Catapult Communications Reports First Quarter Fiscal Year 2009 Results

• Press Release
• Source: Catapult Communications Corporation
• On 4:02 pm EST, Thursday February 5, 2009

MOUNTAIN VIEW, CA--(MARKET WIRE)--Feb 5, 2009 -- Catapult Communications Corporation (NasdaqGS:CATT - News) today reported that revenues for its first fiscal quarter ended December 31, 2008 were $9.8 million. After non-cash, pre-tax stock option expenses of $553,000, the Company reported net income for the quarter of $57,000 or 0.49 cents per share compared to a net loss of $1.2 million or 9 cents per share for the first quarter of fiscal 2008.

During the first quarter of fiscal 2009, Catapult invested $2.0 million in capitalized software development expenses and repurchased approximately 393,000 shares at a cost of $2.0 million. The Company's total cash, cash equivalent and investment position decreased by $5.3 million to $41.1 million. This total includes $4.6 million in currently illiquid auction rate securities classified as long-term investments. This value is net of a non-cash temporary unrealized holding loss of $309,000 that was recorded against these securities on the Company's December 31, 2008 balance sheet in light of the deterioration in financial markets.

"There is no doubt that LTE is gaining momentum as the next worldwide telecom standard, and Catapult is well positioned to capitalize on it," said Dr. Richard A. Karp, Chairman and CEO. "While the majority of our revenue continues to be derived from the delivery of test systems for current telecom technologies, the upside in the first quarter came from new business driven by LTE design wins. We have received LTE test system orders in each of our major geographic regions, with the majority coming from our Japan and Asia Pacific regions, where early adoption of new technology is the norm. Thanks to a strong cash position, we have been able to invest in product development to be prepared for the LTE cycle. Our results are now beginning to reflect the benefit of that investment."

Catapult Communications will be discussing its first quarter results on a conference call today at 5:15 p.m. Eastern/2:15 p.m. Pacific. Please dial (866) 761-0748 or (617) 614-2706 and provide conference ID# 18906063 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 February 12, 2009. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter conference ID# 16776041.

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, 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 United Kingdom, 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.

 
                    Catapult Communications Corporation
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)
                                (Unaudited)



                                               For the three months ended
                                                      December 31,
                                                  2008           2007
                                              -------------- -------------

Revenues:
  Products                                    $        6,457 $       6,770
  Services                                             3,355         3,531
                                              -------------- -------------
    Total revenues                                     9,812        10,301
                                              -------------- -------------
Cost of revenues:
  Products                                             1,452         1,248
  Services                                               473           798
  Amortization of purchased technology                    12            12
                                              -------------- -------------
    Total cost of revenues                             1,937         2,058
                                              -------------- -------------
Gross profit                                           7,875         8,243
                                              -------------- -------------
Operating expenses:
  Research and development                             1,638         3,553
  Sales and marketing                                  3,971         4,345
  General and administrative                           2,259         2,172
                                              -------------- -------------
    Total operating expenses                           7,868        10,070
                                              -------------- -------------
Operating income (loss)                                    7        (1,827)
Interest income                                          232           744
Other income, net                                        175           130
                                              -------------- -------------
Income (loss) before income taxes                        414          (953)
Provision for income taxes                               357           218
                                              -------------- -------------
Net income (loss)                             $           57 $      (1,171)
                                              ============== =============

Net income (loss) per share:
  Basic                                       $         0.00 $       (0.09)
                                              ============== =============
  Diluted                                     $         0.00 $       (0.09)
                                              ============== =============

Shares used in per share calculation:
  Basic                                               11,568        13,373
                                              ============== =============
  Diluted                                             11,568        13,373
                                              ============== =============





                   Catapult Communications Corporation
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)
                                (Unaudited)


                                              December 31,   September 30,
                                                  2008           2008
                                              -------------- --------------

         ASSETS

Current Assets:
  Cash, cash equivalents and short-term
   investments                                $       36,410 $       41,380
  Accounts receivable, net                             7,866          6,487
  Inventories                                          2,775          2,313
  Other current assets                                 2,217          2,431
                                              -------------- --------------
    Total current assets                              49,268         52,611
Long-term investments                                  4,641          4,950
Property and equipment, net                            1,027          1,011
Goodwill and other intangibles                        49,446         49,464
Other assets                                           8,017          5,992
                                              -------------- --------------
    Total assets                              $      112,399 $      114,028
                                              ============== ==============


   LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued liabilities    $        5,123 $        6,024
  Deferred revenue                                     7,196          6,446
                                              -------------- --------------
    Total current liabilities                         12,319         12,470
Deferred revenue, long-term                              111            173
Deferred taxes and other liabilities,
 long-term                                             5,218          5,057
                                              -------------- --------------
    Total liabilities                                 17,648         17,700
                                              -------------- --------------
    Total stockholders' equity                        94,751         96,328
                                              -------------- --------------
    Total liabilities and stockholders'
     equity                                   $      112,399 $      114,028
                                              ============== ==============

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