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August 19, 2010

Despite Session Border Controller Sales, Veraz Networks Reports Decrease in Revenue

By Anil Sharma, TMCnet Contributor

Veraz Networks, Inc., a provider of Multimedia Generation Network (MGN) application, control, and bandwidth optimization products, has reported decrease in revenues in second quarter ended June 30.

One of the company’s best-selling products, its network-adaptive session border controller, has been bringing i nearnings – but not enough to keep revenues level.

As per the financial results for the second quarter, the company’s revenues touched $14.7 million, a 9 percent decrease over the preceding quarter and a 13 percent decrease over the second quarter of 2009.

"We began to see significant traction in Q2 with our session border controller product. While we are encouraged by the market response to this new product, we saw lower than anticipated overall revenues for Q2, largely driven by restrictions in shipping already accepted orders in India -- an issue that is being experienced by many of the technology companies selling into Indian carriers," said Doug Sabella, CEO of Veraz Networks (News - Alert), in a statement.

Sabella said that the impact of the Indian restrictions amounted to $1.5M for Q2.

He pointed out that the company’s order backlog however remains at a near all time high, and the company is confident that the announced plans to merge with Dialogic will give the company the size and scale needed to remain a true mission critical supplier to the customers.

Officials with Veraz Networks while giving details of financial results said that cash used in operating activities was $(0.4 million) and at the end of the second quarter 2010, the company had cash, cash equivalents, restricted cash and short-term investments of $30.6 million and no debt.

Gross margin was 57 percent, as compared to 56 percent for the preceding quarter and 54 percent for the second quarter of 2009.

Operating expenses were $14.0 million, flat as compared to the preceding quarter and an 8 percent increase over the second quarter of 2009.

Company officials said that net loss was $(6.2 million) or $(0.14) loss per share, as compared to a $(5.2 million) or $(0.12) loss per share in the preceding quarter and a $(2.9 million) or $(0.07) loss per share reported in the second quarter of 2009.

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