NMS Communications (NMSS) Reports Preliminary Q3 Financials; Company to Reorganize Business Under LiveWire Mobile "LVWR"
NMS Communications (NASDAQ: NMSS) announced preliminary financial results for the third quarter ended September 30, 2008 and is providing a business update on LiveWire Mobile.
NMSS currently expects to report total revenue in the range of $16.1-$16.4 million. (Consensus is $18.37 million)
Non-GAAP net loss per share from continuing operations is expected to be in the range of $(0.10) to $(0.09). (Consensus is a loss of $0.03
Third quarter preliminary results are subject to change based on the completion of the Company’s final quarter-end review process. The Company accelerated their close process in advance of the proxy solicitation and shareholder approval process relative to the sale of the Communications Platforms business in order to provide an outlook on the LiveWire Mobile business.
The Company announced plans relating to its LiveWire Mobile business, including restructuring actions designed to further increase the Company’s focus on its managed services business and significantly lower the Company’s breakeven level. LiveWire Mobile will undertake the following action:
- More aggressively de-emphasize the capex channel portion of the business, which has been declining faster than anticipated, is less profitable due to the higher cost of goods sold and more unpredictable quarter-to-quarter due to the fact that it is not a recurring revenue source. As a result, the Company expects the capex business to be a much smaller contributor to revenue in 2009;
- Rightsize the organization to take into consideration the Company’s strategic focus on managed services and capital preservation. The Company expects its breakeven revenue rate to be reduced by approximately half as a result of the restructuring, inclusive of all corporate overhead costs. These actions will also enable the Company to minimize cash usage and end fiscal year 2009 with net cash balances of approximately $8 million, without additional borrowings.
“In the third quarter, we signed a definitive agreement to sell the NMS Communications Platforms business to Dialogic Corporation. Over the course of the past two years we have separated our two businesses, and we believe this final step of selling the NMS Communications Platforms business is the best way to drive long-term value for our shareholders, employees and customers. We are confident about LiveWire Mobile’s ability to create significant shareholder value by executing on its growth initiatives and enhancing its early leadership position in the growing market for mobile personalization services,” said Bob Schechter, NMS Communications Corporation Chairman and CEO.
Subject to and effective immediately following the close of the proposed sale of the NMS Communication Platforms business, Joel Hughes will replace Bob Schechter as CEO of the Company and Todd Donahue will replace Herb Shumway as CFO of the Company. In addition, the Company will change its name to LiveWire Mobile, Inc. and currently has plans to change its ticker symbol. An application has been submitted to NASDAQ to reserve the ticker symbol “LVWR”.
The Company currently expects 2009 total revenue to grow modestly to approximately $20 million with significant year-over-year growth in managed services revenue partially offset by the planned de-emphasis of the capex portion of the business. NMSS expects to have a Non-GAAP net loss from continuing operations of approximately $3 million and to end the fiscal year with net cash balances of approximately $8 million inclusive of cash used in operations, lease obligations and the receipt of the cash in escrow from the proposed sale of the NMS Communications Platforms business. The Company also expects to be profitable and generate positive cash flow from operations in 2010.
NMSS currently expects to report total revenue in the range of $16.1-$16.4 million. (Consensus is $18.37 million)
Non-GAAP net loss per share from continuing operations is expected to be in the range of $(0.10) to $(0.09). (Consensus is a loss of $0.03
Third quarter preliminary results are subject to change based on the completion of the Company’s final quarter-end review process. The Company accelerated their close process in advance of the proxy solicitation and shareholder approval process relative to the sale of the Communications Platforms business in order to provide an outlook on the LiveWire Mobile business.
The Company announced plans relating to its LiveWire Mobile business, including restructuring actions designed to further increase the Company’s focus on its managed services business and significantly lower the Company’s breakeven level. LiveWire Mobile will undertake the following action:
- More aggressively de-emphasize the capex channel portion of the business, which has been declining faster than anticipated, is less profitable due to the higher cost of goods sold and more unpredictable quarter-to-quarter due to the fact that it is not a recurring revenue source. As a result, the Company expects the capex business to be a much smaller contributor to revenue in 2009;
- Rightsize the organization to take into consideration the Company’s strategic focus on managed services and capital preservation. The Company expects its breakeven revenue rate to be reduced by approximately half as a result of the restructuring, inclusive of all corporate overhead costs. These actions will also enable the Company to minimize cash usage and end fiscal year 2009 with net cash balances of approximately $8 million, without additional borrowings.
“In the third quarter, we signed a definitive agreement to sell the NMS Communications Platforms business to Dialogic Corporation. Over the course of the past two years we have separated our two businesses, and we believe this final step of selling the NMS Communications Platforms business is the best way to drive long-term value for our shareholders, employees and customers. We are confident about LiveWire Mobile’s ability to create significant shareholder value by executing on its growth initiatives and enhancing its early leadership position in the growing market for mobile personalization services,” said Bob Schechter, NMS Communications Corporation Chairman and CEO.
Subject to and effective immediately following the close of the proposed sale of the NMS Communication Platforms business, Joel Hughes will replace Bob Schechter as CEO of the Company and Todd Donahue will replace Herb Shumway as CFO of the Company. In addition, the Company will change its name to LiveWire Mobile, Inc. and currently has plans to change its ticker symbol. An application has been submitted to NASDAQ to reserve the ticker symbol “LVWR”.
The Company currently expects 2009 total revenue to grow modestly to approximately $20 million with significant year-over-year growth in managed services revenue partially offset by the planned de-emphasis of the capex portion of the business. NMSS expects to have a Non-GAAP net loss from continuing operations of approximately $3 million and to end the fiscal year with net cash balances of approximately $8 million inclusive of cash used in operations, lease obligations and the receipt of the cash in escrow from the proposed sale of the NMS Communications Platforms business. The Company also expects to be profitable and generate positive cash flow from operations in 2010.
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