Financials: Fourth Quarter 2006 Results

Investor Relations

Fourth Quarter and Year End 2006 Results

Fourth quarter financial highlights

  • SLMS revenues of $26.2 million up 11% over prior quarter
  • Gross margin at 36%
  • Operating expenses at $20.2 million reflect 10% improvement over prior quarter excluding impairment of goodwill
  • Non-GAAP Proforma EBITDA loss of $2.3 million
  • Cash balance at $64.3 million
  • Cash balance net of debt obligations at $22.8 million

Year end financial highlights

  • Total revenues of $194.3 million up 28% over prior year due to acquisition of Paradyne on September 1, 2005
  • SLMS revenues for 2006 represent 61% of total revenues, up from 44% of total revenues in 2005
  • Gross margin at 32% due primarily to legacy inventory write off in Q2 of 2006
  • Operating expenses at $204.8 million due to $113.7 million impairment of intangible assets and goodwill
  • Cash balance of $64.3 million reflects $6.8 million decrease over prior year

Press release

Zhone Technologies Reports Fourth Quarter 2006 Financial Results

Financial Statements

Form 10-K for December 31, 2006

To supplement Zhone's consolidated financial statements presented in accordance with GAAP, Zhone uses pro forma EBITDA, a non-GAAP measure Zhone believes is appropriate to enhance an overall understanding of Zhone's past financial performance and prospects for the future. 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 loss calculated on a GAAP basis and pro forma EBITDA on a non-GAAP basis is provided in a table immediately following the Unaudited Condensed Consolidated Statements of Operations included in the press release which can be accessed from the link above.