Second Quarter 2011 Results:

Total revenues in the second quarter of 2011 were $17.3 million, an increase of 16% compared to $14.9 million in the second quarter of 2010, and an increase of 31% compared to $13.2 million in the first quarter of 2011.

Net income, on a GAAP basis, for the second quarter of 2011 was $4.8 million, or $0.17 per share (diluted), compared to net income of $2.2 million, or $0.09 per share (diluted), in the second quarter of 2010, and net income of $1.5 million, or $0.05 per share (diluted), in the first quarter of 2011.

Net income, on a non-GAAP basis, for the second quarter of 2011 was $9.4 million, or $0.33 per share (diluted), compared to non-GAAP net income of $7.1 million, or $0.26 per share (diluted), in the second quarter of 2010, and non-GAAP net income of $5.4 million, or $0.19 per share (diluted), in the first quarter of 2011.

Cash, cash equivalents and marketable securities as of June 30, 2011, totaled $121.0 million, compared to $108.5 million as of March 31, 2011. Cash generated from operations during the second quarter was $9.2 million, cash used in investing activities was $0.1 million and cash provided by financing activities (resulting from the exercise of options) was $3.4 million.

First Six Months 2011 Results

Total revenues for the six months ended June 30, 2011 were $30.5 million, a year-over-year increase of 7% compared to $28.5 million for the six months ended June 30, 2010. Net income on a GAAP basis for the six months ended June 30, 2011 was $6.2 million, or $0.22 per share (diluted), compared to net income of $5.1 million, or $0.20 per share (diluted), for the six months ended June 30, 2010. Net income on a non-GAAP basis for the six months ended June 30, 2011 was $14.8 million or $0.52 per share (diluted), compared with non-GAAP net income of $13.1 million, or $0.50 per share (diluted), for the six months ended June 30, 2010.

Eli Fruchter, CEO of EZchip commented, "The second quarter of 2011 continues our growth trend and was another record quarter for EZchip in all our financial parameters, including achieving an outstanding 54% non-GAAP net income margin.  NP-4 is making good progress and we are very comfortable it will move to production during the fourth quarter.

"According to the Carrier Ethernet Equipment Analysis report recently published by Infonetics, Service Providers investment in Carrier Ethernet continues to outpace overall telecom capex, with CESR and Transport, EZchip's target markets, expected to grow to over 70% of the total Carrier Ethernet Equipment market by 2015.  The result for us is that the market for our high speed NPUs is growing much faster than previously anticipated in its prior report.  

"During the second quarter we also continued to make good progress with our other products that are under development, including the NP-5 and the new product in Kiryat Gat that are expected to become our growth generators when the NP-4 reaches peak revenues in several years."

Conference Call

The Company will be hosting a conference call later today, August 3, 2011, at 10:00am ET, 7:00am PT, 3:00pm UK time and 5:00pm Israel time. On the call, management will review and discuss the results, and will be available to answer investor questions.

To participate through the live webcast, please access the investor relations section of the Company's web site at: http://www.ezchip.com/investor_relations.htm, at least 10 minutes before the conference call commences. If you intend to ask a question on the call, please contact the investor relations team for the telephone dial in numbers.

For those unable to listen to the live call, a replay of the call will be available the day after the call under the 'Investor Relations' section of the website.

Use of Non-GAAP Financial Information

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), this release of operating results also contains non-GAAP financial measures, which EZchip believes are the principal indicators of the operating and financial performance of its business.  The non-GAAP financial measures exclude the effects of stock-based compensation expenses recorded in accordance with FASB ASC 718, amortization of intangible assets and taxes benefit (taxes on income).  Management believes the non-GAAP financial measures provided are useful to investors' understanding and assessment of the Company's on-going core operations and prospects for the future, as the charges eliminated are not part of the day-to-day business or reflective of the core operational activities of the Company.  Management uses these non-GAAP financial measures as a basis for strategic decisions, forecasting future results and evaluating the Company's current performance.  However, such measures should not be considered in isolation or as substitutes for results prepared in accordance with GAAP.  Reconciliation of the non-GAAP measures to the most comparable GAAP measures are provided in the schedules attached to this release.

About EZchip

EZchip is a fabless semiconductor company that provides Ethernet network processors for networking equipment.  EZchip provides its customers with solutions that scale from 1-Gigabit to 200-Gigabits per second with a common architecture and software across all products.  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 our company, visit the web site at http://www.ezchip.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements are statements that are not historical facts and may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance.  These statements are only predictions based on EZchip's current expectations and projections about future events.  There are important factors that could cause EZchip's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements.  Those factors include, but are not limited to, the impact of general economic conditions, 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 factors indicated in EZchip's filings with the Securities and Exchange Commission (SEC).  For more details, refer to EZchip's SEC filings and the amendments thereto, including its Annual Report on Form 20-F filed on March 31, 2011 and its Current Reports on Form 6-K. EZchip undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

EZchip Semiconductor Ltd. Selected Condensed Consolidated Cash Flow Data (U.S. Dollars in thousands) (Unaudited)
		Three Months Ended						Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2011		2011		2010		2011		2010
Cash flows from operating activities:
Net income		$      4,772		$     1,473		$     2,248		$      6,245		$      5,116
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		452		450		738		902		1,479
Decrease (increase) in trade and other receivables, net		(929)		1,295		14		366		5,009
Increase in inventory		(12)		(1,426)		(835)		(1,438)		(1,154)
Decrease in deferred tax asset		2,110		1,403		2,739		3,513		3,848
Increase (decrease) in trade payables and other accrued liabilities, net		674		(385)		1,330		289		(3,872)
Stock-based compensation		2,100		2,096		1,413		4,196		2,709
Net cash provided by operating activities		9,167		4,906		7,647		14,073		13,135
Cash flows from investing activities:
Purchase of property and equipment		(51)		(125)		(46)		(176)		(265)
Net cash used in investing activities		(51)		(125)		(46)		(176)		(265)
Cash flows from financing activities:
Proceeds from issuance of share capital		--		--		--		--		1,072
Proceeds from exercis Read 562 times | Like this? Tweet it to your followers! Published in Contributed Articles Tagged under Carrier Ethernet EZChip EZCH NASDAQ Finacials Investments Stocks Social sharing Add to Google Buzz Add to Facebook Add to Delicious Digg this Add to Reddit Add to StumbleUpon Add to MySpace Add to Technorati Related items (by tag) What Effect Will Carrier Ethernet 2.0 Have on the Industry? Inteliquent Addition Enhances Phoenix NAP Secured Servers Bandwidth GlobeNet Completes MEF Services Certification Process Equinix Carrier Ethernet Exchange Facilitates many-to-many interconnections Carrier Ethernet Americas 2012 - Rio De Janeiro 21-24 May More in this category: « Packet-Optical Data Center Interconnect Networks New MEF Professional Carrier Ethernet Certification Supports Market Growth and Job Security » Leave a comment Make sure you enter the (*) required information where indicated. Basic HTML code is allowed. Message * enter your message here... Name * E-mail * Website URL Enter the two words you see below back to top © Ethernet Academy 2012. All Rights Reserved. | Terms & Conditions | Refund Policy | Privacy Statement | About Us | Advertise | Submit Content | Contact | Authors