The severe financial situation at Metalink Ltd. (Nasdaq: MTLK;TASE: MTLK) is reflected in its financial report for the third quarter of 2009, which shows the extent of the problem. The company switched to a gross loss and it has a shareholders' equity deficit.
Metalink, founded by CEO Zvi Shukhman, develops broadband communications processors for wireline and wireless networks, with a focus on n802.11 standard wireless local area network (WLAN) solutions. The company posted $529,000 revenue for the third quarter, down from $811,000 for the corresponding quarter of 2008.
The good news is that, in contrast to preceding quarters when most sales were of legacy DSL products, Metalink's discontinued product line, all third quarter revenue came from sales of its new WLAN product, which the company considers to be its future growth engine.
The less good news is that WLAN product sales are growing slowly, and third quarter revenue was 72% less than for the second quarter.
Metalink posted a gross loss of $96,000 for the third quarter, compared with a gross profit of $480,000 for the corresponding quarter. Despite cutting operating costs, the company posted an operating loss of $2.7 million for the third quarter, less than the operating loss of $3.8 million for the corresponding quarter.
Metalink's net loss rose 33% to $4 million ($0.16 per share) for the third quarter from a net loss $3 million for the corresponding quarter.
Metalink had $3.8 million in cash and cash equivalents at the end of September.
More than a year ago, Metalink hired Oppenheimer & Co. to examine the company's strategic options, including a sale of the company or finding a strategic investor.
Metalink's share closed at $0.30 on Nasdaq on Friday, giving a market cap of $7.4 million. The share fell 1% by early afternoon on the TASE today to NIS 1.19.
Published by Globes [online], Israel business news - www.globes-online.com - on November 15, 2009
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