Interphase Reports Q3
Revenues for the third quarter of 2006 were $7.8 million, representing a 12% increase over revenues for the third quarter of 2005 of $6.9 million. Third quarter 2006 revenues are lower by 17% as compared to revenues of $9.4 million in the second quarter of 2006 due to an unexpected reduction in product demand for the quarter from a major US based telecommunications customer.
Revenues in the quarter were primarily driven by the continued strength in broadband telecom revenues, which rose 39% to $6.3 million in the third quarter of 2006 compared to $4.5 million for the third quarter of 2005. As expected, SlotOptimizer™ product line revenues declined to $1.1 million for the third quarter of 2006 compared to $1.9 million for the third quarter of 2005. Gross margin for the third quarter of 2006 was 52% compared to 50% for the third quarter of 2005. The company recorded a third quarter 2006 net income of $175,000, or $0.03 per share, compared to a loss of $(912,000), or $(0.15) per share in the third quarter of 2005.
“Interphase has continued to deliver profitable results during this quarter with a focused execution to our key strategic goal of establishing the company as a premier global supplier of AdvancedTCA™ and AdvancedMC™ solutions,” said Greg Kalush, president and chief executive officer of Interphase Corporation. “The reduction in revenue from a U.S. based telecommunications customer, however, impacted top line performance this quarter. We anticipate that the ongoing merger activity within our telecommunications customer base is likely to create some “lumpiness” in revenues over the next few quarters. However, with additional design wins bolstering the strength of our future revenue streams and with continued enhancement of our customer and partner relationships, such as our recently-announced alliance with Surf Communication Solutions, we have continued to expand our opportunity base for significant future growth.”
For the first nine months of 2006, revenues were $25.3 million compared to $23.3 million in the first nine months of 2005. Gross margin for the nine months ended September 30, 2006 was 54% compared to 53% for the same period in 2005. Net income for the first nine months of 2006 was $1.6 million or $0.27 per share, compared to a net loss of $(1.2) million or $(0.21) per share for the first nine months of 2005. The company’s balance sheet continues to be strong with a working capital position of $26.7 million, including a historically high cash and marketable securities position of $21.8 million on September 30, 2006.