Orckit Announces First Quarter Revenues up 25 Percent; Management Additions
TEL AVIV, Israel, April 27 /PRNewswire/ -- Orckit Communications Ltd. (Nasdaq: ORCTF), a leader in the development, manufacture and marketing of Digital Subscriber Line systems, today reported that revenues for the quarter ended March 31, 1998 increased 25 percent to $6.5 million, compared to $5.2 million for the quarter ended March 31, 1997. Net loss for the first quarter of 1998 was $1.9 million, or $0.13 per share, compared to a loss of $552,000, or $0.04 per share, in the first quarter of 1997.
"During the first quarter of 1998, we invested significant efforts in tailoring our ADSL-based FastInternet DSLAM system to the needs of specific carriers, such at GTE in the US," said Izhak Tamir, President of Orckit. "Orckit's involvement in field trials with GTE and Western European operators resulted in an increased cost of revenues and research and development expenses that were not offset by government research and developments grants."
Recently, Orckit and North American partner Fujitsu Network Communications (FNC) were selected to supply ADSL equipment to GTE for commercial deployment beginning in June, which will initially target approximately 300 central offices in portions of 16 states, subject to regulatory approval.
"We are extremely pleased that our ADSL has been selected for deployment by GTE," Mr. Tamir continued. "Installing our ADSL products in GTE's central offices sites and on their customers' premises gives Orckit and FNC a high profile position in the North American ADSL market."
Orckit's gross margin decreased to 24 percent during the quarter compared with 33 percent in the first quarter of 1997 primarily due to efforts associated with GTE's ADSL evaluation and the Company's involvement in field trials with several Western European operators.
During the first quarter, Orckit joined with the leading companies in the personal computer, telecommunications, and networking industries as a founding member of the Universal Asymmetric Digital Subscriber Line (ADSL) Working Group (UAWG) aimed at accelerating the adoption and availability of high-speed digital Internet access for the mass market.
"The emerging G.Lite ADSL standard is expected to drive the demand for our FastInternet DSLAM system as carriers seek an ADSL platform to serve their growing PC-user market," commented Mr. Tamir.
Orckit has recently expanded its management team, designating a new Chief Financial Officer, Mr. Aviv Boim; forming a new business unit for the existing CopperTrunk(TM) product lines to be headed by Mr. Ehud Rokach; appointing a Managing Director for western Europe, Mr. Bengt Lundin; and appointing Mr. Ron Halpern to the newly created position of Vice President of Sales, who will report to Dan Arazi, Executive Vice President of Marketing and Sales.
"We have been focusing on broadening our management position and strengthening our product position, which sets the stage for large scale deployment of Orckit's products," said Mr. Tamir.
Prior to joining Orckit as Chief Financial Officer in February, Mr. Boim was an investment banker with the technology group of BT Alex. Brown and prior to that was a Vice President with Giza Investment Bank, Tel Aviv, focusing on equity transactions in the technology field.
Mr. Rokach has been a senior member of Orckit's engineering management since he joined the company in 1992, and in April he was promoted to Vice President of Orckit's newly formed CopperTrunk HDSL and VDSL Business Unit. Mr. Rokach previously held a senior R&D position.
Mr. Lundin joined Orckit in November 1997 as Managing Director Western Europe. Mr. Lundin has previously served as Motorola's Vice President and General Manager Europe for their Mobile Data Division and as International Operations Manager for Ericsson.
Mr. Halpern joined Orckit in April as Vice President of Sales. He previously served as the Director of Sales for Israel-based RND Networks, a networking company. Previously he was the Director of Sales and Marketing at JOLT Ltd., a wireless LAN and telecommunications company.
Orckit Communications is a leading company in the field of Digital Subscriber Line, or "DSL," solutions, which enable telephone companies and Internet Service Providers to optimize the bandwidth utilization of the "last mile" of copper wire in the Local Loop. Orckit possesses both core silicon expertise and a wide range of DSL products, including its FastInternet(TM) DSLAM System with ADSL and SDSL, and its CopperTrunk(R) HDSL and VDSL product lines. Orckit has key strategic silicon alliances with Harris Semiconductor, Fujitsu Microelectronics and Rockwell Semiconductor Systems, and alliances with telecom equipment providers Fujitsu Network Communications and SAGEM. For more information about Orckit and its DSL solutions, visit Orckit's web site at 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, 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 COMMUNICATIONS LTD.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
March 31
1998 1997
(Unaudited) (Unaudited)
Revenues $6,548 $5,212
Cost of revenues 4,978 3,478
Gross profit 1,570 1,734
Research and development
expenses 2,440 1,410
Less -- grants 784 292
Research and development
expenses, net 1,656 1,118
Selling, general and
administrative expenses 2,075 1,554
Operations loss (2,161) (938)
Financial income, net 302 386
Net loss $(1,859) $(552)
Net loss per share -
basic and diluted $(0.13) $(0.04)
Weighted average number
of shares outstanding 14,658 14,165
ORCKIT COMMUNICATIONS LTD.
Consolidated Balance Sheets
(in thousands)
March 31 December 31
1998 1997
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash
equivalent $2,166 $4,130
Short-term investments 23,400 26,100
Trade receivables 7,414 6,008
Other receivables 3,326 2,567
Inventories 8,458 7,144
Total current assets 44,764 45,949
Property and equipment, net 2,250 1,839
Total assets $47,014 $47,788
Liabilities and Shareholders'
Equity
Current liabilities:
Short-term bank credit $-- $110
Trade payable 5,278 4,240
Accrued expenses and other 3,685 3,597
Total current liabilities 8,963 7,947
Accrued severance pay, net 253 225
Total liabilities 9,216 8,172
Shareholders' equity:
Share capital 466 466
Additional paid-in capital 44,996 44,955
Accumulated deficit (7,664) (5,805)
Total shareholder's
equity 37,798 39,616
Total liabilities and
shareholder's equity $47,014 $47,788
SOURCE Orckit Communications Ltd.
CO: Orckit Communications Ltd.
ST:
IN: TLS
SU: ERN
04/27/98 07:42 EDT prnewswire.com |
