XURA, INC. |
(Exact name of registrant as specified in its charter) |
Delaware | 001-35572 | 04-3398741 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
Exhibit No. | Description |
99.1 | Press Release of Xura, Inc., dated September 9, 2015. |
XURA, INC. | ||
Date: September 9, 2015 | By: | /s/ Jacky Wu |
Name: | Jacky Wu | |
Title: | Executive Vice President, Chief Financial Officer |
Exhibit No. | Description |
99.1 | Press Release of Xura, Inc., dated September 9, 2015. |
Xura, Inc.: | Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||
(In thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Total revenue | $ | 61,629 | $ | 74,988 | $ | 107,334 | $ | 140,070 | |||||||
Costs and expenses | |||||||||||||||
Cost of revenue | 39,964 | 57,956 | 83,721 | 108,841 | |||||||||||
Research and development, net | 8,235 | 9,813 | 16,515 | 18,172 | |||||||||||
Selling, general and administrative | 19,686 | 23,059 | 39,559 | 48,619 | |||||||||||
Other operating expenses | 4,238 | 1,171 | 7,646 | 3,043 | |||||||||||
Total costs and expenses | 72,123 | 91,999 | 147,441 | 178,675 | |||||||||||
Loss from operations | (10,494 | ) | (17,011 | ) | (40,107 | ) | (38,605 | ) | |||||||
Expense adjustments | 9,878 | 5,489 | 17,642 | 11,366 | |||||||||||
Xura performance (1) | (616 | ) | (11,522 | ) | (22,465 | ) | (27,239 | ) | |||||||
Depreciation | 3,339 | 3,261 | 6,706 | 6,422 | |||||||||||
Adjusted EBITDA (1) | 2,723 | (8,261 | ) | (15,759 | ) | (20,817 | ) | ||||||||
Loss before income tax benefit (expense) | (14,697 | ) | (20,504 | ) | (49,890 | ) | (40,139 | ) | |||||||
Income tax benefit (expense) | 2,534 | (1,877 | ) | (2,253 | ) | (4,337 | ) | ||||||||
Loss from continuing operations | (12,163 | ) | (22,381 | ) | (52,143 | ) | (44,476 | ) | |||||||
Income from discontinued operations | 175,060 | 5,515 | 188,379 | 11,479 | |||||||||||
Net income (loss) | $ | 162,897 | $ | (16,866 | ) | $ | 136,236 | $ | (32,997 | ) | |||||
Earnings (loss) per share - basic & diluted: | |||||||||||||||
Continuing operations | $ | (0.55 | ) | $ | (1.00 | ) | $ | (2.38 | ) | $ | (1.99 | ) | |||
Discontinued operations | 7.95 | 0.25 | 8.59 | 0.51 | |||||||||||
$ | 7.40 | $ | (0.75 | ) | $ | 6.21 | $ | (1.48 | ) | ||||||
Adjusted EBITDA earnings (loss) per share - basic & diluted (1) | $ | 0.12 | $ | (0.37 | ) | $ | (0.72 | ) | $ | (0.93 | ) | ||||
Interest expense | (167 | ) | (231 | ) | (360 | ) | (354 | ) | |||||||
Operating margin | (17.0 | )% | (22.7 | )% | (37.4 | )% | (27.6 | )% | |||||||
Xura performance margin | (1.0 | )% | (15.4 | )% | (20.9 | )% | (19.4 | )% | |||||||
Adjusted EBITDA margin | 4.4 | % | (11.0 | )% | (14.7 | )% | (14.9 | )% | |||||||
Net cash used in operating activities | $ | (31,559 | ) | $ | (13,785 | ) | $ | (49,263 | ) | $ | (49,384 | ) |
As of | |||||||
(In millions) | July 31, 2015 | April 30, 2015 | |||||
Cash and cash equivalents | $ | 346.1 | $ | 136.1 | |||
Restricted cash (including long-term restricted cash) and bank time deposits | 60.8 | 43.8 | |||||
Total | $ | 406.9 | $ | 179.9 |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue: | |||||||||||||||
Product revenue | $ | 17,005 | $ | 20,062 | $ | 27,112 | $ | 37,072 | |||||||
Service revenue | 44,624 | 54,926 | 80,222 | 102,998 | |||||||||||
Total revenue | 61,629 | 74,988 | 107,334 | 140,070 | |||||||||||
Costs and expenses: | |||||||||||||||
Product costs | 12,715 | 18,808 | 25,668 | 28,703 | |||||||||||
Service costs | 27,249 | 39,148 | 58,053 | 80,138 | |||||||||||
Research and development, net | 8,235 | 9,813 | 16,515 | 18,172 | |||||||||||
Selling, general and administrative | 19,686 | 23,059 | 39,559 | 48,619 | |||||||||||
Other operating expenses: | |||||||||||||||
Restructuring expenses | 4,238 | 1,171 | 7,646 | 3,043 | |||||||||||
Total other operating expenses | 4,238 | 1,171 | 7,646 | 3,043 | |||||||||||
Total costs and expenses | 72,123 | 91,999 | 147,441 | 178,675 | |||||||||||
Loss from operations | (10,494 | ) | (17,011 | ) | (40,107 | ) | (38,605 | ) | |||||||
Interest income | 89 | 100 | 173 | 215 | |||||||||||
Interest expense | (167 | ) | (231 | ) | (360 | ) | (354 | ) | |||||||
Foreign currency transaction loss, net | (4,202 | ) | (2,949 | ) | (9,775 | ) | (930 | ) | |||||||
Other income (expense), net | 77 | (413 | ) | 179 | (465 | ) | |||||||||
Loss before income tax benefit (expense) | (14,697 | ) | (20,504 | ) | (49,890 | ) | (40,139 | ) | |||||||
Income tax benefit (expense) | 2,534 | (1,877 | ) | (2,253 | ) | (4,337 | ) | ||||||||
Loss from continuing operations | (12,163 | ) | (22,381 | ) | (52,143 | ) | (44,476 | ) | |||||||
Income from discontinued operations | 175,060 | 5,515 | 188,379 | 11,479 | |||||||||||
Net income (loss) | $ | 162,897 | $ | (16,866 | ) | $ | 136,236 | $ | (32,997 | ) | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic & diluted | 22,005,116 | 22,401,902 | 21,936,379 | 22,348,835 | |||||||||||
Earnings (loss) per share - basic & diluted: | |||||||||||||||
Continuing operations | $ | (0.55 | ) | $ | (1.00 | ) | $ | (2.38 | ) | $ | (1.99 | ) | |||
Discontinued operations | 7.95 | 0.25 | 8.59 | 0.51 | |||||||||||
$ | 7.40 | $ | (0.75 | ) | $ | 6.21 | $ | (1.48 | ) |
July 31, 2015 | January 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 346,074 | $ | 158,121 | |||
Restricted cash and bank deposits | 55,584 | 35,802 | |||||
Accounts receivable, net of allowance of $3,225 and $4,403, respectively | 29,653 | 71,670 | |||||
Inventories | 14,296 | 17,817 | |||||
Deferred cost of revenue | 2,855 | 7,059 | |||||
Deferred income taxes | 14,298 | 13,781 | |||||
Prepaid expenses | 11,288 | 15,156 | |||||
Other current assets | 31,663 | 10,570 | |||||
Total current assets | 505,711 | 329,976 | |||||
Property and equipment, net | 38,496 | 49,230 | |||||
Goodwill | 67,622 | 151,217 | |||||
Intangible assets, net | 1,440 | 4,049 | |||||
Deferred cost of revenue | 19,303 | 30,437 | |||||
Deferred income taxes | 1,731 | 3,064 | |||||
Long-term restricted cash | 5,253 | 7,940 | |||||
Other assets | 16,406 | 30,439 | |||||
Total assets | $ | 655,962 | $ | 606,352 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 145,150 | $ | 121,720 | |||
Deferred revenue | 103,574 | 185,323 | |||||
Deferred income taxes | 1,593 | 1,491 | |||||
Income taxes payable | — | 2,166 | |||||
Total current liabilities | 250,317 | 310,700 | |||||
Deferred revenue | 62,313 | 89,999 | |||||
Deferred income taxes | 51,088 | 56,815 | |||||
Other long-term liabilities | 132,350 | 135,456 | |||||
Total liabilities | 496,068 | 592,970 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Common stock, $0.01 par value - authorized, 100,000,000 shares; issued 22,908,954 and 22,591,411 shares, respectively; outstanding, 21,993,027 and 21,830,081 shares, respectively | 229 | 226 | |||||
Preferred stock, $0.01 par value - authorized, 100,000 shares | — | — | |||||
Treasury stock, at cost, 915,927 and 761,330 shares, respectively | (20,353 | ) | (17,211 | ) | |||
Accumulated earnings (deficit) | 89,846 | (46,390 | ) | ||||
Additional paid in capital | 52,065 | 45,935 | |||||
Accumulated other comprehensive income | 38,107 | 30,822 | |||||
Total equity | 159,894 | 13,382 | |||||
Total liabilities and equity | $ | 655,962 | $ | 606,352 |
Six Months Ended July 31, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 136,236 | $ | (32,997 | ) | ||
Non-cash operating items: | |||||||
Depreciation and amortization | 9,364 | 9,561 | |||||
Gain on BSS Business sale | (201,602 | ) | — | ||||
Provision for doubtful accounts | 331 | 331 | |||||
Stock-based compensation expense | 6,133 | 5,923 | |||||
Deferred income taxes | (4,850 | ) | 3,131 | ||||
Inventory write-downs | 1,303 | 1,108 | |||||
Other non-cash items, net | 420 | 446 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 3,701 | (16,392 | ) | ||||
Inventories | 1,417 | (8,624 | ) | ||||
Deferred cost of revenue | 4,747 | 11,592 | |||||
Prepaid expense and other current assets | (32,838 | ) | (5,580 | ) | |||
Accounts payable and accrued expense | 25,642 | (16,195 | ) | ||||
Income taxes | (4,223 | ) | (1,053 | ) | |||
Deferred revenue | (4,954 | ) | (5,750 | ) | |||
Tax contingencies | 15,352 | 3,598 | |||||
Other assets and liabilities | (5,442 | ) | 1,517 | ||||
Net cash used in operating activities | (49,263 | ) | (49,384 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (7,982 | ) | (11,472 | ) | |||
Advance payment for acquisition of Solaiemes | — | (2,678 | ) | ||||
Net change in restricted cash and bank deposits | (18,477 | ) | (4,027 | ) | |||
Proceeds from asset sales | 110 | 46 | |||||
Proceeds from BSS Business sale net of escrow withheld of $26 million | 266,081 | — | |||||
Net cash provided by (used in) investing activities | 239,732 | (18,131 | ) | ||||
Cash flows from financing activities: | |||||||
Payment for repurchase of common stock in connection with tax liabilities upon settlement of stock awards | (532 | ) | (972 | ) | |||
Payment for repurchase of common stock under repurchase program | (2,351 | ) | (3,573 | ) | |||
Proceeds from exercises of stock options | — | 40 | |||||
Net cash used in financing activities | (2,883 | ) | (4,505 | ) | |||
Effects of exchange rates on cash and cash equivalents | 367 | (973 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 187,953 | (72,993 | ) | ||||
Cash and cash equivalents, beginning of period | 158,121 | 254,580 | |||||
Cash and cash equivalents, end of period | $ | 346,074 | $ | 181,587 | |||
Non-cash investing transactions: | |||||||
Accrued but unpaid purchases of property and equipment | $ | 785 | $ | 4,587 | |||
Inventory transfers to property and equipment | $ | 824 | $ | 1,673 |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Loss from operations | $ | (10,494 | ) | $ | (17,011 | ) | $ | (40,107 | ) | $ | (38,605 | ) | |||
Expense adjustments: | |||||||||||||||
Stock-based compensation expense | 2,589 | 2,382 | 4,965 | 4,535 | |||||||||||
Amortization of intangible assets | 86 | — | 172 | — | |||||||||||
Compliance-related professional fees | 654 | 335 | 705 | 704 | |||||||||||
Compliance-related compensation and other expenses | 229 | — | 237 | (70 | ) | ||||||||||
Strategic related costs | 1,875 | 1,100 | 3,769 | 2,390 | |||||||||||
Write-off of property and equipment | 78 | 169 | 104 | 178 | |||||||||||
Certain litigation settlements and related costs | 12 | 41 | 54 | 5 | |||||||||||
Restructuring expenses | 4,201 | 1,171 | 7,609 | 3,043 | |||||||||||
Loss (gain) on sale of fixed assets | 154 | (14 | ) | 152 | (19 | ) | |||||||||
Other | — | 305 | (125 | ) | 600 | ||||||||||
Total expense adjustments | 9,878 | 5,489 | 17,642 | 11,366 | |||||||||||
Xura Performance | (616 | ) | (11,522 | ) | (22,465 | ) | (27,239 | ) | |||||||
Depreciation | 3,339 | 3,261 | 6,706 | 6,422 | |||||||||||
Adjusted EBITDA | 2,723 | (8,261 | ) | (15,759 | ) | (20,817 | ) | ||||||||
Adjusted EBITDA earnings (loss) per share - basic & diluted | $ | 0.12 | $ | (0.37 | ) | $ | (0.72 | ) | $ | (0.93 | ) |