Zhone Technologies Inc. (ZHNE, Financial) filed Quarterly Report for the period ended 2012-09-30.
Zhone Technologies, Inc. has a market cap of $14.9 million; its shares were traded at around $0.46 with and P/S ratio of 0.1.
For the three months ended September 30, 2012, service revenue decreased by 21% or $0.3 million to $1.1 million, compared to $1.4 million for the same period last year. For the nine months ended September 30, 2012, service revenue decreased by 5% or $0.2 million to $3.5 million, compared to $3.7 million for the same period last year. Service revenue represents revenue from maintenance and other services associated with product shipments.
International net revenue decreased 1% or $0.1 million to $17.0 million for the three months ended September 30, 2012 from $17.1 million for the same period last year, and represented 58% of total net revenue compared with 57% during the same period last year. For the nine months ended September 30, 2012, international net revenue decreased 3% or $1.7 million to $49.9 million from $51.6 million for the same period last year, and represented 57% of total net revenue for both periods. The decrease in international net revenue during the three months ended September 30, 2012 was primarily due to fewer sales of our products in Latin America, which were partially offset by increases in sales of products to customers in the Middle East. The decrease in international net revenue during the nine months ended September 30, 2012 was primarily due to decreases in sales as compared with the same period last year in the Middle East, partially offset by increases in sales to customers in Asia and Latin America.
Total cost of revenue, including stock-based compensation, increased $1.1 million or 5% to $21.0 million for the three months ended September 30, 2012 compared to $19.9 million for the same period last year. Cost of revenue increased $2.0 million or 3% to $61.2 million for the nine months ended September 30, 2012 compared to $59.2 million for the same period last year. The increase in cost of revenue for the three and nine months ended September 30, 2012 was primarily due to changes in product mix. In addition, we had previously recorded $0.7 million and $0.1 million in credits to our income statement in the quarters ended June 30, 2011, and September 30, 2011, respectively, as a result of vendor liabilities identified on the consolidated balance sheet where the applicable statute of limitations had expired. Gross margin decreased for both the three and nine months ended September 30, 2012 as compared with the same periods last year due to greater sales of products with lower gross margin, such as the GPON products. Total cost of revenue was 72% and 66% of net revenue for the three months ended September 30, 2012 and 2011, respectively, and 70% and 65% of net revenue for the nine months ended September 30, 2012 and 2011, respectively.
Sales and marketing expenses decreased 11% or $0.6 million to $5.0 million from $5.6 million for the three months ended September 30, 2012 compared to the three months ended September 30, 2011, and decreased 12% or $1.9 million to $14.5 million from $16.4 million for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The decrease for the three months ended September 30, 2012 was primarily due to a $0.3 million decrease in sales expenses from continued cost reductions in travel and consulting expenses, and decreased commissions, as well as a decrease in marketing and customer service related personnel expenses of $0.2 million. The decrease for the nine months ended September 30, 2012 was primarily due to decreases in sales expense of $1.1 million from continued cost reductions in personnel and consulting expenses, and decreased commissions, as well as decreases of $0.4 million in marketing expenses and $0.3 million in customer service related expenses.
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Zhone Technologies, Inc. has a market cap of $14.9 million; its shares were traded at around $0.46 with and P/S ratio of 0.1.
Highlight of Business Operations:
For the three months ended September 30, 2012, product revenue decreased 2% or $0.7 million to $28.1 million, compared to $28.8 million for the same period last year. For the nine months ended September 30, 2012, product revenue decreased 4% or $3.8 million to $83.6 million, compared to $87.4 million for the same period last year.For the three months ended September 30, 2012, service revenue decreased by 21% or $0.3 million to $1.1 million, compared to $1.4 million for the same period last year. For the nine months ended September 30, 2012, service revenue decreased by 5% or $0.2 million to $3.5 million, compared to $3.7 million for the same period last year. Service revenue represents revenue from maintenance and other services associated with product shipments.
International net revenue decreased 1% or $0.1 million to $17.0 million for the three months ended September 30, 2012 from $17.1 million for the same period last year, and represented 58% of total net revenue compared with 57% during the same period last year. For the nine months ended September 30, 2012, international net revenue decreased 3% or $1.7 million to $49.9 million from $51.6 million for the same period last year, and represented 57% of total net revenue for both periods. The decrease in international net revenue during the three months ended September 30, 2012 was primarily due to fewer sales of our products in Latin America, which were partially offset by increases in sales of products to customers in the Middle East. The decrease in international net revenue during the nine months ended September 30, 2012 was primarily due to decreases in sales as compared with the same period last year in the Middle East, partially offset by increases in sales to customers in Asia and Latin America.
Total cost of revenue, including stock-based compensation, increased $1.1 million or 5% to $21.0 million for the three months ended September 30, 2012 compared to $19.9 million for the same period last year. Cost of revenue increased $2.0 million or 3% to $61.2 million for the nine months ended September 30, 2012 compared to $59.2 million for the same period last year. The increase in cost of revenue for the three and nine months ended September 30, 2012 was primarily due to changes in product mix. In addition, we had previously recorded $0.7 million and $0.1 million in credits to our income statement in the quarters ended June 30, 2011, and September 30, 2011, respectively, as a result of vendor liabilities identified on the consolidated balance sheet where the applicable statute of limitations had expired. Gross margin decreased for both the three and nine months ended September 30, 2012 as compared with the same periods last year due to greater sales of products with lower gross margin, such as the GPON products. Total cost of revenue was 72% and 66% of net revenue for the three months ended September 30, 2012 and 2011, respectively, and 70% and 65% of net revenue for the nine months ended September 30, 2012 and 2011, respectively.
Sales and marketing expenses decreased 11% or $0.6 million to $5.0 million from $5.6 million for the three months ended September 30, 2012 compared to the three months ended September 30, 2011, and decreased 12% or $1.9 million to $14.5 million from $16.4 million for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The decrease for the three months ended September 30, 2012 was primarily due to a $0.3 million decrease in sales expenses from continued cost reductions in travel and consulting expenses, and decreased commissions, as well as a decrease in marketing and customer service related personnel expenses of $0.2 million. The decrease for the nine months ended September 30, 2012 was primarily due to decreases in sales expense of $1.1 million from continued cost reductions in personnel and consulting expenses, and decreased commissions, as well as decreases of $0.4 million in marketing expenses and $0.3 million in customer service related expenses.
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