EX-99.1 2 dex991.htm PRESS RELEASE DATED FEBRUARY 8, 2005 Press Release dated February 8, 2005

Exhibit 99.1

 

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Contact:   Kelly Delany
    Director, Communications
    1.805.861.3322
    kdelany@somera.com

 

Somera Reports Results for Fourth Quarter and Fiscal Year 2004

 

Q4 2004 Highlights

 

    Sequential growth in quarterly revenues

 

    Blended net gross margin improved to 27%

 

    Maintained strong balance sheet metrics with $40.4 million in cash and cash equivalents and short-term investments

 

    Relocated the company headquarters to the telecom corridor in Dallas, Texas

 

DALLAS, TX, February 8, 2005 - Somera Communications, Inc. (Nasdaq: SMRA), a global provider of telecom equipment lifecycle management services, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004.

 

Total revenue for the fourth quarter was $23.2 million, compared with $22.7 million for the third quarter of 2004. Net loss under generally accepted accounting principles (GAAP) was $6.2 million, or a loss of $0.12 per share, compared with a net loss of $8.5 million, or a loss of $0.17 per share, for the third quarter of 2004.

 

Somera’s blended net gross margin for the fourth quarter was 27%, compared with 17% reported in the third quarter of 2004. The increase reflects improved inventory management and operational execution, which aligned to market demand.

 

Somera’s balance sheet at December 31, 2004 included $40.4 million in cash and cash equivalents and short-term investments.

 

“Fourth quarter results demonstrate progress in the implementation of our strategy, while we improved near-term performance,” said David W. Heard, Somera’s President and Chief Executive Officer. “Revenues were up quarter over quarter, for the first time in four quarters, margins improved, cash was tightly managed and we implemented the final stages of our rebalancing efforts to lower our on-going operating expenses.”

 

Added Heard, “Throughout the quarter, we continued to receive positive market response and customer interest in our lifecycle management services. We’ve already signed our first agreement with a major carrier in North America. We believe this is evidence that Somera is positioning itself in the right strategic direction to help carriers efficiently manage the equipment lifecycles of their aging networks and thereby optimizing their return on assets.”

 

Somera’s total revenue for fiscal year 2004 was $100.0 million, compared with $136.6 million for 2003. Net loss on a GAAP basis was $22.6 million, or a loss of $0.45 per share, compared with a net loss of $58.5 million, or a loss of $1.19 per share, for the prior year.

 

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Outlook

 

Consistent with Management’s outlook with respect to profitability as reported in the third-quarter 2004 results on November 2, 2004, Somera expects to achieve profitability on a quarterly basis by the end of 2005.

 

Teleconference and Web cast

 

Management’s teleconference and web cast are scheduled for 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time on February 8, 2005 and are open to everyone. Please dial 800.295.3991 for domestic calls, or 617.614.3924 for international calls, at least five minutes before start time and use passcode 83163838. The call will be simultaneously web cast on the Investor Relations page of the Somera website at www.somera.com. Listeners will need to have Microsoft Media Player installed on their computers. A replay will be available from one hour after the call ends through March 8, 2005, 11:59 p.m. Eastern Time/8:59 p.m. Pacific Time, at 888.286.8010 for domestic calls, or 617.801.6888 for international calls. Please use passcode 34484668.

 

About Somera Communications

 

Somera provides equipment lifecycle management services to support carriers’ need to more effectively manage the assets of their aging networks at the lowest cost and greatest return on assets. The company buys, sells, services, and repairs new and refurbished equipment. Founded in 1995, Somera has developed an impressive base of over 1,100 customers worldwide, including the industry leaders from each segment of the telecommunications market. Visit Somera on the web at www.somera.com

 

This news release contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 934, as amended, including those regarding Somera’s achievement of profitability on a quarterly basis by the end of 2005. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions particularly affecting the telecommunications industry; capital equipment spending levels in the telecommunications industry, including the risk of continued customer spending delays associated with carrier consolidation; the impact of competition in the mark for supplying equipment to telecommunications operators; the risk of potential shortage of product supply; Somera’s ability to reduce operating expenses and breakeven revenue amounts; risks regarding the company’s ability to expand domestic and international operations and build lifecycle management services capabilities; and other factors fully described in the company’s reports to the Securities and Exchange Commission (SEC), including g but not limited, the Annual Report on From 10-K for the fiscal year ended December, 31, 2003, and Quarterly Reports on Form 10-Q. Actual results may differ materially from the statements contained in this new release. The company does not undertake to update any forward-looking statements that may be made by or on behalf of the company. Copies of Somera’s SEC filings may be obtained by contacting Investor Relations, Somera Communications, at 1-805-681-3322.

 

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SOMERA COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)

 

    

December 31,

2004


  

December 31,

2003


ASSETS

             

Current Assets:

             

Cash and cash equivalents

   $ 7,654    $ 41,842

Short-term investments

     32,757      5,000

Accounts receivable, net

     16,217      19,906

Inventories, net

     10,027      13,804

Other current assets

     1,876      10,487

Total current assets

     68,531      91,039

Property and equipment, net

     4,600      5,809

Other assets

     148      117

Intangible assets

     1,810      1,877

Total assets

   $ 75,089    $ 98,842

LIABILITIES AND STOCKHOLDERS' EQUITY

             

Current Liabilities:

             

Accounts payable

   $ 12,396    $ 14,520

Accrued compensation

     2,503      3,478

Other accrued liabilities

     11,139      9,338

Deferred revenue

     723      1,369

Total current liabilities

     26,761      28,705

Stockholders' Equity

     48,328      70,137

Total liabilities and stockholders' equity

   $ 75,089    $ 98,842

 

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SOMERA COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in thousands, except per share data)

(Unaudited)

 

    

For the Three Months

December 31, 2004


    For the Three Months
December 31, 2003


   

For the Twelve Months

December 31, 2004


   

For the Twelve Months

December 31, 2003


 

Equipment Revenue

   $ 20,624     $ 29,979     $ 87,120     $ 119,729  

Service Revenue

     2,562       4,037       12,914       16,838  

Total Revenue

   $ 23,186     $ 34,016     $ 100,034     $ 136,567  

Equipment Cost of Revenue

   $ 15,073     $ 21,607     $ 67,008     $ 88,458  

Service Cost of Revenue

     1,925       3,030       9,479       13,298  

Total Cost of Revenue

   $ 16,998     $ 24,637     $ 76,487     $ 101,756  

Gross profit

   $ 6,188     $ 9,379     $ 23,547     $ 34,811  

Operating expenses:

                                

Selling, general & administrative

     12,914       16,528       46,693       55,179  

Amortization of intangible assets

     17       49       67       751  

Goodwill and intangible assets impairment

     —         —         —         25,329  

Total operating expenses

   $ 12,931     $ 16,577     $ 46,760     $ 81,259  

Loss from operations

   $ (6,743 )   $ (7,198 )   $ (23,213 )   $ (46,448 )

Interest and other income, net

     552       113       643       604  

Loss before income taxes

   $ (6,191 )   $ (7,085 )   $ (22,570 )   $ (45,844 )

Income tax provision

     16       22,101       58       12,666  

Net loss

   $ (6,207 )   $ (29,186 )   $ (22,628 )   $ (58,510 )

Net loss per share - basic and diluted

   $ (0.12 )   $ (0.59 )   $ (0.45 )   $ (1.19 )

Weighted average number of shares outstanding:

                                

Basic and diluted

     49,871       49,257       49,739       49,126  

 

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