Mobile Edition
Print
Get the Mag
Weekly UpdatesSunrise Telecom Incorporated (Pink Sheets: SRTI), a leader in test and measurement solutions for telecom, wireless and cable networks, has announced unaudited financial results for the three months ended June 30, 2009.
Net sales for the second quarter of 2009 were $13.2 million compared to $14.0 million in the first quarter of 2009 and $20.2 million in the second quarter of 2008. Net sales for 2008 included sales from our Protocol Products Group (now named Accanto Systems) which was sold to LTE Innovations on December 12, 2008. Backlog as of June 30, 2009 was $2.5 million, compared to $4.7 million as of March 31, 2009 and $11.1 million at the end of the second quarter of 2008.
Gross margin of 51% for the second quarter 2009 is down from 62% in the first quarter of 2009 and down from 62% in the second quarter a year ago. The decline in gross margin was primarily due to an increase in one time charges such as provisions for warranty and inventory and inventory write-offs. The Company is currently reviewing the cause of such write-offs.
Second quarter operating loss was $2.2 million, compared to an operating loss of $0.6 million in the prior quarter and an operating loss of $3.8 million in the second quarter of 2008. The operating loss in the second quarter of 2009 was primarily due to one time charges in cost of goods sold. Net loss per share on a GAAP basis was $(0.04) compared to net loss of $(0.03) per share in the first quarter of 2009 and net loss of $(0.07) per share in the second quarter of 2008.
Restructuring Update
The Company made substantial progress during the past year towards its cost cutting and productivity improvement program. The integration of the wireline, fiber optics and broadband product groups into a single business has been completed. The Protocol Products Group has been sold and the Swiss based high resolution OTDR business was divested.
As part of the Company's cost cutting initiatives, total headcount has been reduced by 40% since year-end 2007.
Additional Highlights -- Debuted enhanced version of the CM2000(TM) Cable Modem Network Analyzer featuring digital video, high-speed data and voice installation and service functions. -- Introduced the UDSL-3Play module for the MTT platform, the ultimate tool for DSL-based triple play services. -- Unveiled the XTT 5000, the definitive tool for carrier 10 gigabit Ethernet and IP services testing. -- Announced consolidation of most manufacturing operations in Taiwan for a planned annual savings of $2 million in cost of goods sold plus an additional $3 million in cash savings generated from lower inventory levels by year end. This consolidation will further address the material weakness in controls over inventory management noted in the 2009 Q1 form 10Q. -- Voluntarily de-registered its shares with the SEC by filing Form 15-12G as a result of the Company's strategic alternatives review and in order to achieve annual savings of approximately $2 million in administrative and regulatory compliance costs.
-- Announced intention to post regular quarterly and annual reports on the Pink Sheets website and continue to trade under its current symbol in order to preserve investor liquidity and transparency regarding company performance.
"We are pleased that second quarter revenue came in as expected despite the challenging economic environment," said Sunrise Telecom Chief Executive Officer, Bahaa Moukadam. "Our cost cutting efforts significantly reduced our operating expenses, which are down to $9.0 million for the quarter compared to $16.2 million in the second quarter last year. The third quarter revenue will be a challenge with a traditionally soft European market in the summer months. I am optimistic the combination of new products and better execution will grow our top line and expand our margins leading to a return to profitability in the fourth quarter."
Third Quarter Business Outlook
Based on current backlog and order expectations, Sunrise Telecom forecasts its third quarter sales to be in the range of $11 - $13 million.
About Sunrise Telecom Incorporated
Sunrise Telecom develops and delivers high-quality communications test and measurement solutions for telecom, cable and wireless networks. The Company's robust portfolio of feature-rich, easy-to-use products enables service providers to deliver premium voice, video, data and next-generation digital multimedia services quickly, reliably, and cost-effectively. Based in San Jose, California, Sunrise Telecom distributes its products through a direct sales force and a global network of sales representatives and distributors.
For more information, visit http://www.sunrisetelecom.com or call 408/363-8000.
FEED