revenues 12,549 21,283 23,579 45,898 63,065
-------- -------- -------- --------- ---------
Gross profit 10,715 13,130 23,225 34,385 61,965
Operating expenses:
Research and
development 11,343 14,360 16,038 39,312 44,055
Sales and marketing 2,943 4,107 4,763 11,948 13,846
General and
administrative 2,202 2,501 3,432 7,746 11,095
Amortization of
goodwill and
other acquisition
related intangibles 42 41 822 125 2,464
In-process research
and development -- -- -- -- 7,422
-------- -------- -------- --------- ---------
Total operating
expenses 16,530 21,009 25,055 59,131 78,882
-------- -------- -------- --------- ---------
Operating loss (5,815) (7,879) (1,830) (24,746) (16,917)
Interest and other, net 443 502 830 1,455 2,929
Gain (loss) on non-
current investment -- -- -- 440 (990)
-------- -------- -------- --------- ---------
Loss before income
taxes (5,372) (7,377) (1,000) (22,851) (14,978)
Provision for income
taxes 6 27 286 57 520
-------- -------- -------- --------- ---------
Net loss $(5,378) $(7,404) $(1,286) $(22,908) $(15,498)
======== ======== ======== ========= =========
Basic and diluted net
loss per share $ (0.15) $ (0.21) $ (0.04) $ (0.66) $ (0.47)
======== ======== ======== ========= =========
Weighted average shares
of common
stock outstanding
used in computing
basic and diluted
net loss per share 34,765 34,538 33,782 34,533 33,328
======== ======== ======== ========= =========
Centillium Communications, Inc.
Summary Financial Data - Unaudited
(In thousands)
September 30, December 31,
Balance Sheet Data: 2002 2001
-------------- -------------
Cash, cash equivalents and
short-term investments $ 97,577 $110,853
Accounts receivable, net 7,206 4,042
Inventories 4,865 9,356
Other assets 19,922 19,957
-------------- -------------
Total assets $129,570 $144,208
============== ============
Accounts payable $8,842 $7,854
Accruals and other current
liabilities 18,114 14,881
Other long-term liabilities 290 315
-------------- -------------
Total liabilities 27,246 23,050
Total stockholders' equity 102,324 121,158
-------------- -------------
Total liabilities and
stockholders' equity $129,570 $144,208
============== =============
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