Sunday, August 2, 2009

EZchip Reports Q2 Results

EZchip Semiconductor, which supplies network processors, reported Q2 revenues of $6.7 million, compared to $8.0 million in the second quarter of 2008, and $9.8 million in the first quarter of 2009. The lower quarterly revenues follow EZchip's principal customer's decision to temporarily reduce the purchase of processors from the company during most of the second quarter and instead to consume existing inventory. There was a net loss (GAAP) of $0.7 million. Net income, on a non-GAAP basis, was $1.2 million for the quarter

Eli Fruchter, CEO of EZchip commented, "I am pleased to report that the temporary decline in orders from our principal customer ended in May, and, starting from June, we witnessed a strong increase in orders from this customer and from other customers. This strong order pickup underscores our belief that the second quarter revenue shortfall was a singular event and we expect to return to, and potentially exceed, first quarter 2009 revenue levels already in the third quarter. In terms of profitability, we achieved this quarter healthy profit margins, enabling us to generate, despite the revenue shortfall, non-GAAP net income of $1.2 million and strong cash flow of $5 million, enabling us to end the quarter with a strong net cash position of over $55 million."

"During the quarter, revenues from Marvell, the supplier of our specialized NP-3 processor to a leading CESR market player, grew considerably and exceeded $1 million, contributing, for the first time, more than 10% of our quarterly revenues. While these are still early days for the NP-3, with an expected lumpiness between the quarters, we believe that Marvell, through its sales to this leading CESR player has the potential to become our largest customer in the long term."

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