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Metalink Reports First Quarter 2010 Results
Jul 08, 2010 (10:07 AM EDT)
YAKUM, Israel, July 8, 2010 /PRNewswire-FirstCall/ -- Metalink Ltd. (NASDAQ: MTLK), today announced its unaudited financial results for the first quarter of 2010 ended March 31, 2010.
SALE OF WLAN BUSINESS
As previously announced, Metalink completed the sale of its wireless local area network (WLAN) business to Lantiq on February 15, 2010. Under the terms of the agreement, Lantiq has agreed to pay Metalink a total of up to $16.5 million in cash, $5.7 million of which were paid at the closing and additional payments, at the total amount of approximately $1.5 million, were paid through March 31, 2010. As a result of the sale, Metalink recorded a capital gain of approximately $6.9 million.
Following the sale, the results of operations of the WLAN business are reported as discontinued operation and the results from continuing operation no longer include revenues and expenses attributable to the WLAN business.
As a result of our holding of the proceeds of the sale of the WLAN business, there is a high likelihood that Metalink will be classified as a passive foreign investment company for U.S. federal income tax purposes in 2010 and possibly also in later years unless and until we invest a sufficient portion of those proceeds in assets that do not produce passive income.
FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER OF 2010: Revenues for the first quarter of 2010 were $0.05 million compared to $1.6 million for the first quarter of 2009. Net income (loss) for the period was $6.2 million, or $2.31 per share, including the capital gain of approximately $6.9 million from the sale of the WLAN business. Net loss from continuing operation for the period was $(0.5) million, or $(0.18) per share, compared to $(0.3) million, or $(0.13) per share, for the first quarter of 2009. Net income (loss) for the period from discontinued operation was $6.7 million, or $2.49 per share, compared to $(3.2) million, or $(1.32) per share, for the first quarter of 2009.
CASH STATUS: Metalink's cash and cash equivalents as of March 31, 2010 were $4.1 million.
LOAN STATUS: As previously announced, on December 30, 2009, we entered into an amendment to the Loan Agreement, whereby the repayment of the $4.3 million originally due under the Loan Agreement was reduced to $4.1 million to be repaid in four installments: $3,750,000 was repaid concurrently with the closing of the sale of the WLAN business and the remainder is to be paid in three installments between September 30, 2010 and March 31, 2011.
Metalink shares trade on Nasdaq under the symbol "MTLK". For more information, please visit our website at http://www.MTLK.com
SAFE HARBOR STATEMENT
This press release contains "forward looking statements" within the meaning of the United States securities laws. Words such as "aim," "expect," "estimate," "project," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to: absence of significant operations following the Lantiq Transaction; uncertainty as to our future business model and our ability to identify and evaluate suitable business opportunities; and our U.S. shareholders may suffer adverse tax consequences if we will be classified as a passive foreign investment company. Additional factors that could cause actual results to differ materially from these forward-looking statements are set forth from time to time in Metalink's filings with the SEC, including Metalink's Annual Report in Form F-20. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by applicable law, the Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. The Company cannot guarantee future results, events, and levels of activity, performance, or achievements.
METALINK LTD. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2010 2009 (Unaudited) (in thousands except share data) ASSETS Current assets Cash and cash equivalents $ 4,130 $ 2,273 Trade accounts receivable - 461 Other receivables 2,103 602 Prepaid expenses 93 88 Inventories 305 1,068 Total current assets 6,631 4,492 Severance pay fund 16 1,229 Property and equipment, net 98 2,145 Total assets $ 6,745 $ 7,866 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Trade accounts payable $ 406 $ 1,542 Other payables and accrued expenses 2,156 3,239 Short-term loan 350 4,100 Warrants to issue shares - 289 Total current liabilities 2,912 9,170 Accrued severance pay 282 1,798 Shareholders' equity* Ordinary shares of NIS 1.0 par value (Authorized - 5,000,000 shares, issued and outstanding - 2,780,231 and 2,663,723 shares as of March 31, 2010 and December 31, 2009, respectively) 790 759 Additional paid-in capital 158,110 157,692 Accumulated deficit (145,464) (151,668) 13,436 6,783 Treasury stock, at cost; 89,850 as of March 31, 2010 and December 31, 2009 (9,885) (9,885) Total shareholders' equity 3,551 (3,102) Total liabilities and shareholders' equity $ 6,745 $ 7,866
* The number of shares have been adjusted retroactively to reflect the one for ten reverse split of our ordinary shares dated February 22, 2010.
METALINK LTD. CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended March 31, 2010 2009 (Unaudited) (Unaudited) (in thousands, except share and per share data) Revenues $ 50 $ 1,625 Cost of revenues: Costs and expenses - 452 Royalties to the Government of Israel - 48 Total cost of revenues - 500 Gross profit 50 1,125 Operating expenses: Gross research and development - - Less - Royalty bearing and other grants - - Research and development, net - - Selling and marketing - - General and administrative 434 473 Total operating expenses 434 473 Operating profit (loss) (384) 652 Financial income (expenses), net (100) (958) Net loss from continuing operation $ (484) $ (306) Discontinued operation Operating loss from discontinued operation (219) (3,162) Capital gain from sale of discontinued 6,907 - operation Net profit (loss) from Discontinued $ 6,688 $ (3,162) operation Net profit (loss) $ 6,204 $ (3,468) Per share data- Basic loss from continuing operations $ (0.18) $ (0.13) Diluted loss from continuing operations $ (0.18) $ (0.13) Basic and Diluted earnings (loss) from $ 2.49 $ (1.32) discontinued operations Basic earnings (loss) per share $ 2.31 $ (1.45) Basic earnings (loss) per share $ 2.31 $ (1.45) Shares used in computing loss per ordinary share*: Basic and Diluted 2,690,373 2,385,373 * Shares used for loss per share calculation have been adjusted retroactively to reflect the one for ten reverse split of our ordinary shares dated February 22, 2010. Rony Eizenshtein CFO Metalink Ltd. Tel: +972-9-9605555 Fax: +972-9-9605544
SOURCE Metalink Ltd