DZS (Nasdaq: DZSI), a global leader of access, optical and
cloud-controlled software defined solutions, today announced
financial results for its first quarter ended March 31, 2023.
“Q1 revenue of $91 million resulted in an 18% increase
year-over-year and 23% increase on a constant currency basis. While
near-term macroeconomic conditions, slower than expected government
disbursements, and timing with certain deployment schedules are
impacting maximum growth potential, DZS continues to make
encouraging progress in positioning the company to benefit from
what will be a long-term secular growth trend,” said Charlie Vogt,
President and CEO of DZS. “While we remain relentlessly focused on
our customers and prospective customers, balancing our near-term
investments to deliver revenue growth, gross margin expansion and
sustainable earnings is our number one priority.”
CFO Misty Kawecki added, “Q1 revenue was within the guidance
range of $90-100 million. We continue to pull forward lower margin
product shipments which comprise of higher component cost absorbed
during the pandemic. Of our remaining RPOs of $304 million and
forecasted in-year revenue conversion, we anticipate that Q1
represents the low end of our gross margin outlook. Furthermore,
our accelerated cost saving will translate into improved
profitability during the second half of the year.”
Q1 2023 Financial Highlights
- Orders of $80 million compared to $101 million in Q1 2022
- Revenue of $91 million increased 18% compared to $77 million in
Q1, 2022 and 23% on a constant currency basis
- Book-to-Bill ratio of 0.9
- $304 million of RPOs inclusive of backlog and deferred Software
& Services Q1 compared with $252 million at the end of Q1
2022
- GAAP gross margin of 32.8% compared to 34.8% in Q1 2022
- Adjusted gross margin1 of 33.3% compared to 35.2% in Q1
2022
- GAAP operating expenses of $45 million compared to $30 million
in Q1 2022
- Adjusted operating expenses1 of $34 million compared to $27
million in Q1 2022
- Adjusted EBITDA1 loss of $(4) million compared to $(0) million
in Q1 2022
- Net income (loss): $(17) million GAAP; $(2) million
adjusted1
- Diluted Net income (loss) per share of $(0.55) on a GAAP basis
compared to $(0.11) in Q1 2022
- Adjusted EPS1 was a loss of $(0.06) compared to $(0.01) in Q1
2022
|
Revenue by Product Technology ($ in millions) |
|
Q1 |
|
% of |
|
Q1 |
|
Q4 |
|
Change |
|
2023 |
|
Revenue |
|
2022 |
|
2022 |
|
Y/Y |
|
Q/Q |
Access Networking Infrastructure |
$79.5 |
|
87.5% |
|
$72.5 |
|
$87.8 |
|
10% |
|
-10% |
Cloud Software & Services |
$11.3 |
|
12.5% |
|
$4.6 |
|
$12.4 |
|
148% |
|
-8% |
Total |
$90.8 |
|
100.0% |
|
$77.0 |
|
$100.2 |
|
18% |
|
-9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Mix by Geographic Region ($ in millions) |
|
|
Q1 |
|
% of |
|
Q1 |
|
Q4 |
|
Change |
|
|
2023 |
|
Revenue |
|
2022 |
|
2022 |
|
Y/Y |
|
Q/Q |
|
Americas |
$24.8 |
|
27% |
|
$23.1 |
|
$28.4 |
|
7% |
|
-13% |
|
EMEA |
$19.2 |
|
21% |
|
$18.6 |
|
$21.0 |
|
3% |
|
-9% |
|
Asia |
$46.8 |
|
52% |
|
$35.3 |
|
$50.8 |
|
33% |
|
-8% |
|
Total |
$90.8 |
|
100% |
|
$77.0 |
|
$100.2 |
|
18% |
|
-9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OutlookDZS outlook for the second quarter of
2023 ending June 30, 2023 and for the full-year 2023 is as follows
and assumes foreign exchange rates as of the end of March 2023:
Q2 2023
- Net revenue in the range of $90 – 95 million
- Adjusted gross margin1 of 33% - 35%
- Adjusted operating expenses1 of $29 – 31 million
- Adjusted EBITDA1 of $(1) – 4 million
2023
- Net revenue of approximately $400 million
- Adjusted gross margin1 of 35% - 37%
- Adjusted operating expenses1 of $115 – 120 million
- Adjusted EBITDA1 of $22 – 27 million
(1) Item represents a non-GAAP financial
measure; see discussion below, as well as a reconciliation to the
comparable GAAP measure in the financial tables in this earnings
press release.Conference Call Details:Date:
Monday, May 8, 2023Time: 5:00 p.m. Eastern Time (4:00 p.m. Central
Time)Dial-In: (800) 715-9871Conference ID: 8318114
Please join the conference call at least five minutes prior to
the start time to ensure you are admitted prior to management’s
prepared remarks.
A live broadcast and replay of the audio webcast will be
available at https://investor.dzsi.com/
About DZSDZS Inc. (Nasdaq: DZSI) is a
global leader of access, optical and cloud-controlled software
defined solutions.
DZS, the DZS logo, and all DZS product names are trademarks of
DZS Inc. Other brand and product names are trademarks of their
respective holders. Specifications, products, and/or product names
are all subject to change.
Forward-Looking StatementsStatements made in
this stockholder letter and the earnings call contains
forward-looking statements regarding future events and our future
results that are subject to the safe harbors created under the
Private Securities Litigation Reform Act of 1995. These statements
reflect the beliefs and assumptions of the company’s management as
of the date hereof. Words such as “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “forecast,” “goal,”
“intend,” “may,” “plan,” “project,” “seek,” “should,” “target,”
“will,” “would,” variations of such words, and similar expressions
are intended to identify forward-looking statements. In addition,
statements that refer to projections of earnings, revenue,
operating expenses, gross profit, costs or other financial items
(including non-GAAP measures) in future periods are forward-looking
statements. Readers are cautioned that these forward-looking
statements are only predictions and are subject to risks,
uncertainties and assumptions that are difficult to predict. The
company’s actual results could differ materially and adversely from
those expressed in or contemplated by the forward-looking
statements. In addition to the factors discussed in this
stockholder letter, factors that could cause actual results to
differ include, but are not limited to, those risk factors
contained in the company’s SEC filings available at www.sec.gov,
including without limitation, the company’s annual report on Form
10-K, quarterly reports on Form 10-Q and subsequent filings. In
addition, additional or unforeseen affects from the COVID-19
pandemic and global economic climate may give rise to, or amplify,
many of these risks. Readers are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of
the date on which they are made. The company undertakes no
obligation to update or revise any forward-looking statements for
any reason.
Non-GAAP MeasuresTo supplement DZS’s
consolidated financial statements presented in accordance with
GAAP, DZS reports Adjusted Cost of Revenue, Adjusted Gross Margin,
Adjusted Operating Expenses, Adjusted Operating Income (Loss),
Adjusted Net Income (including on a per share basis), EBITDA, and
Adjusted EBITDA, which are non-GAAP measures DZS believes are
appropriate to provide meaningful comparison with, and to enhance
an overall understanding of DZS’s past financial performance and
prospects for the future. DZS believes these non-GAAP financial
measures provide useful information to both management and
investors by excluding specific items that DZS believes are not
indicative of core operating results. These items share one or more
of the following characteristics: they are unusual and DZS does not
expect them to recur in the ordinary course of its business; they
do not involve the expenditure of cash; they are unrelated to the
ongoing operation of the business in the ordinary course; or their
magnitude and timing is largely outside of the Company’s control.
Further, each of these non-GAAP measures of operating performance
are used by management, as well as industry analysts, to evaluate
operations and operating performance and are widely used in the
telecommunications and manufacturing industries. Other companies in
the telecommunications and manufacturing industries may calculate
these metrics differently than DZS does. The presentation of this
additional information is not meant to be considered in isolation
or as a substitute for measures of financial performance prepared
in accordance with GAAP.
DZS defines Adjusted Cost of Revenue as GAAP Cost of Revenue
less (i) depreciation and amortization, (ii) stock-based
compensation, and (iii) the impact of material transactions or
events that we believe are not indicative of our core product cost
and may or may not be recurring in nature. We believe Adjusted Cost
of Revenue provides the investor more accurate information
regarding the actual cost of our products and services, excluding
the impact of costs of revenue that are not routine components of
our core product cost, for better comparability of our costs of
revenue between periods and to other companies.
DZS defines Adjusted Gross Margin as GAAP Gross Margin less (i)
depreciation and amortization, (ii) stock-based compensation, and
(iii) the impact of material transactions or events that we believe
are not indicative of our core operating performance and may or may
not be recurring in nature. We believe Adjusted Gross Margin
provides the investor more accurate information regarding our core
profit margin on sales, excluding the impact of cost of revenue
that are not routine components of our core product cost, for
better comparability of gross margin between periods and to other
companies.
DZS defines Adjusted Operating Expenses as GAAP operating
expenses plus or minus (as applicable) (i) depreciation and
amortization, (ii) stock-based compensation, and (iii) the impact
of material transactions or events that we believe are not
indicative of our core operating performance, such as acquisition
costs, restructuring and other charges, including termination
related benefits, headquarters and facilities relocation, executive
transition, and bad debt expense primarily related to a large
customer in India, and legal costs related to certain litigation,
any of which may or may not be recurring in nature. We believe
Adjusted Operating Expenses provides the investor more accurate
information regarding our core operating expenses, which include
research and development costs, selling, general and administrative
costs, and amortization of intangible assets, excluding the impact
of charges that are not routine components of our core operating
expenses, for better comparability between periods and to other
companies.
DZS defines Adjusted Operating Income (Loss) as GAAP Operating
Income (Loss) plus or minus (as applicable) (i) depreciation and
amortization, (ii) stock-based compensation, and (iii) the impact
of material transactions or events that we believe are not
indicative of our core operating performance, such as acquisition
costs, restructuring and other charges, including termination
related benefits, headquarters and facilities relocation, executive
transition, and bad debt expense primarily related to a large
customer in India, and legal costs related to certain litigation,
any of which may or may not be recurring in nature. We believe
Adjusted Operating Income (Loss) provides the investor more
accurate information regarding our core operating Income (Loss),
excluding the impact of charges that are not routine components of
our core operating expenses, for better comparability between
periods and to other companies.
DZS defines Non-GAAP Net Income (Loss) as GAAP Net Income plus
or minus (as applicable) (i) depreciation and amortization, (ii)
stock-based compensation, (iii) the impact of material transactions
or events that we believe are not indicative of our core operating
performance, such as acquisition costs, restructuring and other
charges, including termination related benefits, headquarters and
facilities relocation, executive transition, and bad debt expense
primarily related to a large customer in India, and legal costs
related to certain litigation, any of which may or may not be
recurring in nature, iv) unrealized foreign exchange gains and
losses, v) adjusted for a non-GAAP income tax benefit (provision)
based on an estimated tax rate applied against forecasted annual
non-GAAP income and vi) including the tax effect of non-GAAP
adjustments to Adjusted Net Income and Adjusted EPS. The Company
determines non-GAAP income taxes by computing an annual rate for
the Company and applying that single rate (rather than multiple
rates by jurisdiction) to its consolidated quarterly results. The
non-GAAP income tax rate for Q1 2023 was 24.9% and for 2022 the
rate was 25.6%. The Company expects that this methodology will
provide a consistent rate throughout the year and allow investors
to better understand the impact of income taxes on its results. Due
to the methodology applied to its estimated annual tax rate, the
Company’s estimated tax rate on non-GAAP income will differ from
its GAAP tax rate and from its actual tax liabilities. We believe
Non-GAAP Net Income (Loss) provides the investor more accurate
information regarding our core income, excluding the impact of
charges that are not routine components of our core product cost or
core operating expenses, for better comparability between periods
and to other companies.
DZS defines EBITDA as Net Income (Loss) plus or minus (as
applicable) (i) interest expense, net, (ii) income tax provision
(benefit), and (iii) depreciation and amortization expense. DZS
defines Adjusted EBITDA as EBITDA plus or minus (as applicable) (i)
stock-based compensation, (ii) other income and expense and (iii)
the impact of material transactions or events that we believe are
not indicative of our core operating performance, such as
acquisition costs, restructuring and other charges, including
termination related benefits, headquarters and facilities
relocation, executive transition, and bad debt expense primarily
related to a large customer in India, and legal costs related to
certain litigation, any of which may or may not be recurring in
nature. DZS believes that EBITDA and Adjusted EBITDA are useful
measures because they provide supplemental information to assist
investors in comparing the Company’s performance across reporting
periods on a consistent basis by excluding items that the Company
does not believe are indicative of its core operating performance,
as well as in assessing the sustainable cash-generating ability of
the business. In addition, DZS believes these measures are of
importance to investors and lenders in assessing the Company’s
overall capital structure and its ability to borrow additional
funds.
Beginning in the third quarter of 2022, the Company updated its
presentation of certain non-GAAP financial measures, including
Adjusted EBITDA and Non-GAAP Net Income (Loss).
- The Adjusted EBITDA calculation was revised to exclude the
impact of other income and expense which reflects exclusion of
transactions that we believe are not indicative of our core
operating performance.
- The presentation of Non-GAAP Net Income (Loss) was revised to
1) exclude unrealized foreign exchange gains and losses, 2) apply a
non-GAAP income tax benefit (provision) based on an estimated tax
rate applied against forecasted annual non-GAAP income and 3) to
include the tax effect of non-GAAP adjustments to Adjusted Net
Income and Adjusted EPS. Unrealized foreign exchange gains and
losses are a non-cash item that are not indicative of our core
operating performance and are largely outside of our control. The
application of a non-GAAP income tax rate methodology in the
determination of Adjusted Net Income and EPS will provide a
consistent rate throughout the year and allow investors to better
understand the impact of income taxes on its results. The inclusion
of the tax impact of the non-GAAP adjustments provides a more
accurate after-tax view of Adjusted Net Income and EPS.
Financial Statements
DZS INC. AND
SUBSIDIARIES |
Unaudited
Condensed Consolidated Statements of Comprehensive Income
(Loss) |
($ in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
For the Quarters Ended |
|
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
Net revenue |
|
$ |
90,812 |
|
|
$ |
100,177 |
|
|
$ |
77,040 |
|
Cost of
revenue |
|
|
60,985 |
|
|
|
70,119 |
|
|
|
50,215 |
|
Gross
profit |
|
|
29,827 |
|
|
|
30,058 |
|
|
|
26,825 |
|
Operating
expenses: |
|
|
|
|
|
|
Research and product development |
|
|
14,851 |
|
|
|
16,433 |
|
|
|
11,844 |
|
Selling, marketing, general and administrative |
|
|
24,781 |
|
|
|
23,418 |
|
|
|
17,742 |
|
Restructuring and other charges |
|
|
4,152 |
|
|
|
3,224 |
|
|
|
436 |
|
Amortization of intangible assets |
|
|
1,271 |
|
|
|
1,622 |
|
|
|
294 |
|
Total operating expenses |
|
|
45,055 |
|
|
|
44,697 |
|
|
|
30,316 |
|
Operating income (loss) |
|
|
(15,228 |
) |
|
|
(14,639 |
) |
|
|
(3,491 |
) |
Interest
income |
|
|
31 |
|
|
|
53 |
|
|
|
37 |
|
Interest
expense |
|
|
(823 |
) |
|
|
(842 |
) |
|
|
(127 |
) |
Other income
(expense), net |
|
|
728 |
|
|
|
1,010 |
|
|
|
(800 |
) |
Income (loss) before income taxes |
|
|
(15,292 |
) |
|
|
(14,418 |
) |
|
|
(4,381 |
) |
Income tax
(benefit) provision |
|
|
1,843 |
|
|
|
141 |
|
|
|
(1,333 |
) |
Net income
(loss) |
|
$ |
(17,135 |
) |
|
$ |
(14,559 |
) |
|
$ |
(3,048 |
) |
|
|
|
|
|
|
|
Earnings
(loss) per share |
|
|
|
|
|
|
Basic |
|
$ |
(0.55 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.11 |
) |
Diluted |
|
$ |
(0.55 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.11 |
) |
Weighted
average shares outstanding: |
|
|
|
|
|
|
Basic |
|
|
31,045 |
|
|
|
29,273 |
|
|
|
27,530 |
|
Diluted |
|
|
31,045 |
|
|
|
29,273 |
|
|
|
27,530 |
|
|
|
|
|
|
|
|
Reconciliation of net income (loss) to Adjusted EBITDA: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(17,135 |
) |
|
$ |
(14,559 |
) |
|
$ |
(3,048 |
) |
Interest expense, net |
|
|
792 |
|
|
|
789 |
|
|
|
90 |
|
Income tax (benefit) provision |
|
|
1,843 |
|
|
|
141 |
|
|
|
(1,333 |
) |
Depreciation and amortization |
|
|
2,076 |
|
|
|
2,574 |
|
|
|
1,081 |
|
EBITDA |
|
$ |
(12,424 |
) |
|
$ |
(11,055 |
) |
|
$ |
(3,210 |
) |
Stock-based compensation |
|
|
4,486 |
|
|
|
5,240 |
|
|
|
2,671 |
|
Acquisition costs |
|
|
107 |
|
|
|
417 |
|
|
|
51 |
|
Executive transition |
|
|
(2 |
) |
|
|
125 |
|
|
|
247 |
|
Litigation |
|
|
230 |
|
|
|
36 |
|
|
|
- |
|
Amortization of capitalized costs |
|
|
221 |
|
|
|
- |
|
|
|
- |
|
Bad debt expense, net of recoveries |
|
|
(23 |
) |
|
|
(123 |
) |
|
|
(1,227 |
) |
Restructuring and other charges |
|
|
4,152 |
|
|
|
3,224 |
|
|
|
436 |
|
Adjusted (Non-GAAP) Amount, previously
reported |
$ |
(3,253 |
) |
|
$ |
(2,136 |
) |
|
$ |
(1,032 |
) |
Other expense (income), net |
|
|
(728 |
) |
|
|
(1,010 |
) |
|
|
800 |
|
Adjusted EBITDA |
|
$ |
(3,981 |
) |
|
$ |
(3,146 |
) |
|
$ |
(232 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
DZS INC. AND
SUBSIDIARIES |
|
Unaudited
Condensed Consolidated Balance Sheets |
|
($ in
thousands) |
|
|
March 31, |
|
December 31, |
|
Assets |
|
2023 |
|
|
|
2022 |
|
|
Current
assets |
|
|
|
|
Cash, cash equivalents and restricted cash |
$ |
30,867 |
|
|
$ |
38,316 |
|
|
Accounts receivable - trade, net |
|
141,029 |
|
|
|
153,780 |
|
|
Other receivables |
|
21,518 |
|
|
|
16,144 |
|
|
Inventories |
|
69,722 |
|
|
|
78,513 |
|
|
Contract assets |
|
605 |
|
|
|
576 |
|
|
Prepaid expenses and other current assets |
|
10,689 |
|
|
|
8,371 |
|
|
Total current assets |
|
274,430 |
|
|
|
295,700 |
|
|
Property,
plant and equipment, net |
|
7,135 |
|
|
|
9,478 |
|
|
Right-of-use
assets from operating leases |
|
11,971 |
|
|
|
12,606 |
|
|
Goodwill |
|
19,952 |
|
|
|
19,952 |
|
|
Intangible
assets, net |
|
30,422 |
|
|
|
31,742 |
|
|
Other
assets |
|
17,013 |
|
|
|
15,536 |
|
|
Total assets |
$ |
360,923 |
|
|
$ |
385,014 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable - trade |
$ |
107,904 |
|
|
$ |
121,225 |
|
|
Short-term debt - bank, trade facilities and secured
borrowings |
|
16,746 |
|
|
|
9,706 |
|
|
Current portion of long-term debt |
|
23,660 |
|
|
|
24,073 |
|
|
Contract liabilities |
|
19,476 |
|
|
|
21,777 |
|
|
Operating lease liabilities |
|
4,859 |
|
|
|
4,834 |
|
|
Accrued and other liabilities |
|
29,615 |
|
|
|
27,559 |
|
|
Total current liabilities |
|
202,260 |
|
|
|
209,174 |
|
|
Long-term
debt |
|
- |
|
|
|
- |
|
|
Contract
liabilities - non-current |
|
6,636 |
|
|
|
7,864 |
|
|
Operating
lease liabilities - non-current |
|
10,499 |
|
|
|
11,417 |
|
|
Pension
liabilities |
|
11,060 |
|
|
|
11,021 |
|
|
Other
long-term liabilities |
|
2,583 |
|
|
|
2,806 |
|
|
Total liabilities |
|
233,038 |
|
|
|
242,282 |
|
|
Stockholders’ equity |
|
|
|
|
Common stock |
|
31 |
|
|
|
30 |
|
|
Additional paid-in capital |
|
276,282 |
|
|
|
271,884 |
|
|
Accumulated other comprehensive loss |
|
(6,462 |
) |
|
|
(4,351 |
) |
|
Accumulated deficit |
|
(141,966 |
) |
|
|
(124,831 |
) |
|
Total stockholders’ equity |
|
127,885 |
|
|
|
142,732 |
|
|
Total liabilities and stockholders’ equity |
$ |
360,923 |
|
|
$ |
385,014 |
|
|
|
|
|
|
|
DZS INC. AND
SUBSIDIARIES |
|
Unaudited
Reconciliation of GAAP to Non-GAAP Results |
|
($ in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The reconciliation of
EBITDA and Adjusted EBITDA to net income is included above in the
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Loss). Set forth below are reconciliations of Non-GAAP Cost of
Revenue, Non-GAAP Gross Profit, Non-GAAP Operating Expenses,
Non-GAAP Operating Income (Loss), Non-GAAP Net Income (Loss), and
Non-GAAP Net Income (Loss) per Diluted Share to GAAP Cost of
Revenue, Gross Profit, Operating Expenses, Operating Income (Loss),
Net Income (Loss), and Net Income (Loss) per Diluted Share,
respectively, which the Company considers to be the most directly
comparable U.S. GAAP financial measures. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
|
|
Cost of Revenue |
|
Gross Profit |
|
Gross Margin Percentage |
|
Operating Expenses |
|
Operating Income (Loss) |
|
Net Income (Loss) |
|
Net Income (Loss) per Diluted Share |
|
GAAP amount |
|
$ |
60,985 |
|
|
$ |
29,827 |
|
32.8 |
% |
|
$ |
45,055 |
|
|
$ |
(15,228 |
) |
|
$ |
(17,135 |
) |
|
$ |
(0.55 |
) |
|
Adjustments
to GAAP amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
(171 |
) |
|
|
171 |
|
0.2 |
% |
|
|
(1,905 |
) |
|
|
2,076 |
|
|
|
2,076 |
|
|
|
0.07 |
|
|
Stock-based compensation |
|
|
(247 |
) |
|
|
247 |
|
0.3 |
% |
|
|
(4,239 |
) |
|
|
4,486 |
|
|
|
4,486 |
|
|
|
0.15 |
|
|
Acquisition costs |
|
|
|
|
|
|
|
|
(107 |
) |
|
|
107 |
|
|
|
107 |
|
|
|
- |
|
|
Restructuring and other charges |
|
|
|
|
|
|
|
|
(4,152 |
) |
|
|
4,152 |
|
|
|
4,152 |
|
|
|
0.13 |
|
|
Executive transition |
|
|
|
|
|
|
|
|
2 |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
- |
|
|
Litigation |
|
|
|
|
|
|
|
|
(230 |
) |
|
|
230 |
|
|
|
230 |
|
|
|
0.01 |
|
|
Amortization of capitalized costs |
|
|
|
|
|
|
|
|
(221 |
) |
|
|
221 |
|
|
|
221 |
|
|
|
0.01 |
|
|
Bad debt expense, net of recoveries |
|
|
|
|
|
|
|
|
23 |
|
|
|
(23 |
) |
|
|
(23 |
) |
|
|
- |
|
|
Adjusted
(Non-GAAP) amount, as previously calculated |
|
$ |
60,567 |
|
|
$ |
30,245 |
|
33.3 |
% |
|
$ |
34,226 |
|
|
$ |
(3,981 |
) |
|
$ |
(5,888 |
) |
|
$ |
(0.18 |
) |
|
Unrealized foreign exchange (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
1,397 |
|
|
|
0.04 |
|
|
Non-GAAP adjustments to tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
5,648 |
|
|
|
0.18 |
|
|
Tax effect on Non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
(3,146 |
) |
|
|
(0.10 |
) |
|
Adjusted
(Non-GAAP) amount |
|
$ |
60,567 |
|
|
$ |
30,245 |
|
33.3 |
% |
|
$ |
34,226 |
|
|
$ |
(3,981 |
) |
|
$ |
(1,989 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2022 |
|
|
|
Cost of Revenue |
|
Gross Profit |
|
Gross Margin Percentage |
|
Operating Expenses |
|
Operating Income (Loss) |
|
Net Income (Loss) |
|
Net Income (Loss) per Diluted Share |
|
GAAP
amount |
|
$ |
70,119 |
|
|
$ |
30,058 |
|
30.0 |
% |
|
$ |
44,697 |
|
|
$ |
(14,639 |
) |
|
$ |
(14,559 |
) |
|
$ |
(0.50 |
) |
|
Adjustments
to GAAP amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
(352 |
) |
|
|
352 |
|
0.4 |
% |
|
|
(2,222 |
) |
|
|
2,574 |
|
|
|
2,574 |
|
|
|
0.09 |
|
|
Stock-based compensation |
|
|
(245 |
) |
|
|
245 |
|
0.2 |
% |
|
|
(4,995 |
) |
|
|
5,240 |
|
|
|
5,240 |
|
|
|
0.18 |
|
|
Acquisition costs |
|
|
|
|
|
|
|
|
(417 |
) |
|
|
417 |
|
|
|
417 |
|
|
|
0.01 |
|
|
Restructuring and other charges |
|
|
|
|
|
|
|
|
(3,224 |
) |
|
|
3,224 |
|
|
|
3,224 |
|
|
|
0.11 |
|
|
Executive transition |
|
|
|
|
|
|
|
|
(125 |
) |
|
|
125 |
|
|
|
125 |
|
|
|
- |
|
|
Litigation |
|
|
|
|
|
|
|
|
(36 |
) |
|
|
36 |
|
|
|
36 |
|
|
|
- |
|
|
Bad debt expense, net of recoveries |
|
|
|
|
|
|
|
|
123 |
|
|
|
(123 |
) |
|
|
(123 |
) |
|
|
- |
|
|
Adjusted
(Non-GAAP) amount, as previously calculated |
|
$ |
69,522 |
|
|
$ |
30,655 |
|
30.6 |
% |
|
$ |
33,801 |
|
|
$ |
(3,146 |
) |
|
$ |
(3,066 |
) |
|
$ |
(0.11 |
) |
|
Unrealized foreign exchange (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
(839 |
) |
|
|
(0.03 |
) |
|
Non-GAAP adjustments to tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
3,830 |
|
|
|
0.13 |
|
|
Tax effect on Non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
(2,726 |
) |
|
|
(0.09 |
) |
|
Adjusted
(Non-GAAP) amount |
|
$ |
69,522 |
|
|
$ |
30,655 |
|
30.6 |
% |
|
$ |
33,801 |
|
|
$ |
(3,146 |
) |
|
$ |
(2,801 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
Cost of Revenue |
|
Gross Profit |
|
Gross Margin Percentage |
|
Operating Expenses |
|
Operating Income (Loss) |
|
Net Income (Loss) |
|
Net Income (Loss) per Diluted Share |
|
GAAP
amount |
|
$ |
50,215 |
|
|
$ |
26,825 |
|
34.8 |
% |
|
$ |
30,316 |
|
|
$ |
(3,491 |
) |
|
$ |
(3,048 |
) |
|
$ |
(0.11 |
) |
|
Adjustments
to GAAP amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
(146 |
) |
|
|
146 |
|
0.2 |
% |
|
|
(935 |
) |
|
|
1,081 |
|
|
|
1,081 |
|
|
|
0.04 |
|
|
Stock-based compensation |
|
|
(130 |
) |
|
|
130 |
|
0.2 |
% |
|
|
(2,541 |
) |
|
|
2,671 |
|
|
|
2,671 |
|
|
|
0.09 |
|
|
Acquisition costs |
|
|
|
|
|
|
|
|
(51 |
) |
|
|
51 |
|
|
|
51 |
|
|
|
- |
|
|
Restructuring and other charges |
|
|
|
|
|
|
|
|
(436 |
) |
|
|
436 |
|
|
|
436 |
|
|
|
0.02 |
|
|
Executive transition |
|
|
|
|
|
|
|
|
(247 |
) |
|
|
247 |
|
|
|
247 |
|
|
|
0.01 |
|
|
Litigation |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Bad debt expense, net of recoveries |
|
|
|
|
|
|
|
|
1,227 |
|
|
|
(1,227 |
) |
|
|
(1,227 |
) |
|
|
(0.04 |
) |
|
Adjusted (Non-GAAP) amount, previously reported |
$ |
49,939 |
|
|
$ |
27,101 |
|
35.2 |
% |
|
$ |
27,333 |
|
|
$ |
(232 |
) |
|
$ |
211 |
|
|
$ |
0.01 |
|
|
Unrealized foreign exchange (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
876 |
|
|
|
0.03 |
|
|
Non-GAAP adjustments to tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
(212 |
) |
|
|
(0.01 |
) |
|
Tax effect on Non-GAAP adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
(1,058 |
) |
|
|
(0.04 |
) |
|
Adjusted
(Non-GAAP) amount |
|
$ |
49,939 |
|
|
$ |
27,101 |
|
35.2 |
% |
|
$ |
27,333 |
|
|
$ |
(232 |
) |
|
$ |
(183 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DZS INC. AND
SUBSIDIARIES |
Unaudited
Reconciliation of GAAP to Non-GAAP Guidance |
($ in
millions) |
|
|
|
|
|
|
|
|
The reconciliation of
Adjusted EBITDA, Adjusted Gross margin and Adjusted Operating
expenses to Net income (loss), Gross margin and Operating expenses,
respectively, which the Company considers to be the most directly
comparable U.S. GAAP measures. |
|
|
|
|
|
|
|
|
|
Q2 2023 |
|
Full Year 2023 |
|
Low |
|
High |
|
Low |
|
High |
Reconciliation of Net Income (Loss) to Adjusted
EBITDA: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(9.6 |
) |
|
$ |
(4.0 |
) |
|
$ |
(22.0 |
) |
|
$ |
(16.3 |
) |
Interest expense, net |
|
0.9 |
|
|
|
0.9 |
|
|
|
3.0 |
|
|
|
3.0 |
|
Income tax (benefit) provision |
|
0.4 |
|
|
|
0.4 |
|
|
|
6.2 |
|
|
|
6.2 |
|
Depreciation and amortization |
|
2.1 |
|
|
|
2.1 |
|
|
|
8.2 |
|
|
|
8.2 |
|
EBITDA |
|
(6.2 |
) |
|
|
(0.6 |
) |
|
|
(4.6 |
) |
|
|
1.1 |
|
Stock-based compensation |
|
4.2 |
|
|
|
4.2 |
|
|
|
17.0 |
|
|
|
17.0 |
|
Other income (expense), net |
|
- |
|
|
|
- |
|
|
|
(0.7 |
) |
|
|
(0.7 |
) |
Acquisition costs |
|
- |
|
|
|
- |
|
|
|
0.1 |
|
|
|
0.1 |
|
Amort of Capitalized Costs |
|
0.2 |
|
|
|
0.2 |
|
|
|
1.2 |
|
|
|
1.2 |
|
Litigation |
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
0.2 |
|
Restructuring cost |
|
0.5 |
|
|
|
0.5 |
|
|
|
8.3 |
|
|
|
8.3 |
|
Adjusted EBITDA |
$ |
(1.3 |
) |
|
$ |
4.3 |
|
|
$ |
21.5 |
|
|
$ |
27.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Gross Margin to Adjusted Gross
Margin: |
|
|
|
|
|
|
|
GAAP Gross margin |
|
32.6 |
% |
|
|
34.7 |
% |
|
|
34.6 |
% |
|
|
36.7 |
% |
COGS Depreciation and amortization |
|
0.4 |
% |
|
|
0.3 |
% |
|
|
0.4 |
% |
|
|
0.3 |
% |
Adjusted Gross Margin |
|
33.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
37.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Expenses to Adjusted Operating
Expenses: |
|
|
|
|
|
|
Operating expenses |
$ |
35.7 |
|
|
$ |
37.7 |
|
|
$ |
148.4 |
|
|
$ |
153.4 |
|
Depreciation and amortization |
|
2.0 |
|
|
|
2.0 |
|
|
|
7.7 |
|
|
|
7.7 |
|
Stock-based compensation |
|
4.2 |
|
|
|
4.2 |
|
|
|
17.0 |
|
|
|
17.0 |
|
Acquisition costs |
|
- |
|
|
|
- |
|
|
|
0.1 |
|
|
|
0.1 |
|
Executive transition |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Headquarters and facilities relocation |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
0.2 |
|
Restructuring cost |
|
0.5 |
|
|
|
0.5 |
|
|
|
8.3 |
|
|
|
8.3 |
|
Adjusted Operating Expenses |
$ |
29.0 |
|
|
$ |
31.0 |
|
|
$ |
115.0 |
|
|
$ |
120.0 |
|
|
|
|
|
|
|
|
|
Contact
DZS:
Ted Moreau
Vice President, Investor Relations
IR@dzsi.com
DZS (NASDAQ:DZSI)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
DZS (NASDAQ:DZSI)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024