For investor information contact: Leigh Salvo, Investor Relations (650) 314-1000 ir@catapult.com
CATAPULT COMMUNICATIONS REPORTS
SECOND QUARTER FISCAL YEAR 2008 RESULTS
Mountain View, CA—April 24, 2008—Catapult Communications Corporation (Nasdaq: CATT) today reported that revenues for its second fiscal quarter ended March 31, 2008 were $9.9 million, an increase of 4% over revenues of $9.6 million for the second quarter of fiscal 2007. After non-cash, pre-tax stock option expenses of $655,000, the Company reported a net loss for the quarter of $3.35 million or $0.26 per diluted share compared to net income of $64,000 or $0.00 per diluted share for the second quarter of fiscal 2007. The results for the fiscal 2008 quarter included the impact of a pre-tax restructuring charge of $2.2 million related to a previously announced 11% reduction in the company’s workforce. The results for the fiscal 2007 quarter included $1.8 million in pre-tax income from the settlement of a lawsuit.
In the second quarter of fiscal year 2008, the Company’s combined cash, cash equivalent and investment position decreased by $2 million to $57.2 million. This total includes $7 million in currently illiquid auction rate securities reclassified as long-term investments at quarter end. During the second fiscal quarter, Catapult repurchased 223,020 shares at a total cost of approximately $1.5 million. This reduced the remaining number of shares authorized for repurchase to 1,132,692 at March 31, 2008. The Company’s Board of Directors has since authorized an increase to 1,500,000 in the number of shares available for repurchase at April 22, 2008.
“In our second fiscal quarter, we saw year-over-year revenue growth driven by continuing recovery in our Japanese region, and we received our first order for the next generation wireless technology, LTE,” said Dr. Richard A. Karp, Catapult’s Chairman and CEO. “However, due to the delays in the finalization of LTE standards, a cost reduction effort was necessary to ensure that we put our expenses in line with our expected revenues for the remainder of this fiscal year. I am confident that we are now sized appropriately to return to profitability while still maintaining the resources necessary for long-term 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 (866) 770-7146 or (617) 213-8068 and provide conference ID# 94904902 to access the call. The conference call will also be broadcast from www.catapult.com.
A replay of this teleconference will be available on the Company’s website for one year following the conference call. A digital recording will be provided by telephone two hours after the completion of the conference call through midnight on May 1, 2008. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter conference ID# 18776644.
About Catapult Communications
Catapult Communications is a leading supplier of advanced digital telecom test systems to global equipment manufacturers and service providers, including Alcatel-Lucent, Ericsson, Motorola, NEC, NTT DoCoMo, Nortel and Nokia Siemens Networks. The Catapult DCT2000® and MGTS® systems deliver superior high-end test solutions for hundreds of protocols and variants – spanning LTE, IMS, WiMAX, mobile telephony, VoIP, GPRS, SS7, Intelligent Network, ATM and ISDN. 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., Ireland, Germany, France, Finland, Sweden, Canada, Japan, China, India and the Philippines. Information about Catapult Communications can be found on the Web at www.catapult.com.
Forward Looking Statements
The statements in this press release regarding a return to profitability and long-term growth 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 delays in the rate of adoption of new technologies, the Company’s inability to develop products to address those technologies, competitive product offerings, including those developed by the Company’s customers, and the Company’s dependence on a limited number of customers. 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.
###
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,
2008
2007
2008
2007
Revenues:
Products
$
6,925
$
6,069
$
13,695
$
12,625
Services
3,010
3,524
6,541
7,535
Total revenues
9,935
9,593
20,236
20,160
Cost of revenues:
Products
1,225
1,290
2,473
2,418
Services
752
748
1,550
1,602
Amortization of purchased technology
12
12
24
24
Total cost of revenues
1,989
2,050
4,047
4,044
Gross profit
7,946
7,543
16,189
16,116
Operating expenses:
Research and development
3,466
3,270
7,019
6,285
Sales and marketing
4,241
3,941
8,586
8,232
General and administrative
2,106
2,194
4,278
4,478
Restructuring costs
2,197
—
2,197
—
Total operating expenses
12,010
9,405
22,080
18,995
Operating loss
(4,064
)
(1,862
)
(5,891
)
(2,879
)
Interest income
592
840
1,336
1,647
Other income, net
235
1,835
365
1,828
Income (loss) before income taxes
(3,237
)
813
(4,190
)
596
Provision for income taxes
113
749
331
976
Net income (loss)
$
(3,350
)
$
64
$
(4,521
)
$
(380
)
Net income (loss) per share:
Basic
$
(0.26
)
$
0.00
$
(0.34
)
$
(0.03
)
Diluted
$
(0.26
)
$
0.00
$
(0.34
)
$
(0.03
)
Shares used in per share calculation:
Basic
13,119
13,970
13,247
14,037
Diluted
13,119
14,025
13,247
14,037
Catapult Communications Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
March 31,
September 30,
2008
2007
ASSETS
Current Assets:
Cash, cash equivalents and short-term investments
$
50,161
$
62,242
Accounts receivable, net
10,569
7,015
Inventories
2,171
2,485
Other current assets
2,242
1,863
Total current assets
65,143
73,605
Long-term investments
7,000
—
Property and equipment, net
1,424
1,585
Goodwill and other intangibles
49,501
49,537
Other assets
2,247
2,243
Total assets
$
125,315
$
126,970
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities
$
6,459
$
5,573
Deferred revenue
7,935
6,206
Total current liabilities
14,394
11,779
Deferred revenue, long-term
137
406
Deferred taxes and other liabilities, long-term
4,695
3,009
Total liabilities
19,226
15,194
Total stockholders’ equity
106,089
111,776
Total liabilities and stockholders’ equity
$
125,315
$
126,970
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