Click here to close now.

Welcome!

Mobile IoT Authors: Elizabeth White, Liz McMillan, Pat Romanski, David Miller, James Carlini

News Feed Item

TranSwitch Corporation Announces Third Quarter 2012 Financial Results

TranSwitch Corporation (NASDAQ: TXCC), a leading provider of semiconductor solutions for multimedia connectivity and processing today announced financial results for the third quarter ended September 30, 2012.

Net revenues for the third quarter of 2012 were approximately $4.8 million, as compared to net revenues of $3.8 million for the second quarter of 2012 and $6.7 million for the third quarter of 2011. Net loss for the third quarter of 2012 was ($3.0) million, or ($0.09) per basic and diluted common share, as compared to a net loss of ($6.0) million, or ($0.19) per basic and diluted common share for the second quarter of 2012, and a net loss of ($4.8) million, or ($0.16) per basic and diluted common share for the third quarter of 2011.

The GAAP gross margin for the third quarter was 64%. This is compared to the Company's GAAP gross margin of 67% for the second quarter of 2012, and 65% for the third quarter of 2011.

Total non-GAAP operating expenses for the third quarter of 2012 were $5.7 million, as compared to $7.4 million in the second quarter of 2012 and $7.4 million in the third quarter of 2011. Non-GAAP operating expenses for the third quarter of 2012 exclude $0.1 million in amortization of purchase price intangibles and $0.5 million in stock-based compensation along with a benefit of $0.3 million from the reversal of accrued royalties. Total GAAP operating expenses for the third quarter of 2012 were $6.0 million, as compared to $8.5 million in the second quarter of 2012 and $8.8 million in the third quarter of 2011.

Non-GAAP operating loss for the third quarter of 2012 was ($2.7) million, compared to a non-GAAP operating loss of ($4.9) million for the second quarter of 2012 and a non-GAAP operating loss of ($3.1) million for the third quarter of 2011. On a GAAP basis, the operating loss for the third quarter of 2012 was ($2.9) million, compared to an operating loss of ($5.9) million for the second quarter of 2012 and an operating loss of ($4.5) million for the third quarter of 2011.

Non-GAAP net loss for the third quarter of 2012 was ($2.7) million, or ($0.08) per share, compared with a non-GAAP net loss of ($5.0) million, or ($0.16) per share, for the second quarter of 2012 and a non-GAAP net loss of ($3.3) million, or ($0.11) per share, for the third quarter of 2011.

Further information about non-GAAP measures is provided below and a reconciliation of the non-GAAP measures to the comparable GAAP results is provided after the financial statements attached to this release.

“We made meaningful progress in the third quarter toward our business objectives,” stated Dr. M. Ali Khatibzadeh, President and CEO of TranSwitch Corporation. “In addition to 24% quarterly sequential revenue growth driven by IP licensing opportunities and increased royalty revenue, we achieved significant on-going reductions in expenses due to the restructuring plan we initiated earlier in the quarter. On the new video connectivity business front, we passed an important milestone of initial production shipments of HDplay™ product for our first customer who also plans to incorporate HDplay™ in new products. In addition, we are making progress securing new customers from an expanding list of opportunities and anticipate additional customers reaching production ramp in the fourth quarter and as we move into 2013. Overall, through the combination of an increased backlog of telecom products, IP licensing opportunities, royalty revenue and ramp of HDplay™ product, we are targeting further sequential growth in the fourth quarter. With regard to improving our balance sheet, as we have previously announced, our primary plan is the sale of telecom patents. We are making tangible progress towards the sale of our patents and anticipate completing a transaction by the end of the year.”

Additional details on TranSwitch’s third quarter 2012 financial results will be discussed during a conference call regarding this announcement today at 5:30 pm Eastern time. To listen to the live call, investors can dial 719-325-2484 and reference confirmation code: 2054387. The call will be recorded and a replay will be available two hours after the conclusion of the live broadcast through November 18, 2012. To access the replay, dial 719-457-0820 and enter confirmation code: 2054387. Investors can also access an audio webcast which will be broadcast through Vcall’s Investor Calendar at www.investorcalendar.com or the Company’s website at www.transwitch.com. This audio webcast will also be available on a replay basis for 10 business days.

About TranSwitch Corporation

TranSwitch Corporation (Nasdaq:TXCC) provides innovative integrated circuit (IC) and intellectual property (IP) solutions that deliver core functionality for video, voice, and data communications equipment for the customer premises and network infrastructure markets. For the customer-premises market, we offer multi-standard, high-speed interconnect solutions enabling the distribution and presentation of high-definition (HD) video and data content for consumer electronics applications. We also provide a family of best-in-class communications processors. For the network infrastructure market we provide integrated multi-core network processor System-on-a-Chip (SoC) solutions for Fixed, 3G and 4G Mobile, VoIP and Multimedia applications. TranSwitch’s customers are leading consumer electronics and telecom equipment companies around the globe. For more information, please visit www.transwitch.com or follow us at Facebook or Twitter.

Forward-looking statements in this release, including statements regarding management's expectations for future financial results and the markets for TranSwitch's products, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements regarding TranSwitch, its operations and its financial results, involve risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation the risks associated with downturns in economic conditions generally and in the telecommunications and data communications markets and the semiconductor industry specifically; risks in product development and market acceptance of and demand for TranSwitch’s products and products developed by TranSwitch’s customers; risks associated with foreign sales and high customer concentration; risks associated with competition and competitive pricing pressures; risks in technology development and commercialization; risks of failing to attract and retain key managerial and technical personnel; risks relating to TranSwitch’s available cash; risks associated with acquiring new businesses; risks of dependence on third-party VLSI fabrication facilities; risks related to intellectual property rights and litigation; and other risks detailed in TranSwitch's filings with the Securities and Exchange Commission.

TranSwitch expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in expectations or any change in events, conditions or circumstances on which any such statement is based.

TranSwitch is a registered trademark of TranSwitch Corporation.

Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited)

Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call or webcast to the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The reconciliation for historic non-GAAP measures is provided herein on a quantitative basis and for non-GAAP measures that are forward-looking is provided herein on a qualitative basis.

The non-GAAP measures used in this earnings release and related conference call differ from GAAP in that they exclude expenses related to stock-based compensation, amortization of intangible assets, the effects of special charges such as asset impairments, restructuring charges and benefits from the reversal of accrued royalties. The Company’s basis for these adjustments is described below. Management uses these non-GAAP measures for internal reporting and forecasting purposes. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company’s historical and prospective financial performance.

Management uses these non-GAAP financial measures when evaluating the Company’s operating performance and believes that such measures are useful to investors and financial analysts in assessing the Company’s operating performance as the Company believes that the presentation of non-GAAP measures that adjust for the impact of stock-based compensation expenses, amortization of intangible assets, the effects of special charges such as asset impairments and restructuring charges and benefits from the reversal of accrued royalties provides investors and financial analysts with a consistent basis for comparison across accounting periods and, therefore, are useful to investors and financial analysts in helping them to better understand the Company’s operating results and underlying operational trends.

We do not provide forward-looking GAAP measures or a reconciliation of the forward-looking non-GAAP measures to GAAP measures because of our inability to project special charges, asset impairments, employee separation costs and stock-based compensation related expenses.

The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. The non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. We endeavor to compensate for the limitations of these non-GAAP measures by providing GAAP financial statements, descriptions of the reconciling items and a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures so that investors can appropriately incorporate the non-GAAP measures and their limitations into their analyses. Please see our financial statements and "Management's Discussion and Analysis of Results of Operations and Financial Condition" that will be included in the periodic report we expect to file with the SEC with respect to the financial periods discussed herein.

       

TranSwitch Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except for per share amounts)

 
Three Months Ended Nine Months Ended
Sep 30,

2012

 

June 30,
2012

Sep 30,

2011

Sep 30,

2012

  Sep 30,

2011

Net revenues:
Product revenues $ 1,631 $ 2,374 $ 4,855 $ 7,167 $ 14,682
Intellectual property and service revenues 3,121 1,451 1,810 5,091 7,263
Total net revenues 4,752 3,825 6,665 12,258 21,945
 
Cost of revenues:
Cost of product revenues 694 866 1,425 2,679 4,510
Provision for excess and obsolete inventories 154 220 26 605 186
Cost of service revenues 844 175 917 1,180 2,955
Total cost of revenues 1,692 1,261 2,368 4,464 7,651
Gross profit 3,060 2,564 4,297 7,794 14,294
 
Operating expenses:
Research and development 3,325 4,678 4,672 12,339 13,727
Marketing and sales 1,144 1,317 1,772 4,103 5,836
General and administrative 1,851 1,930 1,925 5,913 5,699
Restructuring charges 1,001 924 1,001 1.391
Reversal of accrued royalties (332 ) (442 ) (455 ) (832 ) (2,030 )
Total operating expenses 5,988 8,484 8,838 22,524 24,623
Operating loss (Note 1) (2,928 ) (5,920 ) (4,541 ) (14,730 ) (10,329 )
 
Other (expense) income:
Other income (expense) 41 57 23 (3 ) 10
Interest income (expense):
Interest income 32 17 8 72 100
Interest expense (37 ) (32 ) (44 ) (78 ) (237 )
Interest (expense) income, net (5 ) (15 ) (36 ) (6 ) (137 )
Total other income (expense), net 36 42 (13 ) (9 ) (127 )
 
Loss before income taxes (2,892 ) (5,878 ) (4,554 ) (14,739 ) (10,456 )
Income tax expense 108 119 233 341 479
Net loss $ (3,000 ) $ (5,997 ) $ (4,787 ) $ (15,080 ) $ (10,935 )
 
Net loss per common share – basic and diluted $ (0.09 ) $ (0.19 ) $ (0.16 ) $ (0.47 ) $ (0.40 )
 
Weighted average common shares outstanding – basic and diluted 34,269 31,617 30,475 32,198 27,019
 
 

Note 1: Stock-based compensation expense included in cost of
revenues and operating expenses is as follows:

Cost of revenues $ 8 $ (14 ) $ 11 $ $ 48
Research and development 147 78 195 345 624
Marketing and sales 93 39 111 243 361
General and administrative 259 283 286 837 903
Total $ 507 $ 386 $ 603 $ 1,425 $ 1,936
 
         

TranSwitch Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands)

 

September 30,

2012

December 31,

2011

ASSETS
Current assets:
Cash, cash equivalents, restricted cash and short-term investments $ 1,607 $ 7,554
Accounts receivable, net 4,295 6,375
Inventories 1,383 1,988
Prepaid expenses and other current assets   1,808     1,876
 
Total current assets 9,093 17,793
 
Property and equipment, net 1,153 1,355
Goodwill 5,271 5,271
Other intangible assets, net 1,228 1,461
Other assets   1,928     1,738
 
Total assets $ 18,673   $ 27,618
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank debt $ 942 $
Accounts payable, accrued expenses and other current liabilities 10,170 10,932
Current portion of restructuring liabilities   2,093     1,995

 

Total current liabilities 13,205 12,927
 
Restructuring liabilities   1,776     2,485
 
Total liabilities   14,981     15,412
 
Total stockholders’ equity   3,692     12,206
 
Total liabilities and stockholders’ equity $ 18,673   $ 27,618
               
TRANSWITCH CORPORATION
Supplemental Reconciliation of GAAP Results to Non-GAAP
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Sep 30, Jun 30, Sep 30, Sep 30, Sep 30,
2012   2012   2011 2012   2011
GAAP gross profit $ 3,060 $ 2,564 $ 4,297 $ 7,794 $ 14,294
Add:
Stock-based compensation 8 (14) 11 - 48
Non-GAAP gross profit $ 3,068 $ 2,550 $ 4,308 $ 7,794 $ 14,342
 
GAAP gross margin 64.4% 67.0% 64.5% 63.6% 65.1%
Stock-based compensation 0.2% -0.4% 0.2% 0.0% 0.2%
Non-GAAP gross margin 64.6% 66.7% 64.6% 63.6% 65.4%
 
GAAP research and development expenses $ 3,325 $ 4,678 $ 4,672 $ 12,339 $ 13,727
Less:
Amortization of purchase accounting intangibles 38 42 114 115 340
Stock-based compensation 147 78 195 345 624
Non-GAAP research and development expenses $ 3,140 $ 4,558 $ 4,363 $ 11,879 $ 12,763
 
GAAP selling, general, and administrative expenses $ 2,995 $ 3,247 $ 3,697 $ 10,016 $ 11,535
Less:
Amortization of purchase accounting intangibles 39 36 283 118 849
Stock-based compensation 352 322 397 1,080 1,264
Non-GAAP selling, general, and administrative expenses $ 2,604 $ 2,889 $ 3,017 $ 8,818 $ 9,422
 
GAAP operating expenses $ 5,988 $ 8,484 $ 8,838 $ 22,524 $ 24,623
Less:
Amortization of purchase accounting intangibles 77 78 397 233 1,189
Stock-based compensation 499 400 592 1,425 1,888
Reversal of accrued royalties and other (332) (442) (455) (832) (2,030)
Restructuring charges - 1,001 924 1,001 1,391
Non-GAAP operating expenses $ 5,744 $ 7,447 $ 7,380 $ 20,697 $ 22,185
Non-GAAP operating loss $ (2,676) $ (4,897) $ (3,072) $ (12,903) $ (7,843)
 
GAAP net loss $ (3,000) $ (5,997) $ (4,787) $ (15,080) $ (10,935)
Add:
Amortization of purchase accounting intangibles 77 78 397 233 1,189
Stock-based compensation 507 386 603 1,425 1,936
Reversal of accrued royalties and other (332) (442) (455) (832) (2,030)
Restructuring charges - 1,001 924 1,001 1,391
Non-GAAP net loss $ (2,748) $ (4,974) $ (3,318) $ (13,253) $ (8,449)
 
Non-GAAP basic net loss per share $ (0.08) $ (0.16) $ (0.11) $ (0.41) $ (0.31)
Basic shares used to calculate non-GAAP net loss per share 34,269 31,617 30,475 32,198 27,019

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
The recent trends like cloud computing, social, mobile and Internet of Things are forcing enterprises to modernize in order to compete in the competitive globalized markets. However, enterprises are approaching newer technologies with a more silo-ed way, gaining only sub optimal benefits. The Modern Enterprise model is presented as a newer way to think of enterprise IT, which takes a more holistic approach to embracing modern technologies.
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impact.
There's no doubt that the Internet of Things is driving the next wave of innovation. Google has spent billions over the past few months vacuuming up companies that specialize in smart appliances and machine learning. Already, Philips light bulbs, Audi automobiles, and Samsung washers and dryers can communicate with and be controlled from mobile devices. To take advantage of the opportunities the Internet of Things brings to your business, you'll want to start preparing now.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
The world is at a tipping point where the technology, the device and global adoption are converging to such a point that we will see an explosion of a world where smartphone devices not only allow us to talk to each other, but allow for communication between everything – serving as a central hub from which we control our world – MediaTek is at the heart of both driving this and allowing the markets to drive this reality forward themselves. The next wave of consumer gadgets is here – smart, connected, and small. If your ambitions are big, so are ours. In his session at @ThingsExpo, Jack Hu, D...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participa...
We’re entering a new era of computing technology that many are calling the Internet of Things (IoT). Machine to machine, machine to infrastructure, machine to environment, the Internet of Everything, the Internet of Intelligent Things, intelligent systems – call it what you want, but it’s happening, and its potential is huge. IoT is comprised of smart machines interacting and communicating with other machines, objects, environments and infrastructures. As a result, huge volumes of data are being generated, and that data is being processed into useful actions that can “command and control” thi...
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not the disruptee.
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
The worldwide cellular network will be the backbone of the future IoT, and the telecom industry is clamoring to get on board as more than just a data pipe. In his session at @ThingsExpo, Evan McGee, CTO of Ring Plus, Inc., discussed what service operators can offer that would benefit IoT entrepreneurs, inventors, and consumers. Evan McGee is the CTO of RingPlus, a leading innovative U.S. MVNO and wireless enabler. His focus is on combining web technologies with traditional telecom to create a new breed of unified communication that is easily accessible to the general consumer. With over a de...
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...