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» UTStarcom, Inc. Q2 2010 Earnings Call Transcript
This includes risks and uncertainties regarding the ability of the company to realize anticipated results of operational improvements, the company’s ability to successfully launch internet TV platform, continue to integrate recent acquisitions, successfully operate new service business, execute on its business plan and the managed regulatory matters, as well as risk factors identified in its latest annual report on Form 10-K, Form 10-Ka, quarterly reports on Form 10-Q and current reports on Form 6-K as filed with the Security and Exchange Commission.The company assures no obligation to update any forward-looking statements. I will now turn the call over to our President and CEO, Mr. Jack Lu. Jack Lu Thank you, Jing, and hello to everyone on the call. As Jing mentioned, you can follow along on today's call by downloading the presentation from our website at www.utstar.com. Let's start with Slide 4 of our second quarter highlights. We are expected and excited to report UTStarcom's first profitable quarter after 24 consecutive quarters of losses. In the quarter, we had a significant from the Equipment business, which helped us achieve a net income of $11.6 million or basic earnings per share of $0.07. Our revenues were $92.5 million, a 26.5% or $19.3 million increase compared to the same period of 2010. Gross profit margin was 37.6% compared to 31.3% in the same period of 2010 and 31.1% in Q1 2011. Our operating income was $9.7 million and we had a positive operational cash flow for the quarter. We ended the quarter with $316.4 million in cash and cash equivalents and short-term investments. This quarter is a very important milestone for the new management team after a long process of restructuring and reorganization. While I'm happy that our efforts have started to gain some traction, achieving sustainable, long-term profitability will require even more discipline and a more meaningful growth on the top line.
Next, let's move to operational development in our various targeted markets on Slide 5. In China, we successfully launched an end-to-end internet TV solution and won our first commercial contract for internet TV in [North] China.We also secured a leading market position in Hubei Province through contact with local cable operators to build their bi-directional networks. Finally, in Hangzhou, we've started to move into the new office facility by the end of June, which is more appropriate for our needs and provides a dramatic reduction of rental costs. Moving to Slide 6, Japan continued to show momentum in our PTN orders as demonstrated in this quarter's positive results. In India, we also see encouraging signs as the new DOT regulations promote a level playing field and facilitate fair competition for all companies. Last week, we announced our successful participation in BSNL fibre to home services, which demonstrated our well established relationship with this leading telecomm company. Though we retained our presence there, we plan to streamline our operations in India to [inaudible] our profitability there. Moreover, as mentioned last quarter, we will continue to look for local partners with strong market presence for cooperation. Next, on Slide 7, I'd like to update you on our programs with our iTV.cn subsidiary, which you will recall is the new name for Stage Smart. This platform, soon to be widely accessible through the website www.itv.cn, will provide Chinese language content to overseas Chinese. We successfully launched non-commercial trial across 300 North American households in the second quarter and our rollout of the full subscription [data surveys] is planned in the rest of the year. As I mentioned on our last call, iTV.cn revenues will be generated through advertising, subscription and software license fees. Before I hand the call over to Edmond I wanted to touch on a couple of recent achievements [performing private insurance status].
Our disclosure policy and the corporate governance [properties] will have committees going forward. This change is part of a reorganization of UTStarcom's corporate structure. It is a natural progression as presently the majority of our assets are located outside of the United States and our major business are managing in Asia.Read the rest of this transcript for free on seekingalpha.com