 Net revenues - 70.5 million GAAP net loss - 0.2 million Non-GAAP net income - 2.0 million Adjusted EBITDA - 3.2 million Cash and cash equivalents - 38.0 million GAAP gross margin - 33.7 Charlie Vogt announced as President, CEO and member of Board of Directors on August 3, 2020PLANO, Texas, Aug. 05, 2020 GLOBE NEWSWIRE -- DASAN Zhone Solutions, Inc. NASDAQ: DZSI, the Company or DZS, a leading enabler of the emerging hyper-connected, hyper-broadband world, today reported results for the second quarter of 2020.Selected Financial Information Three Months Ended Six Months Ended Key Financial ResultsJune 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 in millions Net revenue70.5 47.5 83.7 118.0 157.8 GAAP Net income loss attributable to DZS 0.2 8.8 2.4 8.9 0.8 Non-GAAP Net income loss attributable to DZS1 2.0 5.4 4.8 3.4 5.6 Adjusted EBITDA1 3.2 4.8 6.7 1.6 8.5 Cash and cash equivalents at quarter end 38.0 26.4 56.4 38.0 56.4 Quarterly data may not sum to full year data due to rounding. 1 Item represents a non-GAAP financial measure; see discussion below, as well as a reconciliation to the comparable GAAP measure in the financial tables attached to this release.Management CommentaryWe continued to advance our strategic growth initiatives and produced healthy financial results for the second quarter of 2020, despite a challenging operating environment due to COVID-19, said Yung Kim, retiring CEO of DZS. It has been a privilege to lead DZS for the past four years and to help transform the company into what it is today - a global provider of leading-edge access, 5G transport, and enterprise communications platforms. I look forward to watching an exciting and promising next chapter for DZS. Second Quarter 2020 Financial ResultsNet revenue for the second quarter of 2020 was 70.5 million, a 15.7 decrease year-over-year from 83.7 million in the prior year period, primarily due to the global slowdown associated with the COVID-19 pandemic. Revenues were positively impacted by new business with top tier customers focused on the next generation of fiber and wireless access solutions.GAAP gross profit margin for the second quarter of 2020 was 33.7, compared to 33.2 in the second quarter of 2019. Adjusted gross profit margin for the second quarter of 2020 was 34.4, compared to 34.2 in the second quarter of 2019.GAAP net loss attributable to DZS for the second quarter of 2020 totaled 0.2 million, or 0.01 per diluted share compared to GAAP net income attributable to DZS of 2.4 million, or 0.13 per diluted share, in the same period last year. Non-GAAP net income attributable to DZS for the second quarter of 2020 totaled 2.0 million, or 0.09 per diluted share, compared to non-GAAP net income attributable to DZS of 4.8 million, or 0.26 per diluted share, in the year ago quarter.GAAP operating expenses for the second quarter of 2020 were 22.0 million compared to 24.8 million in the same quarter last year as the Company benefited from recent cost-cutting initiatives. Adjusted operating expenses for the second quarter of 2020 were 20.4 million compared to 23.3 million in the comparable year ago period.Adjusted EBITDA for the second quarter of 2020 totaled 3.2 million and the Adjusted EBITDA margin was 4.6. This compares to Adjusted EBITDA of 6.7 million, or 8.0 Adjusted EBITDA margin, in the same year-ago period. Total cash and cash equivalents excluding restricted cash as of June 30, 2020 were 38.0 million, compared to 26.4 million as of March 31, 2020.Business OutlookDZSs business outlook is based on current expectations. The following statements are forward-looking, and actual results can differ materially and adversely from those expressed below. Actual results will be impacted by market conditions and those factors described below under Forward-Looking Statements and in the sections entitled Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2019, and subsequent filings with the U.S. Securities and Exchange Commission. Accordingly, undue reliance should not be placed on these projections.Due to the variability in the macro environment brought on by COVID-19, the Companys full year financial results cannot be reasonably estimated at this time.Third Quarter 2020 Guidance Q3 2020 Low High in millions Net revenue74.0 79.0 Adjusted Gross margin 1 31.5 32.5 Adjusted Operating expenses1 24.0 23.0 Adjusted EBITDA1 0.5 2.5 1 Item represents a non-GAAP financial measure; see discussion below, as well as a reconciliation to the comparable GAAP measure in the financial tables attached to this release.Non-GAAP Financial MeasuresTo supplement DZSs consolidated financial statements presented in accordance with GAAP, DZS reports Adjusted Cost of Revenue, Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Operating Income Loss, Adjusted Non-GAAP Net Income attributable to DZS including on a per share basis, EBITDA, and Adjusted EBITDA, which are non-GAAP measures DZS believes are appropriate to provide meaningful comparison with, and to enhance an overall understanding of DZSs past financial performance and prospects for the future. DZS believes these non-GAAP financial measures provide useful information to both management and investors by excluding specific expenses and gains that DZS believes are not indicative of core operating results. Further, each of these are non-GAAP measures of operating performance used by management, as well as industry analysts, to evaluate operations and operating performance and is widely used in the telecommunications and manufacturing industries. Other companies in the telecommunications and manufacturing industries may calculate these metrics differently than DZS does. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP.DZS defines Adjusted Cost of Revenue as GAAP Cost of Revenue plus or minus i depreciation and amortization, ii stock-based compensation, and iii the impact of material transactions or events that we believe are not indicative of our core product cost, such as, inventory step-up amortization, any of which may or may not be recurring in nature. We believe Adjusted Cost of Revenue provides the investor more accurate information regarding the actual cost of our products and services, excluding the impact of cost of revenue that are not routine components of our core product cost, for better comparability of our cost of revenue between periods and to other companies.DZS defines Adjusted Gross Profit as GAAP Gross Profit plus or minus i depreciation and amortization, ii stock-based compensation, and iii the impact of material transactions or events that we believe are not indicative of our core operating performance, such as, inventory step-up amortization, any of which may or may not be recurring in nature. We believe Adjusted Gross Profit provides the investor more accurate information regarding our core profit margin on sales, excluding the impact of cost of revenue that are not routine components of our core product cost, for better comparability of gross profit margin between periods and to other companies.DZS defines Adjusted Operating Expenses as GAAP Operating Expenses plus or minus as applicable i depreciation and amortization, ii stock-based compensation, and iii the impact of material transactions or events that we believe are not indicative of our core operating performance, such as merger and acquisition costs, purchase price adjustment, goodwill impairment, impairment of long-lived assets or loss on debt extinguishment, restructuring and other charges, any of which may or may not be recurring in nature. We believe Adjusted Operating Expenses provides the investor more accurate information regarding our core operating expenses, which include research and development costs, selling, general and administrative costs, and amortization of intangible assets, excluding the impact of charges that are not routine components of our core operating expenses, for better comparability between periods and to other companies.DZS defines Adjusted Operating Income Loss as GAAP Operating Income Loss plus or minus as applicable i depreciation and amortization, ii stock-based compensation, and iii the impact of material transactions or events that we believe are not indicative of our core operating performance, such as merger and acquisition costs, purchase price adjustment, goodwill impairment, impairment of long-lived assets or loss on debt extinguishment, restructuring and other charges, any of which may or may not be recurring in nature. We believe Adjusted Operating Income Loss provides the investor more accurate information regarding our core operating income loss, excluding the impact of charges that are not routine components of our core operating expenses, for better comparability between periods and to other companies.DZS defines Non-GAAP Net Income Loss attributable to DZS as GAAP Net Income Loss plus or minus as applicable i depreciation and amortization, ii stock-based compensation, and iii the impact of material transactions or events that we believe are not indicative of our core operating performance, such as merger and acquisition costs, inventory step-up amortization, purchase price adjustment, goodwill impairment, impairment of long-lived assets or loss on debt extinguishment, restructuring and other charges, any of which may or may not be recurring in nature. 