UTStarcom Provides Select Preliminary Balance Sheet Liquidity Information as of June 30, 2007
ALAMEDA, Calif., July 24 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI) today announced select preliminary balance sheet liquidity
information as of June 30, 2007. In addition, the Company announced the
preliminary results of its review of historical equity grant award practices
and a separate independent review of historical sales contracts in China.
The Company Also Announces The Preliminary Results Of Its Review Of Historical Equity Grant Award Practices
The Company Announces An Independent Review Of Historical China Sales Contracts
(Logo: Photo: http://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO )
Select Balance Sheet Liquidity Information
The Company is not providing detailed financial results for the fiscal
fiscal quarter ended
The preliminary financial metrics presented below do not reflect possible
adjustments that may be made to the Company's financial statements as part of
the financial close for the quarter ended
preliminary until such time as the Company files its quarterly and annual
reports on Forms 10-Q and 10-K.
-- As of June 30, 2007, the Company's cash and short-term investments totaled approximately $528 million, of which approximately $416 million was held in China. This compares with approximately $658 million, of which approximately $504 million was held in China at June 30, 2006. -- As of June 30, 2007, the Company's short- and long-term debt totaled approximately $380 million, of which approximately $275 million was related to the Company's subordinated convertible notes due March 2008, and approximately $105 million was related to other short-term debt. This compares to short- and long-term debt of approximately $398 million at June 30, 2006, of which approximately $275 million was related to the Company's subordinated convertible notes and approximately $123 million was related to short-term debt.
'In lieu of our full financial statements at this time, we wanted to
provide transparency to the financial community as to the continued adequacy
of our cash position,' stated
'Operationally, while we continue to see declines in the PAS business in
IPTV. In addition, we are maintaining our handset market share in the PCD
division,' Barton continued. 'We look forward to providing a full update and
introducing you to our new Chief Operating Officer,
file our financial statements.'
Preliminary Results of Equity Award Grant Practices Review
The Company also announced today the preliminary results of its review of
historical equity award practices.
As previously communicated on
the Nominating and Corporate Governance Committee of the Company's Board of
Directors (the 'Governance Committee') found that in certain instances all
actions that establish a measurement date under the requirements of Accounting
Principles Board No. 25, Accounting for Stock Issued to Employees, had not
occurred at the grant date, which had been used as the measurement date in
accounting for Company stock option grants. A later date, when all such
actions had taken place, should have been used as the measurement date for
these stock options. The Audit Committee of the Company's Board of Directors
(the 'Audit Committee') then determined, in consultation with and on the
recommendation of the Company's management, the effect of using incorrect
measurement dates would require the Company to record material additional
stock-based compensation charges in its previously issued financial
The Company therefore announced its previously issued financial statements
for the years 2000 through 2006, including interim periods within these fiscal
years, should no longer be relied upon.
The Company has now determined that the amount of the non-cash restatement
will be approximately
Separately today, the Company also announced an independent review of
historical sales contracts with some of its customers in
is being conducted by the Audit Committee of the Company's Board of Directors
with the assistance of independent legal counsel and forensic accountants.
Although this review is ongoing and the Company does not yet know the outcome
of the review, the Company cannot rule out the possibility that the outcome
could impact revenue recognized for certain of such contracts as recorded in
its previously issued financial statements.
The completion of this review could result in the additional delay in our
ability to file our currently delinquent and upcoming periodic reports with
the Securities and Exchange Commission.
About UTStarcom, Inc.
UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. UTStarcom sells its broadband,
wireless, and handset solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables its customers
to rapidly deploy revenue-generating access services using their existing
infrastructure, while providing a migration path to cost-efficient, end-to-end
IP networks. Founded in 1991 and headquartered in Alameda, California,
UTStarcom has research and design operations in the
For more information about UTStarcom, please visit the UTStarcom Web site
Safe Harbor Statement under the Private Securities Litigation Reform Act
The statements contained in this press release that are not purely
historical are forward-looking statements within the meaning of Section 21E of
the Securities and Exchange Act of 1934, as amended, including statements
regarding UTStarcom's expectations, beliefs, intentions or strategies
regarding the future and including, without limitation, preliminary cash and
short-term investments at
the timing of UTStarcom's filing of its full financial statements, the amount
of the restatement associated with the equity grant award practices review,
declines in the PAS business in
such as IPTV and UTStarcom's maintenance of its market share in the PCD
All forward-looking statements included in this document are based upon
information available to UTStarcom as of the date hereof, and UTStarcom
assumes no obligation to update any such forward-looking statements.
Forward-looking statements involve risks and uncertainties, which could cause
actual results to differ materially from those projected. The preliminary
financial metrics presented above in this release do not reflect possible
accounting entries and adjustments that may be made to the Company's financial
statements as part of the close of the books for the quarter ended
independent reviews. Other risks that may impact the Company's performance
include, but are not limited to, general adverse economic conditions, trends
and uncertainties, fluctuations in product sales and changes in demand for and
acceptance of the Company's products, the changing and competitive nature of
global telecommunications markets, economic, political, regulatory and legal
risks associated with UTStarcom's multinational operations, the termination of
significant contracts, and the evolution of product and applications
standards. These risks and other risks relating to UTStarcom's business are
set forth in the documents filed by UTStarcom with the Securities and Exchange
Commission, specifically its most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, and amendments thereto.
SOURCE UTStarcom, Inc.