SRTI BLOCKCHAIN GENERATION INC 
By
Net sales for the third quarter of 2008 were
Gross margin for the third quarter of 2008 was 56% including the effect of
a
The third quarter operating loss was
"We are pleased to report third quarter revenues at the high end of our
expected revenue range. In addition, excluding restructuring charges in the
third quarter, we have achieved annualized cost savings of roughly
Restructuring Update
Sunrise Telecom's restructuring actions include the following:
-- The company has signed a memorandum of understanding to divest the hi- resolution portion of its optical products group, which is expected to close in the fourth quarter. This is in line with the company's strategy to simplify its operations and divest non-core businesses.
-- The company expects to take additional cost cutting actions during the fourth quarter to further tighten its strategic focus and improve operating efficiencies. Sunrise Telecom is targeting a 25% reduction in operating expenses once the restructuring is fully implemented, which should put the company on path for profitability in 2009. The company expects to incur a one- time charge in the fourth quarter associated with employee severance payments and other miscellaneous charges.
Due to the decline in the company's market capitalization, the company expects to recognize a significant non-cash impairment charge related to certain of its long term assets, including goodwill in the third quarter of 2008.
Additional Highlights
--
-- The company filed with the Securities and Exchange Commission ("SEC")
its Form 10-K for the fiscal year ended
-- The company's flagship Traffic Analysis and Monitoring System (TAMS) received software validation for the IBM Netcool/Omnibus Platform, one of the most popular solutions for fault management in operator network operations centers;
-- The company has recently introduced the CM2000, SunLite GigE and SunLite GigE Responder. The company has a strong pipeline of new products to be introduced over the next two quarters.
-- Sunrise Telecom's Mobile X-Ray mobile services data platform was
selected to provide service monitoring for Telefonica O2
Fourth Quarter Business Outlook
Based on current backlog and order expectations, Sunrise Telecom forecasts
its fourth quarter sales to be in the range of
Conference Call and Webcast
President and Chief Executive Officer,
-Financial Tables Following-
Financial Results Summary
(In thousands, except per share and percentage data, unaudited)
For the Three For the Three
Months Ended Months Ended
Sept. 30, Sept. 30,
2008 2007
Selected Income Statement Data (preliminary)
Net sales $18,721 $22,934
Total Operating Expenses $14,652 $17,649
Loss from operations $(4,145) $(3,351)
Net loss $(5,239) $(2,917)
Diluted earnings per share $(0.10) $(0.06)
Shares outstanding (diluted) 51,349 51,349
Gross profit percentage 56% 62%
Backlog at end of quarter $12,900 $11,309
Selected Consolidated Balance Sheet Data (preliminary)
Sept. 30, Sept. 30,
2008 2007
Cash and cash equivalents $11,043 $13,367
Short-term investments - 1,003
Accounts receivable, net of
allowance of $299 and $542 17,743 16,095
Inventories 17,067 20,131
Short-term borrowings and current
portion of notes payable 4,167 183
Accounts payable 4,535 3,034
Other accrued expenses 14,876 13,336
Deferred revenue 3,305 3,008
Notes payable, less current portion 252 411
This financial information has not been subjected to completed audit or review procedures, by our independent auditor.
SUNRISE TELECOM INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (preliminary)
(In thousands, except per share data, unaudited)
Three Months Ended
Sept 30,
2008
Net sales $18,721
Cost of sales 8,212
Gross profit 10,509
Operating expenses:
Research and development 4,365
Selling and marketing 5,884
General and administrative 3,455
Restructuring 950
Total operating expenses 14,654
Loss from operations (4,145)
Other income, net (967)
Loss before income taxes (5,112)
Income tax expense 127
Net loss $(5,239)
Earnings per share:
Basic and diluted $(0.10)
Shares used in per share computation:
Basic and diluted 51,349
SUNRISE TELECOM INCORPORATED
NET SALES DETAILS (preliminary)
(In thousands, unaudited)
Three Months Ended
Sept. 30, Jun. 30, Sept. 30,
2008 2008 2007
By Product:
Wireline access $6,631 5% $6,653 34% $9,581 42%
Cable broadband 3,974 21% 4,903 25% 6,398 28%
Fiber optics 5,683 30% 5,920 29% 4,337 19%
Protocol 2,433 13% 2,301 12% 2,618 11%
$18,721 $19,777 $22,934
Three Months Ended
Sept. 30, Jun. 30, Sept. 30,
2008 2008 2007
By Region:
North America
(United States
and Canada) $7,345 39% $7,888 38% $10,124 44%
Asia Pacific 3,847 21% 4,610 24% 3,757 16%
Europe/Africa
/Middle East 6,275 34% 6,563 34% 8,173 36%
Latin America 1,254 7% 716 4% 880 4%
$18,721 $19,777 $22,934
SUMMARY OF CERTAIN NONCASH EXPENSES (preliminary)
(In thousands, unaudited)
The following expenses are included in the applicable lines of Sunrise
Telecom Incorporated's Condensed Consolidated Statements of Operations, as
required by GAAP.
Three Months Ended
Sept 30,
2008
Share based compensation:
Included in cost of sales $2
Included in research and development 13
Included in selling and marketing 15
Included in general and administrative 13
$43
Amortization of acquisition-related intangible assets
included in general and administrative $31
About Sunrise Telecom Incorporated
Sunrise Telecom develops and delivers high-quality communications test and
measurement solutions for today's telecom, cable and wireless networks. The
Company's robust portfolio of feature-rich, easy-to-use products enables
service providers to deliver premium voice, video, data and next-generation
digital multimedia services quickly, reliably, and cost-effectively. Based in
SUNRISE TELECOM, the "S" logo, and other trademarks are trademarks of Sunrise Telecom Incorporated and may not be used without permission.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, including, but not limited to, material contained in
quotations, sales expectations for the fourth quarter of 2008, statements
regarding write downs for asset impairments, expectations for the divestitures
of non-core assets, expectations regarding the Company's goal to be current
with its periodic reporting by the end of 2008, expectations related to the
implementation of a cost reduction program and ability to reduce operating
expenses. These forward-looking statements are subject to many risks and
uncertainties that could cause actual results to differ materially from those
projected. Specific factors that may cause results to differ include the
following: a lack of acceptance or slower than anticipated acceptance for
Sunrise Telecom's new or enhanced products and modules; slower than
anticipated product development or introduction into the marketplace;
unanticipated delays in product delivery schedules; lower than anticipated
end-user demand for telecommunications services and a corresponding cutback in
spending by customers; increased competitive pressures, including from former
employees; rapid technological change within the telecommunications industry;
Sunrise Telecom's dependence on a limited number of major customers; Sunrise
Telecom's dependence on limited source suppliers; deferred or lost sales
resulting from order cancellations or order changes; deferred or lost sales
resulting from Sunrise Telecom's lengthy sales cycle; unanticipated
difficulties associated with international operations; Sunrise Telecom's
ability to manage growth and slowdowns; disproportionately high compliance
costs relative to Sunrise Telecom's size; time spent by management reviewing
alternative capital structure proposals and strategic, balance-sheet asset
proposals to make the Company more successful; the loss of key employees;
ineffective internal controls requiring remediation; the long-term impact of
cost controls; the unknown effects of management changes; the unknown effects
of marking to market certain Sunrise Telecom's balance sheet assets that may
be permanently impaired; the ramifications of Sunrise Telecom's inability to
file required reports with the SEC on a timely basis; any potential claims or
proceedings related to such matters, including stockholder litigation and any
action by the SEC; and protracted litigation, which could disrupt Sunrise
Telecom's normal business operations. Some of these risks and uncertainties
are described in more detail in Sunrise Telecom's reports filed with the SEC,
including, but not limited to, its Annual Report on Form 10-K for the period
ended
SOURCE Sunrise Telecom Incorporated
