Exhibit 99.1
FOR INVESTOR RELATIONS CONTACT:
INVESTOR RELATIONS
(650) 314-1000
ir@catapult.com
RECORD NORTH AMERICAN REVENUES DRIVE CATAPULT
COMMUNICATIONS STRONG PERFORMANCE FOR
THIRD QUARTER OF FISCAL 2004
Mountain View, CA--July 22, 2004--Catapult Communications Corporation (Nasdaq:
CATT) today reported quarterly revenues and net income for its third fiscal
quarter ended June 30, 2004. Total revenues for the quarter were $14.3 million,
representing 35 percent year-over-year growth. Revenues in North America in the
third fiscal quarter increased by 80 percent year-over-year to a record $7.1
million and European revenues increased by 75 percent to $4.7 million.
Net income for the third fiscal quarter was $2.9 million or $0.21 per diluted
share. This compares to net income of $1.4 million or $0.10 per diluted share in
the third fiscal quarter of 2003.
Strong positive cash flow from operations improved the Company's cash and
short-term investment position by $8.3 million to $46.5 million.
"Several factors contributed to our success this quarter. First, we entered the
quarter with an uncharacteristic backlog. Second, we saw continued strong order
flow during the quarter - orders in three of our four regions exceeded our
internal expectations. And third, we continued to benefit from cost control;
although our revenues for the first three fiscal quarters increased by 22
percent year-over-year, our headcount has actually decreased slightly since last
fiscal year end," said Dr. Richard A. Karp, Catapult's Chairman and CEO.
BUSINESS OUTLOOK
"I project that the current quarter will show not only year-over-year revenue
and earnings growth but also sequential growth, even though historically this
quarter, the final quarter of our fiscal year, has been a challenging one. We
currently expect that revenues in the fourth quarter of our fiscal year will be
$14.8 million, a 45 percent increase from the $10.2 million in the same quarter
of our last fiscal year, and that our earnings per share will be $0.22, a 144
percent improvement from our earnings of $0.09 per share in the same quarter a
year ago," Karp concluded.
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. The toll-free
access number for the call is (800) 599-9795. International and local
participants can dial (617) 786-2905. Please reference Catapult Communications
or reservation number 34780289. The conference call will also be available on
the Internet from the Investor section of the Company's website at
www.catapult.com.
An online replay of this teleconference will be available on the Company's
website. A digital recording will also be available two hours after the
completion of the conference call until
August 6, 2004. For access, please dial (888) 286-8010 or (617) 801-6888 and
enter reservation number 23560467.
ABOUT CATAPULT
Catapult Communications is a leading supplier of advanced digital telecom test
systems to global equipment manufacturers and service providers. The Catapult
DCT2000(R) and MGTS(R) 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. 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, China and Australia.
FORWARD LOOKING STATEMENTS
The statement in this press release regarding the Company's expected revenues
and net income for its third fiscal quarter 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 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)
For the three months ended For the nine months ended
June 30, June 30,
2004 2003 2004 2003
-------- -------- -------- --------
Revenues:
Products $ 11,267 $ 8,344 $ 33,619 $ 27,842
Services 3,053 2,253 8,992 7,176
-------- -------- -------- --------
Total revenues 14,320 10,597 42,611 35,018
-------- -------- -------- --------
Cost of revenues:
Products 1,196 1,113 3,762 4,282
Services 787 669 2,418 2,127
Amortization of purchased technology 171 171 514 514
-------- -------- -------- --------
Total cost of revenues 2,154 1,953 6,694 6,923
-------- -------- -------- --------
-------- -------- -------- --------
Gross profit 12,166 8,644 35,917 28,095
-------- -------- -------- --------
Operating expenses:
Research and development 2,973 3,349 8,693 10,412
Sales and marketing 4,234 3,571 12,845 10,901
General and administrative 1,676 1,485 5,131 5,048
-------- -------- -------- --------
Total operating expenses 8,883 8,405 26,669 26,361
-------- -------- -------- --------
Operating income 3,283 239 9,248 1,734
Interest income 204 183 583 594
Interest expense (87) (87) (262) (262)
Other income (expense) (1) (70) 161 670
-------- -------- -------- --------
Income before income taxes 3,399 265 9,730 2,736
Provision for (benefit from) income taxes 476 (1,096) 1,362 (404)
-------- -------- -------- --------
Net income $ 2,923 $ 1,361 $ 8,368 $ 3,140
======== ======== ======== ========
Net income per share:
Basic $ 0.22 $ 0.11 $ 0.64 $ 0.24
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Diluted $ 0.21 $ 0.10 $ 0.59 $ 0.24
======== ======== ======== ========
Shares used in per share calculation:
Basic 13,139 12,863 13,014 12,971
======== ======== ======== ========
Diluted 14,582 13,034 14,463 13,119
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CATAPULT COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, September 30,
2004 2003
-------- --------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 24,309 $ 11,770
Short-term investments 22,174 18,901
Accounts receivable, net 8,353 10,598
Inventory 2,893 2,325
Other current assets 4,499 3,503
-------- --------
Total current assets 62,228 47,097
Property and equipment, net 2,782 3,384
Goodwill and other intangibles, net 54,721 55,487
Other assets 1,068 1,121
-------- --------
Total assets $120,799 $107,089
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 9,568 $ 7,218
Deferred revenue 6,448 5,576
Convertible notes payable 17,368 17,674
-------- --------
Total current liabilities 33,384 30,468
Total stockholders' equity 87,415 76,621
-------- --------
Total liabilities and
stockholders' equity $120,799 $107,089
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