Interphase Announces First Quarter 2013 Financial Results

  Interphase Announces First Quarter 2013 Financial Results

Business Wire

PLANO, Texas -- April 25, 2013

Interphase Corporation (NASDAQ: INPH), a diversified information and
communications technology company, today reported financial results for its
first quarter ended March 31, 2013.

Revenues for the first quarter of 2013 were $3.3 million, a decrease of
$734,000 when compared to revenues from the first quarter of 2012 of $4.0
million. Revenues in the quarter were primarily derived from
telecommunications and enterprise product revenues, which decreased to $2.5
million in the first quarter of 2013 compared to $3.2 million for the first
quarter of 2012. Services revenues were $722,000 for the first quarter of 2013
compared to $781,000 for the first quarter of 2012. Gross margin was 39% for
the first quarter of 2013 compared to 46% for the first quarter of 2012. The
decrease in gross margin percentage was primarily due to a revenue mix shift
toward lower margin products and services and decreased utilization of our
manufacturing facility. The Company recorded a charge of approximately
$340,000 during the first quarter of 2013, classified as other loss, in
response to a labor court decision in France regarding a lawsuit brought
against the Company by former employees of Interphase SAS, a subsidiary of
Interphase Corporation. The Company reported a net loss of $1.4 million, or
($0.20) per share in the first quarter of 2013 compared to a net loss of
$929,000, or ($0.13) per share in the first quarter of 2012. On March 31,
2013, the Company’s working capital position was $10.5 million, including cash
and marketable securities of $8.3 million.

“Our revenue results for the first quarter of 2013 reflect a continued
weakness in the telecom market worldwide. We had Electronic Manufacturing
Services orders in house that would have allowed us to grow sequentially and
achieve similar revenue levels to those achieved in the first quarter of 2012,
but a global parts shortage from one of the suppliers kept us from meeting
this goal,” said Gregory B. Kalush, CEO and President of Interphase. “However,
we have since received those parts, and I am pleased to say that we will begin
fulfilling this order early in the second quarter. It is important to note
that we have also received a second order from this customer, and it is double
the size of the first order. We expect to begin fulfilling this next order
during the second and throughout the third quarter of 2013. There is very
strong interest in our engineering design and manufacturing services, and we
expect to enjoy significant revenue growth in 2013 in this area of our
business. I would also like to mention that penveu^® has entered the second
phase of our internal beta testing, and we expect to enter external beta
testing soon.”

About Interphase

Interphase Corporation (NASDAQ: INPH) is a diversified information and
communications technology company, committed to innovation through the process
of identifying, developing and introducing new products and services. The
Company provides its customers solutions for connectivity, interworking and
packet processing. Clients of the Company’s communications networking products
include Alcatel-Lucent, Fujitsu Ltd., Genband, Hewlett Packard, Oracle, and
Samsung.

The Company also offers engineering design and manufacturing services to
customers from a wide variety of industries within the electronics market.

Interphase recently expanded its business to include penveu^®, a handheld
device that adds interactivity to the installed base of projectors and large
screen displays, making any flat surface, from pull down screens to HDTVs, an
interactive display system. penveu is an affordable and portable solution that
targets the education and enterprise markets.

The Company, founded in 1974, is headquartered in Plano, Texas, with
manufacturing facilities in Carrollton, Texas, and sales offices in the United
States and Europe. For more information, please visit our websites at
www.iphase.com and www.penveu.com.

Forward-Looking Statements

This press release contains forward-looking statements about the business,
financial condition and prospects of the Company. These statements are made
under the “safe harbor” provisions of the Private Securities Litigation Reform
Act of 1995. The actual results of the Company could differ materially from
those indicated by the forward-looking statements because of various risks and
uncertainties, including (without limitation) effects of the ongoing issues in
global credit and financial markets, our reliance on a limited number of
customers, the lack of spending improvements in the telecommunications and
computer networking industries, significant changes in product demand, the
development and introduction of new products and services, changes in
competition, various inventory risks due to changes in market conditions and
other risks and uncertainties indicated in Item 1A of the Company’s Annual
Report on Form 10-K and in the Company’s other filings and reports with the
Securities and Exchange Commission. All of the foregoing risks and
uncertainties are beyond the ability of the Company to control, and in many
cases, the Company cannot predict the risks and uncertainties that could cause
its actual results to differ materially from those indicated by the
forward-looking statements. When used in this press release, the words
“believes,” “plans,” “expects,” “will,” “intends,” and “anticipates” and
similar expressions as they relate to the Company or its management are
intended to identify forward-looking statements.

Interphase, the Interphase logo, and penveu are trademarks or registered
trademarks of Interphase Corporation. All other trademarks are the property of
their respective owners.

Condensed Consolidated Financial Statements


Interphase Corporation
                                                           
Condensed Consolidated Statements of Operations
(amounts in thousands, except per-share amounts)
                                                               
                                              Three Months Ended Mar. 31,
                                                2013           2012  
Revenues                                      $  3,280         $  4,014
Gross margin                                     1,270            1,849
Research and development                         830              932
Sales and marketing                              676              914
General and administrative                       888              940
Restructuring charge                            (67     )       -     
Total operating expenses                         2,327            2,786
Loss from operations                             (1,057  )        (937  )
Loss before income tax                           (1,398  )        (933  )
Net loss                                         (1,410  )        (929  )
Net loss per diluted share                    $  (0.20   )     $  (0.13 )
Weighted average common and dilutive shares      7,006            6,914


Selected Consolidated Balance Sheet Information
(amounts in thousands)
                                                 
                                    Mar. 31, 2013   Dec. 31, 2012
Cash and marketable securities      $    8,321      $    8,803
Accounts receivable, net                 2,609           2,781
Inventories                              2,072           2,219
Net property, plant and equipment        314             334
Total assets                             14,529          15,178
Total liabilities                        6,664           6,125
Total shareholders' equity          $    7,865      $    9,053

Contact:

Interphase Corporation
Media Contact:
Lisa Bascom, 214-654-5000
pr@iphase.com
or
Investor Contact:
Joseph Hassett, 866-630-INPH
ir@iphase.com