Zhone Technologies Inc. (ZHNE, Financial) filed Quarterly Report for the period ended 2012-06-30.
Zhone Technologies, Inc. has a market cap of $17.5 million; its shares were traded at around $0.5999 with and P/S ratio of 0.1.
International net revenue decreased 4% or $0.8 million to $17.5 million for the three months ended June 30, 2012 from $18.3 million for the same period last year, and represented 57% of total net revenue compared with 58% during the same period of 2011. For the six months ended June 30, 2012, international revenue decreased 5% or $1.6 million to $32.9 million from $34.5 million for the same period last year, and represented 57% of total revenue for both periods. The decreases in international net revenue during the three and six months ended June 30, 2012 were primarily due to decreases in sales as compared with the same periods last year in the Middle East, which were only partially offset by increases in sales to customers in Asia.
Total cost of revenue, including stock-based compensation, increased 7% or $1.3 million to $21.6 million for the three months ended June 30, 2012, compared to $20.2 million for the three months ended June 30, 2011. Cost of revenue increased $1.0 million or 3% to $40.2 million for the six months ended June 30, 2012 compared to $39.2 million for the same period last year. The increase in cost of revenue for the three and six months ended June 30, 2012 was primarily due to changes in product mix. Gross margin decreased for both the three and six months ended June 30, 2012 as compared with the same periods last year due to greater sales of products with lower gross margin, such as our GPON products. Total cost of revenue was 70% and 65% of net revenue for the three months ended June 30, 2012 and 2011, respectively, and 70% and 64% of net revenue for the six months ended June 30, 2012 and 2011, respectively.
Sales and marketing expenses decreased 11% or $0.6 million to $4.8 million for the three months ended June 30, 2012, compared to $5.4 million for the three months ended June 30, 2011, and decreased 12% or $1.4 million to $9.5 million from $10.9 million for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease for the three months ended June 30, 2012 was primarily due to a $0.4 million decrease in sales expenses from continued cost reductions in travel and consulting expenses, and decreased commissions, as well as a decrease in customer service related personnel expenses of $0.1 million. The decrease for the six months ended June 30, 2012 was primarily due to decreases in sales expense of $0.8 million from continued cost reductions in personnel and consulting expenses, and decreased commissions, as well as a decrease of $0.3 million in marketing expenses.
General and administrative expenses decreased 18% or $0.4 million to $1.7 million from $2.1 million for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and decreased 8% or $0.4 million to $3.8 million from $4.2 million for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease for the three and six months ended June 30, 2012 was primarily due to $0.5 million gain as a result of patent sales.
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Zhone Technologies, Inc. has a market cap of $17.5 million; its shares were traded at around $0.5999 with and P/S ratio of 0.1.
Highlight of Business Operations:
For the three months ended June 30, 2012, service revenue increased 17% or $0.2 million to $1.4 million from $1.2 for the same period last year. For the six months ended June 30, 2012, service revenue increased by 4% or $0.1 million to $2.4 million, compared to $2.3 million for the same period last year. Service revenue represents revenue from maintenance and other services associated with product shipments.International net revenue decreased 4% or $0.8 million to $17.5 million for the three months ended June 30, 2012 from $18.3 million for the same period last year, and represented 57% of total net revenue compared with 58% during the same period of 2011. For the six months ended June 30, 2012, international revenue decreased 5% or $1.6 million to $32.9 million from $34.5 million for the same period last year, and represented 57% of total revenue for both periods. The decreases in international net revenue during the three and six months ended June 30, 2012 were primarily due to decreases in sales as compared with the same periods last year in the Middle East, which were only partially offset by increases in sales to customers in Asia.
Total cost of revenue, including stock-based compensation, increased 7% or $1.3 million to $21.6 million for the three months ended June 30, 2012, compared to $20.2 million for the three months ended June 30, 2011. Cost of revenue increased $1.0 million or 3% to $40.2 million for the six months ended June 30, 2012 compared to $39.2 million for the same period last year. The increase in cost of revenue for the three and six months ended June 30, 2012 was primarily due to changes in product mix. Gross margin decreased for both the three and six months ended June 30, 2012 as compared with the same periods last year due to greater sales of products with lower gross margin, such as our GPON products. Total cost of revenue was 70% and 65% of net revenue for the three months ended June 30, 2012 and 2011, respectively, and 70% and 64% of net revenue for the six months ended June 30, 2012 and 2011, respectively.
Sales and marketing expenses decreased 11% or $0.6 million to $4.8 million for the three months ended June 30, 2012, compared to $5.4 million for the three months ended June 30, 2011, and decreased 12% or $1.4 million to $9.5 million from $10.9 million for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease for the three months ended June 30, 2012 was primarily due to a $0.4 million decrease in sales expenses from continued cost reductions in travel and consulting expenses, and decreased commissions, as well as a decrease in customer service related personnel expenses of $0.1 million. The decrease for the six months ended June 30, 2012 was primarily due to decreases in sales expense of $0.8 million from continued cost reductions in personnel and consulting expenses, and decreased commissions, as well as a decrease of $0.3 million in marketing expenses.
General and administrative expenses decreased 18% or $0.4 million to $1.7 million from $2.1 million for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and decreased 8% or $0.4 million to $3.8 million from $4.2 million for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease for the three and six months ended June 30, 2012 was primarily due to $0.5 million gain as a result of patent sales.
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