DASAN Zhone Solutions Reports Third Quarter 2016 Financial Results
(Thomson Reuters ONE) -
Exhibit 99.1
Contacts
DASAN Zhone Investor Relations: DASAN Zhone Public Relations:
Tel: +1 510.777.7013 Tel: +1 760.814.8194
Fax: +1 510.777.7001 E: carla.vallone(at)portavocepr.com
E: investor-relations(at)zhone.com
Oakland, CA - November 9, 2016 - 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 September 30, 2016.
Due to the continuing post-merger consolidation of the operations and financial
reporting of Legacy Zhone and DASAN Network Solutions, Inc. (DNS), the Company
intends to file its Quarterly Report on Form 10-Q for the nine months ended
September 30, 2016 after market close on Monday, November 14, 2016, which is
five days later than the required filing deadline. On November 10, 2016, the
Company will file the requisite Form 12b-25 with the Securities and Exchange
Commission in connection with the filing delay.
The Merger has been accounted for as a reverse acquisition under which DNS was
considered the accounting acquirer of Legacy Zhone. As such, the financial
results of the Company for the three and nine months ended September 30, 2016
reflect the operating results of DNS and its consolidated subsidiaries only for
the period commencing on the first day of the applicable period through
September 8, 2016 and include the operating results of both DNS and Legacy Zhone
for the period September 9 through September 30, 2016. Such results are
compared to the financial results for DNS and its consolidated subsidiaries for
the three and nine months ended September 30, 2015. The balance sheet of the
Company reflects the fair value of its assets and liabilities as of the merger
date. Those assets include the value of acquired intangible assets and goodwill.
Additionally, all historical equity accounts of DNS and its subsidiaries,
including par value per share, share and per share numbers, have been adjusted
to reflect the shares of the Company's common stock issued in connection with
the Merger.
Revenue for the third quarter of 2016 was $32.2 million, compared to $35.3
million for the second quarter of 2016 and $22.6 million for the third quarter
of 2015. Net loss for the third quarter of 2016, calculated in accordance with
generally accepted accounting principles ("GAAP"), was $4.9 million or $0.06 per
share compared with net income of less than $0.01 million or $0.00 per share for
the second quarter of 2016 and net loss of $2.8 million or $0.01 per share for
the third quarter of 2015. Adjusted earnings before stock-based compensation,
interest, taxes, depreciation and amortization and merger transaction costs
("adjusted EBITDA") was an adjusted EBITDA loss of $0.5 million for the third
quarter of 2016, compared to an adjusted EBITDA profit of $0.7 million for the
second quarter of 2016 and an adjusted EBITDA loss of $2.0 million for the third
quarter of 2015.
Cash and cash equivalents at September 30, 2016 were $34.4 million compared to
$10.0 million at December 31, 2015.
DASAN Zhone Solutions will conduct a conference call and audio webcast to
discuss further details of its third quarter 2016 results at approximately 2:00
p.m. PT / 5:00 p.m. ET on Wednesday, November 9, 2016. 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 passcode 95210950. 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 recording 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 providing passcode 95210950. An audio webcast
recording will also be available online at http://www.zhone.com/investors/ for
approximately one week following the original call.
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).
About DASAN Zhone Solutions
DASAN Zhone Solutions, Inc. (NASDAQ: DZSI) 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. The IP Zhone is
the only solution that enables service providers to build the network of the
future today, supporting end-to-end voice, data, entertainment, social media,
business, mobile backhaul and mobility service. DASAN Zhone Solutions is
committed to building the fastest and highest quality All IP Multi-Service
solution for its customers. DASAN Zhone 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.
Forward-Looking Statements
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.
DASAN ZHONE SOLUTIONS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September September September September
30, June 30, 30, 30, 30,
------------ ------------ ------------ ------------------------
2016 2016 2015 2016 2015
------------ ------------ ------------ ------------ -----------
Net revenue $ 32,166 $ 35,297 $ 22,591 $ 93,256 $ 93,339
Cost of revenue 22,693 25,588 16,774 68,997 69,287
------------ ------------ ------------ ------------ -----------
Gross profit 9,473 9,709 5,817 24,259 24,052
------------ ------------ ------------ ------------ -----------
Operating
expenses:
Research and
product
development (1) 5,885 5,018 4,859 15,582 16,546
Selling,
general and
administrative
(1) 8,202 4,284 3,939 16,903 12,458
Amortization of
intangible
assets 299 - - 299 -
------------ ------------ ------------ ------------ -----------
Total operating
expenses 14,386 9,302 8,798 32,784 29,004
------------ ------------ ------------ ------------ -----------
Operating loss (4,913 ) 407 (2,981 ) (8,525 ) (4,952 )
Interest
expense, net (173 ) (144 ) (87 ) (463 ) (286 )
Other income
(expense) , net 52 (20 ) 583 117 780
------------ ------------ ------------ ------------ -----------
Income
(expense)
before income
taxes (5,034 ) 243 (2,485 ) (8,871 ) (4,458 )
Income tax
expense
(benefit) (153 ) 196 295 (584 ) 480
------------ ------------ ------------ ------------ -----------
Net income
(loss) $ (4,881 ) $ 47 $ (2,780 ) $ (8,287 ) $ (4,938 )
------------ ------------ ------------ ------------ -----------
Less: Net loss
attributable to
the non-
controlling
interests 38 190 - 234 -
Net loss
attributable to
DASAN Zhone
Solutions, Inc. (4,919 ) (143 ) (2,780 ) (8,521 ) (4,938 )
------------ ------------ ------------ ------------ -----------
Foreign
currency
translation
adjustments 2,337 (116 ) 1,009 2,738 107
------------ ------------ ------------ ------------ -----------
Comprehensive
loss $ (2,544 ) $ (69 ) $ (1,771 ) $ (5,549 ) $ (4,831 )
------------ ------------ ------------ ------------ -----------
Less:
Comprehensive
income
attributable to
the non-
controlling
interests 44 245 - 303 -
Comprehensive
loss
attributable to
DASAN Zhone
Solutions, Inc. $ (2,588 ) $ (314 ) $ (1,771 ) $ (5,852 ) $ (4,831 )
Basic and
diluted net
loss per share $ (0.06 ) $ 0.00 $ (0.01 ) $ (0.10 ) $ (0.01 )
Weighted
average shares
outstanding
used to compute
basic net loss
per share 81,839 353,678 347,005 81,739 347,005
Weighted
average shares
outstanding
used to compute
diluted net
loss per share 81,839 353,678 347,005 81,739 347,005
(1) Amounts
include stock-
based
compensation
costs as
follows:
Research and
product
development 3 - - 3 -
Selling,
general and
administrative 125 - - 125 -
------------ ------------ ------------ ------------ -----------
$ 128 $ - $ - $ 128 $ -
GAAP net income
(loss) $ (4,881 ) $ 47 $ (2,780 ) $ (8,287 ) $ (4,938 )
Stock-based
compensation 128 - - 128 -
Interest
expense 204 202 114 600 378
Income taxes (153 ) 196 295 (584 ) 480
Depreciation
and
amortization 628 269 369 1,165 1,143
Merger
transaction
costs 3,536 - - 3,536 -
------------ ------------ ------------ ------------ -----------
Non-GAAP
Adjusted EBITDA
income (loss) $ (538 ) $ 714 $ (2,002 ) $ (3,442 ) $ (2,937 )
------------ ------------ ------------ ------------ -----------
DASAN ZHONE SOLUTIONS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except par value)
September December
30, 31,
2016 2015
------------- -----------
Assets
Current assets:
Cash and cash equivalents $ 34,375 $ 10,015
Restricted cash 106 345
Other short-term investments and loans 5,112 3,818
Accounts receivable, net 39,306 32,728
Other receivables 12,892 12,690
Inventories 31,957 13,900
Prepaid expenses and other current assets 3,878 1,279
------------- -----------
Total current assets 127,626 74,775
Property and equipment, net 6,258 2,251
Intangible assets, net 22,573 696
Other assets 3,892 5,869
------------- -----------
Total assets $ 160,349 $ 83,591
------------- -----------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 20,609 $ 14,935
Short-term debt 21,941 21,848
Accrued and other liabilities 26,735 4,469
------------- -----------
Total current liabilities 69,285 41,252
Long-term debt 5,000 -
Other long-term liabilities 8,024 510
------------- -----------
Total liabilities 82,309 41,762
------------- -----------
Stockholders' equity:
Common stock 97,481 56,579
Additional paid-in capital (8,324 ) (8,890 )
Other comprehensive loss 908 (1,776 )
Accumulated deficit (12,743 ) (4,222 )
Non-controlling interest 718 138
------------- -----------
Total stockholders' equity 78,040 41,829
------------- -----------
Total liabilities and stockholders' equity $ 160,349 $ 83,591
------------- -----------
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: DASAN Zhone Solutions, Inc. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 09.11.2016 - 22:15 Uhr
Sprache: Deutsch
News-ID 506052
Anzahl Zeichen: 19117
contact information:
Town:
Oakland, California
Kategorie:
Business News
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