Company Website:
http://www.transwitch.com
SHELTON, Conn. -- (Business Wire)
TranSwitch Corporation (NASDAQ: TXCC), a leading provider of
semiconductor solutions for the converging voice, data and video
network, today announced financial results for the fourth quarter ended
December 31, 2011.
Net revenues for the fourth quarter of 2011 were approximately $6.3
million, as compared to net revenues of $6.7 million for the third
quarter of 2011 and $10.1 million for the fourth quarter of 2010. Net
loss for the fourth quarter of 2011 was ($11.9) million, or ($0.39) per
basic and diluted common share, as compared to a net loss of ($4.8)
million, or ($0.16) per basic and diluted common share for the third
quarter of 2011, and a net loss of ($1.8) million, or ($0.08) per basic
and diluted common share for the fourth quarter of 2010. The Company's
fourth quarter results include non-cash goodwill and intangible
impairment charges aggregating $14.3 million related to an acquisition
made by the Company in 2008 partially offset by a $6.9 million reversal
of accrued restructuring liabilities due to an amendment to a sublease
for approximately 93,000 square feet of excess office space. This
amendment extends the sublease through May 2017.
The GAAP gross margin for the fourth quarter was 58%. This is compared
to the Company's GAAP gross margin of 65% for the third quarter of 2011,
and 64% for the fourth quarter of 2010.
Total non-GAAP operating expenses for the fourth quarter of 2011 were
$7.7 million, as compared to $7.4 million in the third quarter of 2011
and $7.3 million in the fourth quarter of 2010. Non-GAAP operating
expenses for the fourth quarter of 2011 exclude $0.1 million in
amortization of purchase price intangibles, $0.5 million in stock-based
compensation, $14.3 million in goodwill and intangible impairments, and
benefits of $0.3 million and $6.9 million from the reversal of accrued
royalties and restructuring liabilities, respectively. Total GAAP
operating expenses for the fourth quarter of 2011 were $15.4 million, as
compared to $8.8 million in the third quarter of 2011 and $8.0 million
in the fourth quarter of 2010.
Non-GAAP operating loss for the fourth quarter of 2011 was ($4.1)
million, compared to a non-GAAP operating loss of ($3.1) million for the
third quarter of 2011 and a non-GAAP operating loss of ($0.9) million
for the fourth quarter of 2010. On a GAAP basis, the operating loss for
the fourth quarter of 2011 was ($11.8) million, compared to an operating
loss of ($4.5) million for the third quarter of 2011 and an operating
loss of ($1.6) million for the fourth quarter of 2010.
Non-GAAP net loss for the fourth quarter of 2011 was ($4.2) million, or
($0.14) per share, compared with a non-GAAP net loss of ($3.3) million,
or ($0.11) per share, for the third quarter of 2011 and a non-GAAP net
loss of ($1.1) million, or ($0.05) per share, for the fourth quarter of
2010.
Further information about non-GAAP measures is provided below and a
reconciliation of the non-GAAP measures to the comparable GAAP results
is provided after the financial statements attached to this release.
“We continue to make steady progress toward our strategic goal of
developing a new growth engine in the video connectivity market,” stated
Dr. M. Ali Khatibzadeh, President and CEO of TranSwitch Corporation.
“During the quarter, we announced our first customer for HDplay™
products and recently introduced HDwire™ as the world’s fastest video
interface solution for flat-screen panels. HDwire™ delivers record
throughput while significantly reducing the cost and complexity of video
interconnects inside TV’s and computer monitors.”
Additional details on TranSwitch’s fourth quarter 2011 financial results
will be discussed during a conference call regarding this announcement
today at 8:30 am Eastern time. To listen to the live call, investors can
dial 719-325-4750 and reference confirmation code: 2399041. The call
will be recorded and a replay will be available two hours after the
conclusion of the live broadcast through February 17, 2012. To access
the replay, dial 719-457-0820 and enter confirmation code: 2399041.
Investors can also access an audio webcast which will be broadcast
through Vcall’s Investor Calendar at www.investorcalendar.com
or the Company’s website at www.transwitch.com.
This audio webcast will also be available on a replay basis for 10
business days.
About TranSwitch Corporation
TranSwitch Corporation (NASDAQ: TXCC)designs, develops and
supplies innovative semiconductor and intellectual property (IP)
solutions that provide core functionality for voice, data and video
communications equipment for network, enterprise and customer premises
applications. Founded in 1988, TranSwitch is headquartered in
Shelton,CT. The Company provides integrated multi-core network processor
System-on-a-Chip (SoC) solutions and software solutions for fixed, 3G
and 4G Mobile, VoIP and Multimedia Infrastructures.For the
customer premises market the Company offers a family of communications
processors that provide best-in-class performance for a range of
applications andalso provide interoperable connectivity
solutions that enable the reliable distribution and presentation of
high-definition (HD) content for consumer electronics and personal
computermarkets.Our intellectual property (IP) products
are compliant with global industry standards such as HDMI and
DisplayPort and also feature our proprietary HDP™ and AnyCable™
technologies. For more information, please visit www.transwitch.com
Forward-looking statements in this release, including statements
regarding management's expectations for future financial results and the
markets for TranSwitch's products, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that these forward-looking statements regarding
TranSwitch, its operations and its financial results, involve risks and
uncertainties that could cause actual results to differ materially from
those contained in the forward-looking statements, including without
limitation the risks associated withdownturns in economic
conditions generally and in the telecommunications and data
communications markets and the semiconductor industry specifically;
risks in product development and market acceptance of and demand for
TranSwitch’s products and products developed by TranSwitch’s customers;
risks associated with foreign sales and high customer concentration;
risks associated with competition and competitive pricing pressures;
risks in technology development and commercialization;risks of
failing to attract and retain key managerial and technical personnel;
risks relating to TranSwitch’s available cash; risks associated with
acquiring new businesses; risks of dependence on third-party VLSI
fabrication facilities; risks related to intellectual property rights
and litigation; and other risks detailed in TranSwitch's filings with
the Securities and Exchange Commission.
TranSwitch expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any such statements to
reflect any change in expectations or any change in events, conditions
or circumstances on which any such statement is based.
TranSwitch is a registered trademark of TranSwitch Corporation.
Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP
Measures (Unaudited)
Pursuant to the requirements of Regulation G, the Company has provided a
reconciliation of each non-GAAP financial measure used in this earnings
release and related conference call or webcast to the most directly
comparable financial measure prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”). The
reconciliation for historic non-GAAP measures is provided herein on a
quantitative basis and for non-GAAP measures that are forward-looking is
provided herein on a qualitative basis.
The non-GAAP measures used in this earnings release and related
conference call differ from GAAP in that they exclude expenses related
to stock-based compensation, amortization of intangible assets, the
effects of special charges such as asset impairments, restructuring
charges and benefits from the reversal of accrued royalties. The
Company’s basis for these adjustments is described below. Management
uses these non-GAAP measures for internal reporting and forecasting
purposes. The Company has provided these non-GAAP financial measures in
addition to GAAP financial results because it believes that these
non-GAAP financial measures provide useful information to certain
investors and financial analysts for comparison across accounting
periods not influenced by certain non-cash items that are not used by
management when evaluating the Company’s historical and prospective
financial performance.
Management uses these non-GAAP financial measures when evaluating the
Company’s operating performance and believes that such measures are
useful to investors and financial analysts in assessing the Company’s
operating performance as the Company believes that the presentation of
non-GAAP measures that adjust for the impact of stock-based compensation
expenses, amortization of intangible assets, the effects of special
charges such as asset impairments and restructuring charges and benefits
from the reversal of accrued royalties provides investors and financial
analysts with a consistent basis for comparison across accounting
periods and, therefore, are useful to investors and financial analysts
in helping them to better understand the Company’s operating results and
underlying operational trends.
We do not provide forward-looking GAAP measures or a reconciliation of
the forward-looking non-GAAP measures to GAAP measures because of our
inability to project special charges, asset impairments, employee
separation costs and stock-based compensation related expenses.
The non-GAAP financial measures we provide have certain limitations
because they do not reflect all of the costs associated with the
operation of our business as determined in accordance with GAAP. The
non-GAAP measures are in addition to, and not a substitute for, or
superior to, measures of financial performance prepared in accordance
with GAAP and may be different from non-GAAP measures used by other
companies. We endeavor to compensate for the limitations of these
non-GAAP measures by providing GAAP financial statements, descriptions
of the reconciling items and a reconciliation of the non-GAAP measures
to the most directly comparable GAAP measures so that investors can
appropriately incorporate the non-GAAP measures and their limitations
into their analyses. Please see our financial statements and
"Management's Discussion and Analysis of Results of Operations and
Financial Condition" that will be included in the periodic report we
expect to file with the SEC with respect to the financial periods
discussed herein.
|
| |
| |
| | |
|
| | |
TranSwitch Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except for per share amounts) |
| | | | | | | | | | |
|
| | Three Months Ended | | | Twelve Months Ended |
| | Dec 31,
2011 | | | Sep. 30,
2011 | | | Dec 31,
2010 | | | Dec 31,
2011 | | | Dec 31,
2010 | |
|
Net revenues:
| | | | | | | | | | | | | | | | | | | | |
|
Product revenues
| |
$
|
5,018
| | |
$
|
4,855
| | |
$
|
6,865
| | |
$
|
19,700
| | |
$
|
41,703
| |
|
Service revenues
| | |
1,292
| | | |
1,810
| | | |
3,229
| | | |
8,555
| | | |
8,119
| |
|
Total net revenues
| | |
6,310
| | | |
6,665
| | | |
10,094
| | | |
28,255
| | | |
49,822
| |
| | | | | | | | | | | | | | | | | | | |
|
|
Cost of revenues:
| | | | | | | | | | | | | | | | | | | | |
|
Cost of product revenues
| | |
2,131
| | | |
1,425
| | | |
2,492
| | | |
6,641
| | | |
17,992
| |
|
Provision for excess and obsolete inventories
| | |
42
| | | |
26
| | | |
116
| | | |
228
| | | |
773
| |
|
Cost of service revenues
| | |
499
| | | |
917
| | | |
1,057
| | | |
3,454
| | | |
3,259
| |
|
Total cost of revenues
| | |
2,672
| | | |
2,368
| | | |
3,665
| | | |
10,323
| | | |
22,024
| |
|
Gross profit
| | |
3,638
| | | |
4,297
| | | |
6,429
| | | |
17,932
| | | |
27,798
| |
| | | | | | | | | | | | | | | | | | | |
|
|
Operating expenses:
| | | | | | | | | | | | | | | | | | | | |
|
Research and development
| | |
5,158
| | | |
4,672
| | | |
4,572
| | | |
18,885
| | | |
15,994
| |
|
Marketing and sales
| | |
1,499
| | | |
1,772
| | | |
2,114
| | | |
7,335
| | | |
7,784
| |
|
General and administrative
| | |
1,758
| | | |
1,925
| | | |
1,768
| | | |
7,457
| | | |
7,479
| |
|
Restructuring charges
| | |
(6,949
|
)
| | |
924
| | | |
—
| | | |
(5,558
|
)
| | |
398
| |
|
Impairment of goodwill and intangibles
| | |
14,312
| | | |
—
| | | |
—
| | | |
14,312
| | | |
—
| |
|
Reversal of accrued royalties
| | |
(333
|
)
| | |
(455
|
)
| | |
(418
|
)
| | |
(2,363
|
)
| | |
(418
|
)
|
|
Total operating expenses
| | |
15,445
| | | |
8,838
| | | |
8,036
| | | |
40,068
| | | |
31,237
| |
|
Operating loss (Note 1)
| | |
(11,807
|
)
| | |
(4,541
|
)
| | |
(1,607
|
)
| | |
(22,136
|
)
| | |
(3,439
|
)
|
| | | | | | | | | | | | | | | | | | | |
|
|
Other (expense) income:
| | | | | | | | | | | | | | | | | | | | |
|
Other (expense) income
| | |
8
| | | |
23
| | | |
325
| | | |
18
| | | |
426
| |
|
Interest income (expense):
| | | | | | | | | | | | | | | | | | | | |
|
Interest income
| | |
25
| | | |
8
| | | |
30
| | | |
125
| | | |
84
| |
|
Interest expense
| | |
(6
|
)
| | |
(44
|
)
| | |
(157
|
)
| | |
(243
|
)
| | |
(704
|
)
|
|
Interest expense, net
| | |
19
| | | |
(36
|
)
| | |
(127
|
)
| | |
(118
|
)
| | |
(620
|
)
|
|
Total other expense, net
| | |
27
| | | |
(13
|
)
| | |
198
| | | |
(100
|
)
| | |
(194
|
)
|
| | | | | | | | | | | | | | | | | | | |
|
|
Loss before income taxes
| | |
(11,780
|
)
| | |
(4,554
|
)
| | |
(1,409
|
)
| | |
(22,236
|
)
| | |
(3,633
|
)
|
|
Income tax expense
| | |
157
| | | |
233
| | | |
419
| | | |
636
| | | |
976
| |
| Net loss | | $ | (11,937 | ) | | $ | (4,787 | ) | | $ | (1,828 | ) | | $ | (22,872 | ) | | $ | (4,609 | ) |
| | | | | | | | | | | | | | | | | | | |
|
|
Net loss per common share – basic and diluted
| |
$
|
(0.39
|
)
| |
$
|
(0.16
|
)
| |
$
|
(0.08
|
)
| |
$
|
(0.82
|
)
| |
$
|
(0.21
|
)
|
|
Weighted average common shares outstanding – basic and diluted
| | |
30,555
| | | |
30,475
| | | |
23,428
| | | |
27,911
| | | |
22,162
| |
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
|
|
Note 1: Stock-based compensation expense included in
| | | | | | | | | | | | | | | | | | | | |
|
cost of revenues and operating expenses is as
| | | | | | | | | | | | | | | | | | | | |
|
follows:
| | | | | | | | | | | | | | | | | | | | |
|
Cost of revenues
| |
$
|
6
| | |
$
|
11
| | |
$
|
39
| | |
$
|
54
| | |
$
|
111
| |
|
Research and development
| | |
156
| | | |
195
| | | |
270
| | | |
780
| | | |
877
| |
|
Marketing and sales
| | |
107
| | | |
111
| | | |
147
| | | |
468
| | | |
384
| |
|
General and administrative
| | |
269
| | | |
286
| | | |
308
| | | |
1,172
| | | |
986
| |
|
Total
| |
$
|
538
| | |
$
|
603
| | |
$
|
764
| | |
$
|
2,474
| | |
$
|
2,358
| |
|
| |
|
|
| |
TranSwitch Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands) |
| | | | | |
|
| | December 31, 2011 |
| | | December 31, 2010 |
| ASSETS | | | | | | | | |
|
Current assets:
| | | | | | | | |
|
Cash, cash equivalents, restricted cash and short-term investments
| |
$
|
7,554
| | | |
$
|
7,835
|
|
Accounts receivable, net
| | |
6,375
| | | | |
7,907
|
|
Inventories
| | |
1,988
| | | | |
2,555
|
|
Prepaid expenses and other current assets
| |
|
1,876
|
| | |
|
2,089
|
| | | | | | | |
|
|
Total current assets
| | |
17,793
| | | | |
20,386
|
| | | | | | | |
|
|
Property and equipment, net
| | |
1,355
| | | | |
1,239
|
|
Goodwill
| | |
5,271
| | | | |
14,144
|
|
Other intangible assets, net
| | |
1,461
| | | | |
8,254
|
|
Other assets
| |
|
1,738
|
| | |
|
1,795
|
| | | | | | | |
|
|
Total assets
| |
$
|
27,618
|
| | |
$
|
45,818
|
| | | | | | | |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
|
Current liabilities:
| | | | | | | | |
|
Accounts payable, accrued expenses and other current liabilities
| |
$
|
10,932
| | | |
$
|
14,120
|
|
Current portion of restructuring liabilities
| | |
1,995
| | | | |
891
|
|
Current portion of 5.45% Convertible Notes
| |
|
—
|
| | |
|
3,758
|
| | | | | | | | |
|
Total current liabilities
| | |
12,927
| | | | |
18,769
|
| | | | | | | |
|
|
Restructuring liabilities
| |
|
2,485
|
| | |
|
10,317
|
| | | | | | | |
|
|
Total liabilities
| |
|
15,412
|
| | |
|
29,086
|
| | | | | | | |
|
|
Total stockholders’ equity
| |
|
12,206
|
| | |
|
16,732
|
| | | | | | | |
|
|
Total liabilities and stockholders’ equity
| |
$
|
27,618
|
| | |
$
|
45,818
|
|
|
| TRANSWITCH CORPORATION |
| Supplemental Reconciliation of GAAP Results to Non-GAAP |
| (Unaudited) |
| (In thousands, except per share data) |
|
|
|
|
|
| Three Months Ended |
|
| Twelve Months Ended |
| | | | Dec 31, |
| Sep 30, |
| Dec 31, | | | Dec 31, |
| Dec 31, |
| | | | 2011 | | 2011 | | 2010 | | | 2011 | | 2010 |
| GAAP gross profit | | | |
$
|
3,638
| | |
$
|
4,297
| | |
$
|
6,429
| | | |
$
|
17,932
| | |
$
|
27,798
| |
|
Add:
| | | | | | | | | | | | | | | | | | |
|
Stock-based compensation
| | | | |
6
|
| | |
11
|
| | |
39
|
| | | |
54
|
| | |
111
|
|
|
Non-GAAP gross profit
| | | |
$
|
3,644
|
| |
$
|
4,308
|
| |
$
|
6,468
|
| | |
$
|
17,986
|
| |
$
|
27,909
|
|
| | | | | | | | | | | | | | | | | |
|
| GAAP gross margin | | | | |
57.7
|
%
| | |
64.5
|
%
| | |
63.7
|
%
| | | |
63.5
|
%
| | |
55.8
|
%
|
|
Stock-based compensation
| | | | |
0.1
|
%
| | |
0.2
|
%
| | |
0.4
|
%
| | | |
0.2
|
%
| | |
0.2
|
%
|
|
Non-GAAP gross margin
| | | | |
57.7
|
%
| | |
64.6
|
%
| | |
64.1
|
%
| | | |
63.7
|
%
| | |
56.0
|
%
|
| | | | | | | | | | | | | | | | | |
|
| GAAP research and development expenses | | | |
$
|
5,158
| | |
$
|
4,672
| | |
$
|
4,572
| | | |
$
|
18,885
| | |
$
|
15,994
| |
|
Less:
| | | | | | | | | | | | | | | | | | |
|
Amortization of purchase accounting intangibles
| | | | |
39
| | | |
114
| | | |
114
| | | | |
379
| | | |
454
| |
|
Stock-based compensation
| | | | |
156
|
| | |
195
|
| | |
270
|
| | | |
780
|
| | |
877
|
|
|
Non-GAAP research and development expenses
| | | |
$
|
4,963
|
| |
$
|
4,363
|
| |
$
|
4,188
|
| | |
$
|
17,726
|
| |
$
|
14,663
|
|
| | | | | | | | | | | | | | | | | |
|
| GAAP selling, general, and administrative expenses | | | |
$
|
3,257
| | |
$
|
3,697
| | |
$
|
3,882
| | | |
$
|
14,792
| | |
$
|
15,263
| |
|
Less:
| | | | | | | | | | | | | | | | | | |
|
Amortization of purchase accounting intangibles
| | | | |
127
| | | |
283
| | | |
282
| | | | |
976
| | | |
1,131
| |
|
Stock-based compensation
| | | | |
376
|
| | |
397
|
| | |
455
|
| | | |
1,640
|
| | |
1,370
|
|
|
Non-GAAP selling, general, and administrative expenses
| |
$
|
2,754
|
| |
$
|
3,017
|
| |
$
|
3,145
|
| | |
$
|
12,176
|
| |
$
|
12,762
|
|
| | | | | | | | | | | | | | | | | |
|
| GAAP operating expenses | | | |
$
|
15,445
| | |
$
|
8,838
| | |
$
|
8,036
| | | |
$
|
40,068
| | |
$
|
31,237
| |
|
Less:
| | | | | | | | | | | | | | | | | | |
|
Amortization of purchase accounting intangibles
| | | | |
166
| | | |
397
| | | |
396
| | | | |
1,355
| | | |
1,585
| |
|
Stock-based compensation
| | | | |
532
| | | |
592
| | | |
725
| | | | |
2,420
| | | |
2,247
| |
|
Reversal of accrued royalties
| | | | |
(333
|
)
| | |
(455
|
)
| | |
(418
|
)
| | | |
(2,363
|
)
| | |
(418
|
)
|
|
Impairment of goodwill and intangibles
| | | | |
14,312
| | | |
-
| | | |
-
| | | | |
14,312
| | | |
-
| |
|
Restructuring charges
| | | | |
(6,949
|
)
| | |
924
|
| | |
-
|
| | | |
(5,558
|
)
| | |
398
|
|
|
Non-GAAP operating expenses
| | | |
$
|
7,717
|
| |
$
|
7,380
|
| |
$
|
7,333
|
| | |
$
|
29,902
|
| |
$
|
27,425
|
|
|
Non-GAAP operating (loss) income
| | | |
$
|
(4,073
|
)
| |
$
|
(3,072
|
)
| |
$
|
(865
|
)
| | |
$
|
(11,916
|
)
| |
$
|
484
|
|
| | | | | | | | | | | | | | | | | |
|
| GAAP net loss | | | |
$
|
(11,937
|
)
| |
$
|
(4,787
|
)
| |
$
|
(1,828
|
)
| | |
$
|
(22,872
|
)
| |
$
|
(4,609
|
)
|
|
Add:
| | | | | | | | | | | | | | | | | | |
|
Amortization of purchase accounting intangibles
| | | | |
166
| | | |
397
| | | |
396
| | | | |
1,355
| | | |
1,585
| |
|
Stock-based compensation
| | | | |
538
| | | |
603
| | | |
764
| | | | |
2,474
| | | |
2,358
| |
|
Reversal of accrued royalties
| | | | |
(333
|
)
| | |
(455
|
)
| | |
(418
|
)
| | | |
(2,363
|
)
| | |
(418
|
)
|
|
Impairment of goodwill and intangibles
| | | | |
14,312
| | | |
-
| | | |
-
| | | | |
14,312
| | | |
-
| |
|
Restructuring charges
| | | | |
(6,949
|
)
| | |
924
|
| | |
-
|
| | | |
(5,558
|
)
| | |
398
|
|
|
Non-GAAP net (loss) income
| | | |
$
|
(4,203
|
)
| |
$
|
(3,318
|
)
| |
$
|
(1,086
|
)
| | |
$
|
(12,652
|
)
| |
$
|
(686
|
)
|
| | | | | | | | | | | | | | | | | |
|
| Non-GAAP basic net (loss) income per share | | | |
$
|
(0.14
|
)
| |
$
|
(0.11
|
)
| |
$
|
(0.05
|
)
| | |
$
|
(0.45
|
)
| |
$
|
(0.03
|
)
|
|
Basic shares used to calculate non-GAAP net loss per share
| |
30,555
| | | |
30,475
| | | |
23,428
| | | | |
27,911
| | | |
22,162
| |
Contacts:
TranSwitch Corporation
Robert A. Bosi, 203-929-8810 ext. 2465
Vice
President and Chief Financial Officer
or
Mary Lombardo,
203-929-8810 ext. 2254
Investor Relations
Source: TranSwitch Corporation
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