Symmetricom Inc. (SYMM, Financial) filed Quarterly Report for the period ended 2009-12-27.
Symmetricom Inc. has a market cap of $242.6 million; its shares were traded at around $5.55 with a P/E ratio of 20.6 and P/S ratio of 1. SYMM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of ROYCE & ASSOCIATES.
We determined that the initial liability component of the Notes was valued at $77.0 million, with the equity component representing the residual amount of the Notes proceeds. As a result, for fiscal 2005, we retrospectively recorded $43.0 million as a component of equity and a corresponding debt discount as of the date of issuance, and a deferred tax liability of $15.9 million.
In addition, we allocated $0.9 million, net of tax, of the total issuance costs of $4.0 million to the equity component of the Notes and the remaining $2.6 million of the issuance costs remained classified as long-term other assets. The issuance costs were allocated pro rata based on the relative carrying amounts of the liability and equity components. The debt discount and the issuance costs allocated to the liability component are amortized using the effective interest method as additional interest expense over a seven-year period ending June 2012 at which point the Notes may be redeemed by the holders. The equity component of the issuance costs of $1.4 million is included in common stock as additional paid-in-capital.
Upon adoption, interest expense increased on our Notes by adding a non-cash component to amortize a debt discount calculated based on the difference between the cash coupon rate (3.25% per year) of the Notes and the effective interest rate on the debt borrowing (10.69% per year). For the quarter ended December 27, 2009, the total interest expense relating to our Notes was $1.3 million, including $0.5 million related to the contractual interest coupon and $0.8 million related to amortization of the discount on the liability component. For the quarter ended December 28, 2008, the total interest expense relating to our Notes was $1.2 million, including $0.5 million related to the contractual interest coupon and $0.7 million related to amortization of the discount on the liability component.
First Six Months of Fiscal 2010: In the first six months of fiscal 2010, net revenue increased $5.8 million, or 5.6%, compared to the corresponding period of fiscal 2009. Revenue for both Wireline Products and Wireless/OEM Products was essentially flat in the first half of fiscal 2010 compared to the same period in the prior year. Revenue for Global Services increased $2.2 million, or 25.9%, compared to the same period for the prior year, due to increased installation revenue from one key customer. Timing, Test and Measurement Division revenue increased by $3.7 million, or 9.6%, compared to the same period for the prior year, due to higher instrumentation sales led by strong sales of primary timing reference systems.
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Symmetricom Inc. has a market cap of $242.6 million; its shares were traded at around $5.55 with a P/E ratio of 20.6 and P/S ratio of 1. SYMM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:
During the second quarter of fiscal 2010, we decided to sell our Quality of Experience Assurance (QoE) business. QoE was a reportable segment of our Telecom Solutions Division (TSD). As of the end of the second quarter of fiscal 2010, we were engaged in negotiations toward an expected sale transaction and we expect this transaction to close during the second half of fiscal 2010. Accordingly, we have classified the assets and liabilities of QoE as held for sale and its results of operations have been excluded from continuing operations in the condensed consolidated statements of operations. During the first six months of fiscal 2010, we recognized a $0.8 million loss, or $0.02 per share, net of taxes, attributable to the discontinued operations of QoE. In addition, QoE will no longer be shown as a reportable segment and all comparative information from prior periods has been updated to reflect this change.We determined that the initial liability component of the Notes was valued at $77.0 million, with the equity component representing the residual amount of the Notes proceeds. As a result, for fiscal 2005, we retrospectively recorded $43.0 million as a component of equity and a corresponding debt discount as of the date of issuance, and a deferred tax liability of $15.9 million.
In addition, we allocated $0.9 million, net of tax, of the total issuance costs of $4.0 million to the equity component of the Notes and the remaining $2.6 million of the issuance costs remained classified as long-term other assets. The issuance costs were allocated pro rata based on the relative carrying amounts of the liability and equity components. The debt discount and the issuance costs allocated to the liability component are amortized using the effective interest method as additional interest expense over a seven-year period ending June 2012 at which point the Notes may be redeemed by the holders. The equity component of the issuance costs of $1.4 million is included in common stock as additional paid-in-capital.
Upon adoption, interest expense increased on our Notes by adding a non-cash component to amortize a debt discount calculated based on the difference between the cash coupon rate (3.25% per year) of the Notes and the effective interest rate on the debt borrowing (10.69% per year). For the quarter ended December 27, 2009, the total interest expense relating to our Notes was $1.3 million, including $0.5 million related to the contractual interest coupon and $0.8 million related to amortization of the discount on the liability component. For the quarter ended December 28, 2008, the total interest expense relating to our Notes was $1.2 million, including $0.5 million related to the contractual interest coupon and $0.7 million related to amortization of the discount on the liability component.
First Six Months of Fiscal 2010: In the first six months of fiscal 2010, net revenue increased $5.8 million, or 5.6%, compared to the corresponding period of fiscal 2009. Revenue for both Wireline Products and Wireless/OEM Products was essentially flat in the first half of fiscal 2010 compared to the same period in the prior year. Revenue for Global Services increased $2.2 million, or 25.9%, compared to the same period for the prior year, due to increased installation revenue from one key customer. Timing, Test and Measurement Division revenue increased by $3.7 million, or 9.6%, compared to the same period for the prior year, due to higher instrumentation sales led by strong sales of primary timing reference systems.
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