Atheros Announces Record
Revenue and Operating Income for Q1 2006
Santa Clara, Calif. – April 24,
2006 – Atheros Communications, Inc. (NASDAQ: ATHR), a leading
developer of advanced wireless solutions, today announced financial results for
the first quarter of 2006, ended March 31, 2006.
Revenue in the first quarter was a record $61.1 million, up
15 percent from the $53.1 million reported in the fourth quarter of 2005 and up
48 percent from the $41.2 million reported in the first quarter of 2005.
In accordance with U.S. generally accepted accounting
principles (GAAP), the company recorded first quarter net income of $6.8 million
or $0.13 per diluted share. This compares with a GAAP net income of $13.1
million or $0.24 per diluted share in the fourth quarter of 2005, and $1.7
million or $0.03 per diluted share in the first quarter of 2005. First quarter
2006 GAAP results include stock-based compensation, the cumulative effect of
accounting change from the adoption of FAS 123R and the tax benefit due to the
partial release of the deferred tax asset valuation allowance.
Total cash and investments increased $12.1 million during
the quarter to $185.7 million at March 31, 2006.
Atheros reports operating income, net income and basic and
diluted net income per share in accordance with GAAP and additionally on a
non-GAAP basis. Non-GAAP net income excludes the effect of the amortization of
stock-based compensation, the cumulative effect of accounting change due to the
adoption of FAS 123R and the tax benefit due to the partial release of the
deferred tax asset valuation allowance. A reconciliation of GAAP to non-GAAP
condensed consolidated statements of operations is presented in the financial
statements portion of this release.
Non-GAAP gross margins in the first quarter were 48.4
percent, above the company’s target range of 43 to 45 percent, compared with
46.7 percent in the fourth quarter of 2005, and 44.5 percent in the first
quarter of 2005. Non-GAAP operating income was 14 percent, compared with 10
percent in the fourth quarter of 2005, and 4 percent in the first quarter of
2005. In the first quarter of 2006, non-GAAP net income was $7.9 million or
$0.14 per diluted share, compared with non-GAAP net income of $5.9 million or
$0.11 per diluted share in the fourth quarter of 2005, and $2.1 million or $0.04
per diluted share in the first quarter of 2005.
“We are very pleased to report the highest revenue and
operating income in the history of our company,” said Craig Barratt, president
and CEO of Atheros. “Our core WLAN business continued to be strong, especially
in the PC OEM market. We are shipping our 802.11n products in volume with
multiple customers, and we expect to see significant growth in the .11n space
over the next several quarters as customers make more end-products available.
“As we had expected, our initial partner in the PAS
market, UTStarcom, became a greater than 10 percent customer in the quarter, as
sales of our single-chip PAS solution continued to increase significantly,” Dr.
Barratt said.
In March, the FCC approved additional 5GHz bands for
wireless LAN products, increasing the number of channels available from 13 to
24. “Given Atheros’ deep experience and technical leadership in the 5GHz band,
we expect a growing number of customers to seek Atheros’ dual-band solutions for
802.11n to optimize the new standard’s performance capacity,” he said.
The company shipped a record 9.6 million chipsets in the
first quarter, compared with 7.7 million chipsets in the fourth quarter of 2005.
Acquisition of ZyDAS Technology
Corporation
In a separate release today, Atheros announced it has
signed a definitive agreement to acquire ZyDAS Technology Corporation, a
privately held Taiwan-based fabless IC design company, specializing in
high-performance WLAN USB solutions.
“This acquisition creates a rich set of new opportunities
in WLAN USB and potentially other markets, and significantly increases our
presence in Hsinchu Science Park, which is close to many of our customers and
offers a favorable cost structure,” Dr. Barratt said. “We are happy to welcome
to the Atheros family the more than 70 ZyDAS employees, who will form the basis
of our new Taiwan R&D center.”
Q1 Highlights:
-
Atheros announced the first draft 802.11n wireless LAN
solution, XSPAN™, including the world’s only single-chip triple-radio RF
design, and is currently shipping in volume to D-Link and other leading
customers.
-
Atheros announced that UTStarcom has expanded its
portfolio of PAS handsets based on Atheros’ AR1900 single-chip solution,
with handsets ranging from the ultra low-cost UT117 to the feature-rich
UT619.
-
Atheros announced its collaboration with QUALCOMM to
develop interoperability between Atheros’ highly integrated, single-chip
Radio-on-Chip for Mobile™ (ROCm) solution and select QUALCOMM Mobile Station
Modem™ chipsets. The combined solutions will enable cellular devices to
support a new level of 802.11g and 802.11a/g wireless LAN technology that
addresses the growing demand for data-intensive products, such as advanced
mobile handsets.
-
Atheros announced it had shipped more than 50 million
wireless chipsets as of January 2006, solidifying its position as the
wireless market’s leader in performance and integration.
Conference Call
Atheros will broadcast its first quarter 2006 financial
results conference call today, Monday, April 24, 2006, at 2 p.m. Pacific time (5
p.m. Eastern time).
To listen to the call, please dial (210) 234-0003
approximately 10 minutes prior to the start time. The pass code is Atheros. A
taped replay will be available approximately one hour after the conclusion of
the call and will remain available for one week. To access the replay, dial
(203) 369-3401.
The Atheros financial results conference call will be
available via a live webcast on the investor relations section of the Atheros
website at www.atheors.com. Please access
the website approximately 15 minutes prior to the start of the call to download
and install any necessary audio software. An archived webcast replay of the
call will be available on the web site for one year.
About Atheros Communications, Inc.
Atheros Communications is a leading developer of
semiconductor system solutions for wireless communications products. Atheros
combines its wireless systems expertise with high-performance radio frequency
(RF), mixed signal and digital semiconductor design skills to provide highly
integrated chipsets that are manufacturable on low-cost, standard complementary
metal-oxide semiconductor (CMOS) processes. Atheros technology is being used by
a broad base of leading customers, including personal computer, networking
equipment and handset manufacturers. For more information, please visit
www.atheros.com or send email to
info@atheros.com.
NOTE: Atheros, the Atheros logo, ROCm and
XSPAN are trademarks of Atheros Communications, Inc.
Note on
Forward-Looking Statements
Except for the historical information
contained herein, the matters set forth in this press release, including the
anticipated growth of the 802.11n market and Atheros’ success in this market;
the anticipated increase in sales of Atheros’ PAS product; the expected benefits
of our collaboration with QUALCOMM; and the expected benefits of the acquisition
of ZyDAS, are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially, including, but not limited to, the impacts of competition,
technological advances and pricing pressures; general economic conditions;
variability in the quarterly operating results of Atheros and its customers;
difficulties in the development of new products and technologies, and in
particular Atheros’ 802.11n products; potential unforeseen defects in our
802.11n products that may become apparent upon volume production; manufacturing
difficulties; whether Atheros is successful in marketing its products; whether
Atheros successfully completes the ZyDAS acquisition and is able to integrate
ZyDAS and its products with Atheros and its products, and other risks detailed
in Atheros’ Annual Report on Form 10-K for the year ended December 31, 2005 as
filed with the Securities and Exchange Commission, and in other reports filed
with the SEC by Atheros from time to time. These forward-looking statements
speak only as of the date hereof. Atheros disclaims any obligation to update
these forward-looking statements.
– Summary Financial Data PDF Link –
For
analyst inquires contact: Jack Lazar,
Chief Financial Officer for Atheros Communications, Inc., +1-408-773-5200; or Deborah Stapleton of Stapleton Communications, Inc.,
+1-650-470-0200, for Atheros
Susan Lansing, 408-773-5216,
susan@atheros.com, or Greg Wood, A&R Partners, 650-762-2838,
gwood@arpartners.com
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