Lanoptics Ltd. (MM) (NASDAQ:LNOP)
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LanOptics Ltd. (NASDAQ: LNOP), a provider of network processors, today
announced results for the third quarter ended September 30, 2006.
For the three months ended September 30, 2006, LanOptics reported
revenues of US$ 2,074,000 versus US$ 687,000 in the third quarter of
2005. All of the revenues were attributable to LanOptics' subsidiary,
EZchip Technologies. LanOptics incurred an operating loss of US$
1,991,000, versus an operating loss of US$ 2,404,000 in the third
quarter of 2005. The majority of the expenses that resulted in the
operating loss were attributable to EZchip's research and development
efforts on future products. The balance of the expenses were related
primarily to EZchip's sales and marketing activities. Net loss for the
third quarter was US$ 2,136,000, including stock based compensation
expenses in the amount of US$ 171,000 which are being reported as of
January 1st 2006 pursuant to SFAS 123R, a loss of US$ 0.18 per share,
compared to a net loss of US$ 2,514,000 or US$ 0.22 per share for the
same period last year.
For the nine months ended September 30, 2006, LanOptics reported
revenues of US$ 5,087,000, compared with US$ 4,563,000 for the same
period last year. All of the revenues were attributable to LanOptics'
subsidiary, EZchip Technologies. LanOptics incurred an operating loss
for the nine months of US$ 6,905,000, versus an operating loss of US$
8,297,000, which included a one-time in-process research and development
write-off in the amount of US$ 1,475,000, in the same period last year.
Net loss for the nine months was US$ 7,217,000, including stock based
compensation expenses in the amount of US$ 396,000 which are being
reported for the first time pursuant to SFAS 123R, or US$ 0.62 per
share, compared to a year-earlier loss for the comparable period of US$
8,311,000, or US$ 0.76 per share.
"We are pleased with the progress made during the third quarter and the
agreement with Marvell that was signed last week," said Eli Fruchter,
President and CEO of EZchip Technologies. "The Marvell agreement is
further validation for our network processors, whose adoption in the
Carrier Ethernet space is gaining momentum. We are jointly developing an
NPU chip with Marvell that utilizes both companies' technologies and
offers interoperable solutions that enable joint Marvell-EZchip based
system architectures. The partnership will open new opportunities for
EZchip that would not otherwise exist and is expected to start
generating meaningful revenues in 2008. The new NPU does not alter
EZchip's plans for NP-2, NP-3 and NP-4.
"We have seen a meaningful and very positive change in the way our
customers are adopting and implementing our NP-2 network processors. Our
customers selected the NP-1 for optional services cards, mostly 1-2 per
chassis, to deal with exception processing that the hard wired ASICs on
the line cards could not handle. In contrast, the NP-2 replaces the
ASICs on the line cards, with one to four NP-2 devices per line card and
10-12 line cards per chassis.
"EZchip's NPUs have been adopted by leading tier-1 system vendors that
use them on the line cards of their carrier Ethernet platforms. We now
have close to 100 NP-1 and NP-2 design wins. One tier-1 vendor began
production of several NP-2 designs during the third quarter and placed
initial production orders during the quarter. We expect several more
tier-1 designs to enter production in the coming quarters. NP-2 sales
contributed significantly to the third quarter revenues; we anticipate
that NP-2 revenues will continue growing during the fourth quarter, and
will account for the majority of our sales in the very near future. Our
future revenue ramp-up will continue to depend on the success of our
customers' new products that incorporate our network processors and on
market acceptance of these products."
About LanOptics
LanOptics is focused on its subsidiary EZchip Technologies, a fabless
semiconductor company providing highly integrated 10-Gigabit and
5-Gigabit network processors. EZchip's network processors provide the
flexibility and integration that enable triple-play data, voice and
video services in systems that make up the new Carrier Ethernet
networks. Flexibility and integration make EZchip's solutions ideal for
building systems for a wide range of applications in telecom networks,
enterprise backbones and data centers.
For more information on EZchip, visit the web site at http://www.ezchip.com
For more information on LanOptics, visit the web site at http://www.lanoptics.com
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward looking statements
that are subject to risks and uncertainties, including, but not limited
to, the impact of competitive products, product demand and market
acceptance risks, customer order cancellations, reliance on key
strategic alliances, fluctuations in operating results, delays in
development of highly-complex products and other risks detailed from
time to time in the Company's filings with the Securities and Exchange
Commission. These risks could cause the Company's actual results for
2006 and beyond to differ materially from those expressed in any forward
looking statements made by, or on behalf of LNOP.
LanOptics Ltd.
Consolidated Statement of Operations
(U.S. Dollars in thousands, except per share amounts)
Three Months Ended
September 30
(UnAudited)
Nine Months Ended
September 30
(UnAudited)
2006
2005
2006
2005
Revenues
2,074
687
5,087
4,563
Cost of Revenues
851
293
2,242
1,782
Amortization of Developed Technology
86
86
257
205
Gross Profit
1,137
308
2,588
2,576
Research & Development, Net
2,093
1,815
6,370
6,584
In-process Research and Development Write-off
--
--
--
1,475
Selling, General & Administration
1,035
897
3,123
2,814
Operating Loss
(1,991)
(2,404)
(6,905)
(8,297)
Financial Expenses, net
(145)
(110)
(324)
(220)
Loss Before Minority Interest
(2,136)
(2,514)
(7,229)
(8,517)
Minority Interest in Loss of Subsidiaries
--
--
12
206
Net Loss
(2,136)
(2,514)
(7,217)
(8,311)
Net Loss per Share
(0.18)
(0.22)
(0.62)
(0.76)
Weighted Average Number of Shares Used in Computing Net Losses per
Share
11,650,021
11,633,771
11,644,723
10,995,327
LanOptics Ltd.
Consolidated Balance Sheet
(U.S. Dollars in thousands)
September 30,
December 31,
2006
2005
(UnAudited)
(Audited)
ASSETS
CURRENT ASSETS:
Cash, Cash Equivalents & Marketable Securities
17,220
19,552
Trade Receivables, Net
1,958
931
Other Receivables
817
300
Inventories
2,767
2,098
Total Current Assets
22,762
22,881
LONG-TERM INVESTMENTS:
Prepaid Development and Production Costs, Net
305
381
Severance Pay Fund
1,905
1,564
Total Long-Term Investments
2,210
1,945
PROPERTY & EQUIPMENT, NET
356
351
Developed Technology, Net
604
861
Goodwill
4,833
4,833
TOTAL ASSETS
30,765
30,871
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade Payables
1,149
338
Other Payables and Accrued Expenses
2,539
1,916
Total Current Liabilities
3,688
2,254
LONG TERM LIABILITIES:
Accrued Severance Pay
2,417
1,990
Long-Term Loan
3,275
--
Warrants to Redeemable Preferred Shares
239
253
Total Long-Term Liabilities
5,931
2,243
EMPLOYEES STOCK OPTIONS IN A SUBSIDIARY
396
--
PREFERRED SHARES IN A SUBSIDIARY
40,061
38,567
SHAREHOLDERS' DEFICIENCY:
Share Capital
75
75
Additional Paid-in Capital
61,252
61,185
Accumulated Other Comprehensive Loss
(4)
(36)
Accumulated Deficit
(80,634)
(73,417)
Total Shareholders' Deficiency
(19,311)
(12,193)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY
30,765
30,871
LanOptics Ltd. (NASDAQ: LNOP), a provider of network processors,
today announced results for the third quarter ended September 30,
2006.
For the three months ended September 30, 2006, LanOptics reported
revenues of US$ 2,074,000 versus US$ 687,000 in the third quarter of
2005. All of the revenues were attributable to LanOptics' subsidiary,
EZchip Technologies. LanOptics incurred an operating loss of US$
1,991,000, versus an operating loss of US$ 2,404,000 in the third
quarter of 2005. The majority of the expenses that resulted in the
operating loss were attributable to EZchip's research and development
efforts on future products. The balance of the expenses were related
primarily to EZchip's sales and marketing activities. Net loss for the
third quarter was US$ 2,136,000, including stock based compensation
expenses in the amount of US$ 171,000 which are being reported as of
January 1st 2006 pursuant to SFAS 123R, a loss of US$ 0.18 per share,
compared to a net loss of US$ 2,514,000 or US$ 0.22 per share for the
same period last year.
For the nine months ended September 30, 2006, LanOptics reported
revenues of US$ 5,087,000, compared with US$ 4,563,000 for the same
period last year. All of the revenues were attributable to LanOptics'
subsidiary, EZchip Technologies. LanOptics incurred an operating loss
for the nine months of US$ 6,905,000, versus an operating loss of US$
8,297,000, which included a one-time in-process research and
development write-off in the amount of US$ 1,475,000, in the same
period last year. Net loss for the nine months was US$ 7,217,000,
including stock based compensation expenses in the amount of US$
396,000 which are being reported for the first time pursuant to SFAS
123R, or US$ 0.62 per share, compared to a year-earlier loss for the
comparable period of US$ 8,311,000, or US$ 0.76 per share.
"We are pleased with the progress made during the third quarter
and the agreement with Marvell that was signed last week," said Eli
Fruchter, President and CEO of EZchip Technologies. "The Marvell
agreement is further validation for our network processors, whose
adoption in the Carrier Ethernet space is gaining momentum. We are
jointly developing an NPU chip with Marvell that utilizes both
companies' technologies and offers interoperable solutions that enable
joint Marvell-EZchip based system architectures. The partnership will
open new opportunities for EZchip that would not otherwise exist and
is expected to start generating meaningful revenues in 2008. The new
NPU does not alter EZchip's plans for NP-2, NP-3 and NP-4.
"We have seen a meaningful and very positive change in the way our
customers are adopting and implementing our NP-2 network processors.
Our customers selected the NP-1 for optional services cards, mostly
1-2 per chassis, to deal with exception processing that the hard wired
ASICs on the line cards could not handle. In contrast, the NP-2
replaces the ASICs on the line cards, with one to four NP-2 devices
per line card and 10-12 line cards per chassis.
"EZchip's NPUs have been adopted by leading tier-1 system vendors
that use them on the line cards of their carrier Ethernet platforms.
We now have close to 100 NP-1 and NP-2 design wins. One tier-1 vendor
began production of several NP-2 designs during the third quarter and
placed initial production orders during the quarter. We expect several
more tier-1 designs to enter production in the coming quarters. NP-2
sales contributed significantly to the third quarter revenues; we
anticipate that NP-2 revenues will continue growing during the fourth
quarter, and will account for the majority of our sales in the very
near future. Our future revenue ramp-up will continue to depend on the
success of our customers' new products that incorporate our network
processors and on market acceptance of these products."
About LanOptics
LanOptics is focused on its subsidiary EZchip Technologies, a
fabless semiconductor company providing highly integrated 10-Gigabit
and 5-Gigabit network processors. EZchip's network processors provide
the flexibility and integration that enable triple-play data, voice
and video services in systems that make up the new Carrier Ethernet
networks. Flexibility and integration make EZchip's solutions ideal
for building systems for a wide range of applications in telecom
networks, enterprise backbones and data centers.
For more information on EZchip, visit the web site at
http://www.ezchip.com
For more information on LanOptics, visit the web site at
http://www.lanoptics.com
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward looking statements
that are subject to risks and uncertainties, including, but not
limited to, the impact of competitive products, product demand and
market acceptance risks, customer order cancellations, reliance on key
strategic alliances, fluctuations in operating results, delays in
development of highly-complex products and other risks detailed from
time to time in the Company's filings with the Securities and Exchange
Commission. These risks could cause the Company's actual results for
2006 and beyond to differ materially from those expressed in any
forward looking statements made by, or on behalf of LNOP.
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*T
LanOptics Ltd.
Consolidated Statement of Operations
(U.S. Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
(UnAudited) (UnAudited)
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues 2,074 687 5,087 4,563
Cost of Revenues 851 293 2,242 1,782
Amortization of
Developed Technology 86 86 257 205
----------- ----------- ----------- -----------
Gross Profit 1,137 308 2,588 2,576
Research &
Development, Net 2,093 1,815 6,370 6,584
In-process Research
and Development
Write-off -- -- -- 1,475
Selling, General &
Administration 1,035 897 3,123 2,814
----------- ----------- ----------- -----------
Operating Loss (1,991) (2,404) (6,905) (8,297)
Financial Expenses,
net (145) (110) (324) (220)
----------- ----------- ----------- -----------
Loss Before Minority
Interest (2,136) (2,514) (7,229) (8,517)
Minority Interest in
Loss of Subsidiaries -- -- 12 206
----------- ----------- ----------- -----------
Net Loss (2,136) (2,514) (7,217) (8,311)
=========== =========== =========== ===========
Net Loss per Share (0.18) (0.22) (0.62) (0.76)
Weighted Average
Number of Shares Used
in Computing Net
Losses per Share 11,650,021 11,633,771 11,644,723 10,995,327
----------- ----------- ----------- -----------
*T
-0-
*T
LanOptics Ltd.
Consolidated Balance Sheet
(U.S. Dollars in thousands)
September 30, December 31,
------------- ------------
2006 2005
------------- ------------
(UnAudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash, Cash Equivalents & Marketable
Securities 17,220 19,552
Trade Receivables, Net 1,958 931
Other Receivables 817 300
Inventories 2,767 2,098
------------- ------------
Total Current Assets 22,762 22,881
LONG-TERM INVESTMENTS:
Prepaid Development and Production Costs,
Net 305 381
Severance Pay Fund 1,905 1,564
------------- ------------
Total Long-Term Investments 2,210 1,945
PROPERTY & EQUIPMENT, NET 356 351
Developed Technology, Net 604 861
Goodwill 4,833 4,833
------------- ------------
TOTAL ASSETS 30,765 30,871
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade Payables 1,149 338
Other Payables and Accrued Expenses 2,539 1,916
------------- ------------
Total Current Liabilities 3,688 2,254
LONG TERM LIABILITIES:
Accrued Severance Pay 2,417 1,990
Long-Term Loan 3,275 --
Warrants to Redeemable Preferred Shares 239 253
------------- ------------
Total Long-Term Liabilities 5,931 2,243
EMPLOYEES STOCK OPTIONS IN A SUBSIDIARY 396 --
PREFERRED SHARES IN A SUBSIDIARY 40,061 38,567
SHAREHOLDERS' DEFICIENCY:
Share Capital 75 75
Additional Paid-in Capital 61,252 61,185
Accumulated Other Comprehensive Loss (4) (36)
Accumulated Deficit (80,634) (73,417)
------------- ------------
Total Shareholders' Deficiency (19,311) (12,193)
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY 30,765 30,871
============= ============
*T