CATAPULT COMMUNICATIONS REPORTS SECOND QUARTER FISCAL YEAR 2006 RESULTS
Mountain View, CA—April 27, 2006—Catapult Communications Corporation (Nasdaq: CATT) today reported that revenues for its second fiscal quarter ended March 31, 2006 were $10.7 million, compared to $19.1 million in the second quarter of fiscal 2005. The Company reported a net loss of $789,000 for the second fiscal quarter of 2006 compared to net income of $5.4 million in the same period a year ago. The loss per diluted share was $0.05 in the second quarter of fiscal 2006 compared to net income per diluted share of $0.36 in the prior year period. The net loss and loss per diluted share for the second quarter of fiscal 2006 reflected the impact of approximately $480,000 in pre-tax, non-cash stock option expenses recognized under FAS 123R. No stock option expenses were recorded in the second quarter of fiscal 2005.
Orders received during the quarter totaled $15.9 million, 49 percent higher than revenues. The Company has received a cumulative total of approximately $5.2 million in orders requiring additional engineering on which no revenue has been recognized. The Company does not expect to begin to recognize this revenue until the fourth quarter of its current fiscal year.
“Despite this disappointing quarterly result, I believe our core business and the market for telecom test systems remains healthy,” said Dr. Richard A. Karp, Catapult’s Chairman and CEO.
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 (866) 510-0705 to access the conference call. International and local participants can dial (617) 597-5363. Please reference Catapult Communications or reservation number 45417848. 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 May 4, 2006. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter reservation number 66143848.
About Catapult Communications Catapult Communications is a leading supplier of advanced digital telecom test systems to global equipment manufacturers and service providers, including Ericsson, Lucent, Motorola, NEC, NTT DoCoMo, Nortel and Siemens. 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. The Company is committed to providing testing tools that are at the forefront of the telecom technology curve. 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, Sweden, Canada, Japan, China and Australia. Information about Catapult Communications can be found on the Web atwww.catapult.com.
FORWARD LOOKING STATEMENTS The statements in this press release regarding the Company’s core business, the market for its products, and the expected recognition of deferred product revenue are forward-looking statements. These statements are 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 OPERATIONS (In thousands, except per share amounts) (Unaudited)
For the three months ended
For the six months ended
March 31,
March 31,
2006
2005
2006
2005
Revenues:
Products
$
6,914
$
15,095
$
15,448
$
27,468
Services
3,749
3,955
7,317
7,453
Total revenues
10,663
19,050
22,765
34,921
Cost of revenues:
Products
1,245
1,429
2,433
2,671
Services
956
852
2,018
1,673
Amortization of purchased technology
172
172
343
343
Total cost of revenues
2,373
2,453
4,794
4,687
Gross profit
8,290
16,597
17,971
30,234
Operating expenses:
Research and development
3,433
3,211
6,515
6,182
Sales and marketing
4,154
4,802
8,782
9,505
General and administrative
2,321
2,026
4,748
3,932
Total operating expenses
9,908
10,039
20,045
19,619
Operating income (loss)
(1,618
)
6,558
(2,074
)
10,615
Interest income
620
289
1,240
513
Other income (expense), net
40
(144
)
53
(137
)
Income (loss) before income taxes
��
(958
)
6,703
(781
)
10,991
Provision (benefit) for income taxes
(169
)
1,273
(135
)
1,748
Net income (loss)
$
(789
)
$
5,430
$
(646
)
$
9,243
Net income (loss) per share:
Basic
$
(0.05
)
$
0.37
$
(0.04
)
$
0.63
Diluted
$
(0.05
)
$
0.36
$
(0.04
)
$
0.61
Shares used in per share calculation:
Basic
14,784
14,676
14,763
14,637
Diluted
14,784
15,103
14,763
15,129
1
Catapult Communications Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
March 31,
September 30,
2006
2005
ASSETS
Current Assets:
Cash, cash equivalents and short-term investments
$
71,488
$
68,807
Accounts receivable, net
12,395
14,724
Inventories
4,495
3,104
Other current assets
2,757
2,004
Total current assets
91,135
88,639
Property and equipment, net
1,921
1,693
Goodwill and other intangibles
52,933
53,445
Other assets
3,959
3,983
Total assets
$
149,948
$
147,760
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities
$
5,049
$
7,055
Deferred revenue
10,997
7,697
Total current liabilities
16,046
14,752
Deferred revenue long-term portion
371
485
Total liabilities
16,417
15,237
Total stockholders’ equity
133,531
132,523
Total liabilities and stockholders’ equity
$
149,948
$
147,760
2
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