ATCA/Standard Servers

Interphase Q2 Revenues Dip

PLANO, Texas -- Interphase Corporation (NASDAQ: INPH), a leading international supplier of next-generation networking technologies, today reported financial results for its second quarter ended June 30, 2007.

Revenues for the second quarter of 2007 were $8.2 million compared to $9.4 million in the second quarter of 2006. Revenues for the quarter increased 61% sequentially when compared to revenues of $5.1 million for the first quarter of 2007. The sequential increase in revenues for the quarter was primarily due to the company’s tier 1 customers returning to more normalized operations after the impact of the recent merger activity impacting the industry. In the quarter, broadband telecom revenues were $7.2 million compared to $7.8 million in the second quarter of 2006. As expected enterprise revenues decreased to about $695,000 compared to $1.3 million during the second quarter of 2006. All other revenues were approximately $340,000 compared to $320,000 for the second quarter of 2006. Gross margin for the second quarter of 2007 was 60% compared to 58% for the second quarter of 2006. The company reported a second quarter 2007 net profit of $390,000 or $0.06 per share, compared to approximately $1.1 million, or $0.19 per share in the second quarter of 2006.

“We are pleased to have delivered a successful and profitable quarter with the return to a more normal state of business”, said Gregory B. Kalush, CEO and President of Interphase. “I am very proud of the efforts of the entire Interphase organization in executing diligently to meet our customer expectations as the industry begins its transition to the adoption of AdvancedTCA™ and MicroTCA™ platforms together with AdvancedMC’s. Our focus across the entire organization has been on the delivery of a broad portfolio of high quality and high performance products in a timely fashion to meet the lab testing and platform integration needs of our customers. While there could still be some “lumpiness” in our revenue performance in future quarters as the rate of this transformation accelerates, we remain very optimistic of our ability to grow our revenue and profit as our customers incorporate these new products to deliver emerging network infrastructure elements in the IMS, VoIP and Wireless networks.”

Interphase Corp.

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