Exhibit 99.1
Investor Relations:
Leigh Salvo
(650) 314-1000
ir@catapult.com
CATAPULT COMMUNICATIONS REPORTS
THIRD FISCAL QUARTER FINANCIAL RESULTS
Mountain View, CA--July 24, 2003--Catapult Communications Corporation (Nasdaq:
CATT) today reported that revenues for its third fiscal quarter ended June 30,
2003 were $10.6 million, compared to $8.0 million in the same quarter the prior
year. Net income for the third fiscal quarter of 2003 was $1.4 million or $0.10
per diluted share. This compares to net income of $1.9 million and earnings of
$0.14 per diluted share for the third fiscal quarter of 2002.
"In the quarter just completed, although most of our earnings came from a
reversal of the tax provision, operating income remained positive and we
generated $2.4 million in cash and short-term investments," noted Dr. Richard A.
Karp, Catapult's Chairman and CEO.
BUSINESS OUTLOOK
"We continue to believe that our top line is stable and we are not losing
significant sales to competition," Karp continued, "but our experience in this
past quarter indicates that it is still too early to look for revenues to
recover. In these conditions, we could no longer afford to keep our expenses at
last quarter's level, and thus reduced our staff by 15% earlier this week. This
action will result in a one-time charge for termination costs of approximately
$750,000 or six cents per share in the current quarter and will produce an
ongoing reduction in costs of approximately $3.8 million per annum.
"For the fourth fiscal quarter, we are projecting that revenues will remain
sequentially flat at $10.5 million. This would represent an increase of 17% over
the same quarter in the previous fiscal year. We are projecting that diluted
earnings per share for the fourth fiscal quarter on a GAAP basis will be zero
cents, given that the cost savings available in the remainder of the quarter
from the staff reduction are expected to be offset by the charge for termination
costs. We are projecting diluted earnings per share of six cents per share for
the fourth fiscal quarter on a pro forma basis excluding the charge for
termination costs," concluded Karp.
Catapult Communications will discuss its third 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 participants can dial
(617) 786-2962. Please reference Catapult Communications or reservation number
44391906. The conference call will also be available on the Internet from the
Investor section of the Company's website.
An online replay of this teleconference will be available on the Company's
website 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 7, 2003. To access this recording, please dial (888)
286-8010 or (617) 801-6888 and enter reservation number 69861948.
ABOUT CATAPULT
Catapult Communications is the leading provider of advanced digital telecom test
systems to global equipment manufacturers and service providers including
Lucent, Motorola, NEC, NTT DoCoMo and Nortel. Catapult's DCT2000 and MGTS
systems deliver 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, Canada, Japan and Australia. Information about Catapult
Communications can be found on the Web at www.catapult.com.
FORWARD LOOKING STATEMENTS
The statements in this press release regarding the Company's business outlook
and projected revenues and earnings per share 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 INCOME
(In thousands, except share and per share data; unaudited)
Three months ended Nine months ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenues:
Products $ 8,344 $ 6,623 $ 27,842 $ 26,722
Services 2,253 1,400 7,176 4,311
------------ ------------ ------------ ------------
Total revenues 10,597 8,023 35,018 31,033
------------ ------------ ------------ ------------
Cost of revenues:
Products 1,113 532 4,282 1,949
Services 669 233 2,127 771
------------ ------------ ------------ ------------
Total cost of revenues 1,782 765 6,409 2,720
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Gross profit 8,815 7,258 28,609 28,313
------------ ------------ ------------ ------------
Operating expenses:
Research and development 3,349 1,774 10,412 5,219
Sales and marketing 3,571 2,656 10,901 8,126
General and administrative 1,656 705 5,562 3,520
------------ ------------ ------------ ------------
Total operating expenses 8,576 5,135 26,875 16,865
------------ ------------ ------------ ------------
Operating income 239 2,123 1,734 11,448
Interest income 181 346 592 1,102
Other income (expense) (155) 134 410 (100)
------------ ------------ ------------ ------------
Income before income taxes 265 2,603 2,736 12,450
Provision for (benefit from) income taxes (1,096) 729 (404) 3,487
------------ ------------ ------------ ------------
Net income $ 1,361 $ 1,874 $ 3,140 $ 8,963
============ ============ ============ ============
Net income per share
Basic $ 0.11 $ 0.14 $ 0.24 $ 0.69
============ ============ ============ ============
Diluted $ 0.10 $ 0.14 $ 0.24 $ 0.67
============ ============ ============ ============
Shares used in per share calculation:
Basic 12,863,000 13,050,000 12,971,000 13,033,000
Diluted 13,034,000 13,381,000 13,119,000 13,375,000
CATAPULT COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands; unaudited)
June 30, September 30,
2003 2002
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 20,960 $ 12,575
Short-term investments 13,244 22,790
Accounts receivable, net 8,935 11,009
Inventory 2,653 3,869
Other current assets 2,654 2,777
Assets of discontinued operations -- 2,636
-------- --------
Total current assets 48,446 55,656
Property, plant and equipment, net 3,793 3,874
Goodwill and other intangibles 56,182 57,148
Other assets 1,175 1,172
-------- --------
Total assets $109,596 $117,850
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 11,873 $ 21,423
Deferred revenue 5,135 4,492
Liabilities of discontinued operations -- 889
-------- --------
Total current liabilities 17,008 26,804
Convertible notes payable 17,775 18,081
Total stockholders' equity 74,813 72,965
-------- --------
Total liabilities and
stockholders' equity $109,596 $117,850
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