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 2008, which ended on June 30,
2008. Revenues were $17.3 million for the second quarter of 2008,
compared with $13.5 million for the second quarter of 2007 and
$14.2 million for the first quarter of 2008. Net loss, calculated
in accordance with accounting principles generally accepted in the
United States (GAAP), for the second quarter of 2008 was $760,000,
or $0.08 per share, compared with net loss for the second quarter
of 2007 of $1.9 million, or $0.16 per share, and net loss for the
first quarter of 2008 of $1.9 million, or $0.21 per share. Non-GAAP
net income for the second quarter of 2008 was $648,000, or $0.05
per diluted share, compared with non-GAAP net loss for the second
quarter of 2007 of $489,000, or $0.04 per share, and non-GAAP net
loss for the first quarter of 2008 of $603,000 or $0.07 per share.
For the second quarter of 2008, non-GAAP net loss was calculated by
excluding non-cash stock-based compensation expense of $1.1 million
and amortization of intangible assets of $328,000. For the second
quarter of 2007, non-GAAP net income was calculated by excluding
non-cash stock-based compensation expense of $1.1 million and
amortization of intangible assets of $270,000. For the first
quarter of 2008, 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. Cash, cash
equivalents and investments as of June 30, 2008 were $44.0 million,
compared with $47.4 million at March 31, 2008. �We are pleased to
have generated strong revenue gains in the second quarter,� said Ed
Keible, Endwave's CEO and President. �Our growth in quarterly
revenues was largely the result of increased demand from Nokia
Siemens Networks and increased momentum with our non-telecom
customers. Endwave�s investment in new high-frequency markets that
complement our telecom business is beginning to provide the
expected benefits as evidenced by this quarter�s strong 78%
year-over-year growth in non-telecom revenues.� 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)
262-2137 by 1:20 p.m. Pacific time. Starting approximately one hour
after the completion of the live call, a replay will also be
available until July 31. To access the recording, dial (303)
590-3000 (Pass code: 11116569 #). 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
website at 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 43 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 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. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) � � � June
30, 2008 December 31, 2007 � � Assets Current assets Cash and cash
equivalents $ 33,352 $ 38,992 Short-term investments 9,469 5,464
Accounts receivables, net 10,833 9,362 Inventories 15,130 12,434
Other current assets � 778 � 1,168 Total current assets 69,562
67,420 Long-term investments 1,222 4,501 Property and equipment,
net 3,421 2,999 Other assets 242 212 Restricted cash 625 25
Goodwill and intangible assets, net � 6,817 � 7,432 Total assets $
81,889 $ 82,589 � Liabilities and stockholders' equity Current
liabilities: Accounts payable $ 4,045 $ 3,422 Accrued warranty
2,803 2,712 Accrued compensation 2,630 2,240 Other current
liabilities � 696 � 2,251 Total current liabilities 10,174 10,625 �
Other long-term liabilities 29 116 Total stockholders' equity �
71,686 � 71,848 Total liabilities and stockholders' equity $ 81,889
$ 82,589 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except share and per share amounts) (unaudited) � � � �
� � � � Three months ended Six months ended � June 30, 2008 � June
30, 2007 June 30, 2008 � June 30, 2007 Total revenues $ 17,280 � $
13,539 � $ 31,461 � $ 28,290 � Costs and expenses: � � � � Cost of
product revenues � 11,688 � � 10,208 � � 21,731 � � 20,828 � Cost
of product revenues, amortization of intangible assets � 149 � �
137 � � 298 � � 250 � Research and development � 2,930 � � 2,709 �
� 5,772 � � 5,114 � Selling, general and administrative � 3,366 � �
3,280 � � 6,727 � � 6,479 � Amortization of intangible assets � 179
� � 133 � � 358 � � 172 � Total costs and expenses � 18,312 � �
16,467 � � 34,886 � � 32,843 � Loss from operations � (1,032 ) �
(2,928 ) � (3,425 ) � (4,553 ) Interest and other income, net � 294
� � 1,021 � � 751 � � 1,866 � Loss before provision for income
taxes $ (738 ) $ (1,907 ) $ (2,674 ) $ (2,687 ) Provision for
income taxes � 22 � � - � � 22 � � - � Net loss $ (760 ) $ (1,907 )
$ (2,696 ) $ (2,687 ) Basic and diluted net loss per share $ (0.08
) $ (0.16 ) $ (0.29 ) $ (0.23 ) Shares used in calculating basic
and diluted net loss per share � 9,187,183 � � 11,601,642 � �
9,164,682 � � 11,575,716 � 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, 2008 � June 30, 2007 June 30, 2008 � June
30, 2007 Total revenues $ 17,280 $ 13,539 � $ 31,461 � $ 28,290 �
Costs and expenses: � � � � Cost of product revenues � 11,496 �
10,018 � � 21,365 � � 20,533 � Research and development � 2,687 �
2,478 � � 5,303 � � 4,732 � Selling, general and administrative �
2,721 � 2,553 � � 5,477 � � 5,166 � Total costs and expenses �
16,904 � 15,049 � � 32,145 � � 30,431 � Income (loss) from
operations � 376 � (1,510 ) � (684 ) � (2,141 ) Interest and other
income, net � 294 � 1,021 � � 751 � � 1,866 � Income (loss) before
provision for income taxes $ 670 $ (489 ) $ 67 � $ (275 ) Provision
for income taxes � 22 � - � � 22 � � - � Net income (loss) $ 648 $
(489 ) $ 45 � $ (275 ) Basic net income (loss) per share $ 0.07 $
(0.04 ) $ 0.00 � $ (0.02 ) Diluted net income (loss) per share $
0.05 $ (0.04 ) $ 0.00 � $ (0.02 ) Shares used in calculating basic
net income (loss) per share � 9,187,183 � 11,601,642 � � 9,164,682
� � 11,575,716 � Shares used in calculating diluted net income
(loss) per share � 12,337,212 � 11,601,642 � � 12,323,661 � �
11,575,716 � � Basis of presentation: 1. Non-GAAP operating results
exclude amortization of intangible assets and non-cash stock
compensation expense. � � � � GAAP TO NON-GAAP NET INCOME (LOSS)
RECONCILIATION (in thousands) (unaudited) � � � � � � Three months
ended Six months ended � June 30, 2008 June 30, 2007 June 30, 2008
June 30, 2007 GAAP net loss $ (760 ) $ (1,907 ) $ (2,696 ) $ (2,687
) Cost of product revenues, amortization of intangible assets � 149
� � 137 � � 298 � � 250 � Cost of product revenues, stock-based
compensation expense � 192 � � 190 � � 366 � � 295 � Amortization
of intangible assets � 179 � � 133 � � 358 � � 172 � Research and
development, stock-based compensation expense � 243 � � 231 � � 469
� � 382 � Selling, general and administrative, stock-based
compensation expense � 645 � � 727 � � 1,250 � � 1,313 � Non-GAAP
net income (loss) $ 648 � $ (489 ) $ 45 � $ (275 )
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