EX-99.1 2 a04-12096_1ex99d1.htm EX-99.1

Exhibit 99.1

UTStarcom, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

		Three months ended								Nine months ended
		September 30, 2004				September 30, 2003 *				September 30, 2004				September 30, 2003 *
Net sales		$	645,016			$	584,382			$	1,956,935			$	1,320,736
Cost of sales		507,882				398,280				1,467,496				884,445
Gross profit		137,134				186,102				489,439				436,291
Operating expenses:
Selling, general and administrative		74,916				57,371				209,689				129,917
Research and development		56,026				44,723				154,276				107,613
In process research and development		—				161				1,400				10,809
Amortization of intangible assets		3,639				3,081				9,946				5,259
Total operating expenses		134,581				105,336				375,311				253,598
Operating income		2,553				80,766				114,128				182,693
Interest and other income (expenses)		1,295				(306			)	15,313				2,827
Equity in loss of affiliated companies		(727			)	(1,560			)	(2,925			)	(4,280		)
Income before income taxes and minority interest		3,121				78,900				126,516				181,240
Income tax expense (income)		(1,906			)	19,725				22,773				45,310
Minority interest in earnings of consolidated subsidiaries		(40			)	(35			)	(127			)	(35		)
Net income		$		4,987		$	59,140			$		103,616		$	135,895
Basic earnings per share		$		0.04		$	0.58			$		0.91		$	1.31
Diluted earnings per share		$		0.04		$		0.46		$		0.78		$	1.12
Diluted earnings per “If Converted” share		$		0.04		N/A				N/A				N/A
Weighted average shares used in per-share calculation:
• Basic		113,945				102,814				114,110				103,607
• Diluted		116,307				131,914				136,210				123,194
• Diluted “If Converted” Shares		133,226				N/A				N/A				N/A
		Three months ended								Nine months ended
		September 30, 2004				September 30, 2003 *				September 30, 2004				September 30, 2003 *
1. The above unaudited financial statements include the following non-cash expenses:
Cost of Sales		$		—		$		2		$		—		$	7
Selling, general and administrative		—				39				51				225
Research and development		83				121				277				3,005
Total stock compensation expense		$		83		$		162		$		328		$	3,237
Amortization of intangible assets		$		4,102		$		3,081		$		10,569		$	5,259
In-process research and development		$		—		$		161		$		1,400		$	10,809
Change in investment portfolio		$		1,061		$		157		$		1,562		$	380
2. Earnings per share
Basic earnings per share Income available to common stockholders		$		4,987		$		59,140		$		103,616		$	135,895
Effect of Dilutive Securities 7/8% Convertible Subordinated Notes		816				1,098				2,663				2,473
Diluted earnings per share Income available to common stockholders + assumed conversions		$		5,803		$		60,238		$		106,279		$	138,368

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

UTStarcom, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)

		September 30, 2004			December 31, 2003*
ASSETS
Current assets:
Cash, cash equivalents and short-term investments		$	796,203		$	422,591
Accounts receivable, net		691,160			324,921
Related parties accounts receivable, net		46,339			43,944
Notes receivable		24,877			11,362
Inventories, net		439,412			257,038
Deferred costs/Inventories at customer sites under contracts		168,903			558,977
Prepaid expenses		79,849			136,262
Restricted cash and short term investments		36,799			24,404
Other current assets		41,313			52,408
Total current assets		2,324,855			1,831,907
Property, plant and equipment, net		255,029			186,076
Long-term investments		25,428			24,066
Goodwill and intangible assets, net		174,087			144,232
Other long term assets		53,427			40,677
Total assets		$	2,832,826		$	2,226,958
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and short term debt		$	513,010		$	251,176
Income taxes payable		16,783			16,780
Customer advances		279,631			458,654
Deferred revenue		57,874			44,958
Other		191,606			173,139
Total current liabilities		1,058,904			944,707
Long-term debt		402,500			402,500
Minority interest in consolidated subsidiaries		687			560
Stockholders’ equity:
Common stock		143			131
Additional paid-in capital		1,115,433			653,624
Deferred stock compensation		(7,233		)	(7,761		)
Retained earnings		260,371			229,777
Other comprehensive income		2,021			3,420
Total stockholders’ equity		1,370,735			879,191
Total liabilities and stockholders’ equity		$	2,832,826		$	2,226,958
		September 30, 2004			December 31, 2003*
Inventories and deferred costs are made up of the following:
Inventories at factories		$	324,244		$	166,075
Inventories at customer sites		115,168			90,963
Inventories at customer sites under contracts		168,903			558,977
Total inventories and deferred costs		$	608,315		$	816,015

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