Atheros Announces Record Q4 2005 Financial
Results
Q4 Revenue up 16 percent over Q3; Up 27 percent
over Q404
Santa Clara, Calif.
– Jan. 30, 2006 – Atheros Communications, Inc. (NASDAQ: ATHR), a leading
developer of advanced wireless solutions, today announced financial results for
the fourth quarter of 2005 and year ended Dec. 31, 2005.
Revenue in the fourth quarter was $53.1 million, up 16 percent from the $45.8
million reported in the third quarter and up 27 percent from the $41.7 million
reported in the fourth quarter of 2004. Gross margins in the fourth quarter were
46.7 percent, above the company’s target range of 43 to 45 percent and above
43.5 percent gross margins recorded in the third quarter.
In
accordance with U.S. generally accepted accounting principles (GAAP), the
company recorded fourth quarter net income of $13.1 million or $0.24 per diluted
share. This compares with a GAAP net income of $2.2 million or $0.04 per
diluted share in the third quarter of 2005 and $2.2 million or $0.04 per diluted
share in the fourth quarter of 2004.
Total cash and investments increased $9.1 million in the quarter to $173.6
million at Dec. 31, 2005. Cash and investments at Dec. 31, 2004 were $154.5
million.
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 and a tax
benefit due to the partial reversal of the deferred tax asset valuation
allowance. In the fourth quarter of 2005, non-GAAP net income was $5.9 million
or $0.11 per diluted share, compared with non-GAAP net income of $2.6 million or
$0.05 per diluted share in the third quarter of 2005 and $2.8 million or $0.05
per diluted share in the fourth quarter of 2004.
For the year ended Dec. 31, 2005 revenue was $183.5 million, up 8 percent from
the $169.6 million reported in 2004. Net income in accordance with GAAP for
2005 was $16.7 million or $0.31 per diluted share. For the prior year, GAAP net
income was $10.8 million or earnings of $0.21 per diluted share. Non-GAAP net
income for 2005 was $11.0 million or $0.21 per diluted share, compared with
non-GAAP net income of $14.5 million or $0.28 per diluted share in 2004.
“We had a tremendous fourth quarter across all metrics, with revenue gains in
each product category: retail, PC OEM, enterprise/carrier and consumer
electronics,” said Craig Barratt, president and CEO of Atheros. “We continued
development of our XSPAN® 802.11n solutions and demonstrated them at the January
Consumer Electronics Show. We’re now sampling to OEMs. With XSPAN and its
Signal-Sustain Technology™, Atheros has leveraged its outstanding integration
and RF design capabilities to maximize the potential of the draft 802.11n
specification. The world’s first triple-radio, designed by Atheros, elevates
WLAN performance to the industry’s highest level and can be offered at price
points that will encourage rapid adoption of this exciting technology,” Dr.
Barratt said.
“Revenue from our single-chip PAS solution grew significantly in the quarter, as
we continued to win important new handset designs. We anticipate that UT
Starcom, our initial PAS OEM partner, will be one of our 10 percent revenue
customers in the first quarter,” Dr. Barratt said.
The company shipped a record 7.7 million chipsets in the fourth quarter, 74
percent of which were single-chip solutions.
New Vice
President of Sales
Today, Atheros appointed Gary Szilagyi as its new vice president of worldwide
sales. Gary had served previously as the vice president of sales at
Marvell Semiconductor’s Communications Business Unit, where he led the sales
initiative and design-win activity for all of its communications products,
including its WLAN business. Immediately prior to joining Atheros, he was vice
president of worldwide sales at Greenfield Networks, a semiconductor startup
company focused on advanced Ethernet switching and routing solutions.
“Gary is an important addition to the Atheros management team, and we are
pleased to have someone of his talent and experience leading our sales efforts,”
Dr. Barratt said.
Szilagyi replaces Tom Foster, who is transitioning out of the company this
quarter. “We thank Tom for all of his efforts in establishing Atheros as a
wireless market leader,” Dr. Barratt said. “We wish him the best in his new
endeavors.”
Q4 Highlights :
§ At the January
2006 Consumer Electronics Show, Atheros demonstrated its XSPAN family of MIMO
wireless solutions, which are capable of delivering 300 Mbps data range across
the entire home environment using an innovative 3x3 transmitter/receiver
architecture. The XSPAN family is compatible with the new IEEE 802.11n draft
standard, which was ratified on Jan. 19. Atheros once again leads the industry
in innovation by introducing Signal-Sustain Technology, which unleashes the true
potential of MIMO to significantly enhance signal reliability and throughput
range.
Also featured at CES was Atheros’ ROCm®
platform, which is being integrated into nearly every major mobile category:
dual-mode cell phones, smart phones/personal digital assistants, single-mode
VoIP phones, mobile gaming devices and digital cameras.
Atheros also demonstrated its JumpStart for
Wireless™ 2.0, a push-button simple WLAN security configuration that works on
all types of WiFi-enabled devices. JumpStart is forward compatible with Windows
Vista ™ Wireless Connect Now and the highly anticipated Wi-Fi configuration
standard.
§ Atheros
continues to be the leading silicon provider for the hundreds of Metro Wi-Fi
networks that are being implemented worldwide, from Philadelphia to Tokyo. There
were several new metro networks launched in the fourth quarter that employ
Atheros technology, including cities in Arizona, California, Louisiana,
Massachusetts, Minnesota, Virginia and Northern Ireland.
§
In November, Atheros launched the world’s most integrated single-chip
802.11g access point solution. The AR5007AP-G is a WLAN design breakthrough, as
it houses the wireless network processor, media access controller baseband and
all radio functions up to the antenna on a single chip, including an on-chip
power amplifier, low noise amplifiers (LNA), and an antenna switch. The company
achieved significant design win success with the AR5007AP-G in the fourth
quarter.
Conference Call
Atheros will broadcast its fourth quarter 2005 financial
results conference call today, Monday, Jan. 30, 2006, at 2 p.m. Pacific time (5
p.m. Eastern time).
To listen to the call, please dial (210) 234-0001
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) 369-0744.
The Atheros financial results conference call will be
available via a live webcast on the investor relations section of the Atheros
web site at
http://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, ROCm, XSPAN, Jumpstart for
Wireless and Signal-Sustain Technology 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
features, benefits and performance of Atheros’ 802.11n solutions and ROCm
products; the anticipated adoption of 802.11n technology; the anticipated amount
of sales of PAS products to UT Starcom in the first quarter; and statements
regarding Atheros’ design wins, 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 timing of adoption of a final 802.11n standard and
whether the currently ratified draft standard is the standard that adopted as
the final 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
September 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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