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TheStreet Open House

Vitesse Reports First Quarter Fiscal Year 2013 Results

Stocks in this article: VTSS

Vitesse Semiconductor Corporation (NASDAQ: VTSS), a leading provider of advanced IC solutions for Carrier and Enterprise networks, reported its financial results for the first quarter fiscal year 2013, ended December 31, 2012.

“At Vitesse, we are focused on running operations as efficiently as possible while investing in our future. New product revenues in the first quarter fiscal year 2013 are in line with our expectations. We are driving revenue growth from our new products in 2013 and beyond,” said Chris Gardner, CEO of Vitesse. “During the quarter, we made significant progress on our goal to manage our capital structure. We raised net proceeds of $17.1 million in a follow-on offering. This strengthened our balance sheet and provides us with additional options and flexibility to address our debt maturities due in 2014.”

“For the second quarter, we expect solid growth in bookings for new products. We continue to project new product revenue to double to $30.0 million in fiscal year 2013 from fiscal year 2012, and double again in fiscal year 2014.”

First Quarter Fiscal Year 2013 Financial Results Summary

  • Total net revenues were $25.7 million, compared to $29.5 million in the fourth quarter of fiscal year 2012 and $30.0 million in the first quarter of fiscal year 2012.
    • Product revenues were $23.9 million, compared to $28.1 million in the fourth quarter of fiscal year 2012 and $28.9 million in the first quarter of fiscal year 2012.
    • The product lines contributed the following as a percentage of product revenue as compared to the fourth quarter of fiscal year 2012:
      • Carrier networking products: 58.5% versus 51.6%
      • Enterprise networking products: 40.4% versus 45.6%
      • Core Carrier and Enterprise networking products: 98.9% versus 97.2%
      • Non-core products: 1.1% versus 2.8%
    • Intellectual property revenues totaled $1.8 million, compared to $1.4 million in the fourth quarter of fiscal year 2012 and $1.0 million in the first quarter of fiscal year 2012.
  • Product margins were 54.1%, compared to 55.9% in the fourth quarter of fiscal year 2012 and 58.0% in the first quarter of fiscal year 2012.
  • Operating expenses were $18.6 million. This compares to $16.6 million net of a restructuring and impairment credit of $1.5 million in the fourth quarter of fiscal year 2012 and $19.9 million in the first quarter of fiscal year 2012.
  • Operating loss was $3.8 million, compared to operating income of $531,000 in the fourth quarter of fiscal year 2012 and an operating loss of $2.1 million in the first quarter of fiscal year 2012.
  • Non-GAAP operating loss was $2.5 million, compared to operating income of $308,000 in the fourth quarter of fiscal year 2012 and non-GAAP operating loss of $1.0 million in the first quarter of fiscal year 2012.
  • Net loss was $5.0 million, or $0.18 per basic and fully diluted share. This compares to net income of $1.2 million, or $0.05 per basic and fully diluted share, in the fourth quarter of fiscal year 2012; and net loss of $0.8 million, or $0.03 per basic share and fully diluted share, in the first quarter of fiscal year 2012.
  • Non-GAAP net loss was $4.5 million or $0.16 per basic and fully diluted share, compared to non-GAAP net loss of $130,000, or breakeven per basic and fully diluted share, for the fourth quarter of fiscal year 2012; and non-GAAP net loss of $3.0 million, or $0.12 per basic and fully diluted share, in the first quarter of fiscal year 2012.

Balance Sheet Data at December 31, 2012 as Compared to September 30, 2012

  • Cash balance increased to $37.1 million, compared to $23.9 million;
  • Accounts receivable totaled $9.6 million, compared to $9.4 million;
  • Inventory totaled $12.6 million, compared to $12.1 million; and
  • Working capital increased to $42.0 million, compared to $28.7 million.

Financial Outlook

For the second quarter of fiscal year 2013, ending March 31, 2013, Vitesse expects revenues to be in the range of $25.0 million to $28.0 million and product margins are expected to be between 51% and 54%. Operating expenses are expected to be between $18.0 million and $19.0 million.

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