Somera Announces First Quarter 2005 Financial Results Q1 2005
Highlights DALLAS, April 28 /PRNewswire-FirstCall/ -- Somera
Communications (NASDAQ:SMRA), a global provider of
telecommunications asset management services, today announced
financial results for the first quarter ended March 31, 2005. Total
revenue for the first quarter of 2005 was $20.5 million, compared
with $23.2 million for the fourth quarter of 2004. The sequential
decline in sales was primarily due to traditional first quarter
seasonality and purchasing decision delays resulting from the
recent wave of industry mergers and acquisitions. Gross profit for
the first quarter of 2005 grew to $7.7 million, an increase of 24%
over the gross profit of $6.2 million reported for the fourth
quarter of 2004. Blended gross profit margin for the first quarter
was 37%, compared with 27% for the fourth quarter of 2004. The
gross margin increase was primarily associated with higher margins
on our international business, new lifecycle services programs and
improved product supply chain management. Operating expenses for
the first quarter of 2005 were $10.8 million, compared with $12.9
million for the fourth quarter of 2004. The sequential decrease
from the fourth quarter directly reflects the impact associated
with organizational changes and expense controls implemented during
the third and fourth quarters of 2004 to effectively rebalance the
Company's cost structure. Somera's net loss was $3.3 million, or
$0.07 per share for the first quarter of 2005, an improvement of
47% over the net loss of $6.2 million, or $0.12 per share, for the
fourth quarter of 2004. Somera's balance sheet at March 31, 2005
included $35.2 million of cash and cash equivalents and short-term
investments, $38.9 million in working capital and no long-term
debt. "Our first quarter results demonstrate that we are making
progress toward reaching our target breakeven model and delivering
on our four point plan to profitability," commented David W. Heard,
Somera's President and Chief Executive Officer. "I am very pleased
to see our gains in gross profit dollars and gross margin, and our
quarterly operating expenses decreased according to plan. Going
forward, we will seek to manage quarterly expenses while continuing
to invest in key areas that will support our growing market
penetration. These include further development of our intellectual
property in our operating systems and expansion of our global
channel for sales, service and supply." Continued Heard, "While
total revenue was lower than the fourth quarter of 2004, we signed
a large Lifecycle Services contract for spares management with XO
Communications, initiated a limited market trial for a similar
service with one of our Regional Bell Operating Company (RBOC)
customers, and began implementation of our Somera RecoveryPLUS(TM)
program with a top 10 national North America service provider. The
positive market response to our service offering gives us
confidence in our ability to gain new customers and expand our
programs with existing customers. Our pipeline looks promising and
our balance sheet provides resources to support our strategic
business initiatives." "In addition, Somera made several key
executive appointments during the first quarter and I believe the
Company is solidly positioned with the knowledge, leadership, and
sales and service resources to successfully execute our asset
management strategy," concluded Heard. Teleconference and Webcast
Management will hold a teleconference with simultaneous webcast
today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss
first quarter results. Please dial 800-510-9691 for domestic calls,
or 617-614-3453 for international calls, at least five minutes
before start time and use passcode 11010929. The call will be
webcast on the Investor Relations page of the Somera web site at
http://www.somera.com/. Listeners will need to have Microsoft Media
Player installed on their computers. A telephonic replay will be
available from one hour after the call ends through May 26, 2005,
at 888-286-8010 for domestic calls, or 617-801-6888 for
international calls, passcode 60318183. The webcast is also being
distributed through the Thomson StreetEvents Network. Individual
investors can listen to the call at http://www.earnings.com/,
Thomson's individual investor portal, powered by StreetEvents.
Institutional investors can access the call via Thomson
StreetEvents (http://www.streetevents.com/), a password-protected
event management site. About Somera Somera launched its family of
Lifecycle Management Services in 2004 in response to an
industry-wide need for telecom asset management to optimize return
on assets. Somera's product offerings enable service providers to
generate greater value from legacy assets in the form of lower
operating costs, longer product life, higher productivity, and real
measurable capital savings. With Somera LifecyclePLUS, customers
can outsource elements of network operations, logistics, and
technical service. Somera RecoveryPLUS(TM) is a program approach to
deliver documented savings and expense relief by recovering hidden
value in current under-utilized assets and inventories. Somera
RepairPLUS provides comprehensive support for wireless, wireline,
and data products at significant savings and reduced cycle times.
These services are in addition to Somera's traditional Brokerage
business that provides immediate availability of quality, warranted
new and refurbished equipment at savings of 25 to 60%. Founded in
1995, Somera has developed an impressive base of over 1,100
customers worldwide, including the industry leaders from each
segment of the telecommunications market. Visit Somera on the web
at http://www.somera.com/. This news release contains
forward-looking statements as that term is defined in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements
about Somera's projected return to quarterly profitability in the
fourth quarter of 2005, Somera's ability to manage quarterly
expense levels, continue to invest in key areas, increase market
penetration, develop its operating system and make improvements
within its global channel for sales, service and supply, Somera's
ability to gain new customers and expand its programs with existing
customers in future periods, the nature of the future market
environment, and Somera's customer pipeline. Forward-looking
statements involve a number of risks and uncertainties including,
but not limited to, general economic conditions particularly
affecting the telecommunications industry; capital equipment
spending levels in the telecommunications industry, including the
risk of continued customer spending delays associated with carrier
consolidation; the impact of competition in the market for
supplying equipment and equipment lifecycle management services to
telecommunications operators; the risk of potential shortage of
product supply; and Somera's ability to build its lifecycle
management services capabilities; and other factors fully described
in the company's reports to the Securities and Exchange Commission
(SEC), including but not limited to, the Annual Report on Form 10-K
for the fiscal year ended December, 31, 2004, and Quarterly Reports
on Form 10-Q. Actual results may differ materially from the
statements contained in this new release. The company does not
undertake to update any forward-looking statements that may be made
by or on behalf of the company. Copies of Somera's SEC filings may
be obtained by contacting Investor Relations, Somera
Communications, at 1-805-681-3322. SOMERA COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per
share data) (unaudited) March 31, December 31, 2005 2004 ASSETS
Current assets: Cash and cash equivalents $6,303 $7,654 Short-term
investments 28,909 32,757 Accounts receivable, net of allowance for
doubtful accounts of $557 and $574 at March 31, 2005 and December
31, 2004, respectively 16,710 16,217 Inventories, net 11,472 10,027
Other current assets 2,473 1,876 Total current assets 65,867 68,531
Property and equipment, net 4,593 4,600 Other assets 142 148
Goodwill 1,760 1,760 Intangible assets, net 33 50 Total assets
$72,395 $75,089 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $13,854 $12,396 Accrued compensation
2,750 2,503 Other accrued liabilities 9,925 11,139 Deferred revenue
464 723 Total current liabilities 26,993 26,761 Stockholders'
equity: Preferred stock ($0.001 par value per share; authorized
20,000 shares, no shares issued) Common stock ($0.001 par value per
share; authorized 200,000 shares, shares issued and outstanding:
50,233 and 49,872 at March 31, 2005 and December 31, 2004,
respectively 50 49 Additional paid-in capital 75,131 74,652
Unearned stock-based compensation (289) (72) Accumulated other
comprehensive loss (104) (191) Accumulated deficit (29,386)
(26,110) Total stockholders' equity 45,402 48,328 Total liabilities
and stockholders' equity $72,395 $75,089 SOMERA COMMUNICATIONS,
INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share data) (unaudited) Three Months Ended March 31,
2005 2004 Revenues: Equipment revenue $18,804 $23,012 Service
revenue 1,730 5,376 Total revenues 20,534 28,388 Cost of revenues:
Equipment cost of revenue 11,966 17,756 Service cost of revenue 880
4,152 Total cost of revenues 12,846 21,908 Gross profit 7,688 6,480
Operating expenses: Sales and marketing 5,830 5,639 General and
administrative 4,990 4,648 Amortization of intangible assets 17 17
Total operating expenses 10,837 10,304 Loss from operations (3,149)
(3,824) Other expense, net 114 206 Loss before income taxes (3,263)
(4,030) Income tax provision 13 26 Net loss $(3,276) $(4,056) Net
loss per share: basic and diluted $(0.07) $(0.08) Weighted average
shares: basic and diluted 49,935 49,519 DATASOURCE: Somera
Communications CONTACT: Kelly Delany, Director, Communications of
Somera Communications, +1-805-681-3322, Web site:
http://www.somera.com/
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Somera Communications (NASDAQ:SMRA)
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