Zhone Technologies Inc. (ZHNE, Financial) filed Annual Report for the period ended 2011-12-31.
Zhone Tech Inc has a market cap of $36.9 million; its shares were traded at around $1.15 with and P/S ratio of 0.3.
Total cost of revenue, including stock-based compensation, increased $0.6 million or 1% to $80.5 million for 2011, compared to $79.9 million for 2010. The increase was primarily due to an increase in non-personnel expenses compared to the prior year. The increase was partially offset by a release of $0.8 million due to vendor liabilities identified on the consolidated balance sheet where the applicable statute of limitations had expired. Total cost of revenue was 65% of net revenue for 2011, compared to 62% of net revenue for 2010, which resulted in a decrease in gross profit percentage from 38% in 2010 to 35% in 2011. The gross margin decreased as compared with prior periods primarily due to decreased sales volume and the increase in cost of revenue for the period resulting from greater sales of products with lower gross margin, such as our GPON products.
International net revenue increased 11% or $7.9 million to $78.8 million in 2010 and represented 61% of total net revenue compared with 56% in 2009. The increase in international net revenue was primarily due to higher demand in Latin America as a result of recent growth in demand for our products. In addition to the growth experienced in Latin America, we experienced continued growth associated with one customer in the Middle East (Etisalat) that accounted for 24% of net revenue in 2010. The increase in international net revenue was partially offset by a decrease in domestic net revenue of 10% or $5.4 million to $50.2 million in 2010 compared to $55.6 million in 2009. The decrease was primarily the result of the continued weak economic conditions in the United States during 2010.
Total cost of revenue, including stock-based compensation, decreased $1.2 million or 2% to $79.9 million for 2010, compared to $81.1 million for 2009. Total cost of revenue was 62% of net revenue for 2010, compared to 64% of net revenue for 2009, which resulted in an increase in gross profit percentage from 36% in 2009 to 38% in 2010. The gross margin increased as compared with prior periods primarily due to increased sales volume and the reduction in cost of revenue for the period resulting from greater sales of products with higher gross margin, such as our MXK products.
Sales and marketing expenses increased 9% or $2.0 million to $24.0 million for 2010 compared to $22.0 million for 2009. The increase was primarily attributable to increases in marketing expenses of $1.3 million as we continue to grow our brand awareness which included increases of $0.5 million in personnel-related costs and $0.8 million in non-personnel costs. In addition, overall sales and customer service expenses increased $0.7 million compared to 2009, mainly due to increased personnel-related expenses, including $0.3 million of additional headcount expenses incurred to support operations in the Middle East.
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Zhone Tech Inc has a market cap of $36.9 million; its shares were traded at around $1.15 with and P/S ratio of 0.3.
Highlight of Business Operations:
International net revenue decreased 9% or $7.1 million to $71.7 million in 2011 and represented 58% of total net revenue compared with 61% in 2010. The decrease in international net revenue was primarily due to decreased sales in the Middle East, which was partially offset by higher revenue from Latin America as a result of recent growth in demand for our products in this region. The decrease in international net revenue was partially offset by an increase in domestic net revenue of 5% or $2.6 million to $52.8 million in 2011 compared to $50.2 million in 2010. The increase was primarily the result of continued relationships with customers who have been approved for broadband stimulus funding through the federal Rural Utilities Service.Total cost of revenue, including stock-based compensation, increased $0.6 million or 1% to $80.5 million for 2011, compared to $79.9 million for 2010. The increase was primarily due to an increase in non-personnel expenses compared to the prior year. The increase was partially offset by a release of $0.8 million due to vendor liabilities identified on the consolidated balance sheet where the applicable statute of limitations had expired. Total cost of revenue was 65% of net revenue for 2011, compared to 62% of net revenue for 2010, which resulted in a decrease in gross profit percentage from 38% in 2010 to 35% in 2011. The gross margin decreased as compared with prior periods primarily due to decreased sales volume and the increase in cost of revenue for the period resulting from greater sales of products with lower gross margin, such as our GPON products.
International net revenue increased 11% or $7.9 million to $78.8 million in 2010 and represented 61% of total net revenue compared with 56% in 2009. The increase in international net revenue was primarily due to higher demand in Latin America as a result of recent growth in demand for our products. In addition to the growth experienced in Latin America, we experienced continued growth associated with one customer in the Middle East (Etisalat) that accounted for 24% of net revenue in 2010. The increase in international net revenue was partially offset by a decrease in domestic net revenue of 10% or $5.4 million to $50.2 million in 2010 compared to $55.6 million in 2009. The decrease was primarily the result of the continued weak economic conditions in the United States during 2010.
Total cost of revenue, including stock-based compensation, decreased $1.2 million or 2% to $79.9 million for 2010, compared to $81.1 million for 2009. Total cost of revenue was 62% of net revenue for 2010, compared to 64% of net revenue for 2009, which resulted in an increase in gross profit percentage from 36% in 2009 to 38% in 2010. The gross margin increased as compared with prior periods primarily due to increased sales volume and the reduction in cost of revenue for the period resulting from greater sales of products with higher gross margin, such as our MXK products.
Sales and marketing expenses increased 9% or $2.0 million to $24.0 million for 2010 compared to $22.0 million for 2009. The increase was primarily attributable to increases in marketing expenses of $1.3 million as we continue to grow our brand awareness which included increases of $0.5 million in personnel-related costs and $0.8 million in non-personnel costs. In addition, overall sales and customer service expenses increased $0.7 million compared to 2009, mainly due to increased personnel-related expenses, including $0.3 million of additional headcount expenses incurred to support operations in the Middle East.
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