Atheros Communications
Announces Q3 2005 Results
Above Guidance Non-GAAP Q3 EPS of
$0.05; GAAP Q3 EPS of $0.04
Santa Clara, Calif. – Oct. 24,
2005 – Atheros Communications, Inc. (NASDAQ: ATHR), a leading
developer of advanced wireless solutions, today announced financial results for
the third quarter of 2005, ended Sept. 30, 2005.
Revenue in the third quarter was $45.8 million, up six
percent from the $43.4 million reported in the second quarter. Gross margins in
the third quarter were 43.5 percent, in line with the company’s target model,
compared with 41.6 percent in the second quarter.
In accordance with U.S. generally accepted accounting
principles (GAAP), the company recorded a third quarter net income of $2.2
million or $0.04 per diluted share. This compares with a GAAP net loss of
$216,000, or $0.00 per diluted share in the second quarter of fiscal 2005.
Total cash and investments increased to $164.6 million at
Sept. 30, 2005, compared with $164.1 million at June 30, 2005.
Atheros reports 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. In the third quarter of 2005, non-GAAP net income was $2.6
million, or $0.05 per diluted share, compared with non-GAAP net income of
$401,000, or $0.01 per diluted share, in the second quarter of fiscal 2005.
“Our WLAN business was strong and profitable in the third
quarter, especially in the enterprise and PC OEM channels,” said Craig Barratt,
president and CEO of Atheros. “We also gained additional design wins for our
ROCm® embedded solutions for the consumer electronics market. These and other
new products are increasing our total available market in WLAN, where we remain
focused on our goal of being number one.
“Shipments of our AR1900 to UTStarcom for the PAS cellular
handset market in China accelerated in the third quarter. We were also very
pleased to report that our overall average selling prices declined only four
percent in the quarter, a significant improvement from previous quarterly
declines of 10 to 15 percent.
“Design win activity remained robust in all product
categories, as customers continued to adopt our single-chip solutions. We are
now seeing many expected benefits, including operational leverage, from the
significant investments we have been making in the company’s research and
development programs over the past two years. Our third quarter results and our
visibility into the fourth quarter position us well for continued growth and
profitability in 2006 and beyond,” he said.
“Earlier this month, we announced our leadership in and
endorsement of the Enhanced Wireless Consortium (EWC) and its efforts to
accelerate adoption of the 802.11n standard. Based on the unified
specification, we plan to leverage our market-leading technology and CMOS
integration expertise to deliver EWC-based 802.11n-based products for
high-bandwidth connectivity through the home, enterprise and mobile environments
as early as the first quarter of 2006,” Dr. Barratt said.
Highlights
-
On Sept. 19, Atheros and Spansion announced a
partnership to deliver innovative packaging solutions for handset
manufacturers, called Package-on-Package (PoP). This unique packaging
allows a reduction in the size of today’s dual-mode cellular/WLAN mobile
phones by vertically stacking Atheros’ ROCm® 802.11a/g and 802.11g solutions
with Spansion’s MirrorBit™ Flash memory. This solution enables handset
manufacturers to provide valuable new services, such as Voice-over-IP (VoIP)
and WLAN data connectivity for fast download of content such as ring tones,
music, video clips, games, and email, in very small form factors.
-
During September, Atheros announced that consumers are
purchasing more MIMO (Multiple Input Multiple Output) wireless networking
products based on the Atheros Super G® technology than any other MIMO
solutions. According to NPD weekly data, Atheros based MIMO products sold
in North America made up a majority of all MIMO based WLAN product sales in
the third quarter.
-
TRENDnet launched a new WLAN product portfolio
featuring Atheros’ Super G, Super A/G® and VLocityTM MIMO technologies.
TRENDnet, a manufacturer of wired and wireless networking solutions, is
offering three new high performance WLAN product lines based on Atheros’
performance-improving technologies, which enable users to enjoy throughput
and coverage benefits of networking equipment that also interoperates
seamlessly with standard 802.11g and 802.11a/g devices.
-
Lenovo announced that it has introduced its first
notebook computers with Atheros PCI Express chips, which enhance performance
and mobility of its new ThinkPad Z60. Introduced in April, the Atheros
802.11a/g AR5006EX and 802.11g AR5006EG are the world’s first complete
single-chip WLAN solutions to support the PCI Express interface.
-
The company announced its endorsement of the Enhanced
Wireless Consortium (EWC) and its efforts to accelerate completion of the
802.11n WLAN standard. Atheros, a founding member of the EWC, plans to
deliver chipsets based on the new WLAN specification introduced by the EWC
as early as the first quarter of 2006. The group's proposal is a blueprint
for semiconductor manufacturers to develop chipsets for interoperable, high
performance WLAN products. Other EWC members include Airoha, Apple, Azimuth,
Broadcom, Buffalo, Cisco, Conexant, D-Link, Gateway, Gemtek, Intel, Lenovo,
Linksys, LitePoint, Marvell, Metalink, Mitsubishi, NETGEAR, Nvidia, Ralink,
Realtek, SANYO, Sony, Symbol Technologies, Toshiba, USRobotics, WildPackets,
Winbond and ZyDAS, with additional members expected to join.
-
Earthlink, using equipment from Tropos Networks, was
chosen as the WiFi equipment vendor for the city of Philadelphia’s free
network. Tropos’ equipment is based on Atheros 802.11g technology.
Conference Call
Atheros will broadcast its third quarter 2005 financial
results conference call today, Monday, Oct. 24, 2005, at 2 p.m. Pacific time (5
p.m. Eastern time).
To listen to the call, please dial (630) 395-0018
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) 369-3287.
The Atheros financial results conference call will be
available via a live webcast on the investor relations section of the Atheros
web site at
www.atheros.com. Please access the web site
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, Super G,
Super AG, ROCm and VLocity 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
Atheros’ goal of being number one in the WLAN market; the anticipated future
results of Atheros, including expected growth and profitability in 2006 and
beyond; the plans of Atheros to deliver 802.11n-based products based on the
EWC’s specification as early as the first quarter of 2006; the timing of the
adoption of an 802.11n standard and whether the specification promoted by the
EWC will be adopted as the standard; and Atheros’ design wins and the
introduction of Atheros’ products into various customers’ products, 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; the rate of growth of
wireless telecommunications markets; whether and in what form the EWC
specification is adopted as the 802.11n standard; the timing of adoption of an
802.11n standard; difficulties in the development of new products and
technologies, including Atheros’ anticipated 802.11n products; manufacturing
difficulties; whether Atheros is successful in marketing its products; and other
risks detailed in Atheros’ Quarterly Report on Form 10-Q for the quarter ended
June 30, 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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