TEKELEC Q1 2010 Earnings Call Transcript

TEKELEC Q1 2010 Earnings Call Transcript
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TEKELEC (TKLC)

Q1 2010 Earnings Call

May 6, 2010 8:00 am ET

Executives

Mike Gallentine - Director, Investor Relations

Frank Plastina - President, Chief Executive Officer

Greg Rush - Chief Financial Officer

Analysts

Brian Modoff - Deutsche Bank

Amir Rozwadowski - Barclays Capital

Catherine Trebnick - Avian Securities

Michael Genovese - Soleil Securities

Todd Kaufman - Raymond James

Larry Harris - C.L. King

Presentation

Operator

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Good morning and welcome to Tekelec's first quarter 2010 earnings release call. At this time, all participants have been placed on a listen-only mode and the call will be opened for questions following the presentation. It is now my pleasure to turn the call over to Mike Gallentine. You may begin.

Mike Gallentine

Thank you. Today I'm joined by Frank Plastina, President and Chief Executive Officer and Greg Rush, Chief Financial Officer of Tekelec. Hopefully by now you have access to a copy of the slides of supplemental material posted on our website at tekelec.com. From there you can access the slides by selecting the investors tab, which will take you to the investor relations home page. From that location you can access the press release issued earlier today.

As a reminder there will be a telephone replay of this conference call available for seven days following the call. You may also listen to a rebroadcast on our website at any time during the next 90 days. All of this replay and rebroadcast information can be found in the investor relations section of Tekelec's website.

I would also remind you that during the course of this conference call we will make projections or other forward-looking statements regarding future events or the future financial performance of the company.

The actual events or results of the company may differ materially from these forward-looking statements as a result of important risk factors including those discussed in our 2009 10-K, the first quarter 2010 Form 10-Q, the press release issued earlier today and other documents the company periodically files with the Securities and Exchange Commission.

Also, unless explicitly noted, all financial results and metrics during our call today are non-GAAP results. Please see slides five through eight in the supplemental material posted on our website for information reconciling GAAP to non-GAPP measures. We will also post the transcripts of this call on the investor section of our website.

With that said, I'd like to turn the call over to Frank Plastina. Frank?

Frank Plastina

Thanks, Mike, and good morning to everyone on the call. Over the past three years we have evolved the company to one that focuses on building robust and scalable intelligent [control ware] solutions. We have established a global market-leading position by helping service providers handle the transition to next-gen networks.

This morning, I am pleased to announce that we have made significant strides in advanced our portfolio with the acquisitions of Camiant and Blueslice, two companies with leading portfolios in this network space.

With these acquisitions we expand our mobile data offering by adding policy control and subscriber data management to our leading session management portfolio. Tekelec will now evolve from influencing the direction of next-gen networks to defining these networks.

Tekelec is now the only player in the industry to uniquely blend and capture the synergies between session, policy, subscriber data management, network and business intelligence and mobile messaging. The combination of these solutions will enable our service provider customers to significantly enhance the user experience.

Turning to this morning's announcements, I would like to provide a bit more detail on Camiant and Blueslice. Camiant is the global mind share leader in real-time policy control solutions. Over 30 mobile and fixed service providers have selected Camiant for their policy needs. In fact, Verizon Wireless recently announced that the Camiant solutions will perform the policy function for their LTE and IMS deployments.

Additional customers include Vodafone, Sprint, Comcast and Cox. Since it was founded, Camiant has booked over $60 million in orders resulting in a clear leadership position. They have deployed over 150 systems that support more than 185 million broadband subscribers and multiple access technologies including UMTS HSPA, CDMA, cable DOCSIS, Fiber-to-the-Home and DSL networks and deployments in IMS and LTE are underway.

The Camiant multimedia policy engine applies business rules that determine, among other things, which customers and/or applications receive [them] with priority. This offers service providers the ability to manage broadband data traffic growth, provide cost controls and generate incremental revenue.

Camiant's initial success was enabling fixed broadband policy in US-based cable companies. Camiant estimates that today their solutions support 70% of all North American cable modem subscribers. Camiant's early policy deployments with Comcast became the de facto standard in the US cable space.

Their work with Vodafone and others is today defining policy in the 3G space and the Camiant policy solution win at Verizon Wireless will now shape the definition for LTE and IMS network deployments.

Camiant's leadership in the policy space has also been validated by various third parties. Camiant recently received the highest marks in seven of eight categories in an infonetic survey of current and potential policy management customers. Service providers rated it 30% to 40% higher than the nearest competitor on such factors and technology leadership, product roadmap and price-to-performance ratio.

Camiant also has built a large interoperability ecosystem in the policy control market having completed integration with more than 35 leading vendors, including Blueslice, another key addition to our portfolio also announced this morning.

Due to the high degree of interaction between subscriber data management and policy solutions, Camiant and Blueslice formed and announced their integration partnership earlier this year. Blueslice is leading next generation subscriber data management solutions nicely complement the rest of Tekelec's portfolio and will form the basis of our database oriented products moving forward such as number portability, ENUM and DNS.

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