Investor Relations Contact:
Leigh Salvo
(650) 314-1000
investor-relations@catapult.com
CATAPULT COMMUNICATIONS REPORTS RECORD REVENUES
FOR SECOND QUARTER OF FISCAL 2005
Mountain View, CA—April 21, 2005—Catapult Communications Corporation (Nasdaq: CATT) today reported record quarterly revenues for its second fiscal quarter ended March 31, 2005. Total revenues for the quarter were $19.1 million, a 10 percent increase over revenues of $17.2 million reported in the second quarter of fiscal 2004. Net income for the second fiscal quarter was $5.4 million, a 20 percent increase year over year. Diluted earnings per share were $0.36 compared to $0.32 in the prior year period.
Strong cash flow from operations during the quarter increased the Company’s cash, cash equivalents and short-term investment position by $8 million to $65 million at quarter end.
“Our record second quarter revenues reflect continued strong performance in Europe and further growth in our Rest of World region,” said Dr. Richard A. Karp, Catapult’s Chairman and CEO. “We also completed the first sale of our new Chameleon protocol analyzer during the quarter.”
BUSINESS OUTLOOK
“Looking ahead, however, current business conditions suggest caution,” Karp continued. “We currently expect that our revenues in the third fiscal quarter will remain unchanged from the prior year at $14.3 million and that diluted net income per share will be $0.14, reflecting the ongoing significant costs associated with Sarbanes-Oxley compliance as well as our investment in sales and development staff to facilitate future growth.”
Catapult Communications will be discussing its second quarter results on a conference call today, beginning at 5:15 p.m. Eastern/2:15 p.m. Pacific. Please dial (800) 901-5213 to access the conference call. International and local participants can dial (617) 786-2962. Please reference Catapult Communications or reservation number 85868728. The conference call will also be available on the Internet from the Investor section of the Company’s website.
A replay of this teleconference will be available on the Company’s website for one year following the conference call. A digital recording will also be available by telephone one hour after the completion of the conference call through midnight on April 28, 2005. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter reservation number 25792248.
ABOUT CATAPULT
Catapult Communications is a leading supplier of advanced digital telecom test systems to global equipment manufacturers and service providers. The Catapult DCT2000® and MGTS® systems deliver superior high-end test solutions for hundreds of protocols and variants, spanning 3G, VoIP, GPRS, SS7, Intelligent Network, ATM, ISDN and other network environments. Catapult is headquartered at 160 South Whisman Road, Mountain View, CA. 94041, tel. 650-960-1025. International offices are located in the U.K., Germany, France, Finland, Canada, Japan, China and Australia.
FORWARD LOOKING STATEMENTS
The statement in this press release regarding the Company’s expected revenues and net income per share for its third fiscal quarter is a forward-looking statement. This statement is subject to various risks and uncertainties that could cause actual results to differ from those forecasted. Such risks include the Company’s dependence on a limited number of customers and the resulting effect of delays or cancellations by such customers of their orders; inability by the Company to meet its production and/or product development schedules; the demand for telecommunications equipment in general and, in particular, for software-based telecommunications test systems; and new and enhanced product offerings by competitors. For other factors that may cause actual results to differ from those projected, please refer to the Company’s Form 10-K, Forms 10-Q and other filings with the Securities and Exchange Commission.
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Catapult Communications Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
For the three months ended | For the six months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues: | ||||||||||||||||
Products | $ | 15,095 | $ | 13,931 | $ | 27,468 | $ | 22,352 | ||||||||
Services | 3,955 | 3,311 | 7,453 | 5,939 | ||||||||||||
Total revenues | 19,050 | 17,242 | 34,921 | 28,291 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Products | 1,429 | 1,565 | 2,671 | 2,566 | ||||||||||||
Services | 852 | 911 | 1,673 | 1,631 | ||||||||||||
Amortization of purchased technology | 172 | 172 | 343 | 343 | ||||||||||||
Total cost of revenues | 2,453 | 2,648 | 4,687 | 4,540 | ||||||||||||
Gross profit | 16,597 | 14,594 | 30,234 | 23,751 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 3,211 | 3,068 | 6,182 | 5,720 | ||||||||||||
Sales and marketing | 4,802 | 4,661 | 9,505 | 8,611 | ||||||||||||
General and administrative | 2,026 | 1,779 | 3,932 | 3,455 | ||||||||||||
Total operating expenses | 10,039 | 9,508 | 19,619 | 17,786 | ||||||||||||
Operating income | 6,558 | 5,086 | 10,615 | 5,965 | ||||||||||||
Interest income | 289 | 185 | 513 | 379 | ||||||||||||
Interest expense | — | (87 | ) | (175 | ) | |||||||||||
Other income (expense), net | (144 | ) | 58 | (137 | ) | 162 | ||||||||||
Income before income taxes | 6,703 | 5,242 | 10,991 | 6,331 | ||||||||||||
Provision for income taxes | 1,273 | 712 | 1,748 | 886 | ||||||||||||
Net income | $ | 5,430 | $ | 4,530 | $ | 9,243 | $ | 5,445 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.37 | $ | 0.35 | $ | 0.63 | $ | 0.42 | ||||||||
Diluted | 0.36 | 0.32 | 0.61 | 0.39 | ||||||||||||
Shares used in per share calculation: | ||||||||||||||||
Basic | 14,676 | 13,000 | 14,637 | 12,952 | ||||||||||||
Diluted | 15,103 | 14,570 | 15,129 | 14,425 | ||||||||||||
Catapult Communications Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, | September 30, | |||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash, cash equivalents and short-term investments | $ | 64,684 | $ | 52,670 | ||||
Accounts receivable, net | 12,623 | 10,110 | ||||||
Inventories | 2,550 | 2,380 | ||||||
Other current assets | 2,507 | 2,623 | ||||||
Total current assets | 82,364 | 67,783 | ||||||
Property and equipment, net | 2,234 | 2,640 | ||||||
Goodwill and other intangibles | 53,955 | 54,466 | ||||||
Other assets | 3,299 | 3,382 | ||||||
Total assets | $ | 141,852 | $ | 128,271 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 7,050 | $ | 7,048 | ||||
Deferred revenue | 7,425 | 5,388 | ||||||
Total current liabilities | 14,475 | 12,436 | ||||||
Deferred revenue long term portion | 373 | 70 | ||||||
Total liabilities | 14,848 | 12,506 | ||||||
Total stockholders’ equity | 127,004 | 115,765 | ||||||
Total liabilities and | ||||||||
stockholders’ equity | $ | 141,852 | $ | 128,271 | ||||
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