UTStarcom Reports Unaudited Financial Results for First Half of 2024
HANGZHOU, China, Sept. 05, 2024 (GLOBE NEWSWIRE) -- UTStarcom ("UT," "UTStarcom" or the "Company") (NASDAQ:UTSI), a global telecommunications infrastructure provider, today reported its unaudited financial results and a business update for the six months ended June 30, 2024 ("the first half").
Business Highlights:
Expansion order for the mobile transport network of a Mobile Operator in Europe. In 1H 2024, UTStarcom received a new order for an updated NetRing PTN product that includes certain new features required by the customer to address its network expansion plans. UT also works with the customer on SDN solution integration and testing to enable the customer's network evolution.
Expansion order for the Broadband Core solution in India. Further expansion order for IMS solution deployed with one of our key Indian customers, including software, spare parts, and services.
Maintenance and support services orders. In 1H 2024, UTStarcom received multiple maintenance and support orders in our key markets related to the deployed UT's solutions such as PTN, NMS, SyncRing, and IMS.
India Receivable. The Company collected a portion of the amount due from its major customer in India. During the first half of 2024, the Company collected a total of $3.39 million from BSNL, leaving $4.57 million still outstanding.
UTStarcom's Chief Executive Officer Mr. Hua Li commented, "We kept working on the direction we aimed to and have made progresses on the marketing side of our new products. We expect to see some results of our continuous efforts and extend our products to more application fields. Meanwhile we are continuously supporting our current products and customers for the products deployed."
First Half 2024 Financial Results
Summary of 1H 2024 Key Financials
1H 2024
1H 2023
Y/Y Change
Revenue
$5.7
$6.5
-12.3%
Gross Profit
$1.7
$1.8
-5.6%
Operating Expenses
$5.3
$5.8
-8.6%
Operating Loss
($3.6)
($4.0)
$0.4
Net Loss
($2.0)
($2.0)
-$0.0
Basic EPS
($0.22)
($0.22)
-$0.00
Cash Balance (including Restricted Cash)
$56.0
$60.6
-7.6%
* Dollar comparisons are used where percentage comparisons are not meaningful. * All amounts are in U.S. Dollars millions except for Earnings Per Share (EPS)
Total Revenues
Total revenues for the first half of 2024 were $5.7 million, compared to $6.5 million in the corresponding period in 2023.
Net equipment sales were $0.8 million, a decrease of 20.4% from $1.0 million in the corresponding period in 2023, driven by lower sales to major customers in Japan.
Net services sales were $4.9 million, a decrease of 10.7% from $5.5 million in the corresponding period in 2023. The decrease was mainly due to the completion of current projects and no new major projects in India.
Gross Profit
Gross profit was $1.7 million, or 30.0% of net sales, for the first half of 2024, compared to $1.8 million, or 28.0% of net sales, in the corresponding period in 2023.
Gross margin on equipment sales was $0.1 million, compared to $0.5 million in the corresponding period in 2023. Equipment gross margin for the first half of 2024 was 10.6%, compared to 49.2% for the corresponding period in 2023. The decrease in gross margin was due to a decline in revenue from a mobile operator in Europe.
Service gross margin was $1.6 million, compared to $1.3 million in the corresponding period in 2023. Service gross margin was 33.1%, compared to 24.1% for the corresponding period in 2023, due to decreased personnel cost as a result of the reduction of personnel.
Operating Expenses
Operating expenses for the first half of 2024 were $5.3 million, compared to $5.8 million in the corresponding period in 2023.
Selling, general and administrative ("SG&A") expenses for the first half of 2024 were $2.7 million, compared to $2.9 million in the corresponding period in 2023. The decrease was mainly due to decreased personnel cost as a result of the reduction of personnel.
Research and development ("R&D") expenses were $2.6 million, compared to $2.9 million in the corresponding period in 2023. The decrease was mainly attributable to decreased personnel cost as a result of the reduction of personnel.
Operating Loss
Operating loss for the first half of 2024 was $3.6 million, compared to $4.0 million in the corresponding period in 2023.
Interest Income, Net
Net interest income for the first half of 2024 was $1.3 million, compared to $0.9 million in the corresponding period in 2023.
Other Income (Expenses), Net
Net other income for the first half of 2024 was $0.8 million, compared to $1.9 million in the corresponding period in 2023. Other income mainly reflects a foreign exchange gain resulting from the appreciation of the U.S. dollar against the Renminbi and U.S. dollar against the Japanese Yen.
Net Loss
Net loss attributable to shareholders for the first half of 2024 was $2.0 million, compared to $2.0 million in the corresponding period in 2023. Basic net loss per share for the first half of 2024 was $0.22, compared to $0.22 for the corresponding period in 2023.
Cash Flow
Cash used in operating activities in the first half of 2024 was $2.5 million, cash used in investing activities was $0.1 million, and cash provided by financing activities was nil. As of June 30, 2024, UTStarcom had cash, cash equivalents and restricted cash of $56.0 million.
About UTStarcom Holdings Corp.
UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan, India and China. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.
Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the Company's strategic initiatives and the Company's business outlook. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially and adversely from the Company's current expectations. These include risks and uncertainties related to, among other things, changes in the financial condition and cash position of the Company, changes in the composition of the Company's management and their effect on the Company, the Company's ability to realize anticipated results of operational improvements and benefits of the divestiture transaction, the ability to successfully identify and acquire appropriate technologies and businesses for inorganic growth and to integrate such acquisitions, the ability to internally innovate and develop new products, assumptions the Company makes regarding the growth of the market and the success of the Company's offerings in the market and the Company's ability to execute its business plan and manage regulatory matters. The risks and uncertainties also include the risk factors identified in the Company's latest annual report on Form 20-F and current reports on Form 6-K as filed with the Securities and Exchange Commission. The Company is in a period of strategic transition and the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, which may change and the Company assumes no obligation to update any such forward-looking statements.
For investor and media inquiries, please contact:
UTStarcom Holdings Corp. Tel: +86 (571) 8192 8888 Ms. Shelley Jiang, Investor Relations Email: /
UTStarcom Holdings Corp. Unaudited Condensed Consolidated Balance Sheets
June 30,
December 31,
2024
2023
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
46,533
$
49,968
Accounts and notes receivable, net
6,916
8,870
Short-term investments
369
—
Inventories and deferred costs
783
886
Short-term restricted cash
6,991
7,117
Prepaid and other current assets
4,071
3,755
Total current assets
65,663
70,596
Long-term assets:
Property, plant and equipment, net
531
610
Operating lease right-of-use assets, net
2,029
2,649
Long-term restricted cash
2,514
2,562
Other long-term assets
1,024
1,063
Total long-term assets
6,098
6,884
Total assets
$
71,761
$
77,480
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
6,998
$
7,959
Customer advances
237
226
Deferred revenue
61
72
Income tax payable
8,574
8,509
Operating lease liabilities, current
1,163
1,184
Other current liabilities
4,253
5,438
Total current liabilities
21,286
23,388
Long-term liabilities:
Operating lease liabilities, non-current
1,067
1,660
Long-term deferred revenue and other liabilities
1,043
1,049
Total liabilities
23,396
26,097
Total equity
48,365
51,383
Total liabilities and equity
$
71,761
$
77,480
UTStarcom Holdings Corp. Unaudited Condensed Consolidated Statements of Operations
