Tuesday, August 3, 2010

Ikanos Reports Q2, Restructuring, New CEO

Ikanos Communications reported Q2 revenue of $55.6 million compared with revenue of $57.4 million for the first quarter of 2010 and revenue of $22.4 million for the second quarter of 2009.

"Ikanos' revenue for the second quarter of 2010 was just below our guidance," said Dennis Bencala, chief financial officer of Ikanos. "Overall, Ikanos' revenue continued to be well diversified by region. Our core VDSL business also saw double digit sequential revenue growth from first quarter to second quarter 2010. In contrast, revenue from ADSL products decreased. What we now see as a sustained decline in the market for these ADSL products led us to write down inventory by $12.9 million during the second quarter, which reduced gross margin by 23% and 11% to 24% and 31% respectively on a GAAP basis, for the three and six months ended July 4, 2010."

Ikanos announced a restructuring plan that will result in approximately a 20% headcount reduction, which will take place in the third and fourth quarter. The restructuring plan is contemplated to include the closing of three overseas offices. The company estimates this will result in an annual operational cost savings of approximately $15 million in 2011.

In addition, Ikanos named John Quigley as its new president and chief executive officer. Prior to joining Ikanos, Quigley was senior vice president at Cambridge Silicon Radio which acquired SiRF Technology where Quigley was the senior vice president general manager of the wireless business unit. Prior to SiRF, Quigley was the vice president of Engineering for Airgo Networks (now Qualcomm).