CATAPULT COMMUNICATIONS REPORTS THIRD QUARTER FISCAL 2006 RESULTS
Mountain View, CA—July 27, 2006—Catapult Communications Corporation (Nasdaq: CATT) today reported that revenues for its third fiscal quarter ended June 30, 2006 were $10.8 million, compared to $14.3 million in the third quarter of fiscal 2005. Net income for the third quarter of fiscal 2006 was $1.1 million or $0.07 per diluted share, compared to $2.4 million or $0.16 per diluted share in the same period a year ago.
For the three months ended June 30, 2006, the Company reported pre-tax loss of $1.0 million, compared to pre-tax income of $2.8 million for the third quarter of fiscal 2005. The pre-tax loss for the third quarter of fiscal 2006 reflected the impact of approximately $748,000 in pre-tax, non-cash stock option expenses recognized under FAS123R. No stock option expenses were recorded in the third quarter of fiscal 2005. For the three months ended June 30, 2006, the Company recorded a tax benefit of $2.1 million, compared with a tax provision of $0.4 million in the same period a year ago.
At the end of the third fiscal quarter, the Company had approximately $5.4 million in orders on hand requiring additional product development on which revenue has not yet been recognized. The Company expects to begin recognizing this revenue in the fourth quarter of its current fiscal year.
During the quarter, the Company’s cash, cash equivalents and short-term investment position increased by $2.4 million to $73.9 million at quarter end.
“We continue to see a decline in business in Japan; however, orders and revenue again grew during the third quarter in our Rest of World region, which includes China, Korea, and India,” said Dr. Richard A. Karp, Catapult’s Chairman and CEO. “Overall, we are seeing signs of weakness in the telecom industry, but new technologies should ultimately begin to create good opportunities for Catapult to address.”
Catapult Communications will be discussing its third quarter results on a conference call today, beginning at 5:15 p.m. ET/2:15 p.m. PT. Please dial (866) 383-8008 or (617) 597-5341 to access the conference call. Please reference Catapult Communications or reservation number 17194717. 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 August 3, 2006. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter reservation number 88665045.
ABOUT CATAPULT 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, India and Australia. Information about Catapult Communications can be found on the Web at www.catapult.com.
Forward Looking Statements The statement in this press release regarding our expectation of recognizing certain revenue beginning in the fourth quarter of the current fiscal year on orders requiring additional product development 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 possibility that the Company might be unable to meet its current product development and/or production schedules. 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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1
Catapult Communications Corporation CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
For the three months ended
For the nine months ended
June 30,
June 30,
2006
2005
2006
2005
Revenues:
Products
$
6,996
$
10,873
$
22,444
$
38,341
Services
3,793
3,403
11,110
10,856
Total revenues
10,789
14,276
33,554
49,197
Cost of revenues:
Products
1,142
1,236
3,575
3,907
Services
908
923
2,926
2,596
Amortization of purchased technology
171
171
514
514
Total cost of revenues
2,221
2,330
7,015
7,017
Gross profit
8,568
11,946
26,539
42,180
Operating expenses:
Research and development
3,543
3,224
10,058
9,406
Sales and marketing
4,423
4,431
13,205
13,936
General and administrative
2,391
1,946
7,139
5,878
Total operating expenses
10,357
9,601
30,402
29,220
Operating income (loss)
(1,789
)
2,345
(3,863
)
12,960
Interest income
751
409
1,991
922
Other income (expense), net
3
16
56
(121
)
Income (loss) before income taxes
(1,035
)
2,770
(1,816
)
13,761
Provision (benefit) for income taxes
(2,091
)
387
(2,226
)
2,135
Net income
$
1,056
$
2,383
$
410
$
11,626
Net income per share:
Basic
$
0.07
$
0.16
$
0.03
$
0.79
Diluted
$
0.07
$
0.16
$
0.03
$
0.77
Shares used in per share calculation:
Basic
14,801
14,712
14,776
14,662
Diluted
14,887
14,971
14,935
15,087
2
Catapult Communications Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
June 30,
September 30,
2006
2005
ASSETS
Current Assets:
Cash, cash equivalents and short-term investments
$
73,930
$
68,807
Accounts receivable, net
8,354
14,724
Inventories
4,504
3,104
Other current assets
2,690
2,004
Total current assets
89,478
88,639
Property and equipment, net
1,922
1,693
Goodwill and other intangibles
52,678
53,445
Other assets
6,080
3,983
Total assets
$
150,158
$
147,760
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities
$
4,142
$
7,055
Deferred revenue
11,096
7,697
Total current liabilities
15,238
14,752
Deferred revenue long-term portion
339
485
Total liabilities
15,577
15,237
Total stockholders’ equity
134,581
132,523
Total liabilities and stockholders’ equity
$
150,158
$
147,760
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