TEL AVIV, Israel, July 16, 2008 (PRIME NEWSWIRE) -- Orckit Communications Ltd. (Nasdaq:ORCT) today reported results for the second quarter and six months ended June 30, 2008.
Revenues in the second quarter of 2008 were $3.1 million compared to $2.0 million in the previous quarter ended March 31, 2008 and $1.9 million in the comparable quarter last year.
Net loss for the quarter ended June 30, 2008 was $7.8 million, or $(0.48) per share, compared to a net loss of $7.7 million, or $(0.47) per share, for the previous quarter ended March 31, 2008 and a net loss of $6.4 million, or $(0.40) per share, for the second quarter of 2007. Results for the quarters ended June 30, 2008, March 31, 2008 and June 30, 2007 included financial income of $1.0 million, $419,000 and $1.6 million, respectively, which resulted from adjustments related to the valuation of the conversion terms of the Company's convertible notes issued in March 2007.
Revenues for the six months ended June 30, 2008 were $5.1 million compared to $6.4 million for the six months ended June 30, 2007. Net loss for the six months ended June 30, 2008 was $15.5 million, or $(0.95) per share, compared to a net loss of $12.0 million, or $(0.76) per share, for the six months ended June 30, 2007. Results for the six months ended June 30, 2008 and June 30, 2007 included financial income of $1.4 million and $1.6 million, respectively, which resulted from adjustments related to the valuation of the conversion terms of the Company's convertible notes issued in March 2007.
Key Highlights for the quarter:
-- Three new customer wins, two of which are global carriers.
-- Product and sales strategy broadened, now targeting heavy
Ethernet-only metro area applications.
-- Sales force continued to grow with a broadening of geographical
areas covered, allowing Orckit to target a wider range of
customers.
-- Deliveries to T-Systems in Germany and deployment are
progressing, in line with the project's initial schedule.
-- Additional customer evaluations are ongoing.
Izhak Tamir, President of Orckit, commented, "This quarter we are proud to announce that we have added three new customers in addition to KDDI and T-Systems. We are seeing growing demand as global carriers are now recognizing the caliber and quality of our products and technology.
"Our optimism stretches beyond the success embodied in our new customer wins this quarter. As we anticipated, the availability of our new CM-4000 product line is opening new applications and market segments for our product offerings. The efforts we put into bringing the CM-4000 to market are starting to pay off. We believe that our product and sales strategy are now well positioned to address market dynamics, to diversify our customer base and to target shorter sales cycle opportunities."
Mr. Tamir concluded, "Our top objectives are to continue to expand and diversify our customer base with new wins, along with continuous revenue growth. With the ongoing innovations of our metro products and demand for video transmission, we believe the future holds significant opportunities for us."
Outlook and Guidance
For the quarter ending September 30, 2008, we expect revenues to be approximately $5.4 million, with a net loss of approximately $8.0 million, or approximately $(0.49) per share. This guidance does not take into account financial income or loss due to valuation of the conversion terms included in our $25.8 million principal amount of convertible subordinated notes that were issued in March 2007. Such income or loss is subject to certain factors, including our share price, and cannot be estimated at this time.
Conference Call
Orckit Communications will host a conference call on July 16, at 9 a.m. EDT. The call can be accessed by dialing 1-888-459-5609 in the United States and 1-973-321-1024 internationally. Please utilize the code 54568230. A replay of the call will be available at http://www.orckit.com. A replay of the call will be also available through July 23, 2008 at 11:59 p.m. at 1-800-642-1687 in the United States and 1-706-645-9291 internationally. To access this replay, enter the following code: 54568230.
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 product line of metro optical transport solutions, based on RPR and MPLS technologies, delivering packet transmission services in the metro area. For more information on Orckit see 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, need for additional financing, the ability to repay the convertible notes, 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 BALANCE SHEETS
(US$ in thousands)
June 30 December 31
2008 2007
---- ----
ASSETS
Current assets:
Cash and short term marketable
securities $ 56,924 $ 68,225
Trade receivables 3,407 49
Other receivables 2,739 1,632
Inventories 1,437 1,347
--------- ---------
Total current assets 64,507 71,253
Long term marketable securities 30,781 34,142
Severance pay fund 4,011 3,454
Property and equipment, net 1,537 1,384
Deferred issuance costs, net 689 781
--------- ---------
Total assets $ 101,525 $ 111,014
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables $ 5,079 $ 4,292
Accrued expenses and other
payables 8,690 8,240
Deferred income 1,345 1,045
--------- ---------
Total current liabilities 15,114 13,577
Long term liabilities :
Convertible subordinated notes 33,894 28,723
Adjustments due to convertible
notes conversion terms (5,617) (3,247)
--------- ---------
Convertible subordinated notes,
net 28,277 25,476
Accrued severance pay and other 5,123 4,553
--------- ---------
33,400 30,029
Total liabilities 48,514 43,606
Shareholders' equity 53,011 67,408
--------- ---------
Total liabilities and
shareholders' equity $ 101,525 $ 111,014
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ORCKIT COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(US$ in thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2008 2007 2008 2007
---- ---- ---- ----
Revenues $ 3,105 $ 1,900 $ 5,097 $ 6,426
Cost of revenues 1,584 978 2,574 3,022
-------- -------- -------- --------
Gross profit 1,521 922 2,523 3,404
Research and
development expenses,
net 5,953 4,897 11,769 9,871
Selling, marketing
general and
administrative
expenses 4,895 4,094 9,376 8,105
-------- -------- -------- --------
Total operating
expenses 10,848 8,991 21,145 17,976
-------- -------- -------- --------
Operating loss (9,327) (8,069) (18,622) (14,572)
Financial income, net 538 97 1,674 987
Adjustments due to
convertible notes
conversion terms 985 1,609 1,404 1,609
-------- -------- -------- --------
Total financial income,
net 1,523 1,706 3,078 2,596
-------- -------- -------- --------
Net loss $ (7,804) $ (6,363) $(15,544) $(11,976)
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Net loss per share -
basic $ (0.48) $ (0.40) $ (0.95) $ (0.76)
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Net loss per share -
diluted $ (0.48) $ (0.40) $ (0.95) $ (0.76)
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Weighted average
number of shares
outstanding - basic 16,384 15,776 16,373 15,742
======== ======== ======== ========
Weighted average
number of shares
outstanding - diluted 16,384 15,776 16,373 15,742
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