SAN JOSE, Calif., Feb. 5 /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
fourth quarter and full year of 2007, which ended on December 31,
2007. Revenues were $14.4 million for the fourth quarter of 2007,
compared with $13.3 million for the fourth quarter of 2006 and
$13.8 million for the third quarter of 2007. Net loss, calculated
in accordance with accounting principles generally accepted in the
United States (GAAP), for the fourth quarter of 2007 was $1.1
million, or $0.09 per share, compared with net loss for the fourth
quarter of 2006 of $870,000, or $0.08 per share, and net loss for
the third quarter of 2007 of $1.7 million, or $0.14 per share.
Non-GAAP net income for the fourth quarter of 2007 was $282,000, or
$0.02 per diluted share, compared with non-GAAP net income for the
fourth quarter of 2006 of $229,000, or $0.02 per diluted share, and
non-GAAP net loss for the third quarter of 2007 of $215,000, or
$0.02 per share. For the fourth quarter of 2007, non-GAAP net
income was calculated by excluding non-cash stock-based
compensation expense of $1.0 million and amortization of intangible
assets of $328,000. For the fourth quarter of 2006, non-GAAP net
income was calculated by excluding non-cash stock-based
compensation expense of $748,000, the expensing of $200,000 of
capitalized transaction costs and amortization of intangible assets
of $151,000. For the third 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 $329,000.
Cash, cash equivalents and investments as of December 31, 2007 were
$49.0 million, compared with $65.4 million at September 30, 2007,
reflecting cash used by Endwave to repurchase 2,502,247 of its
shares from the Wood River Funds on December 24, 2007, partially
offset by cash generated from operations. "As previously announced,
we are pleased to have exceeded our revenue expectations for the
fourth quarter, largely as a result of higher-than-anticipated
revenues from Nokia Siemens Networks. We believe this renewed
strength indicates that the impact of the merger of our two largest
customers is normalizing," said Ed Keible, Endwave's CEO and
President. "Furthermore, our non-telecom revenues grew 18%
sequentially during the fourth quarter. Our improved year-end
revenue performance gives us added confidence in our expectations
for meaningful revenue growth in 2008." Full Year 2007 Results For
the full year, total revenues were $56.5 million, compared with
$62.2 million for 2006. For 2007, revenues attributable to
customers in telecom markets were $44.3 million and revenues
attributable to customers in defense electronics, homeland security
and other non-telecom markets were $12.2 million. GAAP net loss for
the year ended December 31, 2007 was $5.4 million, or $0.47 per
share, compared with GAAP net loss for 2006 of $1.3 million, or
$0.12 per share. Non-GAAP net loss for the year ended December 31,
2007 was $208,000, or $0.02 per share, compared with a non-GAAP net
income for the year ended December 31, 2006 of $2.9 million, or
$0.21 per diluted share. For 2007, non-GAAP net income was
calculated by excluding non-cash stock-based compensation expense
of $4.1 million and amortization of intangible assets of $1.1
million. In December, Endwave acquired and retired 2,502,247 shares
of its common stock from the Wood River funds. In a separate
transaction, the Wood River funds sold an additional 1.6 million
shares of Endwave common stock to institutional investors. As a
result of these two transactions, the Wood River funds no longer
hold any Endwave shares. Reflecting the retirement of these shares,
the total number of Endwave shares outstanding at year end were
12.1 million, including 3 million shares on an "as if" converted
basis from the preferred stock held by Oak Investment Partners.
Because the number of basic and diluted shares outstanding for
financial statement purposes is calculated on a weighted-average
basis, the impact of the repurchase on net income (loss) per share
will be fully reflected for the first time in Endwave's financial
statements for the first quarter of 2008. Conference Call Endwave
Corporation will hold a conference call to discuss its financial
results today at 1:30 p.m. Pacific Time. Investors are invited to
participate in the conference call by dialing (303) 262-2131 by
1:20 p.m. PT. Starting approximately one hour after the completion
of the live call, a replay will also be available until February
12. To access the recording, dial (303) 590-3000 (Pass code:
11106008). 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 at
http://www.endwave.com/. 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 Endwave can be accessed from
its web site at http://www.endwave.com/. Use of Non-GAAP Financial
Information To supplement Endwave'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
Endwave's current financial performance and Endwave'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. (408) 404-5401 CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) (unaudited) December 31, 2007 December 31, 2006 Assets
Current assets Cash and cash equivalents $38,992 $26,176 Short-term
investments 5,464 41,411 Accounts receivables, net 9,362 8,713
Inventories 12,434 17,127 Other current assets 1,168 640 Total
current assets 67,420 94,067 Long-term investments 4,501 - Property
and equipment, net 2,999 2,024 Other assets 212 110 Restricted cash
25 261 Goodwill and intangible assets, net 7,432 4,191 Total assets
$82,589 $100,653 Liabilities and stockholders' equity Current
liabilities: Accounts payable $3,422 $4,280 Accrued warranty 2,712
2,928 Accrued compensation 2,240 2,652 Other current liabilities
2,251 1,164 Total current liabilities 10,625 11,024 Other long-term
liabilities 116 231 Total stockholders' equity 71,848 89,398 Total
liabilities and stockholders' equity $82,589 $100,653 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share
and per share amounts) (unaudited) Three months ended Twelve months
ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2007 2006 2007 2006 Total
revenues $14,392 $13,318 $56,476 $62,226 Costs and expenses: Cost
of product revenues 10,448 9,526 41,216 43,771 Cost of product
revenues, amortization of intangible assets 149 112 548 449
Research and development 2,801 2,277 10,707 8,856 Selling, general
and administrative 2,754 2,844 12,463 12,689 Transaction costs -
200 - 200 Amortization of intangible assets 179 39 531 156 Total
costs and expenses 16,331 14,998 65,465 66,121 Loss from operations
(1,939) (1,680) (8,989) (3,895) Interest and other income, net 882
907 3,590 2,648 Loss before provision for income taxes $(1,057)
$(773) $(5,399) $(1,247) Provision for income taxes 2 97 2 97 Net
loss $(1,059) $(870) $(5,401) $(1,344) Basic and diluted net loss
per share $(0.09) $(0.08) $(0.47) $(0.12) Shares used in
calculating basic and diluted net loss per share 11,484,687
11,508,255 11,563,716 11,429,860 NON-GAAP CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (1) (in thousands, except share and per
share amounts) (unaudited) Three months ended Twelve months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2007 2006 2007 2006 Total
revenues $14,392 $13,318 $56,476 $62,226 Costs and expenses: Cost
of product revenues 10,282 9,425 40,555 43,336 Research and
development 2,568 2,146 9,862 8,316 Selling, general and
administrative 2,140 2,328 9,855 10,352 Total costs and expenses
14,990 13,899 60,272 62,004 Income (loss) from operations (598)
(581) (3,796) 222 Interest and other income, net 882 907 3,590
2,732 Income (loss) before provision for income taxes $284 $326
$(206) $2,954 Provision for income taxes 2 97 2 97 Net income
(loss) $282 $229 $(208) $2,857 Basic net income (loss) per share
$0.02 $0.02 $(0.02) $0.25 Diluted net income (loss) per share $0.02
$0.02 $(0.02) $0.21 Shares used in calculating basic net income
(loss) per share 11,484,687 11,508,255 11,563,716 11,429,860 Shares
used in calculating diluted net income (loss) per share 14,634,551
14,804,635 11,563,716 13,837,555 Basis of presentation: 1. Non-GAAP
operating results exclude amortization of intangible assets, loss
on sale of assets, transaction costs and non-cash stock
compensation expense. GAAP TO NON-GAAP NET LOSS RECONCILIATION (in
thousands) (unaudited) Three months Twelve months ended ended Dec.
31, Dec. 31, Dec. 31, Dec. 31, 2007 2006 2007 2006 GAAP net loss
$(1,059) $(870) $(5,401) $(1,344) Cost of product revenues,
amortization of intangible assets 149 112 548 449 Cost of product
revenues, stock-based compensation expense 166 101 661 435
Amortization of intangible assets 179 39 531 156 Research and
development, stock-based compensation expense 233 131 845 540
Selling, general and administrative, stock-based compensation
expense 614 516 2,608 2,337 Transaction costs - 200 - 200 Loss on
sale of assets - - - 84 Non-GAAP net income (loss) $282 $229 $(208)
$2,857 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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