DASAN Zhone Solutions Reports First Quarter 2017 Financial Results
DASAN Zhone Solutions, Inc. (NASDAQ: DZSI or the Company), a global leader in fiber access transformation for enterprise and service provider networks, today reported its financial results for the quarter ended March 31, 2017.
Revenue for the first quarter of 2017 was $53.1 million, compared to $59.4 million for the fourth quarter of 2016 and $25.8 million for the first quarter of 2016. Net loss attributable to DASAN Zhone Solutions, Inc. for the first quarter of 2017, calculated in accordance with generally accepted accounting principles ("GAAP"), was $3.6 million or $0.22 per share compared with net loss of $4.7 million or $0.29 per share for the fourth quarter of 2016 and net loss of $3.5 million or $0.36 per share for the first quarter of 2016. Adjusted earnings before stock-based compensation, interest income (expense), net, income tax provision (benefit), and depreciation and amortization ("adjusted EBITDA") was an adjusted EBITDA loss of $1.3 million for the first quarter of 2017, compared to an adjusted EBITDA income of $0.3 million for the fourth quarter of 2016 and an adjusted EBITDA loss of $3.7 million for the first quarter of 2016.
Cash and cash equivalents at March 31, 2017 were $17.3 million compared to $17.9 million at December 31, 2016.
DASAN Zhone Solutions will conduct a conference call and audio webcast today, May 16, 2017, at approximately 2:00 p.m. PT / 5:00 p.m. ET to review its first quarter 2017 results. This call is open to the public by dialing +1 (888) 306-9369 for U.S. callers and +1 (503) 406-4059 for international callers, and then providing conference ID 16559544. The audio webcast will be simultaneously available on the Investor Relations section of DASAN Zhone Solution's website at http://www.zhone.com/investors/.
A replay of the conference call will be available after the original call by dialing +1 (855) 859-2056 for U.S. callers, and +1 (404) 537-3406 for international callers and then entering passcode 63172138. An audio webcast replay will also be available online at http://www.zhone.com/investors/ for approximately one week following the original call.
|DASAN ZHONE SOLUTIONS INC. AND SUBSIDIARIES|
|Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)|
|(In thousands, except per share data)|
|Three Months Ended|
|March 31,||December 31,||March 31,|
|Cost of revenue||34,680||40,836||20,716|
|Amortization of intangible assets||204||153||-|
|Research and product development (1)||9,229||9,564||4,679|
|Selling, general and administrative (1)||10,707||9,721||4,417|
|Amortization of intangible assets||442||1,297||-|
|Gain from sale of assets||-||(304||)||-|
|Total operating expenses||20,378||20,278||9,096|
|Other expense, net||(498||)||(121||)||85|
|Loss before income taxes||(2,934||)||(2,125||)||(4,080||)|
|Income tax provision (benefit)||440||2,528||(627||)|
|Net income attributable to non-controlling interest||249||15||6|
|Net loss attributable to DASAN Zhone Solutions, Inc.||$||(3,623||)||$||(4,668||)||$||(3,459||)|
|Foreign currency translation adjustments||2,993||(3,826||)||517|
|Comprehensive income (loss) attributable to non-controlling interest||270||(47||)||14|
|Comprehensive loss attributable to DASAN Zhone Solutions, Inc.||$||(651||)||$||(8,432||)||$||(2,950||)|
|Earnings per share attributable to DASAN Zhone Solutions, Inc.:|
|Basic and diluted||$||(0.22||)||$||(0.29||)||$||(0.36||)|
|Weighted average shares outstanding:|
|Basic and diluted||16,378||16,375||9,493|
|(1) Amounts include stock-based compensation costs as follows:|
|Research and product development||$||14||$||12||$||-|
|Selling, general and administrative||241||196||-|
|Reconciliation of Net loss to Adjusted EBITDA:|
|Interest income (expense), net||248||184||146|
|Income tax provision (benefit)||440||2,528||(627||)|
|Depreciation and amortization||1,181||2,009||268|
|DASAN ZHONE SOLUTIONS, INC. AND SUBSIDIARIES|
|Unaudited Condensed Consolidated Balance Sheets|
|March 31,||December 31,|
|Cash and cash equivalents||$||17,288||$||17,893|
|Accounts receivable, net||57,783||53,803|
|Prepaid expenses and other current assets||3,774||4,131|
|Total current assets||133,247||126,246|
|Property and equipment, net||6,386||6,288|
|Intangible assets, net||8,150||8,767|
|Liabilities, Stockholders' Equity and Non-controlling Interest|
|Accrued and other liabilities||9,038||7,278|
|Total current liabilities||75,349||66,926|
|Other long-term liabilities||2,560||2,352|
|Stockholders' equity and non-controlling interest|
|Additional paid-in capital||89,760||89,504|
|Other comprehensive income (loss)||101||(2,870||)|
|Total stockholders' equity||68,813||69,209|
|Total stockholders' equity and non-controlling interest||69,169||69,296|
|Total liabilities, stockholders' equity and non-controlling interest||$||153,955||$||147,048|
About DASAN Zhone Solutions
DASAN Zhone Solutions, Inc. is a global leader in broad-based network access
solutions. The company provides solutions in five major product areas
including broadband access, Ethernet switching, mobile backhaul, passive
optical LAN (POL) and software defined networks (SDN). More than 750 of the
world's most innovative network operators, service providers and
enterprises turn to DASAN Zhone Solutions for fiber access transformation.
DASAN Zhone Solutions is committed to building the fastest and highest quality
All IP Multi-Service solution for its customers. DASAN Zhone Solutions is
headquartered in Oakland, California.
DASAN Zhone Solutions, the DASAN Zhone Solutions logo, and al DASAN Zhone product names are trademarks of DASAN Zhone Solutions, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or products names are all subject to change without notice.
Non-GAAP Financial Measures
To supplement DASAN Zhone's consolidated financial statements
presented in accordance with GAAP, DASAN Zhone uses adjusted EBITDA, a
non-GAAP measure DASAN Zhone believes is appropriate to enhance an
overall understanding of DASAN Zhone's past financial performance
and prospects for the future. These adjustments to GAAP results are made
with the intent of providing greater transparency to supplemental
information used by management in its financial and operational
decision-making. These non-GAAP results are among the primary indicators
that management uses as a basis for making operating decisions because
they provide meaningful supplemental information regarding the
Company's operational performance, including the Company's
ability to provide cash flows to invest in research and development, and
to fund capital expenditures. In addition, these non-GAAP financial
measures facilitate management's internal comparisons to the
Company's historical operating results and comparisons to
competitors' operating results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for measures of financial performance prepared in accordance
with GAAP. A reconciliation between net income calculated on a GAAP
basis and adjusted EBITDA on a non-GAAP basis is provided in a table
immediately following the Unaudited Condensed Consolidated Statements of
Comprehensive Income (Loss).
This press release contains forward-looking statements that are subject
to the safe harbors created under the Securities Act of 1933 and the
Securities Exchange Act of 1934. Words such as "anticipate,"
"believe," "continue," "could,"
"estimate," "expect," "goal,"
"intend," "may," "plan,"
"project," "seek," "should,"
"target," "will," "would," variations of
such words, and similar expressions are intended to identify
forward-looking statements. In addition, forward-looking statements
include, among others, statements that refer to financial estimates;
projections of revenue, margins, expenses or other financial items.
Readers are cautioned that actual results could differ materially from
those expressed in or contemplated by the forward-looking statements.
Factors that could cause actual results to differ include, but are not
limited to, commercial acceptance of the Company's products; intense
competition in the communications equipment market; the Company's
ability to execute on its strategy and operating plans; and economic
conditions specific to the communications, networking, internet and
related industries. In addition, please refer to the risk factors
contained in the Company's SEC filings available at www.sec.gov,
including without limitation, the Company's most recent reports on
Forms 10-K, 10-Q and 8-K. Readers are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of the
date on which they are made. The Company undertakes no obligation to
update or revise any forward-looking statements for any reason.