Investor Relations Contact:
Leigh Salvo
(650) 314-1000
ir@catapult.com
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 | ||||||||||||
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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 | ||||
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