Metalink unveils strategic plan

July 28, 2008

2 Min Read

p>YAKUM, Israel -- Metalink Ltd. (NASDAQ: MTLK), a global provider and developer of high-performance wireless and wireline broadband communication silicon solutions, today announced that it is evaluating number of strategic and financial options for its future development, as well as the potential sale of the Company, and in parallel, is deploying a comprehensive plan to reduce its ongoing operating expenses. Metalink is also actively involved in capital raising activities, including through a private placement .

Metalink is in the process of implementing a cost reduction plan aimed at further reducing its operating expenses and preserve cash reserves until the expected ramp-up of its revenues from the sale of its WLAN chipsets materialize, a development which is currently expected to occur only in the later part of 2009.

This is Metalink's second cost reduction plan, following a plan which was announced in March 2008. The current plan aims to reduce operating expenses to approximately $6.5 million in the fourth quarter of 2008 (excluding one time charges, such as restructuring and severance costs, and stock-based compensation expenses) , and to stabilize operating expenses (excluding one time charges, such as restructuring and severance costs, and stock-based compensation) at a rate of $4 million per quarter by the first quarter of 2009. As part of its plan to achieve these objectives, the Company will be implementing a significant decrease in its workforce, and will be making a number of management changes.

Commenting on the news, Metalink’s CEO, Tzvika Shukhman, said, “Recently, Metalink has experienced an increase in revenues and backlog from its legacy DSL products, primarily due to its issuance of an end-of-life notification regarding part of these products. The Company expects its DSL revenues for the second quarter of 2008 to reach approximately $2.6 million, and has also accumulated a backlog for its DSL product valued at approximately $5.7 million for the next 12 months. With respect to the WLAN, over the past six years, we have focused our efforts on developing 802.11n-compliant chipsets, or WLAN chipsets, that enable the streaming of robust High-Definition video throughout the home. Although the video-over-802.11n service provider market has been developing at a slower rate than expected, we are proud to report that a number of top-tier operators have carried out significant trials using our technology and that we have shipped this quarter our first volume production order to an ODM in Taiwan targeting a major retail OEM in the U.S., although the shipped revenues have not yet been recorded. Despite these positive developments, we do not expect a ramp-up of our revenues from this market before the later part of 2009.”

Metalink Ltd. (Nasdaq: MTLK)

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