TEL AVIV, Israel, July 25 /PRNewswire-FirstCall/ -- Orckit Communications Ltd. (NASDAQ:ORCT) today reported results for the second quarter and six months ended June 30, 2006.
Revenues in the second quarter of 2006 were $14.7 million compared to $21.8 million in the quarter ended June 30, 2005 and $25.0 million in the previous quarter ended March 31, 2006.
Net income for the quarter ended June 30, 2006 was $294,000, or $0.02 per diluted share, compared to net income of $3.9 million, or $0.21 per diluted share, for the quarter ended June 30, 2005 and net income of $5.8 million, or $0.34 per diluted share, for the previous quarter ended March 31, 2006.
Revenues for the six months ended June 30, 2006 were $39.7 million compared to $42.4 million for the six months ended June 30, 2005. Net income for the six months ended June 30, 2006 was $6.1 million, or $0.36 per diluted share, compared to net income of $7.0 million, or $0.39 per diluted share, for the six months ended June 30, 2005.
Key highlights for the quarter: - Product evaluations of CM-100 Packet Transport Systems continued with
several carriers, primarily in Asia.
- Corrigent's CM-100 Packet Transport Systems have been certified by the
Metro Ethernet Forum as compliant with the MEF Carrier Ethernet
Services, Test Specification MEF9. The MEF is an international forum
focused on promulgating specifications to accelerate the worldwide
adoption of Ethernet services.
- The introduction of a new Fibre Channel interface card, now available
with the CM-100 product line. This new module addresses the requirements
of large enterprise customers that desire to extend their storage area
network capabilities across the public network. By using an enhanced
solution of Fibre Channel over IP transmission, carriers can gain
significant operational benefits over existing solutions.
- The release of a suite of TDM-to-Ethernet interface cards for the CM-100
that enables carriers to easily aggregate Ethernet and other packet
services from existing TDM access networks. Using the CM-100, service
providers can now offer popular Ethernet services over existing TDM
access networks and aggregate these services efficiently on 10Gbps
packet rings. Carriers with heavy TDM traffic are expected to enjoy
capital expenditure and operational benefits by using these
functionalities.
Izhak Tamir, President of Orckit, commented, "Worldwide trends for convergence of wireline and wireless networks, coupled with the introduction of IP video services, continue to drive the need for metro network upgrades. We see growing interest in our CM-100 product family from leading telecom carriers as they evaluate 10 Gigabit per second metro upgrades to support data, video and TDM services." He continued, "KDDI, our most significant customer, is progressing in its efforts to have a fully IP-based fixed-mobile converged network, while enjoying subscriber growth for its data services over wireline as well as cellular networks. However, following the significant network expansion KDDI has undertaken using the CM-100 product, additional expansion in 2006 will be low. Nevertheless, we believe that we are well positioned to benefit from the continued growth in KDDI's subscriber base for data and video services, and from expected deliveries related to its future network expansion." Mr. Tamir concluded: "Our R&D efforts remain on track. We are adding superior capabilities to the CM-100 metro platform for high-end metro transport services addressing converged TDM and IP data solutions. We believe that product evaluations, trial activities and increased interest from established carriers will lead to renewed revenue growth in the future." Outlook and Guidance As a result of lower demand for our products in Japan this year, we are reducing our guidance for 2006. For the year ending December 31, 2006, we expect revenues to be in the range of $62.0 million to $68.0 million, net income to be in the range of $2.9 million to $6.0 million and net income per diluted share to be in the range of $0.17 to $0.35.
Conference Call Orckit Communications will host a conference call on July 25, 2006, at 11 a.m. EDT. The call can be accessed by dialing 1-866-406-5408 in the United States and 1-973-582-2822 internationally. A replay of the call will be available at http://www.orckit.com/. A replay of the call will be also available through August 1, 2006 at 11:59 p.m. at 1-877-519-4471 in the United States and 1-973-341-3080 internationally. To access this replay, enter the following code: 7592389.
About Orckit Communications Orckit Communications Ltd. is a leading provider of advanced telecom equipment targeting high capacity broadband services. Our products include Corrigent's CM-100 metro optical transport solution, based on RPR and MPLS technologies, delivering packet transmission services in the metro area. For more information on Orckit see http://www.orckit.com/ Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, risks in product development plans and schedules, rapid technological change, changes and delays in product approval and introduction, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, exchange rate fluctuations, fluctuation in order size, proprietary rights of the Company and its competitors, risk of operations in Israel, government regulation, dependence on third parties to manufacture products, general economic conditions and other risk factors detailed in the Company's United States Securities and Exchange Commission filings. Orckit assumes no obligation to update the information in this release.
ORCKIT COMMUNICATIONS LTD. CONSOLIDATED STATEMENTS OF OPERATIONS
(US$ in thousands, except per share data) Three Months Ended Six Months Ended
June 30 June 30
2006 2005 2006 2005 Revenues $14,706 $21,754 $39,665 $42,401 Cost of revenues 7,357 11,115 19,385 21,662
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Gross profit 7,349 10,639 20,280 20,739 Research and development
expenses, net 3,982 3,941 8,222 7,907 Selling, marketing general and
administrative expenses 3,662 3,709 7,565 7,395
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Total operating expenses 7,644 7,650 15,787 15,302
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Operating income (loss) (295) 2,989 4,493 5,437 Financial income, net 589 865 1,621 1,558
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Net income $294 $3,854 $6,114 $6,995
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Net income per share - basic $0.02 $0.28 $0.40 $0.51
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Net income per share - diluted $0.02 $0.21 $0.36 $0.39
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Weighted average number of
shares outstanding - basic 15,513 13,917 15,218 13,674
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Weighted average number of
shares outstanding - diluted 16,685 16,515 17,020 16,260
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ORCKIT COMMUNICATIONS LTD. CONSOLIDATED BALANCE SHEETS
(US$ in thousands) June 30 December 31
2006 2005
ASSETS Current assets: Cash and short term marketable securities $39,759 $45,379 Trade receivables 1,047 702 Other receivables 1,682 1,520 Inventories 3,416 3,330
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Total current assets 45,904 50,931 Long term marketable securities 61,849 72,381 Severance pay fund 3,033 2,894 Property and equipment, net 3,185 3,740 ------ ------
Total assets $113,971 $129,946
======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade payables $7,517 $9,282 Accrued expenses and other payables 12,276 19,173 Deferred income 13,235 28,736
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Total current liabilities 33,028 57,191 Long term liabilities : Accrued severance pay 4,011 3,689
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Total liabilities 37,039 60,880 Shareholders' equity 76,932 69,066
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Total liabilities and
shareholders' equity $113,971 $129,946
======= ======= Contacts:
Jeffrey Corbin / Lee Roth/ (Investor Relations)
KCSA Worldwide
(212) 896-1214/(212) 896-1209
/ DATASOURCE: Orckit Communications Ltd.
CONTACT: Jeffrey Corbin, +1-212-896-1214, , or Lee Roth, +1-212-896-1209, , both of KCSA Worldwide for Orckit Communications Ltd.
Web site: http://www.orckit.com/
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