SAN JOSE, Calif., July 24 /PRNewswire-FirstCall/ -- Endwave
Corporation (NASDAQ:ENWV), a leading provider of high frequency RF
modules for telecommunications networks, defense electronics and
homeland security systems, today reported financial results for its
second quarter of 2007, which ended on June 30, 2007. Revenues were
$13.5 million for the second quarter of 2007, compared with $16.3
million for the second quarter of 2006 and $14.8 million for the
first quarter of 2007. Net loss, calculated in accordance with
accounting principles generally accepted in the United States
(GAAP), for the second quarter of 2007 was $1.9 million, or $0.16
per share, compared with net loss for the second quarter of 2006 of
$207,000, or $0.02 per share, and net loss for the first quarter of
2007 of $780,000, or $0.07 per share. Non-GAAP net loss for the
second quarter of 2007 was $489,000, or $0.04 per share, compared
with non-GAAP net income for the second quarter of 2006 of
$915,000, or $0.07 per diluted share, and non-GAAP net income for
the first quarter of 2007 of $214,000, or $0.01 per diluted share.
For the second quarter of 2007, non-GAAP net loss was calculated by
excluding non-cash stock- based compensation expense of $1.1
million and amortization of intangible assets of $270,000. For the
second quarter of 2006, non-GAAP net income was calculated by
excluding non-cash stock-based compensation expense of $972,000 and
amortization of intangible assets of $150,000. For the first
quarter of 2007, non-GAAP net income was calculated by excluding
non-cash stock-based compensation expense of $842,000 and
amortization of intangible assets of $152,000. Cash, cash
equivalents and investments as of June 30, 2007 were $64.7 million,
compared with $66.7 million at March 31, 2007. "As expected, our
revenues from the former Siemens product lines were reduced from
prior quarters, impacting our financial performance. Though this
reduction affects our overall business in the short term, our
long-term view is quite positive given our technology base,
customer relationships and financial strength," said Ed Keible,
Endwave's President and Chief Executive Officer. "In addition to
our normal business activities during the quarter, we were able to
close our acquisition of ALC Microwave. We also entered into
settlement and registration rights agreements with the receiver of
the Wood River funds." Conference Call Endwave Corporation will
hold a conference call to discuss the Company's financial results
today at 1:30 p.m. Pacific Time. Investors are invited to
participate in the conference call by dialing 913-981-5543 (Pass
code: Endwave) by 1:20 p.m. PT on July 24. Starting approximately
one hour after the completion of the live call, a replay will also
be available until July 27. To access the recording, dial (719)
457-0820 (Pass code: 3945110). Investors are also invited to listen
to a live and/or archived webcast of Endwave's quarterly conference
call on the investor relations section of the Company's Web site.
The webcast replay will be available for 90 days. About Endwave
Endwave Corporation designs, manufactures and markets RF modules
that enable the transmission, reception and processing of
high-frequency signals in telecommunications networks, defense
electronics and homeland security systems. These RF modules include
high-frequency integrated transceivers, amplifiers, synthesizers,
oscillators, up and down converters, frequency multipliers and
microwave switch arrays. Endwave has 42 issued patents covering its
core technologies including semiconductor and proprietary circuit
designs. Endwave Corporation is headquartered in San Jose, CA, with
operations in Diamond Springs, CA; El Dorado Hills, CA; Andover,
MA; and Chiang Mai, Thailand. Additional information about the
Company can be accessed from the Company's web site at
http://www.endwave.com/. Use of Non-GAAP Financial Information To
supplement the Company's condensed consolidated financial
statements presented in accordance with GAAP, Endwave uses certain
measures of financial performance that are non-GAAP financial
measures within the meaning of Regulation G promulgated by the
Securities and Exchange Commission. These non-GAAP measures may
include gross margin, net income (loss) and net income (loss) per
share data that are adjusted from results based on GAAP to exclude
certain expenses, gains and losses. These non-GAAP measures are
provided to enhance investors' overall understanding of the
Company's current financial performance and the Company's prospects
for the future. Specifically, Endwave believes the non-GAAP
measures provide useful information to both management and
investors by excluding certain expenses that may not be indicative
of its core operating results. These measures should be considered
in addition to results prepared in accordance with GAAP, but should
not be considered a substitute for, or superior to, GAAP results.
These non-GAAP measures included in this press release have been
reconciled to the GAAP results in the attached tables. "Safe
Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: This press release and the conference call referred to
in this press release may contain forward-looking statements within
the meaning of the Federal securities laws and is subject to the
safe harbor created thereby. Any statements contained in this press
release or on the conference call that are not statements of
historical fact may be deemed to be forward-looking statements.
Words such as "plans," "intends," "expects," "believes" and similar
expressions are intended to identify these forward-looking
statements. Information contained in forward-looking statements is
based on current expectations and is subject to change. Actual
results could differ materially from the forward-looking statements
due to many factors, including the following: volatility resulting
from consolidation of key customers; our ability to achieve revenue
growth and maintain profitability; our customer and market
concentration; our suppliers' abilities to deliver raw materials to
our specifications and on time; our successful implementation of
next-generation programs, including inventory transitions; our
ability to penetrate new markets; fluctuations in our operating
results from quarter to quarter; our reliance on third-party
manufacturers and semiconductor foundries; acquiring businesses and
integrating them with our own; component, design or manufacturing
defects in our products; our dependence on key personnel; and
fluctuations in the price of our common stock. Forward-looking
statements contained in this press release and on our conference
call should be considered in light of these factors and those
factors discussed from time to time in Endwave's public reports
filed with the Securities and Exchange Commission, such as those
discussed under "Risk Factors" in Endwave's most recent Annual
Report on Form 10-K, and subsequently-filed reports on Form 10- Q.
Endwave does not undertake any obligation to update such
forward-looking statements. Contact: Mary McGowan Summit IR Group
Inc. Phone: 408-404-5401 - Financial Tables Attached - CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) June 30,
2007 December 31, 2006 Assets Current assets Cash and cash
equivalents $24,046 $26,176 Short-term investments 30,613 41,411
Accounts receivables, net 9,368 8,713 Inventories 12,707 17,127
Other current assets 942 640 Total current assets 77,676 94,067
Long-term investments 10,075 -- Property and equipment, net 2,945
2,024 Other assets 236 110 Restricted cash 25 261 Goodwill and
intangible assets, net 8,102 4,191 Total assets $99,059 $100,653
Liabilities and stockholders' equity Current liabilities: Accounts
payable $3,088 $4,280 Accrued warranty 2,804 2,928 Accrued
compensation 1,992 2,652 Other current liabilities 1,808 1,164
Total current liabilities 9,692 11,024 Other long-term liabilities
153 231 Total stockholders' equity 89,214 89,398 Total liabilities
and stockholders' equity $99,059 $100,653 CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except share and per share
amounts) (unaudited) Three months ended Six months ended June 30,
June 30, June 30, June 30, 2007 2006 2007 2006 Total revenues
$13,539 $16,326 $28,290 $30,072 Costs and expenses: Cost of product
revenues 10,208 11,434 20,828 21,430 Cost of product revenues,
amortization of intangible assets 137 111 250 224 Research and
development 2,709 2,111 5,114 4,190 Selling, general and
administrative 3,280 3,534 6,479 6,492 Amortization of intangible
assets 133 39 172 78 Total costs and expenses 16,467 17,229 32,843
32,414 Loss from operations (2,928) (903) (4,553) (2,342) Interest
and other income, net 1,021 696 1,866 957 Net loss $(1,907) $(207)
$(2,687) $(1,385) Basic and diluted net loss per share $(0.16)
$(0.02) $(0.23) $(0.12) Weighted shares used in per share
calculation 11,601,642 11,410,087 11,575,716 11,387,384 NON-GAAP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1) (in thousands,
except share and per share amounts) (unaudited) Three months ended
Six months ended June 30, June 30, June 30, June 30, 2007 2006 2007
2006 Total revenues $13,539 $16,326 $28,290 $30,072 Costs and
expenses: Cost of product revenues 10,018 11,308 20,533 21,216
Research and development 2,478 1,951 4,732 3,910 Sales, general and
administrative 2,553 2,848 5,166 5,300 Total costs and expenses
15,049 16,107 30,431 30,426 Income (loss) from operations (1,510)
219 (2,141) (354) Interest and other income, net 1,021 696 1,866
957 Net income (loss) $(489) $915 $(275) $603 Basic net income
(loss) per share $(0.04) $0.08 $(0.02) $0.05 Diluted net income
(loss) per share $(0.04) $0.07 $(0.02) $0.05 Weighted average
shares used in basic per share calculation 11,601,642 11,410,087
11,575,716 11,387,384 Weighted average shares used in diluted per
share calculation 11,601,642 14,048,008 11,575,716 12,859,352 Basis
of presentation: (1) Non-GAAP operating results exclude
amortization of intangible assets and non-cash stock compensation
expense. GAAP TO NON-GAAP NET LOSS RECONCILIATION (in thousands)
(unaudited) Three months ended Six months ended June 30, June 30,
June 30, June 30, 2007 2006 2007 2006 GAAP net income (loss)
$(1,907) $(207) $(2,687) $(1,385) Cost of product revenues,
amortization of intangible assets 137 111 250 224 Cost of product
revenues, stock-based compensation expense 190 126 295 214
Amortization of intangible assets 133 39 172 78 Research and
development, stock-based compensation expense 231 160 382 280
Selling, general and administrative, stock-based compensation
expense 727 686 1,313 1,192 Non-GAAP net income (loss) $(489) $915
$(275) $603 DATASOURCE: Endwave Corporation CONTACT: Mary McGowan
of Summit IR Group Inc., +1-408-404-5401, , for Endwave Corporation
Web site: http://www.endwave.com/
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