|Harris Stratex Networks Reports Q2 Fiscal 2009 Financial ResultsLast update: 2/4/2009 4:37:00 PMQ2 revenues of $191 million achieved with strong operating cash flow RESEARCH TRIANGLE PARK, N.C., Feb 04, 2009 /PRNewswire-FirstCall via COMTEX/ -- Harris Stratex Networks, Inc. (HSTX), a leading specialist in backhaul solutions for mobility and broadband networks, today reported financial results for the second quarter of fiscal 2009, which ended January 2, 2009. Revenue for the second quarter of fiscal 2009 was $190.9 million, an increase of 5 percent compared with $181.1 million in the year ago period. GAAP net loss was $315.4 million or $5.37 per share, compared with a net loss of $3.2 million or $0.05 per share in the year ago quarter. Non-GAAP net income for the quarter was $10.9 million, or $0.19 per share, compared with non-GAAP net income of $9.5 million or $0.16 per share in the year ago period. |
GAAP results include $327.1 million of charges comprising: -- $301.0 million impairment of goodwill and other indefinite-lived intangible assets -- $20.8 million increase in deferred tax valuation allowance, and -- $5.3 million amortization of purchased intangibles, restructuring, and stock compensation expenseIn January 2009, we determined that based on the current global economic environment and the decline of our market capitalization, it was likely that an indicator of goodwill and other indefinite lived intangible asset impairment existed as of the end of the second quarter of fiscal 2009. As a result, we performed an interim review for impairment as of the end of the second quarter of fiscal 2009 of our goodwill and other indefinite-lived intangible assets. The results of this review were a $279.0 million charge to write down all of our goodwill, and a $22.0 million charge to write down a majority of our indefinite lived intangible assets. We also recorded an increase in deferred tax valuation allowance of $20.8 million based on our assessment of the future recoverability of our deferred tax assets. We will not be required to make any current or future cash expenditures as a result of these charges, and they do not impact our financial covenant compliance under our credit arrangements or our ongoing financial performance. A reconciliation of GAAP to non-GAAP financial measures is provided on Table 4 along with the accompanying notes. As of January 2, 2009 cash, cash equivalents and investments were $99.3 million, compared with $96.9 million as of September 26, 2008. The company generated positive operating cash flow of $12.5 million in the quarter. Second Quarter Revenue by Business Segment Revenue in the North America segment was $64.8 million in the second quarter of fiscal 2009, compared with $63.8 million in the year ago period. International revenue was $121.2 million, compared with $110.8 million in the year ago period. Year-over-year revenue growth was achieved in International as existing operators continued the expansion of their network infrastructures. Network Operations revenue was $4.9 million compared with $6.5 million in the year ago period. "We are pleased to have reported year-over-year revenue growth of 5 percent, to have met our key guidance metrics in the December quarter and to have generated positive operating cash flow despite a challenging global economy. Our company's value proposition in mobility networks remains a primary growth driver of our business," said Harald Braun, president and chief executive officer of Harris Stratex Networks. "We continue to believe that the long-term demand for higher-capacity data applications is favorable to our company. Our Eclipse(TM) product platform, and its ability to offer full migration for future IP based networks, helps us capture these opportunities." Outlook and Guidance Due to the macro-economic situation, it is more difficult to provide financial guidance and it makes it more likely that Harris Stratex Networks' actual results could differ materially from current expectations. "As we enter our third fiscal quarter, we are pleased to see that overall demand for our backhaul solutions and services remains relatively strong. However, the weakened global economy and the challenging credit markets are creating forecasting and timing issues in our market segment, which then inhibit our visibility. Our current revenue expectations for Q3 are in the range of $150 million to $170 million," noted Braun. "We plan to align worldwide operations with current market conditions and continue to reduce our spending." "We are pleased with our rapid progress to a common IP-based product platform that allows us to improve the productivity of our engineering resources," continued Braun. "We are continuing our R&D investment to maintain our high level of innovation that differentiates us from our competition and that our customers have grown to expect." Conference Call Harris Stratex Networks will host a conference call today to discuss the company's financial results at 5:30 p.m. Eastern Time. Those wishing to join the call should dial 303-262-2137 (no pass code required) at approximately 5:20 p.m. A replay of the call will be available starting one hour after the call's completion until February 11. To access the replay, dial 303-590-3000 (pass code: 11124334 #). A live and archived webcast of the conference call will also be available via the company's Web site at .