Interphase Corporation (NASDAQ: INPH), a leading global provider of solutions for converged communications networks, today reported financial results for its first quarter ended March 31, 2011.
Revenues for the first quarter of 2011 increased approximately 78% to $6.7 million when compared to $3.8 million for the first quarter of 2010. On a sequential basis, revenues increased approximately 15% from $5.8 million in the fourth quarter of 2010. Revenues in the quarter were primarily derived from telecommunications product revenues, which increased to $5.5 million in the first quarter of 2011 compared to $3.2 million for the first quarter of 2010. Enterprise product revenues increased to $840,000 compared to $217,000 on a year to year basis, and services revenues increased to $319,000 for the first quarter of 2011 compared to $291,000 for the first quarter of 2010. Gross margin was 49% for the first quarter of both 2011 and 2010. The company reported a net income of $231,000, or $0.03 per fully diluted share in the first quarter of 2011 compared to a net loss of $2.4 million, or ($0.34) per share in the first quarter of 2010. On March 31, 2011, the company’s working capital position was $14.0 million, including cash and marketable securities of $9.6 million.
“We are very pleased to announce our fourth consecutive quarter of sequential revenue growth, and our business outlook continues to improve,” said Gregory B. Kalush, CEO and President of Interphase. “We are excited about the future of our company, and look forward to expanding our horizons into new exciting markets that embrace many of the value propositions we offer. During 2011, we intend to continue to capitalize on new revenue opportunities and improve our process efficiency so that we are able to compete effectively in these new markets.”
On April 7, 2011, Interphase was named as one of the defendants in a lawsuit filed by Mosaid Technologies (“Mosaid”). The complaint includes allegations that Interphase has infringed and is infringing upon a certain registered U.S. patent to which Mosaid has enforcement rights. The sole infringement allegation directed at Interphase appears to concern communications controller chips that Interphase purchases (indirectly) from Freescale Semiconductor, Inc., (“Freescale”), another defendant in the infringement allegation, which are used in several of Interphase’s products. Interphase does not know if there is any merit to Mosaid’s allegations. Nevertheless, Interphase intends, and Interphase understands that Freescale intends, to vigorously defend the allegations; and to the extent that the infringement claim relates to the Freescale chips used in Interphase’s products, Freescale will also defend Interphase and indemnify Interphase against damages in the lawsuit.