Scopus Announces Record Third Quarter 2008 Results

Revenues Grew 31% Year Over Year Reaching $19.9 Million 


TEL AVIV, November 10  /PRNewswire-FirstCall/ -- Scopus Video Networks Ltd. (NASDAQ:SCOP), a provider of digital video networking products, today announced its results for the third quarter of 2008, ending September 30, 2008.

  Third Quarter Highlights:

  - Strong revenue growth reaching a record of $19.9 million, a
    31% year-over-year increase and a 4% sequential increase.

  - Net income of $0.5 million on a GAAP basis and $0.9 million on a
    non-GAAP basis (excluding stock based compensation)


  Third Quarter 2008 Results Summary


Revenue for the third quarter totaled $19.9 million, a 31% increase from the $15.2 million reported in the third quarter of 2007. The breakdown of revenue by region was 43% EMEA, 23% Asia and Pacific Rim and 34% Americas. Gross profit for the third quarter of 2008 was $10.1 million compared with $7.3 million in the third quarter 2007. Gross profit as a percentage of revenues was 51%, compared with 48% in the third quarter of 2007.

Net income on a GAAP basis for the third quarter of 2008 was $0.5 million, or $0.04 per diluted share, compared with a net loss of $0.1 million, or $0.01 per basic share in the third quarter of 2007.

Net income on a non-GAAP basis for the third quarter of 2008, which excludes expenses related to stock based compensation, was a record $0.9 million, or $0.06 per diluted share, compared to a non-GAAP net income of $0.4 million, or $0.03 per diluted share, in the third quarter of 2007.

The Company ended the third quarter of 2008 with net cash, cash equivalents and short-term securities of $34.6 million, compared with $36.0 million as of June 30, 2008. The Company used $1.4 million worth of cash during the quarter, primarily as a result of the Company's decision to increase inventory levels, due to the overall growth in the business.

"Our third quarter is a continuation of our strong growth in sales and improving profitability, and is driven by the solid business execution that we have shown throughout this and last year," commented Dr. Yaron Simler, CEO of Scopus. "Most importantly, our third quarter results demonstrate the inherent operating leverage in our business model and our achievements are all the more remarkable given the current global economic slowdown. While the economic situation does add uncertainty, we believe that our high level of net cash and diverse customer base, are enhancing our already strong competitive positioning."

The press release contains non-GAAP financial measures. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to regulations promulgated by the Securities and Exchange Commission, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

The non-GAAP results provided in the press release exclude the cost of options. Due to recent changes in US GAAP regulations, in accordance with FAS123R guidelines, from the first quarter of 2006 and onwards, we have been implementing and recording options expenses as part of our P&L, management believes that the presentation of the non-GAAP information provides investors with a better understanding of Scopus' financial results going forward and assists investors in comparing Scopus' historical, current and future expected results.

Conference Call Details

The Company will also be hosting a conference call today at 1:00pm ET. On the call, management will review and discuss the results, and will be available to answer investor questions.

  The dial in numbers are as follows:

  US Dial-in Number: [phone]

  UK Dial-in Number: 0800-917-5108

  Israel Dial-in Number: 03-918-0609

  International Dial-in Number: [phone]




For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Scopus' website, at: http://www.scopus.net/

About Scopus Video Networks

Scopus Video Networks (NASDAQ:SCOP) develops, markets and supports digital video networking solutions thatenable network operators to offer advanced video services to their subscribers. Scopus' solutions support digital television, HDTV, live event coverage and content distribution.

Scopus' comprehensive digital video networking solution offerintelligent video gateways, encoders, decoders and network management products. Scopus' solutions are designed to allow network operators to increase service revenues, improve customer retention and minimize capital and operating expenses.

Scopus' customers include satellite, cable and terrestrial operators, broadcasters and telecom service providers. Scopus' products are used by hundreds of network operators worldwide.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, risks related to the evolving market for digital video in general and the infancy of the video-over-IP in particular and the ability to successfully demonstrate to service providers integrated solutions, general economic conditions and other risk factors. Scopus does not undertake any obligation to update forward-looking statements made herein.

                                           SCOPUS VIDEO NETWORKS
                                   CONDENSED CONSOLIDATED BALANCE SHEET
                                 (Dollars in thousands)

                                         September 30,         December
                                                                 31,
                                               2008         2007    2007
                                                                (Unaudited)
                    ASSETS

  CURRENT ASSETS:
  Cash and cash equivalents                  $ 28,630   $ 10,464  $ 23,090
  Short-term deposits                        -            23,361     7,227
  Trading securities                         6,012         -         5,230
  Trade accounts receivable (net of
  allowance for doubtful accounts of $137
  and $455 and $152 respectively)            13,758        8,934    12,409
  Inventories                                13,443        8,888     7,774
  Other receivables and current assets        2,896        2,061     2,151

  Total current assets                       64,739       53,708    57,881

  Fixed assets, net                           4,278        3,050     3,453

  Deposits in general severance fund            219          218       230

  Other assets                                  130           92       105

  TOTAL ASSETS                             $ 69,366     $ 57,068  $ 61,669

               LIABILITIES AND
             SHAREHOLDERS EQUITY

  CURRENT LIABILITIES:
  Trade accounts payable                     $ 11,452    $ 4,435   $ 6,221
  Other payables and current liabilities       11,639      9,350    11,184

  Total current liabilities                    23,091     13,785    17,405

  Liabilities for vacation and severance pay    1,980      1,740     1,945

  SHAREHOLDERS' EQUITY:
  Ordinary shares                               4,561      4,454     4,517
  Additional paid-in capital                   78,808     76,528    77,428
  Other comprehensive income                       51         -         72
  Accumulated deficit                         (39,125)   (39,439)  (39,698)

  TOTAL SHAREHOLDERS' EQUITY                   44,295     41,543    42,319

  TOTAL LIABILITIES AND SHAREHOLDERS EQUITY  $ 69,366   $ 57,068  $ 61,669



                                           SCOPUS VIDEO NETWORKS
                        CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                  (Dollars in thousands, except share and per share data)

               Nine month ended  Three month ended September 30, Year ended
                 September 30,                                     December
                                                                        31,
                    2 0 0 8       2 0 0 7   2 0 0 8   2 0 0 7       2 0 0 7
                        (Unaudited)                       (Unaudited)

  Revenues         $ 55,402      $ 40,944  $ 19,897  $ 15,175     $ 57,477
  Cost of
  revenues           28,010        21,064     9,790     7,848       29,901
  Gross profit       27,392        19,880    10,107     7,327       27,576
  Research and
  development
  expenses, net
  of grants from
  the OCS            10,420         7,808      3,702    2,742       10,675
  Sales and
  marketing
  expenses           13,126        11,618      4,743    3,747       15,601
  General and
  administrative
  expenses            3,813         4,113      1,354    1,563        5,692
  Operating
  profit (loss)          33        (3,659)       308     (725)      (4,392)
  Financing
  income, net           572           1,206      224      619        1,673
  Profit (loss)
  before income
  taxes                 605         (2,453)      532     (106)      (2,719)
  Income tax
  expense              (32)            (65)      (14)     (39)         (58)
  Net profit
  (loss)                573         (2,518)      518     (145)      (2,777)

  Basic net
  earnings
  (loss) per
  ordinary share       0.04          (0.19)     0.04     (0.01)      (0.20)

  Diluted net
  earnings
  (loss) per
  ordinary share       0.04          (0.19)     0.04     (0.01)      (0.20)

  Shares used in
  basic net
  earnings
  (loss) per
  share
  computation    14,001,032   13,509,988  14,021,821  13,651,381 13,595,346

  Shares used in
  diluted net
  earnings
  (loss) per
  share
  computation    14,913,792   13,509,988  14,432,484  13,651,381 13,595,346



  Company Contact:                 Investor Relations Contact
  Moshe Eisenberg                  Ehud Helft / Kenny Green
  Chief Financial Officer          GK Investor Relations
  Tel: [phone]             Tel: (US) [phone]
                  
  For more information visit: http://www.scopus.net/

DATASOURCE: Scopus Video Networks Ltd



CONTACT:  Company Contact, Moshe Eisenberg, Chief Financial Officer,

Tel: [phone], ; Investor Relations Contact, Ehud

Helft / Kenny Green, GK Investor Relations,Tel: (US) [phone],

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