Metalink Reports First Quarter Revenues - 95% Increase Over the Year-Ago Quarter -

Apr 30, 2001, 01:00 ET from Metalink Ltd.

    YAKUM, Israel, April 30 /PRNewswire/ -- Metalink Ltd. (Nasdaq:   MTLK) today
 reported revenues for the first quarter ended March 31, 2001.
     For the first quarter ended March 31, 2001 Metalink reported revenues of
 $8,108,000 an increase of 95% from revenues of  $4,168,000 reported for the
 first quarter ended March 31, 2000 and 10% over the $7,362,000 reported for
 the fourth quarter ended December 31, 2000.  This represents the eighth
 consecutive quarter of record revenues.
     Net income for the first quarter of 2001 was $547,000 compared to $11,000
 for the first quarter of 2000 and net income of $738,000 for the fourth
 quarter of 2000.   Earnings per share for the first quarter of 2001 were $0.03
 on a fully diluted basis compared to $0.00 for the first quarter of 2000 and
 $0.04 per share for the fourth quarter of 2000.
     Gross margin for the first quarter of 2001 was 57.8% compared to 52.2% for
 the first quarter of 2000 and 56.5% for the fourth quarter of 2000.
     Tzvi Shukhman, Metalink's Chairman and CEO said, "We continued to focus in
 the first quarter on the solid worldwide E1 HDSL market  while substantially
 increasing the number of design-wins in the potentially high-growth emerging
 G.SHDSL, HDSL2 and VDSL markets.
     We experienced a slow down in order commitments and visibility in the
 first quarter reflecting current industry conditions and general economic
 weakness. Such current industry conditions may cause a 10 to 20 percent
 reduction in revenues for the second quarter.
     However, the anticipated production ramp up of our top tier Hydra, Gryphon
 and Centaur design wins in the second half of the year is expected to
 contribute to an overall increase of 40 to 50 percent in revenues for 2001.
 Furthermore, this period presents recruiting opportunities to further
 accelerate our growth. This is reflected in our earnings per share estimates
 for the year 2001 of 6 to 12 cents."
 
     About Metalink Ltd.:
     Metalink Ltd., a fabless semiconductor company, develops and markets high
 performance DSL chip sets used by telecommunications equipment makers.
 Metalink provides network equipment vendors with DSL-based chip sets that
 solve network bandwidth access bottlenecks cost effectively. The company's top
 level algorithmic designers along with its leadership in Standards bodies
 worldwide, are establishing Metalink as a leader in the field of broadband
 access.  The company is currently broadening its scope of activities by
 developing innovative system on silicon solutions for G.SHDSL for DSLAM line
 cards and CPE IADs as well as VDSL for streaming video delivery. Metalink's
 headquarters are located at Yakum Business Park, Yakum, 60972 Israel,
 Tel: 972-9-9605555, Fax: 972-9-9605544. Metalink's U.S. headquarters and
 mixed-signal design center is located at 105 Lake Forest Way, Folsom, CA 95630
 Tel: 916/355-1580, Fax: 916/355-1585.
 
     Parts of this release contain "forward looking" information within the
 meaning of the United States securities laws that involve risks and
 uncertainties that could cause actual results to differ materially from those
 in the forward looking statements.  Potential risks and uncertainties include,
 without limitation, the growth rate or decline of the markets into which the
 company sells its products; market acceptance of and demand for the products
 of the company and those of the company's customers; unanticipated delays or
 problems in the introduction of the company's products, both current and new;
 the company's ability to introduce new products in accordance with OEM design
 requirements and design cycles; new product announcements or product
 introductions by the company and the company's competitors; availability and
 cost of manufacturing sources for the company's products; supply constraints
 for components incorporated into the company's customers' products; changes in
 the mix of sales to OEMs and distributors; incorrect forecasting of future
 revenues, expenses and or earnings; the volume of orders that are received and
 can be filled in a quarter; the rescheduling or cancellation of orders by
 customers; costs associated with protecting the company's intellectual
 property; costs associated with research and development; changes in grants
 from the Office of the Chief Scientist of the Ministry of Industry and Trade
 of the State of Israel; changes in taxes; changes in product mix; changes in
 product costs and pricing; and the possible impact of currency and interest
 rate fluctuations.
 
                                 METALINK LTD.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                                             Three months ended
                                                                   March 31,
                                                                 (Unaudited)
                                                         2001           2000
                                                       (dollars in thousands,
                                                          except share and
                                                             per share data)
 
     Revenues                                          $8,108         $4,168
 
     Cost of revenues:
     Costs and expenses                                 3,209          1,905
     Royalties to the Government of Israel                213             88
     Total cost of revenues                             3,422          1,993
 
     Gross profit                                       4,686          2,175
 
     Operating expenses:
     Gross research and development                     4,556          2,126
     Less - Royalty bearing grants                        945            695
     Research and development, net                      3,611          1,431
 
     Sales and marketing                                1,309            691
      General and administrative                          777            580
     Non-cash compensation                                133            151
     Total operating expenses                           5,830          2,853
 
     Operating loss                                   (1,144)          (678)
 
     Financial income, net:                             1,691            689
 
     Net income                                          $547            $11
 
     Earning per share:
       Basic                                            $0.03          $0.00
       Diluted                                          $0.03          $0.00
 
 
     Shares used in computing earnings per ordinary share:
       Basic                                       18,473,342     16,968,711
       Diluted                                     20,072,766     19,841,969
 
                   METALINK LTD. CONSOLIDATED BALANCE SHEETS
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                  (Unaudited)
                                                        ($ in thousands)
     ASSETS
     Current assets
     Cash and cash equivalents                         $8,484         $8,851
 
     Short-term investments                            83,882         86,268
     Trade accounts receivable                          8,861          3,782
     Other receivables                                  3,268          2,397
     Prepaid expenses                                     738            665
     Inventories                                        2,500          2,013
     Total current assets                             107,733        103,976
 
     Long-term investments                              5,002         15,344
 
     Severance pay fund                                   587            546
 
     Property and equipment
     Cost                                               9,208          7,911
     Less - Accumulated depreciation and amortization   2,946          2,511
 
                                                        6,262          5,400
                                                     $119,584       $125,266
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities
     Trade accounts payable                            $3,080         $3,631
 
     Other payables and accrued expenses                3,781          3,021
     Total current liabilities                          6,861          6,652
 
     Accrued severance pay                              1,313            982
 
     Shareholders' equity
     Ordinary shares of NIS 0.1 par value
       (Authorized - 50,000,000 shares, issued
       and outstanding - 18,953,074 and 18,832,024
       shares as of March 31, 2001 and
       December 31, 2000, respectively)                   575            574
     Additional paid-in capital                       126,354        125,861
     Deferred stock compensation                      (2,110)        (1,945)
 
     Accumulated deficit                              (5,919)        (6,466)
                                                      118,900        118,024
 
     Treasury stock, at cost: 624,500 and
       40,000 as of March 31,2001
       and December 31, 2000, respectively            (7,490)          (392)
     Total shareholders' equity                       111,410        117,632
                                                     $119,584       $125,226
 
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SOURCE Metalink Ltd.
    YAKUM, Israel, April 30 /PRNewswire/ -- Metalink Ltd. (Nasdaq:   MTLK) today
 reported revenues for the first quarter ended March 31, 2001.
     For the first quarter ended March 31, 2001 Metalink reported revenues of
 $8,108,000 an increase of 95% from revenues of  $4,168,000 reported for the
 first quarter ended March 31, 2000 and 10% over the $7,362,000 reported for
 the fourth quarter ended December 31, 2000.  This represents the eighth
 consecutive quarter of record revenues.
     Net income for the first quarter of 2001 was $547,000 compared to $11,000
 for the first quarter of 2000 and net income of $738,000 for the fourth
 quarter of 2000.   Earnings per share for the first quarter of 2001 were $0.03
 on a fully diluted basis compared to $0.00 for the first quarter of 2000 and
 $0.04 per share for the fourth quarter of 2000.
     Gross margin for the first quarter of 2001 was 57.8% compared to 52.2% for
 the first quarter of 2000 and 56.5% for the fourth quarter of 2000.
     Tzvi Shukhman, Metalink's Chairman and CEO said, "We continued to focus in
 the first quarter on the solid worldwide E1 HDSL market  while substantially
 increasing the number of design-wins in the potentially high-growth emerging
 G.SHDSL, HDSL2 and VDSL markets.
     We experienced a slow down in order commitments and visibility in the
 first quarter reflecting current industry conditions and general economic
 weakness. Such current industry conditions may cause a 10 to 20 percent
 reduction in revenues for the second quarter.
     However, the anticipated production ramp up of our top tier Hydra, Gryphon
 and Centaur design wins in the second half of the year is expected to
 contribute to an overall increase of 40 to 50 percent in revenues for 2001.
 Furthermore, this period presents recruiting opportunities to further
 accelerate our growth. This is reflected in our earnings per share estimates
 for the year 2001 of 6 to 12 cents."
 
     About Metalink Ltd.:
     Metalink Ltd., a fabless semiconductor company, develops and markets high
 performance DSL chip sets used by telecommunications equipment makers.
 Metalink provides network equipment vendors with DSL-based chip sets that
 solve network bandwidth access bottlenecks cost effectively. The company's top
 level algorithmic designers along with its leadership in Standards bodies
 worldwide, are establishing Metalink as a leader in the field of broadband
 access.  The company is currently broadening its scope of activities by
 developing innovative system on silicon solutions for G.SHDSL for DSLAM line
 cards and CPE IADs as well as VDSL for streaming video delivery. Metalink's
 headquarters are located at Yakum Business Park, Yakum, 60972 Israel,
 Tel: 972-9-9605555, Fax: 972-9-9605544. Metalink's U.S. headquarters and
 mixed-signal design center is located at 105 Lake Forest Way, Folsom, CA 95630
 Tel: 916/355-1580, Fax: 916/355-1585.
 
     Parts of this release contain "forward looking" information within the
 meaning of the United States securities laws that involve risks and
 uncertainties that could cause actual results to differ materially from those
 in the forward looking statements.  Potential risks and uncertainties include,
 without limitation, the growth rate or decline of the markets into which the
 company sells its products; market acceptance of and demand for the products
 of the company and those of the company's customers; unanticipated delays or
 problems in the introduction of the company's products, both current and new;
 the company's ability to introduce new products in accordance with OEM design
 requirements and design cycles; new product announcements or product
 introductions by the company and the company's competitors; availability and
 cost of manufacturing sources for the company's products; supply constraints
 for components incorporated into the company's customers' products; changes in
 the mix of sales to OEMs and distributors; incorrect forecasting of future
 revenues, expenses and or earnings; the volume of orders that are received and
 can be filled in a quarter; the rescheduling or cancellation of orders by
 customers; costs associated with protecting the company's intellectual
 property; costs associated with research and development; changes in grants
 from the Office of the Chief Scientist of the Ministry of Industry and Trade
 of the State of Israel; changes in taxes; changes in product mix; changes in
 product costs and pricing; and the possible impact of currency and interest
 rate fluctuations.
 
                                 METALINK LTD.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                                             Three months ended
                                                                   March 31,
                                                                 (Unaudited)
                                                         2001           2000
                                                       (dollars in thousands,
                                                          except share and
                                                             per share data)
 
     Revenues                                          $8,108         $4,168
 
     Cost of revenues:
     Costs and expenses                                 3,209          1,905
     Royalties to the Government of Israel                213             88
     Total cost of revenues                             3,422          1,993
 
     Gross profit                                       4,686          2,175
 
     Operating expenses:
     Gross research and development                     4,556          2,126
     Less - Royalty bearing grants                        945            695
     Research and development, net                      3,611          1,431
 
     Sales and marketing                                1,309            691
      General and administrative                          777            580
     Non-cash compensation                                133            151
     Total operating expenses                           5,830          2,853
 
     Operating loss                                   (1,144)          (678)
 
     Financial income, net:                             1,691            689
 
     Net income                                          $547            $11
 
     Earning per share:
       Basic                                            $0.03          $0.00
       Diluted                                          $0.03          $0.00
 
 
     Shares used in computing earnings per ordinary share:
       Basic                                       18,473,342     16,968,711
       Diluted                                     20,072,766     19,841,969
 
                   METALINK LTD. CONSOLIDATED BALANCE SHEETS
 
                                                    March 31,   December 31,
                                                         2001           2000
                                                  (Unaudited)
                                                        ($ in thousands)
     ASSETS
     Current assets
     Cash and cash equivalents                         $8,484         $8,851
 
     Short-term investments                            83,882         86,268
     Trade accounts receivable                          8,861          3,782
     Other receivables                                  3,268          2,397
     Prepaid expenses                                     738            665
     Inventories                                        2,500          2,013
     Total current assets                             107,733        103,976
 
     Long-term investments                              5,002         15,344
 
     Severance pay fund                                   587            546
 
     Property and equipment
     Cost                                               9,208          7,911
     Less - Accumulated depreciation and amortization   2,946          2,511
 
                                                        6,262          5,400
                                                     $119,584       $125,266
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities
     Trade accounts payable                            $3,080         $3,631
 
     Other payables and accrued expenses                3,781          3,021
     Total current liabilities                          6,861          6,652
 
     Accrued severance pay                              1,313            982
 
     Shareholders' equity
     Ordinary shares of NIS 0.1 par value
       (Authorized - 50,000,000 shares, issued
       and outstanding - 18,953,074 and 18,832,024
       shares as of March 31, 2001 and
       December 31, 2000, respectively)                   575            574
     Additional paid-in capital                       126,354        125,861
     Deferred stock compensation                      (2,110)        (1,945)
 
     Accumulated deficit                              (5,919)        (6,466)
                                                      118,900        118,024
 
     Treasury stock, at cost: 624,500 and
       40,000 as of March 31,2001
       and December 31, 2000, respectively            (7,490)          (392)
     Total shareholders' equity                       111,410        117,632
                                                     $119,584       $125,226
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X15615833
 
 SOURCE  Metalink Ltd.