[3] Metalink Reports 22.5% Sequential Increase in First Quarter Revenues; Achieves Net Profitability; Eight Percentage Point Gain in GPM Year-Over-Year.Business Editors TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel--(BUSINESS WIRE)--April 27, 2000 58% Year-Over-Year Revenue Growth Metalink Ltd. (Nasdaq:MTLK), today reported record revenues for the first quarter ended March 31, 2000. Revenues of $4.2 million for the quarter increased 58.2% over the $2.6 million in the year ago quarter and 22.5% from the $3.4 million reported in the fourth quarter of 1999. The rise in revenues reflects continued growth in the demand for Metalink's long-established HDSL See DSL. HDSL - High bit-rate Digital Subscriber Line products, as well as for its SDSL See DSL. SDSL - Single-line Digital Subscriber Line chip sets. The ongoing expansion of the Metalink's SDSL chip sets into DSLAMs serving the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Competitive Local Exchange Carrier (CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ) market continues to positively impact revenues and gross margins. Net profit for the quarter of $11,000 compares to a loss of $310,000 in the previous quarter and a loss of $429,000 in the year ago quarter. On a per share basis, this represents net profit of $0.00 for this quarter, up from a loss of $0.02 for the previous quarter and a loss of $0.04 for the year ago quarter. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the quarter improved to 52.2% and compares to 50.3% in the previous quarter and 44.2% in the year ago quarter. Commenting on the company's outlook, Tzvi Shukhman, Metalink's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said, "Our North American penetration is expanding rapidly as Metalink's customers are winning major CLEC contracts for SDSL equipment. In addition, our strong European customer base is accelerating its worldwide HDSL equipment deployment. "We are very pleased with the progress we have made in expanding and strengthening our management team. We have put together a world-class team of executives equipped with vast experience and successful track records in the fabless communication ICs industry. We have enhanced our sales infrastructure worldwide, specifically in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , with top-notch sales managers and sales representative firms. Our North American design center has been expanded into a new facility and additional personnel has been added. Our access to rare engineering excellence, especially in mixed signal, algorithmic development and networking disciplines, in Israel and North America, allows us to build a powerhouse for symmetric DSL See DSL. . Shukhman went on to emphasize, "Development partnerships with industry leaders continue to be an important element of the company's strategy. We are progressing smoothly and ahead of schedule with our existing Alpha-development partnerships. Our partnerships with two separate North American DSLAM (DSL Access Multiplexor) A central office (CO) device for ADSL service that intermixes voice traffic and DSL traffic onto a customer's DSL line. It also separates incoming phone and data signals and directs them onto the appropriate carrier's network. See DSL. industry leaders are addressing the next generations of SDSL/G.SHDSL SHDSL Single-Line High-bit-rate Digital Subscriber Line SHDSL Symmetrical High-Density Digital Subscriber Line SHDSL Symmetrical High Bitrate Digital Subscriber Line (Ericsson) SHDSL Symmetrical Highspeed Digital Subscriber Loop DSLAM and VDSL See DSL. VDSL - Very high bit-rate Digital Subscriber Line DSLAM products. Another Alpha-development partnership has been signed with a DSLAM leader in Europe thus positioning the company to capture a leadership position in the emerging European SDSL/G.SHDSL DSLAM market. As we get close to sampling these new, leapfrog products, we are working towards initiating Beta relationships with additional significant players in the industry. "Expanding our product offering is another important element of our strategy," continued Shukhman. "We have signed a fourth Alpha-development partnership agreement with a leader in the high end DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary Customer Premise Equipment (CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment ) market for the development of a highly integrated chip set for IAD (Integrated Access Device) A device that multiplexes a variety of communications technologies in the customer's premises onto a single telephone line for transmission to the carrier. It also demultiplexes the incoming streams into their respective channels. (Integrated Access Device An IAD is a customer premises device that provides access to wide area networks and the Internet. Specifically, it aggregates multiple channels of information including voice and data across a single shared access link to a carrier or service provider PoP (Point of Presence). ). This partnership is a result of our successful relationship with Copper Mountain on the SDSL CPE, which further reflects our progress in executing our strategic plan and our commitment to our shareholders." During the quarter, Metalink closed on the follow up offering of 3,000,000 ordinary shares priced at $45.00 per share. Of the shares being offered, Metalink offered 1,500,000 shares and selling shareholders offered 1,500,000 shares. Net of the underwriting discount and estimated expenses, proceeds to Metalink were $62.7M. An underwriting group consisting of Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. Securities LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , CIBC World Markets CIBC World Markets is the investment banking division of the Canadian Imperial Bank of Commerce. It helps governments, large companies, and other large institutions obtain capital and credit and is a primary dealer in U.S. Treasury securities. , US Bancorp Piper Jaffray Piper Jaffray & Co. (NYSE: PJC), often shortened to just Piper Jaffray or PiperJaffray, is a U.S. middle-market investment banking firm based in Minneapolis, Minnesota and is a focused on delivering financial advice, investment products and transaction execution , Warburg Dillon Read Investment bank created by the 1997 merger of S.G. Warburg & Co. and Dillon, Read & Co. Subsequently renamed UBS Warburg and now part of UBS AG, where the Warburg name was eventually dropped. LLC and C.E. Unterberg, Towbin managed the offering. About Metalink: Metalink Ltd., a fabless semiconductor company A fabless semiconductor company specializes in the design and sale of hardware devices implemented on semiconductor chips. It achieves an advantage by outsourcing the fabrication of the devices to a specialized semiconductor manufacturer called a semiconductor foundry or "fab. , develops and markets high performance DSL chip sets used by telecommunications equipment makers. Metalink is a pure-play DSL leader providing network equipment vendors with DSL-based chip sets that solve network bandwidth access bottlenecks cost effectively. The company's top level algorithmic designers along with its leadership in U.S. and European Telecommunications Standards bodies Following are some of the standards bodies defined in this database. For Windows users of CDE, look up Lessons/Review/Associations. For Web users of CDE's online HTML version, review the Lessons list at the bottom of the definition. Organization Covers ANSI U.S. , has helped establish Metalink as a leader in the field of high-end, pure-play DSL technology. Metalink's headquarters is located at 24 Habarzel Street, Ramat Hachayal, Tel Aviv, 69710 Israel, Tel TEL Telephone TEL Telegram TEL Telugu (langauge) TEL Terrorist Exclusion List TEL Technology-Enhanced Learning TEL Transporter-Erector-Launcher TEL Tetra-Ethyl Lead TEL Team Deutsche Telekom : 972-3-645-4333, Fax: 972-3-648-8022. Metalink's U.S. headquarters and mixed-signal design center is located at 105 Lake Forest Way, Ste. C, Folsom, CA 95630 Tel: 916/355-1580, Fax: 916/355-1585. For more information please visit Metalink's Web site at www.metalink.co.il. Parts of this release contain "forward-looking" information within the meaning of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. securities laws that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Potential risks and uncertainties include, without limitation, the growth rate of the markets into which the company sells its products; market acceptance of and demand for the products of the company and those of the company's customers; unanticipated delays or problems in the introduction of the company's products; the company's ability to introduce new products in accordance with OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and design requirements and design cycles; new product announcements or product introductions by the company and the company's competitors; availability and cost of manufacturing sources for the company's products; supply constraints for components incorporated into the company's customers' products; changes in the mix of sales to OEMs and distributors; incorrect forecasting of future revenues; the volume of orders that are received and can be filled in a quarter; the rescheduling or cancellation of orders by customers; costs associated with protecting the company's intellectual property; changes in product mix; changes in product costs and pricing; and the possible impact of currency fluctuations.
METALINK LTD.
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands of U.S. dollars)
March 31, 2000 December 31, 1999
-------------- -----------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 49,416 $ 4,281
Short-term investments 59,760 45,163
Accounts receivable Trade 2,314 2,489
Other receivables 2,507 1,176
Prepaid expenses 775 191
Inventory 1,167 826
-------- --------
Total current assets 115,939 54,126
Severance pay fund 406 391
Property and equipment
Cost 4,751 2,868
Less - Accumulated depreciation
and amortization 1,721 1,535
-------- --------
Property and Equipment, net 3,030 1,333
-------- --------
$ 119,375 $ 55,850
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,683 $ 1,488
Other payables and accrued expenses 2,661 2,715
-------- --------
Total current liabilities 4,344 4,203
-------- --------
Accrued severance pay 804 656
Shareholders' equity:
Ordinary shares of NIS 0.1 par value
(Authorized equals 50,000,000 shares,
issued and outstanding -16,792,400
shares as of December 31 , 1999,
and 18,426,613 shares as of March
31, 2000) 564 523
Additional paid-in capital 124,595 61,562
Deferred stock compensation (2,161) (2,312)
Accumulated deficit (8,771) (8,782)
-------- --------
Total shareholders' equity 114,227 50,991
-------- --------
$ 119,375 $ 55,850
-------- --------
-------- --------
METALINK LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands of U.S. dollars, except per share amounts)
Three Months Ended
March 31, December 31, March 31,
2000 1999 1999
-------- ----------- ----------
Revenues $ 4,168 $ 3,401 $ 2,636
Cost of revenues
Costs and expenses 1,905 1,641 1,427
Royalties to the Government of
Israel 88 50 44
Total cost of revenues 1,993 1,691 1,471
------- ------- ------
Gross profit 2,175 1,710 1,165
Operating expenses:
Gross research and development 2,126 1,596 1,319
Less -- Royalty bearing grants (695) (517) (435)
Research and development, net 1,431 1,081 884
Sales and marketing, net 691 552 518
General and administrative 580 398 198
Amortization of deferred stock
compensation 151 139 25
------- ------- ------
Total operating expenses 2,853 2,170 1,625
------- ------- ------
Operating loss (678) (460) (460)
------- ------- ------
Financial income (expenses), net 689 150 (31)
Net Profit/Loss $ 11 $ (310)(1) $ (429)
Earnings per share:
Basic $ 0.0 $ (0.02)(1) $ (0.04)
Diluted $ 0.0 $ (0.02)(1) $ (0.04)
Shares used in computing
earnings per share:
Basic 16,968,711 13,344,693 12,010,745
Diluted 19,841,969 13,344,693 12,010,745
(1) Exclusive of one time warrant charge of ($1,402). Basic and
diluted loss per ordinary share inclusive of one time warrant
charge was ($0.13).
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