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Ikanos Communications Inc. Reports Operating Results (10-Q)

August 02, 2012 | About:
10qk

10qk

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Ikanos Communications Inc. (IKAN) filed Quarterly Report for the period ended 2012-07-01.

Ikanos Communications, Inc. has a market cap of $62.5 million; its shares were traded at around $0.89 with and P/S ratio of 0.5.

Highlight of Business Operations:

We incurred net losses of $3.0 million and $6.7 million, respectively, for the fiscal quarter and six months ended July 1, 2012, respectively, and we had an accumulated deficit of $284.8 million as of July 1, 2012. To achieve consistent profitability, we will need to generate and sustain higher revenue, while maintaining cost and expense levels appropriate and necessary for our business. Although we have the cash necessary to fund our operations for the foreseeable future, we may also seek additional financing as deemed appropriate to support future company needs and investments. We filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) on October 25, 2010 (declared effective on November 1, 2010) under which we can offer and sell up to $30.0 million of our common stock and warrants. On November 11, 2010 and December 7, 2010 we sold a total of 12.8 million shares of common stock under the Form S-3 in an underwritten offering for $13.5 million. After deducting underwriting fees, legal, accounting and other costs, we realized proceeds of $12.5 million.

We were incorporated in April 1999 and, through December 31, 2001 and were engaged principally in research and development. We began commercial shipment of our products in the fiscal fourth quarter of 2002. Over the last three fiscal years, our revenue was $130.7 million, $191.7 million and $136.6 million in fiscal years 2009, 2010 and 2011, respectively.

Cost of revenue decreased to $17.0 million for the three months ended July 1, 2012 compared to $17.6 million for the three months ended July 3, 2011. Cost of revenue decreased to $31.7 million for the six months ended July 1, 2012 as compared to $32.8 million for the six months ended July 3, 2011. The decrease in cost of revenue for both the three and six month periods ended July 1, 2012 compared to the same period last year is directly attributable to our decreased sales volume and certain changes in product mix. Our gross margins were 47% for the three months ended July 1, 2012 as compared to 48% for the three months ended July 3, 2012. During the fiscal second quarter of 2012 we recognized revenue of $0.3 million related to the sales of inventory previously written off. This compares to $1.2 million recognized in the fiscal second quarter of 2011. In addition, fiscal second quarter 2012 gross margin was adversely affected by a $1.3 million charge related to a patent license agreement covering the current and certain prior periods. The patent license will not have a material impact on future results or margins.

For the three and six months ended July 1, 2012 we have had no purchases or sales of marketable securities or other investments. For the six months ended July 3, 2011 we recognized a gain of $1.3 million. In the fiscal first quarter of 2011 we sold our auction rate securities for $2.0 million and recognized a gain of $1.3 million. At January 1, 2011 the $1.3 million was included as comprehensive income within the stockholders equity.

Interest income and other, net consists primarily of interest income earned on our cash, cash equivalents and investments, as well as other non-operating expenses including gains and losses on foreign exchange and the sales of fixed assets. Net interest income and other, net was a loss of $0.4 million for the three months ended July 1, 2012 compared to a minimal gain of $21 thousand for the three months ended July 3, 2011. Interest income and other, net was a loss of $0.3 million for the six months ended July 1, 2012 compared to a minimal gain of $89 thousand for the six months ended July 3, 2011. The losses for both the three and six months ended July 1, 2012 were directly attributable to declines in both the Euro and Indian rupee versus the US dollar during the fiscal second quarter of 2012. Euro losses were $0.2 million and Indian rupee losses were $0.2 million for the three and six months ending July 1, 2012 while Indian rupee losses were $0.2 million and $0.1 million, respectively, for the three and six months ending July 1, 2012.

Read the The complete Report

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