- Net revenues totaled $27.1 million including $2.2 million from intellectual property
- Product gross margins improved 5.3% sequentially to 57.1%
- New product revenue grew 81.5% year-to-year
- Total indebtedness reduced with $13.7 million convertible debt repurchase
Vitesse Semiconductor Corporation (
"We started strong in fiscal 2014, with net revenue of $27.1 million and exceeded our guidance for revenue, margins, and expenses," said Chris Gardner, CEO of Vitesse. "New products delivered $8.9 million in revenue and intellectual property revenues were $2.2 million. Total gross margin reached 60.6% due to overall product mix combined with cost improvements. Additionally, we amended the terms of our senior secured term loan and reduced our total debt by $13.7 million, providing flexibility for accelerating new product revenue growth and increasing stockholder value."
"We reiterate our financial goals for fiscal year 2014: to achieve non-GAAP operating profitability in the fiscal third quarter and to grow new product revenue to $55 million by year end."
"This quarter, we launched CEServices, the industry's first field-proven, turnkey software solution for Carrier Ethernet service delivery. Already licensed by over 40 OEMs, CEServices fortifies our leading position in Ethernet-based ICs for 4G/LTE Mobile and Cloud Access for Carrier and Enterprise networks as well as creates access to adjacent markets, such as the Internet of Things."
First Quarter Fiscal Year 2014 Financial Results Summary
- Total net revenue was $27.1 million, compared to $26.9 million in the fourth quarter of fiscal year 2013 and $25.7 million in the first quarter of fiscal year 2013.
- Product revenue was $24.9 million, compared to $26.5 million in the fourth quarter of fiscal year 2013 and $23.9 million in the first quarter of fiscal year 2013.
- The product lines contributed the following as a percentage of product revenue as compared to the fourth quarter of fiscal year 2013:
- Carrier networking products: 52.1% versus 55.8%
- Enterprise networking products: 47.3% versus 43.8%
- Intellectual property revenue totaled $2.2 million, compared to $420,000 in the fourth quarter of fiscal year 2013 and $1.8 million in the first quarter of fiscal year 2013.
- Product margins were 57.1%, compared to 51.8% in the fourth quarter of fiscal year 2013 and 54.1% in the first quarter of fiscal year 2013.
- Operating expenses were $18.6 million, compared to $17.6 million in the fourth quarter of fiscal year 2013 and $18.6 million in the first quarter of fiscal year 2013.
- Operating loss was $2.2 million, compared to operating loss of $3.5 million in the fourth quarter of fiscal year 2013 and operating loss of $3.8 million in the first quarter of fiscal year 2013.
- Non-GAAP operating loss was $861,000, compared to non-GAAP operating loss of $2.3 million in the fourth quarter of fiscal year 2013 and non-GAAP operating loss of $2.6 million in the first quarter of fiscal year 2013.
- Net loss was $5.4 million, or $0.09 per basic and fully diluted share. This compares to net loss of $5.8 million, or $0.10 per basic and fully diluted share, in the fourth quarter of fiscal year 2013, and net loss of $5.0 million, or $0.18 per basic and fully diluted share, in the first quarter of fiscal year 2013.
- Non-GAAP net loss was $2.4 million, or $0.04 per basic and fully diluted share, compared to non-GAAP net loss of $4.6 million, or $0.08 per basic and fully diluted share, for the fourth quarter of fiscal year 2013, and non-GAAP net loss of $4.6 million, or $0.16 per basic and fully diluted share, in the first quarter of fiscal year 2013.
Balance Sheet Data at Dec. 31, 2013 as Compared to Sept. 30, 2013
On Nov. 5, 2013, Vitesse strengthened its long-term working capital by amending its senior secured loan agreement and reducing total indebtedness by repurchasing $13.7 million of convertible second lien debentures.
- Cash balance was $48.4 million, compared to $68.9 million.
- Accounts receivable was $11.4 million, compared to $9.8 million.
- Inventory was $12.5 million, compared to $10.7 million.
For the second quarter of fiscal year 2014, ending March 31, 2014, Vitesse expects revenue to be in the range of $25.0 million to $27.5 million and product margins to be between 55% and 57%. GAAP operating expenses are expected to be between $18.5 million and $19.5 million.
February 4, 2014 Conference Call Information
A conference call is scheduled for today, February 4, 2014, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to report financial results for the first quarter of fiscal year 2014.
To listen to the conference call via telephone, dial 888.430.8705 (U.S. toll-free) or 719.325.2215 (International) and provide the passcode 6663122. Participants should dial in at least 10 minutes prior to the start of the call. To listen via the Internet, the webcast can be accessed through the investor section of the Vitesse corporate web site at www.vitesse.com.
The playback of the conference call will be available approximately two hours after the call concludes and will be accessible on the Vitesse corporate web site or by calling 877.870.5176 (U.S. toll-free) or 858.384.5517 (International) and entering the passcode 6663122. The audio replay will be available for seven days.
Vitesse is a registered trademark and CEServices is a trademark of Vitesse Semiconductor Corporation in the United States and other jurisdictions. All other trademarks or registered trademarks mentioned herein are the property of their respective holders.
Cautions Regarding Forward Looking Statements
All statements included or incorporated by reference in this release and the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements that are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," and similar terms, and variations or negatives of these words. Examples of forward-looking statements in this release include the Company's financial outlook for its second fiscal quarter, first half and full year of fiscal 2014, projected revenues from new products and anticipated revenue growth. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that could affect the Company's forward-looking statements include, among other things: identification of feasible new product initiatives, management of R&D efforts and the resulting successful development of new products and product platforms; acceptance by customers of the Company's products; reliance on key suppliers; rapid technological change in the industries in which the Company operates; and competitive factors, including pricing pressures and the introduction by others of new products with similar or better functionality than the Company's products. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.