HANGZHOU, China, Aug. 13, 2021 (GLOBE NEWSWIRE) -- UTStarcom (“UT” or the “Company”) (NASDAQ: UTSI), a global telecommunications infrastructure provider, today reported its unaudited financial results for the six months ended June 30, 2021, and provided a business update.

Business Update

UTStarcom’s Chief Executive Officer Mr. Hua Li commented, “Despite a challenging business environment, we are pleased with our overall financial results for the first half of 2021. While revenue declined 37% year-over-year, the Company returned to profitability and generated solid cash flow of $14 million. Our team is sharpening our focus on developing new products that capitalize on important technology trends and engaging with network operators to address and support their requirements. Furthermore, our cooperation with the two major carriers in China continues to build momentum, and we believe these customers will benefit from UTStarcom’s expertise and capabilities in carrier-class disaggregated solutions.”

First Half 2021 Financial Results

Summary of 1H 2021 Key Financials

 1H 20211H 2020Y/Y Change
Revenue$8.7$13.7-36.6%
Gross Profit$2.2$2.6-16.7%
Operating Expenses$1.3$11.9-89.1%
Operating Income (Loss)$0.9($9.3)N/A
Net Income (Loss)$0.3($12.0)N/A
Basic EPS$0.01($0.34)+$0.34 
Cash Balance (including Restricted Cash)$61.9$48.6+27.3%

* Dollar comparisons are used where percentage comparisons are not meaningful.
* All the numbers in U.S. Dollars are in millions except for Earnings Per Share (EPS)


Total Revenues

Total revenues for the first half of 2021 were $8.7 million, compared to $13.7 million in the corresponding period in 2020.

Gross Profit

Gross profit was $2.2 million, or 25.0% of net sales, for the first half of 2021, compared to $2.6 million, or 19.1% of net sales, in the corresponding period in 2020.

Operating Expenses

Operating expenses for the first half of 2021 were $1.3 million, compared to $11.9 million in the corresponding period in 2020.

Operating Income (Loss)

Operating income for the first half of 2021 was $0.9 million, compared to operating loss of $9.3 million in the corresponding period in 2020.

Interest Income, Net

Net interest income for the first half of 2021 was $0.5 million, compared to $0.5 million in the corresponding period in 2020.

Other Income (Expenses), Net

Net other income for the first half of 2021 was $1.1 million, compared to net other expense of $3.1 million in the corresponding period in 2020. Other income for the first half of 2021 was mainly due to foreign exchange gain resulting from the appreciation of the U.S. dollar against the Japanese Yen which was partially offset by the devaluation of Indian Rupee against the U.S. dollar.

Net Income (Loss)

Net income attributable to shareholders for the first half of 2021 was $0.3 million, compared to net loss of $12.0 million in the corresponding period in 2020. Basic net income per share for the first half of 2021 was $0.01, compared to basic net loss per share of $0.34 for the corresponding period in 2020.

Cash Flow

Cash generated from operating activities in the first half of 2021 was $13.9 million, cash generated from investing activities was $2.0 million, and cash used in financing activities was nil. As of June 30, 2021, UTStarcom had cash, cash equivalent and restricted cash of $61.9 million.

About UTStarcom Holdings Corp.

UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan, India and China. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the Company’s strategic initiatives and the Company’s business outlook. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially and adversely from the Company’s current expectations. These include risks and uncertainties related to, among other things, the effect of the COVID-19 pandemic on the Company’s business, changes in the financial condition and cash position of the Company, changes in the composition of the Company’s management and their effect on the Company, the Company’s ability to realize anticipated results of operational improvements and benefits of the divestiture transaction, the ability to successfully identify and acquire appropriate technologies and businesses for inorganic growth and to integrate such acquisitions, the ability to internally innovate and develop new products, assumptions the Company makes regarding the growth of the market and the success of the Company’s offerings in the market and the Company’s ability to execute its business plan and manage regulatory matters. The risks and uncertainties also include the risk factors identified in the Company’s latest annual report on Form 20-F and current reports on Form 6-K as filed with the Securities and Exchange Commission. The Company is in a period of strategic transition and the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, which may change and the Company assumes no obligation to update any such forward-looking statements.

For investor and media inquiries, please contact:

UTStarcom Holdings Corp.
Tel: +86 571 8192 8888
Ms. Ning Jiang, Investor Relations
Email: utsi-ir@utstar.com/ njiang@utstar.com /

In the United States:
The Blueshirt Group
Mr. Ralph Fong
Tel: +1 (415) 489-2195
Email: ralph@blueshirtgroup.com


UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets

 June 30, December 31, 
 2021 2020 
 (In thousands) 
ASSETS      
Current assets:      
Cash and cash equivalents$49,518 $34,221 
Short-term investments —  2,100 
Accounts and notes receivable, net 37,384  49,681 
Inventories and deferred costs 6,188  6,707 
Short-term restricted cash 8,938  12,088 
Prepaid and other current assets 4,718  5,108 
Total current assets 106,746  109,905 
Long-term assets:      
Property, plant and equipment, net 523  620 
Operating lease right-of-use assets, net 5,025  1,183 
Long-term restricted cash 3,493  2,079 
Other long-term assets 4,851  4,937 
Total long-term assets 13,892  8,819 
Total assets$120,638 $118,724 
       
LIABILITIES AND EQUITY      
Current liabilities:      
Accounts payable$23,615 $25,120 
Customer advances 544  391 
Deferred revenue 106  410 
Income tax payable 8,707  5,934 
Operating lease liabilities, current 1,264  1,217 
Other current liabilities 6,046  6,970 
Total current liabilities 40,282  40,042 
Long-term liabilities:      
Operating lease liabilities, non-current 3,830  256 
Long-term deferred revenue and other liabilities 890  1,025 
Total liabilities 45,002  41,323 
       
Total equity 75,636  77,401 
Total liabilities and equity$120,638 $118,724 


UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Statements of Operations

 Six months ended June 30, 
 2021 2020 
 (In thousands, except per share data) 
Net sales$8,692 $13,708 
Cost of net sales 6,515  11,094 
Gross profit 2,177  2,614 
  25.0% 19.1%
Operating expenses:      
Selling, general and administrative (1,961) 7,549 
Research and development 3,263  4,355 
Total operating expenses 1,302  11,904 
       
Operating income (loss) 875  (9,290)
       
Interest income, net 468  493 
Other income (expense), net 1,104  (3,103)
Income (loss) before income taxes 2,447  (11,900)
Income tax expense (2,195) (142)
Net income (loss) attributable to UTStarcom Holdings Corp.$252 $(12,042)
       
Net income (loss) per share attributable to UTStarcom Holdings Corp.—Basic$0.01 $(0.34)
Weighted average shares outstanding—Basic 36,001  35,692 


UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows

 Six months ended June 30, 
 2021 2020 
 (In thousands) 
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net Income (loss)$252 $(12,042)
Depreciation 239  295 
Provision for doubtful accounts (5,015) 2,477 
Stock-based compensation expense 261  497 
Net gain on disposal of assets (7) — 
Gain on release of tax liability due to expiration of the statute of limitations (134) — 
Deferred income taxes —  116 
Changes in operating assets and liabilities 18,278  7,826 
     Net cash provided by (used in) operating activities 13,874  (831)
       
CASH FLOWS FROM INVESTING ACTIVITIES:      
Additions to property, plant and equipment (140) (85)
Proceeds from short-term investments 2,100  2,095 
    Net cash provided by investing activities 1,960  2,010 
       
CASH FLOWS FROM FINANCING ACTIVITIES:      
Repurchase of ordinary share —  (157)
   Net cash used in financing activities —  (157)
Effect of exchange rate changes on cash and cash equivalents (2,273) (984)
  Net increase (decrease) in cash and cash equivalents 13,561  38 
Cash, cash equivalents and restricted cash at beginning of period 48,388  48,607 
Cash, cash equivalents and restricted cash at end of period$61,949 $48,645