Catapult Communications Reports Third Quarter Fiscal Year 2008 Results

Catapult Communications Corporation (NASDAQ: CATT) today reported that revenues for its third fiscal quarter ended June 30, 2008 were $8.5 million, substantially unchanged from revenues in the same quarter of the prior year. After non-cash, pre-tax stock option expenses of $475,000, the Company reported a net loss for the quarter of $1.0 million or $0.08 per share compared to a net loss of $2.3 million or $0.17 cents per share for the third quarter of fiscal 2007.

During the third fiscal quarter, Catapult repurchased approximately 379,000 shares at a total cost of $2.8 million, and the Company's total cash, cash equivalent and investment position decreased by $2.6 million to $54.6 million. The Company generated $1.8 million in cash flow from operations in the third fiscal quarter and invested $1.7 million in capitalized software development expenses.

"Our net loss was significantly less year over year, largely due to the cost cutting measures we took in the second quarter," noted Dr. Richard A. Karp, Catapult's Chairman and CEO. "We are focused on test systems and applications for LTE, which is clearly emerging as the next major cycle of investment in mobile telephony."

Catapult Communications will be discussing its third quarter results on a conference call today, beginning at 5:15 p.m. Eastern/2:15 p.m. Pacific. Please dial (866) 700-7441 or (617) 213-8839 and provide conference ID# 53015368 to access the call. The conference call will also be broadcast from www.catapult.com.

A replay of this teleconference will be available on the Company's website for one year following the conference call. A digital recording will be provided by telephone two hours after the completion of the conference call through midnight on July 31, 2008. To access the replay, please dial (888) 286-8010 or (617) 801-6888 and enter conference ID# 45124863.

About Catapult Communications

Catapult Communications is a leading supplier of advanced digital telecom test systems to global equipment manufacturers and service providers, including Alcatel-Lucent, Ericsson, Motorola, NEC, NTT DoCoMo, Nortel and Nokia Siemens Networks. The Catapult DCT2000® and MGTS® systems deliver superior high-end test solutions for hundreds of protocols and variants -- spanning LTE, IMS, WiMAX, mobile telephony, VoIP, GPRS, SS7, Intelligent Network, ATM and ISDN. The Company is committed to providing testing tools that are at the forefront of the telecom technology curve.

Catapult is headquartered at 160 South Whisman Road, Mountain View, CA 94041. Tel: 650-960-1025. International offices are located in the United Kingdom, Ireland, Germany, France, Finland, Sweden, Canada, Japan, China, India and the Philippines. Information about Catapult Communications can be found on the Web at www.catapult.com.

                    Catapult Communications Corporation
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)
                                (Unaudited)


                                                 June 30,     September 30,
                                                   2008           2007
                                              -------------- --------------

         ASSETS

Current Assets:
  Cash, cash equivalents and short-term
   investments                                $       48,478 $       62,242
  Accounts receivable, net                             7,350          7,015
  Inventories                                          2,276          2,485
  Other current assets                                 2,237          1,863
                                              -------------- --------------
      Total current assets                            60,341         73,605

Long-term investments                                  6,125              -
Property and equipment, net                            1,198          1,585
Goodwill and other intangibles                        49,483         49,537
Other assets                                           3,902          2,243
                                              -------------- --------------
      Total assets                            $      121,049 $      126,970
                                              ============== ==============


      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued liabilities    $        5,288 $        5,573
  Deferred revenue                                     7,874          6,206
                                              -------------- --------------
      Total current liabilities                       13,162         11,779

Deferred revenue, long-term                              146            406
Deferred taxes and other liabilities,
 long-term                                             4,863          3,009
                                              -------------- --------------

      Total liabilities                               18,171         15,194
                                              -------------- --------------

      Total stockholders' equity                     102,878        111,776
                                              -------------- --------------

      Total liabilities and stockholders'
       equity                                 $      121,049 $      126,970
                                              ============== ==============



                    Catapult Communications Corporation
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)
                                (Unaudited)

                             For the three months    For the nine months
                                ended June 30,          ended June 30,
                               2008        2007        2008        2007
                            ----------  ----------  ----------  ----------

Revenues:
  Products                  $    5,468  $    4,839  $   19,163  $   17,464
  Services                       3,046       3,636       9,587      11,171
                            ----------  ----------  ----------  ----------
    Total revenues               8,514       8,475      28,750      28,635
                            ----------  ----------  ----------  ----------

Cost of revenues:
  Products                         999       1,400       3,472       3,818
  Services                         484         765       2,034       2,367
  Amortization of
   purchased technology             12          13          36          37
                            ----------  ----------  ----------  ----------
    Total cost of revenues       1,495       2,178       5,542       6,222
                            ----------  ----------  ----------  ----------

Gross profit                     7,019       6,297      23,208      22,413
                            ----------  ----------  ----------  ----------

Operating expenses:
  Research and development       2,060       3,463       9,079       9,748
  Sales and marketing            4,012       4,177      12,598      12,409
  General and
   administrative                1,812       2,281       6,090       6,759
  Restructuring costs                -           -       2,197           -
                            ----------  ----------  ----------  ----------
    Total operating expenses     7,884       9,921      29,964      28,916
                            ----------  ----------  ----------  ----------

Operating loss                    (865)     (3,624)     (6,756)     (6,503)

Interest income                    358         825       1,694       2,472
Other income (expense), net       (163)        (81)        202       1,747
                            ----------  ----------  ----------  ----------

Loss before income taxes          (670)     (2,880)     (4,860)     (2,284)

Provision for (benefit
 from) income taxes                345        (541)        676         435
                            ----------  ----------  ----------  ----------
Net loss                    $   (1,015) $   (2,339) $   (5,536) $   (2,719)
                            ==========  ==========  ==========  ==========

Net loss
  Basic                     $    (0.08) $    (0.17) $    (0.42) $    (0.19)
                            ==========  ==========  ==========  ==========
  Diluted                   $    (0.08) $    (0.17) $    (0.42) $    (0.19)
                            ==========  ==========  ==========  ==========

Shares used in per share
 calculation:
  Basic                         12,867      13,739      13,120      13,938
                            ==========  ==========  ==========  ==========
  Diluted                       12,867      13,739      13,120      13,938
                            ==========  ==========  ==========  ==========