Netopia, Inc. (OTCBB:NTPA), a market leader in broadband gateways and service delivery software, today announced results for the third fiscal quarter ended June 30, 2006. Revenues for the third fiscal quarter were $30.5 million, a 9.7% increase from $27.8 million for the same period in the prior fiscal year, and a 9.3% increase from $27.9 million for the prior quarter ended March 31, 2006.
Net loss on a GAAP basis for the third fiscal quarter was ($0.2) million or ($0.01) per share, compared to a net loss of ($2.3) million or ($0.09) per share for the same period in the prior fiscal year. Net loss on a GAAP basis for the first nine months of fiscal year 2006 was ($2.1) million or ($0.08) per share, compared to a net loss of ($5.8) million or ($0.23) per share for the same period in the prior fiscal year.
Non-GAAP income for the third fiscal quarter (which for the current period excludes SFAS 123R stock compensation expense and amortization of acquisition-related intangible assets) was $1.6 million or $0.06 per basic and diluted share, compared to a non-GAAP loss of ($1.9) million or ($0.08) per share for the same period in the prior fiscal year (which for such period excluded amortization of acquisition-related intangible assets). Non-GAAP income for the first nine months of fiscal year 2006 (which for such nine month period excludes SFAS 123R stock compensation expense and amortization of acquisition-related intangible assets) was $2.8 million or $0.11 per basic and diluted share, compared to a non-GAAP loss of ($4.6) million or ($0.19) per share for the same period in the prior fiscal year (which for such period excluded amortization of acquisition-related intangible assets).
"We are pleased with both our revenue growth and bottom line performance for the quarter," said Alan Lefkof, Netopia's president and CEO. "We believe that we are laying the foundation for strong revenue growth for the next fiscal year."
Note:
Netopia will host a conference call to discuss its results for the third fiscal quarter on July 25, 2006 at 6:00 p.m. Eastern time (3:00 p.m. Pacific time). The conference call will be broadcast live on the Internet and can be accessed by visiting Netopia's Web site at www.netopia.com. To join the telephone conference, dial (913) 312-1305 and enter the pass code 4316510.
An archived recording of the conference call will be available on Netopia's Web site for one year, and by telephone from July 25 - July 31, 2006. To listen to the archived recording, dial (719) 457-0820 and enter the pass code 4316510, or go to Netopia's Web site.
About Netopia
Netopia, Inc. delivers broadband service assurance solutions through high-performance broadband customer premises equipment and carrier-class remote device management and support software. Netopia's broadband gateways feature advanced technology, high reliability, and remote manageability to assure delivery of triple-play and IPTV services. Netopia's service assurance software platforms empower service providers, enterprises, and consumers with remote device management, centralized support, and value-added services to speed deployment of innovative new broadband applications across home and business networks. Netopia has established strategic distribution relationships with leading carriers and broadband service providers, including AT&T, BellSouth, Covad Communications, eircom, Swisscom, and Verizon.
Headquartered in Emeryville, California, Netopia's common stock is listed for quotation on the OTC Bulletin Board (OTCBB) System under the symbol "NTPA." Further information about Netopia can be obtained via phone at (510) 420-7400, fax at (510) 420-7601, or on the Web at www.netopia.com.
Note regarding unaudited Non-GAAP Condensed Consolidated Statements of Operations:
To supplement our unaudited GAAP Condensed Consolidated Statements of Operations, Netopia uses non-GAAP measures of net income (loss) and income (loss) per share, which are adjusted from results based on GAAP to exclude non-cash recurring expenses for stock compensation and amortization of acquisition-related intangible assets. These non-GAAP adjustments are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. These adjustments to GAAP results are made with the intent of providing greater transparency to information used by management in its financial and operational decision-making. These non-GAAP results are among the primary indicators that management uses as a basis for making operating decisions because they provide meaningful information regarding our core operating performance, including our ability to provide cash flows to invest in research and development and to fund capital expenditures. The unaudited Non-GAAP Condensed Consolidated Statements of Operations should not be considered in isolation or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. The unaudited Non-GAAP Condensed Consolidated Statements of Operations includes a quantitative reconciliation of the differences between such statements and the financial information presented in accordance with generally accepted accounting principles.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Portions of this release that are not statements of historical fact may include forward-looking statements. Statements regarding Netopia, Inc.'s beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements concerning product development, anticipated new products and customers, growth opportunities, and future operating results. Netopia's actual results could differ materially. Factors that might cause a difference include, but are not limited to: Netopia's continued ability to form key relationships for our broadband gateways and service delivery software; Netopia's ability to enter into new distribution partnerships; Netopia's ability to develop new broadband gateways and service delivery software in a timely manner; market acceptance of Netopia's broadband gateways and service delivery software; Netopia's ability to list its common stock on a Nasdaq Stock Market; Netopia's ability to resolve pending private securities litigation arising out of the restatement of Netopia's consolidated financial statements in a timely and economic manner; the pace of development and market acceptance of Netopia's products and the market for broadband products and services generally; the highly competitive nature of Netopia's markets and competitive pricing pressures; the uncertainties associated with international operations; intense competition from third parties offering competitive broadband products and services; and economic conditions generally. In addition, prior period-to-period comparisons of revenues are not necessarily indicative of period-to-period comparative revenues in future periods. Prospective and current investors are cautioned not to place undue reliance on any forward-looking statements. Further, Netopia expressly disclaims any obligation to revise or update any of the forward-looking statements contained herein to reflect future events or developments after the date hereof. Netopia does not undertake to update any oral or written forward looking-statement that may be made by or on behalf of Netopia. For more information concerning Netopia and risk factors that may affect Netopia's future results and may cause actual results to vary from results anticipated in forward-looking statements, including risk factors relating to securities litigation arising out of the restatements described in Netopia's Annual Report on Form 10-K for the fiscal year ended September 30, 2004, investors should review Netopia's public filings with the United States Securities and Exchange Commission, which are available by calling Netopia at (510) 420-7516 or online at www.sec.gov.
All company names, brand names and product names are trademarks of their respective holder(s).
NETOPIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended June 30, Ended June 30,
----------------- ------------------
2006 2005 2006 2005
REVENUES:
Broadband equipment $ 27,333 $ 25,103 $ 71,099 $ 73,547
Broadband software and services 3,154 2,726 11,162 8,823
-------- -------- -------- ---------
Total revenues 30,487 27,829 82,261 82,370
-------- -------- -------- ---------
COST OF REVENUES:
Broadband equipment 18,854 18,655 48,751 54,907
Broadband software and services 625 489 1,734 1,139
Amortization of acquired
technology 300 300 900 900
-------- -------- -------- ---------
Total cost of revenues 19,779 19,444 51,385 56,946
-------- -------- -------- ---------
GROSS PROFIT 10,708 8,385 30,876 25,424
OPERATING EXPENSES:
Research and development 4,505 3,400 12,616 10,009
Sales and marketing 5,502 4,582 15,254 14,249
General and administrative 2,268 2,561 6,805 6,785
Amortization of acquired
intangible asset - 86 - 259
Restructuring costs - - - 98
-------- -------- -------- ---------
Total operating expenses 12,275 10,629 34,675 31,400
-------- -------- -------- ---------
OPERATING LOSS (1,567) (2,244) (3,799) (5,976)
Gain on equity investment 1,079 - 1,079 -
Other income (expense), net 344 (44) 703 259
-------- -------- -------- ---------
LOSS BEFORE INCOME TAXES (144) (2,288) (2,017) (5,717)
Provision for income taxes 12 24 37 68
-------- -------- -------- ---------
NET LOSS $ (156)$ (2,312)$ (2,054)$ (5,785)
-------- -------- -------- ---------
Net loss per common share:
Basic and Diluted $ (0.01)$ (0.09)$ (0.08)$ (0.23)
-------- -------- -------- ---------
Shares used in per share
calculations: 25,817 25,215 25,636 25,000
-------- -------- -------- ---------
NETOPIA, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Three Months Ended
June 30, 2006 June 30, 2005
--------------------------- --------------------------
Non- Non-
GAAP GAAP
GAAP Adjust- Non- GAAP Adjust- Non-
Reported ments GAAP Reported ments GAAP
--------------------------- --------------------------
REVENUES:
Broadband
equipment $ 27,333 $ - $27,333 $ 25,103 $ - $25,103
Broadband
software and
services 3,154 - 3,154 2,726 - 2,726
-------- ------- ------- -------- ------- -------
Total
revenues 30,487 - 30,487 27,829 - 27,829
-------- ------- ------- -------- ------- -------
COST OF
REVENUES:
Broadband
equipment 18,854 (72)(a)18,782 18,655 - 18,655
Broadband
software and
services 625 - 625 489 - 489
Amortization
of acquired
technology 300 (300)(b) - 300 (300)(b) -
-------- ------- ------- -------- ------- -------
Total
cost of
revenues 19,779 (372) 19,407 19,444 (300) 19,144
-------- ------- ------- -------- ------- -------
GROSS PROFIT 10,708 372 11,080 8,385 300 8,685
OPERATING
EXPENSES:
Research and
development 4,505 (590)(a) 3,915 3,400 - 3,400
Sales and
marketing 5,502 (353)(a) 5,149 4,582 - 4,582
General and
adminis-
trative 2,268 (428)(a) 1,840 2,561 - 2,561
Amortization
of acquired
intangible
asset - - - 86 (86)(b) -
-------- ------- ------- -------- ------- -------
Total
operating
expenses 12,275 (1,371) 10,904 10,629 (86) 10,543
-------- ------- ------- -------- ------- -------
OPERATING INCOME
(LOSS) (1,567) 1,743 176 (2,244) 386 (1,858)
Gain on equity
investment 1,079 - 1,079 - - -
Other income
(expense),
net 344 - 344 (44) - (44)
-------- ------- ------- -------- ------- -------
INCOME (LOSS)
BEFORE TAXES (144) 1,743 1,599 (2,288) 386 (1,902)
Provision for
income taxes 12 - 12 24 - 24
-------- ------- ------- -------- ------- -------
NET INCOME
(LOSS) $ (156)$ 1,743 $ 1,587 $ (2,312)$ 386 $(1,926)
-------- ------- ------- -------- ------- -------
Net income
(loss) per
common share:
Basic $ (0.01) $ 0.06 $ (0.09) $ (0.08)
-------- ------- -------- -------
Diluted $ (0.01) $ 0.06 $ (0.09) $ (0.08)
-------- ------- -------- -------
Shares used in
per share
calculation:
Basic 25,817 25,817 25,215 25,215
-------- ------- -------- -------
Diluted 25,817 26,490 25,215 25,215
-------- ------- -------- -------
Non-GAAP adjustments consist of:
(a) Non-cash stock compensation expense pursuant to SFAS 123R;
(b) Amortization of acquisition related intangible assets
Note regarding unaudited Non-GAAP Condensed Consolidated Statements of Operations:
To supplement our unaudited GAAP Condensed Consolidated Statements of Operations, Netopia uses non-GAAP measures of net income (loss) and income (loss) per share, which are adjusted from results based on GAAP to exclude non-cash recurring expenses for stock compensation and amortization of acquisition-related intangible assets. These non-GAAP adjustments are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. These adjustments to GAAP results are made with the intent of providing greater transparency to information used by management in its financial and operational decision-making. These non-GAAP results are among the primary indicators that management uses as a basis for making operating decisions because they provide meaningful information regarding our core operating performance, including our ability to provide cash flows to invest in research and development and to fund capital expenditures. The unaudited Non-GAAP Condensed Consolidated Statements of Operations should not be considered in isolation or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. The unaudited Non-GAAP Condensed Consolidated Statements of Operations includes a quantitative reconciliation of the differences between such statements and the financial information presented in accordance with generally accepted accounting principles.
NETOPIA, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Nine Months Ended Nine Months Ended
June 30, 2006 June 30, 2005
--------------------------- --------------------------
Non- Non-
GAAP GAAP
GAAP Adjust- Non- GAAP Adjust- Non-
Reported ments GAAP Reported ments GAAP
--------------------------- --------------------------
REVENUES:
Broadband
equipment $ 71,099 $ - $71,099 $ 73,547 $ - $73,547
Broadband
software and
services 11,162 - 11,162 8,823 - 8,823
-------- ------- ------- -------- ------- -------
Total
revenues 82,261 - 82,261 82,370 - 82,370
-------- ------- ------- -------- ------- -------
COST OF
REVENUES:
Broadband
equipment 48,751 (140)(a)48,611 54,907 - 54,907
Broadband
software and
services 1,734 - 1,734 1,139 - 1,139
Amortization
of acquired
technology 900 (900)(b) - 900 (900)(b) -
-------- ------- ------- -------- ------- -------
Total
cost of
revenues 51,385 (1,040) 50,345 56,946 (900) 56,046
-------- ------- ------- -------- ------- -------
GROSS PROFIT 30,876 1,040 31,916 25,424 900 26,324
OPERATING
EXPENSES:
Research and
development 12,616 (1,549)(a)11,067 10,009 - 10,009
Sales and
marketing 15,254 (834)(a)14,420 14,249 - 14,249
General and
adminis-
trative 6,805 (1,462)(a) 5,343 6,785 - 6,785
Amortization
of acquired
intangible
asset - - - 259 (259)(b) -
Restructuring
costs - - - 98 - 98
-------- ------- ------- -------- ------- -------
Total
operating
expenses 34,675 (3,845) 30,830 31,400 (259) 31,141
-------- ------- ------- -------- ------- -------
OPERATING INCOME
(LOSS) (3,799) 4,885 1,086 (5,976) 1,159 (4,817)
Gain on equity
investment 1,079 - 1,079 - - -
Other income,
net 703 - 703 259 - 259
-------- ------- ------- -------- ------- -------
INCOME (LOSS)
BEFORE TAXES (2,017) 4,885 2,868 (5,717) 1,159 (4,558)
Provision for
income taxes 37 - 37 68 - 68
-------- ------- ------- -------- ------- -------
NET
INCOME
(LOSS) $ (2,054)$ 4,885 $ 2,831 $ (5,785)$ 1,159 $(4,626)
-------- ------- ------- -------- ------- -------
Net income
(loss) per
common share:
Basic $ (0.08) $ 0.11 $ (0.23) $ (0.19)
-------- ------- -------- -------
Diluted $ (0.08) $ 0.11 $ (0.23) $ (0.19)
-------- ------- -------- -------
Shares used in
per share
calculation:
Basic 25,636 25,636 25,000 25,000
-------- ------- -------- -------
Diluted 25,636 25,943 25,000 25,000
-------- ------- -------- -------
Non-GAAP adjustments consist of:
(a) Non-cash stock compensation expense pursuant to SFAS 123R;
(b) Amortization of acquisition related intangible assets
Note regarding unaudited Non-GAAP Condensed Consolidated Statements of Operations:
To supplement our unaudited GAAP Condensed Consolidated Statements of Operations, Netopia uses non-GAAP measures of net income (loss) and income (loss) per share, which are adjusted from results based on GAAP to exclude non-cash recurring expenses for stock compensation and amortization of acquisition-related intangible assets. These non-GAAP adjustments are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. These adjustments to GAAP results are made with the intent of providing greater transparency to information used by management in its financial and operational decision-making. These non-GAAP results are among the primary indicators that management uses as a basis for making operating decisions because they provide meaningful information regarding our core operating performance, including our ability to provide cash flows to invest in research and development and to fund capital expenditures. The unaudited Non-GAAP Condensed Consolidated Statements of Operations should not be considered in isolation or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. The unaudited Non-GAAP Condensed Consolidated Statements of Operations includes a quantitative reconciliation of the differences between such statements and the financial information presented in accordance with generally accepted accounting principles.
NETOPIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, September 30,
2006 2005(1)
------------- -------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $26,547 $22,234
Trade receivables, net 17,057 16,208
Inventories 5,930 8,718
Prepaid expenses and other current assets 2,378 1,102
------------- -------------
Total current assets 51,912 48,262
------------- -------------
Property and equipment, net 2,556 2,623
Intangible assets, net 3,015 4,037
Equity investment 1,377 1,032
Deposits and other assets 351 481
------------- -------------
TOTAL ASSETS $59,211 $56,435
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $11,303 $12,525
Deferred revenue 3,323 2,946
Other current liabilities 5,417 4,737
------------- -------------
Total current liabilities 20,043 20,208
------------- -------------
Long-term liabilities:
Deferred revenue, long-term 198 109
Other long-term liabilities 163 246
------------- -------------
TOTAL LIABILITIES 20,404 20,563
------------- -------------
Stockholders' equity 38,807 35,872
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $59,211 $56,435
============= =============
(1) Derived from the audited consolidated balance sheets dated
September 30, 2005 included in Netopia, Inc.'s Annual Report on
Form 10-K for the fiscal year ended September 30, 2005.