EX-99.1 2 a04-8293_1ex99d1.htm EX-99.1

Exhibit 99.1

UTStarcom, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

		Three months ended						Six months ended
		June 30, 2004			June 30, 2003 *			June 30, 2004			June 30, 2003 *
Net sales		$	689,628		$	405,834		$	1,311,919		$	736,354
Cost of sales		514,163			268,330			960,420			486,165
Gross profit		175,465			137,504			351,499			250,189
Operating expenses:
Selling, general and administrative		67,830			34,963			134,773			72,546
Research and development		52,592			36,078			98,250			62,890
In process research and development		1,400			9,328			1,400			10,648
Amortization of intangible assets		3,334			1,483			6,307			2,178
Total operating expenses		125,156			81,852			240,730			148,262
Operating income		50,309			55,652			110,769			101,927
Interest and other income (expenses)		4,962			(1,357		)	14,018			3,133
Equity in loss of affiliated companies		(1,201		)	(1,745		)	(2,198		)	(2,720		)
Income before income taxes and minority interest		54,070			52,550			122,589			102,340
Income tax expense		10,814			13,138			24,518			25,585
Minority interest in earnings (losses) of consolidated subsidiaries		(37		)	—			(87		)	—
Net income		$	43,219		$	39,412		$	97,984		$	76,755
Basic earnings per share		$	0.38		$	0.39		$	0.86		$	0.74
Diluted earnings per share		$	0.32		$	0.33		$	0.72		$	0.62
Weighted average shares used in per-share calculation:
• Basic		113,773			100,698			114,193			104,009
• Diluted		136,095			124,360			137,709			126,409

		Three months ended						Six months ended
		June 30, 2004			June 30, 2003 *			June 30, 2004			June 30, 2003 *
1. The above unaudited financial statements include the following non-cash expenses:
Cost of Sales		$	—		$	3		$	—		$	41
Selling, general and administrative		—			118			51			2,499
Research and development		168			594			194			2,660
Total stock compensation expense		$	168		$	715		$	245		$	5,200
Amortization of intangible assets		$	3,465		$	1,483		$	6,466		$	7,527
In-process research and development		$	1,400		$	1,320		$	1,400		$	4,720
Change in investment portfolio		$	(309	)	$	223		$	(501	)	$	3,376
2. Earnings per share
Basic earnings per share Income available to common stockholders		$	43,219		$	39,412		$	97,984		$	76,755
Effect of Dilutive Securities 7/8% Convertible Subordinated Notes		884			1,092			1,798			1,375
Diluted earnings per share Income available to common stockholders + assumed conversions		$	44,103		$	40,504		$	99,782		$	78,130

*  Certain reclassifications have been made to prior year balances in order to conform to the current year presentation

UTStarcom, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

		June 30, 2004			December 31, 2003
ASSETS
Current assets:
Cash, cash equivalents and short-term investments		$	561,746		$	422,591
Accounts receivable, net		509,608			324,921
Related parties accounts receivable, net		29,884			43,944
Notes receivable		43,392			11,362
Inventories, net		435,473			257,038
Deferred costs/Inventories at customer sites under contracts		334,913			558,977
Prepaid expenses		117,995			136,262
Restricted cash and short term investments		42,633			24,404
Other current assets		39,147			52,408
Total current assets		2,114,791			1,831,907
Property, plant and equipment, net		226,009			186,076
Long-term investments		24,504			24,066
Goodwill and intangible assets, net		177,620			144,232
Other long term assets		47,735			40,677
Total assets		$	2,590,659		$	2,226,958
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	389,094		$	251,176
Income taxes payable		27,945			16,780
Customer advances		149,243			458,654
Deferred revenue		49,493			44,958
Other		205,137			173,139
Total current liabilities		820,912			944,707
Long-term debt		402,500			402,500
Minority interest in consolidated subsidiaries		647			560
Stockholders’ equity:
Common stock		143			131
Additional paid-in capital		1,114,632			653,624
Deferred stock compensation		(7,315		)	(7,761		)
Retained earnings		254,740			229,777
Other comprehensive income/(loss)		4,400			3,420
Total stockholders’ equity		1,366,600			879,191
Total liabilities and stockholders’ equity		$	2,590,659		$	2,226,958

		June 30, 2004			December 31, 2003
Inventories are made up of the following:
Inventories at factories		$	312,810		$	166,075
Inventories at customer sites		122,663			90,963
Inventories at customer sites under contracts		334,913			558,977
Total inventories		$	770,386		$	816,015

* Certain reclassifications have been made to prior year balances in order to conform to the current year presentation