SOURCE: Catapult Communications Corporation

April 24, 2008 16:04 ET

Catapult Communications Reports Second Quarter Fiscal Year 2008 Results

MOUNTAIN VIEW, CA--(Marketwire - 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     For the six months
                                       months ended           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
                                                  ============ ============

Contact Information

  • For investor information contact:
    Leigh Salvo
    Investor Relations
    (650) 314-1000
    ir@catapult.com