DZS(US:DZSI)2024-09-03 12:21Financial Performance - Q2 2024 orders reached $38 million, a 6% increase from $36 million in Q2 2023, while 1H 2024 orders totaled $67 million, down 7% from $72 million in 1H 2023[3] - Revenue for Q2 2024 was $31 million, unchanged from Q2 2023, and 1H 2024 revenue was $59 million, a decrease of 21% from $75 million in 1H 2023[3] - Net income for Q2 2024 was $23 million GAAP, with an adjusted non-GAAP loss of $(11) million, compared to a loss of $(13) million in Q2 2023[3] - Net revenue for Q2 2024 was $31,066,000, an increase of 12.9% from $27,667,000 in Q1 2024 but a decrease of 1.8% from $30,623,000 in Q2 2023[14] - Operating loss for Q2 2024 was $(17,166,000), worsening from $(10,892,000) in Q1 2024 and $(21,072,000) in Q2 2023[14] - Net income for Q2 2024 was $23,073,000, a significant improvement from a net loss of $(13,535,000) in Q1 2024 and $(22,604,000) in Q2 2023[14] - Earnings per diluted share for Q2 2024 was $0.61, compared to a loss of $(0.36) in Q1 2024 and $(0.72) in Q2 2023[14] Margins and Expenses - GAAP gross margin improved to 33.6% in Q2 2024 from 32.7% in Q2 2023, and 39.2% in 1H 2024 compared to 36.3% in 1H 2023[3] - Non-GAAP operating expenses decreased by 27% to $35 million in 1H 2024 from $48 million in 1H 2023[3] - Gross profit for Q2 2024 was $10,439,000, resulting in a gross margin of 33.6%, compared to a gross margin of 32.7% in Q2 2023[18] - The gross profit margin slightly improved from 36.3% to 38.1% when adjusted for non-GAAP items[21] Assets and Liabilities - Total current assets decreased to $137,951,000 as of June 30, 2024, down from $196,368,000 at the end of 2023[15] - Total liabilities decreased to $128,812,000 as of June 30, 2024, down from $226,822,000 at the end of 2023[15] - Cash and cash equivalents decreased to $8,137,000 from $15,102,000 at the end of 2023[15] - Inventories increased significantly to $80,149,000 from $33,113,000 at the end of 2023[15] Strategic Initiatives - The divestiture of the Asia business is expected to enhance gross margins and allow a focus on North America, Europe, and other regions[2] - The acquisition of NetComm in June 2024 is anticipated to be accretive and is already generating positive cross-selling sales synergy[2] - The company aims to convert approximately $150 million of scheduled backlog into orders and cash[4] - DZS will provide a comprehensive report on its accomplishments and future outlook during the earnings call on September 5, 2024[4] Other Financial Adjustments - The company reported a bargain purchase gain of $41,544,000 in Q2 2024, contributing to the positive net income[14] - GAAP revenue was $47,805 million with a gross profit of $27,185 million, resulting in a gross margin of 36.3%[21] - Operating expenses totaled $65,695 million, leading to an operating loss of $38,510 million and a net loss of $42,639 million[21] - Adjusted (Non-GAAP) revenue was $46,435 million with an adjusted gross profit of $28,555 million, achieving a gross margin of 38.1%[21] - The company reported a net loss per diluted share of $1.37 under GAAP and $(0.53) under Non-GAAP adjustments[21] - The company incurred litigation and restatement costs of $476 million, impacting overall financial performance[21] - Unrealized foreign exchange losses amounted to $189 million, affecting the net income figures[21] - Non-GAAP adjustments to the tax rate contributed $10,678 million, with a tax effect of $(3,415) million[21] - The company is focusing on cost management strategies to mitigate operating losses and improve future profitability[21]