Ditech Closes Q2

MOUNTAIN VIEW, Calif. -- Ditech Communications Corporation (Nasdaq: DITC) today reported results for its second quarter of fiscal year 2003. Revenues for the second quarter ended October 31, 2002 were $12.1 million, up 11% from revenues of $10.9 million in the prior quarter and up 52% from revenues of $8.0 million in the same quarter in the prior fiscal year. "This is the fourth consecutive quarter Ditech has generated revenue growth, which given the market conditions, underscores the competitive advantages of our products and our ability to execute as a company," said Tim Montgomery, Ditech's chairman, president and CEO. "Our echo cancellation revenues increased by 10% over last quarter, and our optical subsystems revenues increased by 14%." Continued Montgomery, "The other major event of the quarter was our September announcement that we were shutting down our Titanium optical system development. We resultantly implemented a 30% workforce reduction, enabling us to reduce our expense line moving forward. At the same time, we preserved a substantial portion of our Titanium transmission technology and the core team of talented engineers who developed it." Ditech's Outlook
"We've demonstrated continued momentum in both our echo cancellation business and our optical subsystems business," said Montgomery. "With that said, we expect revenues in the third quarter to be flat compared to the second quarter, as we believe the general weakness in telecom spending and our customers' end-of-year budget cycles will impact our order flow. With new budgets coming in January, we expect our revenue growth to resume. With prudent, yet substantive investment, we believe we can achieve breakeven in the fall of next year." Detailed Results
Actual GAAP net loss and net loss per share results were:
-- Net loss for the second quarter of fiscal 2003 of $19.6 million, compared to a net loss of $15.6 million in the same quarter in the prior fiscal year.
-- Net loss per share for the second quarter of fiscal 2003 of ($0.65) per share, compared to a net loss per share of ($0.54) for the same quarter in the prior fiscal year. Pro forma net loss and net loss per share results, which exclude charges related to mergers and acquisitions activity, such as amortization of goodwill and purchased intangibles and amortization of deferred stock-based and other compensation, write-off of inventory, corporate restructuring, and the impact of income taxes on pro forma adjustments (all as set forth in tabular form in the attached table) were:
-- Net loss for the second quarter of fiscal 2003 of $8.0 million compared to a net loss of $7.3 million in the same quarter in the prior fiscal year.
-- Net loss per share for the second quarter of fiscal 2003 of ($0.26) compared to net loss per share of ($0.25) for the same quarter in the prior fiscal year. Ditech Communications Corp.