EX-99.1
2
a06-5582_1ex99d1.htm
EXHIBIT 99
Exhibit 99.1
Press Release
Contacts:
PRESS
Susan Lehman
Story Communications
510.832.6006
susan@storypr.com
FINANCIAL
Daniel K. Atler, CFO
Ikanos Communications
510.438.6276
datler@ikanos.com
IKANOS
COMPLETES ACQUISITION OF BROADBAND PRODUCT LINES
FROM ANALOG DEVICES
Updated Guidance Provided for First Quarter 2006
Webcast and Conference Call Details Included
Fremont, Calif., February 20, 2006
-Ikanos
Communications, Inc. (NASDAQ: IKAN), a leading developer and provider of Fiber
Fast™ broadband solutions, today announced that it has completed the
acquisition of the network processor and ADSL ASIC product lines from Analog
Devices, Inc. (NYSE: ADI). The estimated $31 million cash acquisition broadens
Ikanos' market by adding the Fusiv®
line of residential gateway processors and Eagle® line
of ADSL2+ modem products, along with associated product development and support
teams. In addition, Ikanos plans to offer VDSL-based residential gateway
solutions that integrate the Fusiv processor with its CleverConnect® and FxS™
VDSL2 products. In addition, the company has updated guidance for the current
quarter.
"This
acquisition is a logical step towards our goal of enabling Ikanos to offer a
full suite of interactive broadband solutions", said Rajesh Vashist, president
and CEO of Ikanos. "The Fusiv processor delivers class-leading performance and
we believe that it will integrate well with our
VDSL
solutions. The Eagle products allow us to offer
ADSL-based gateways for carriers who want to offer a broader range of products
to their customers".
Ikanos
expects to have new gateway designs that combine the Fusiv products with its
VDSL chipsets. The Fusiv family is currently deployed by 20 customers
representing 75 percent of the world's residential gateway manufacturers.
Financial
Summary and Ikanos Updates First Quarter 2006 Outlook
The total purchase price will be approximately $31 million, excluding
transaction costs, as Ikanos received an additional $1 million of inventory
than first anticipated. Based on
preliminary estimates, Ikanos expects to account for this transaction for
financial reporting purposes as follows:
(All amounts are estimated amounts and approximations.)
• $7 to 9 million for tangible assets.
• $16 to 18 million for the intangible
assets.
• $3 to 4 million for in-process R&D -
which will be charged to expense in the first quarter of 2006.
Amortization of the intangibles is expected to occur over the next 5 or
more years, with approximately 60% to 80% expected to be amortized or expensed
in 2006. Current estimated
acquisition-related charges are $6 to $8 million to cost of sales,
and $5 to $7 million to operating expense in 2006. Actual charges may differ as time and usage
estimates are finalized.
Based
on additional revenue and expenses from the acquisition, Ikanos has updated its
outlook for first quarter 2006 as follows:
• Net
revenue is expected to increase 15% to 20% in the first quarter of 2006 over
the fourth quarter of 2005.
• Non-GAAP
Gross Margins* are expected to be between 48% and 51% in the first quarter of
2006. GAAP gross margins will be lower than non-GAAP
gross margins, as they will include amortization of acquisition related
intangibles preliminarily estimated to be up to $1.5 million and charges
related to stock compensation expense in accordance with FAS123R.
• Non-GAAP
Research & Development and Selling, General &
Administrative expenses combined are expected to be in the range of $14 to
$15.5 million in the first quarter of 2006. GAAP Research & Development and Selling, General & Administrative expenses
combined
will be higher, as they will include amortization of acquisition related
intangibles preliminarily estimated to be up to $1.5 million, and charges
related to stock compensation expense in accordance with FAS123R.
*The Company refers to
Gross Margins as the result of net revenue less cost of revenue divided by net
revenue.
The
Company advises interested parties to watch for SEC filings with subsequent
updates, as final purchase accounting determinations and calculations regarding
stock compensation expenses in accordance with FAS123R are completed.
Conference Call and Web cast Regarding
Acquisition at 6:00 am pacific time on February 21
Management will hold a conference call at 6:00
am (pacific time) on February 21 to discuss the
financial and operational details of the acquisition. To listen to the call, please visit http://ir.ikanos.com/ and click on the
link provided for the web cast or dial (719) 457-2618 no password
required. The web cast will be archived and available through February
28, 2006 at http://ir.ikanos.com/ or by calling (719) 457-0820 and entering
conference ID number 1941015.
About Ikanos Communications
Ikanos Communications, Inc. (NASDAQ: IKAN) develops chipsets that enable
carriers to offer Fiber Fast™ bandwidth and high-speed network processing for
enhanced triple-play services. Supporting transmission rates of up to 100 Mbps,
Ikanos' complete line of end-to-end silicon solutions power line terminals, CPE
modems, and residential gateways for most of the world's largest network
equipment manufacturers. With its field-proven solutions, Ikanos enables fast
and cost-effective carrier rollouts of interactive broadband services including
IPTV. For more information, please visit www.ikanos.com
©
2006 Ikanos Communications, Inc.
All Rights Reserved. Ikanos Communications, Ikanos, the
Ikanos logo, SmartLeap, CleverConnect, Fusiv, Eagle, Ikanos Programmable
Operating System, Fx, FxS, VLR and Fiber Fast are among the
trademarks or registered trademarks of Ikanos
Safe
Harbor for Forward-Looking Statements
This
press release contains forward-looking statements that involve substantial
risks and
uncertainties,
including statements relating to the expected successful market acceptance of
Ikanos-based gateway solutions; expected new gateway designs that combine Fusiv
products and VDSL chipsets; and projected net revenues, gross margins and
expenses for the first quarter of 2006.
These forward-looking statements are subject to a number of assumptions,
uncertainties and risks that could cause actual results to differ materially
from those anticipated in the forward-looking statements, including the
development and growth of the fiber-fast broadband market generally,
competition within the fiber-fast broadband market, ability to sustain market
growth, the timing and volume of customer demands, ability to successfully
combine the Fusiv products and VDSL chipsets, competition from other
technologies and finalization of purchase accounting and stock compensation
expense. You should not rely upon
forward-looking statements as predictions of future events. We cannot assure
you that the events and circumstances reflected in the forward-looking
statements will be achieved or occur, nor do we undertake any obligation to
update any forward-looking statements for any reason after the date of this
press release. For additional
information, readers are referred to the risk factors contained in the
documents filed by Ikanos with the SEC, and specifically the most recent
reports on 10-Q and 8-K, and Ikanos' registration statement of Form S-1.
#
# #

EX - 99 . 1 2 a06 - 5582 _ 1ex99d1 . htm EXHIBIT 99 Exhibit 99 . 1 Press Release Contacts : PRESS Susan Lehman Story Communications 510 . 832 . 6006 susan@storypr.com FINANCIAL Daniel K . Atler , CFO Ikanos Communications 510 . 438 . 6276 datler@ikanos.com IKANOS COMPLETES ACQUISITION OF BROADBAND PRODUCT LINES FROM ANALOG DEVICES Updated Guidance Provided for First Quarter 2006 Webcast and Conference Call Details Included Fremont , Calif . , February 20 , 2006 - Ikanos Communications , Inc . ( NASDAQ : IKAN ) , a leading developer and provider of Fiber Fast ™ broadband solutions , today announced that it has completed the acquisition of the network processor and ADSL ASIC product lines from Analog Devices , Inc . ( NYSE : ADI ) . The estimated $ 31 million cash acquisition broadens Ikanos ' market by adding the Fusiv ® line of residential gateway processors and Eagle ® line of ADSL2 + modem products , along with associated product development and support teams . In addition , Ikanos plans to offer VDSL - based residential gateway solutions that integrate the Fusiv processor with its CleverConnect ® and FxS ™ VDSL2 products . In addition , the company has updated guidance for the current quarter . " This acquisition is a logical step towards our goal of enabling Ikanos to offer a full suite of interactive broadband solutions " , said Rajesh Vashist , president and CEO of Ikanos . " The Fusiv processor delivers class - leading performance and we believe that it will integrate well with our VDSL solutions . The Eagle products allow us to offer ADSL - based gateways for carriers who want to offer a broader range of products to their customers " . Ikanos expects to have new gateway designs that combine the Fusiv products with its VDSL chipsets . The Fusiv family is currently deployed by 20 customers representing 75 percent of the world 's residential gateway manufacturers . Financial Summary and Ikanos Updates First Quarter 2006 Outlook The total purchase price will be approximately $ 31 million , excluding transaction costs , as Ikanos received an additional $ 1 million of inventory than first anticipated . Based on preliminary estimates , Ikanos expects to account for this transaction for financial reporting purposes as follows : ( All amounts are estimated amounts and approximations . ) • $ 7 to 9 million for tangible assets . • $ 16 to 18 million for the intangible assets . • $ 3 to 4 million for in - process R & D - which will be charged to expense in the first quarter of 2006 . Amortization of the intangibles is expected to occur over the next 5 or more years , with approximately 60 % to 80 % expected to be amortized or expensed in 2006 . Current estimated acquisition - related charges are $ 6 to $ 8 million to cost of sales , and $ 5 to $ 7 million to operating expense in 2006 . Actual charges may differ as time and usage estimates are finalized . Based on additional revenue and expenses from the acquisition , Ikanos has updated its outlook for first quarter 2006 as follows : • Net revenue is expected to increase 15 % to 20 % in the first quarter of 2006 over the fourth quarter of 2005 . • Non - GAAP Gross Margins * are expected to be between 48 % and 51 % in the first quarter of 2006 . GAAP gross margins will be lower than non - GAAP gross margins , as they will include amortization of acquisition related intangibles preliminarily estimated to be up to $ 1.5 million and charges related to stock compensation expense in accordance with FAS123R . • Non - GAAP Research & Development and Selling , General & Administrative expenses combined are expected to be in the range of $ 14 to $ 15.5 million in the first quarter of 2006 . GAAP Research & Development and Selling , General & Administrative expenses combined will be higher , as they will include amortization of acquisition related intangibles preliminarily estimated to be up to $ 1.5 million , and charges related to stock compensation expense in accordance with FAS123R . * The Company refers to Gross Margins as the result of net revenue less cost of revenue divided by net revenue . The Company advises interested parties to watch for SEC filings with subsequent updates , as final purchase accounting determinations and calculations regarding stock compensation expenses in accordance with FAS123R are completed . Conference Call and Web cast Regarding Acquisition at 6 : 00 am pacific time on February 21 Management will hold a conference call at 6 : 00 am ( pacific time ) on February 21 to discuss the financial and operational details of the acquisition . To listen to the call , please visit http://ir.ikanos.com/ and click on the link provided for the web cast or dial ( 719 ) 457 - 2618 no password required . The web cast will be archived and available through February 28 , 2006 at http://ir.ikanos.com/ or by calling ( 719 ) 457 - 0820 and entering conference ID number 1941015 . About Ikanos Communications Ikanos Communications , Inc . ( NASDAQ : IKAN ) develops chipsets that enable carriers to offer Fiber Fast™ bandwidth and high - speed network processing for enhanced triple - play services . Supporting transmission rates of up to 100 Mbps , Ikanos ' complete line of end - to - end silicon solutions power line terminals , CPE modems , and residential gateways for most of the world 's largest network equipment manufacturers . With its field - proven solutions , Ikanos enables fast and cost - effective carrier rollouts of interactive broadband services including IPTV . For more information , please visit www.ikanos.com © 2006 Ikanos Communications , Inc . All Rights Reserved . Ikanos Communications , Ikanos , the Ikanos logo , SmartLeap , CleverConnect , Fusiv , Eagle , Ikanos Programmable Operating System , Fx , FxS , VLR and Fiber Fast are among the trademarks or registered trademarks of Ikanos Safe Harbor for Forward - Looking Statements This press release contains forward - looking statements that involve substantial risks and uncertainties , including statements relating to the expected successful market acceptance of Ikanos - based gateway solutions ; expected new gateway designs that combine Fusiv products and VDSL chipsets ; and projected net revenues , gross margins and expenses for the first quarter of 2006 . These forward - looking statements are subject to a number of assumptions , uncertainties and risks that could cause actual results to differ materially from those anticipated in the forward - looking statements , including the development and growth of the fiber - fast broadband market generally , competition within the fiber - fast broadband market , ability to sustain market growth , the timing and volume of customer demands , ability to successfully combine the Fusiv products and VDSL chipsets , competition from other technologies and finalization of purchase accounting and stock compensation expense . You should not rely upon forward - looking statements as predictions of future events . We can not assure you that the events and circumstances reflected in the forward - looking statements will be achieved or occur , nor do we undertake any obligation to update any forward - looking statements for any reason after the date of this press release . For additional information , readers are referred to the risk factors contained in the documents filed by Ikanos with the SEC , and specifically the most recent reports on 10 - Q and 8 - K , and Ikanos ' registration statement of Form S - 1 . # # #