LANOPTICS LTD.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2007 JUNE 30, 2007 SEPTEMBER 30, 2006 SEPTEMBER 30, 2007 SEPTEMBER 30, 2006
----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Revenues $ 5,240 $ 5,240 $ 4,608 $ 4,608 $ 2,074 $ 2,074 $ 13,753 $ 13,753 $ 5,086 $ 5,086
Cost of revenues 2,048 2,011 1,918 1,891 851 819 5,634 5,506 2,240 2,163
Amortization of technology 234 -- 258 -- 86 -- 990 -- 258 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Gross profit 2,958 3,229 2,432 2,717 1,137 1,255 7,129 8,247 2,588 2,923
56.5% 61.6% 52.8% 59.0% 54.8% 60.5% 51.8% 60.0% 50.9% 57.5%
Operating expenses:
Research and development, net 1,945 1,846 2,630 1,768 2,093 1,988 6,272 5,202 6,371 6,109
In-process research and
development charge 396 -- -- -- -- -- 396 -- -- --
Selling, general and
administrative 1,470 1,137 1,865 1,174 1,035 969 4,532 3,421 3,122 2,990
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total operating expenses 3,811 2,983 4,495 2,942 3,128 2,957 11,200 8,623 9,493 9,099
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Operating income (loss) (853) 246 (2,063) (225) (1,991) (1,702) (4,071) (376) (6,905) (6,176)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Financial and other income
(expenses), net 68 139 35 98 (145) 114 131 326 (324) 432
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Income (loss) before minority
interest (785) 385 (2,028) (127) (2,136) (1,588) (3,940) (50) (7,229) (5,744)
Minority interest in loss of
EZchip 17 -- 391 -- -- -- 428 -- 12 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net income (loss) $ (768) $ 385 $ (1,637) $ (127) $ (2,136) $ (1,588) $ (3,512) $ (50) $ (7,217) $ (5,744)
============ ============ ============ ============ ============ ============ ============ ============ ============ ============
Net income (loss) per share $ (0.05) $ 0.02 $ (0.10) $ (0.01) $ (0.18) $ (0.14) $ (0.22) $ (0.00) $ (0.62) $ (0.49)
Weighted average number of shares
used in per share calculation 16,301,375 16,301,375 15,780,583 15,780,583 11,650,021 11,650,021 15,932,795 15,932,795 11,644,723 11,644,723
Non-GAAP net income (loss) $ 385 $ (127) $ (1,588) $ (50) $ (5,744)
------------ ------------ ------------ ------------ ------------
Reconciliation items:
Stock-based compensation (430) (1,556) (171) (2,179) (395)
Amortization of intangible assets
and discount on long-term loan (344) (345) (118) (1,315) (334)
In-process research and development
charge (396) -- -- (396) --
Minority interest in loss of EZchip* 17 391 -- 428 12
Accretion to redemption value of
redeemable preferred shares in EZchip ** -- -- (259) -- (756)
------------ ------------ ------------ ------------ ------------
GAAP net loss $ (768) $ (1,637) $ (2,136) $ (3,512) $ (7,217)
============ ============ ============ ============ ============
* Excluded from Non-GAAP measures since the minority interest primarily relates
to EZchip losses accumulated in prior periods
** As of January 1, 2007 the Company stopped the accretion to redemption value
since the redemption right became within the control of the Company.
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LANOPTICS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. DOLLARS IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
2007 2006
--------- ---------
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and marketable securities $ 47,464 $ 17,658
Trade receivables, net 3,566 1,706
Other receivables 672 683
Inventories 3,662 3,489
--------- ---------
Total current assets 55,364 23,536
LONG-TERM INVESTMENTS:
Prepaid development and production costs, net 186 290
Severance pay fund 2,390 1,951
--------- ---------
Total long-term investments 2,576 2,241
PROPERTY AND EQUIPMENT, NET 416 352
Goodwill 49,519 36,531
Intangible assets, net 2,968 3,633
--------- ---------
TOTAL ASSETS $ 110,843 $ 66,293
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 618 $ 1,017
Other payables and accrued expenses 5,203 3,092
--------- ---------
Total current liabilities 5,821 4,109
LONG TERM LIABILITIES:
Accrued severance pay 2,998 2,464
Long-term loan 3,531 3,337
--------- ---------
Total long-term liabilities 6,529 5,801
EMPLOYEE STOCK OPTIONS IN EZchip 1,959 557
PREFERRED SHARES IN EZchip 23,770 23,770
SHAREHOLDERS' EQUITY:
Share capital 106 93
Additional paid-in capital 162,136 117,716
Accumulated other comprehensive loss (10) (19)
Accumulated deficit (89,468) (85,734)
--------- ---------
Total shareholders' equity 72,764 32,056
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 110,843 $ 66,293
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