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 first quarter of 2008, which ended on March 31,
2008. Revenues were $14.2 million for the first quarter of 2008,
compared with $14.8 million for the first quarter of 2007 and $14.4
million for the fourth quarter of 2007. Net loss, calculated in
accordance with accounting principles generally accepted in the
United States (GAAP), for the first quarter of 2008 was $1.9
million, or $0.21 per share, compared with net loss for the first
quarter of 2007 of $780,000, or $0.07 per share, and net loss for
the fourth quarter of 2007 of $1.1 million, or $0.09 per share.
Non-GAAP net loss for the first quarter of 2008 was $603,000, or
$0.07 per share, compared with non-GAAP net income for the first
quarter of 2007 of $214,000, or $0.01 per diluted share, and
non-GAAP net income for the fourth quarter of 2007 of $282,000, or
$0.02 per diluted share. For the first quarter of 2008, non-GAAP
net loss was calculated by excluding non-cash stock-based
compensation expense of $1.0 million and amortization of intangible
assets of $328,000. 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. 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. Cash, cash equivalents and investments as of
March 31, 2008 were $47.4 million, compared with $49.0 million at
December 31, 2007. "We are pleased to have exceeded our revenue
expectations by over 15% for the first quarter, which is often a
seasonally slower quarter for us. This performance reflects higher
than anticipated demand from Nokia Siemens Networks as well as
continued strength in our defense electronics and homeland security
business,� said Ed Keible, Endwave's CEO and President. �This early
strength in 2008 gives us added confidence for the remainder of the
year.� 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 April 29. To access the
recording, dial (303) 590-3000 (Pass code: 11111495 #). 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 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 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. �
Financial Tables Attached � CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited) � � � March 31, 2008 � December 31, 2007
Assets � Current assets Cash and cash equivalents $ 40,932 $ 38,992
Short-term investments 4,995 5,464 Accounts receivables, net 11,158
9,362 Inventories 12,473 12,434 Other current assets � 862 � �
1,168 Total current assets 70,420 67,420 Long-term investments
1,499 4,501 Property and equipment, net 3,171 2,999 Other assets
195 212 Restricted cash 25 25 Goodwill and intangible assets, net �
7,104 � � 7,432 Total assets $ 82,414 � $ 82,589 � Liabilities and
stockholders' equity Current liabilities: Accounts payable $ 4,068
$ 3,422 Accrued warranty 2,794 2,712 Accrued compensation 2,547
2,240 Other current liabilities � 1,967 � � 2,251 Total current
liabilities 11,376 10,625 � Other long-term liabilities 72 116
Total stockholders' equity � 70,966 � � 71,848 Total liabilities
and stockholders' equity $ 82,414 � $ 82,589 CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except share and per share
amounts) (unaudited) � � � Three months ended � March 31, 2008 �
March 31, 2007 Total revenues $ 14,181 � � $ 14,751 � Costs and
expenses: � � � Cost of product revenues � 10,043 � � � 10,620 �
Cost of product revenues, amortization of intangible assets � 149 �
� � 113 � Research and development � 2,842 � � � 2,405 � Selling,
general and administrative � 3,361 � � � 3,199 � Amortization of
intangible assets � 179 � � � 39 � Total costs and expenses �
16,574 � � � 16,376 � Loss from operations � (2,393 ) � � (1,625 )
Interest and other income, net � 457 � � � 845 � Net loss $ (1,936
) � $ (780 ) Basic and diluted net loss per share $ (0.21 ) � $
(0.07 ) Shares used in calculating basic and diluted net loss per
share � 9,142,180 � � � 11,549,789 � NON-GAAP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (1) (in thousands, except
share and per share amounts) (unaudited) � � � Three months ended �
March 31, 2008 � March 31, 2007 Total revenues $ 14,181 � � $
14,751 � Costs and expenses: � � � Cost of product revenues � 9,869
� � � 10,515 � Research and development � 2,616 � � � 2,254 �
Selling, general and administrative � 2,756 � � � 2,613 � Total
costs and expenses � 15,241 � � � 15,382 � Loss from operations �
(1,060 ) � � (631 ) Interest and other income, net � 457 � � � 845
� Net income (loss) $ (603 ) � $ 214 � Basic net income (loss) per
share $ (0.07 ) � $ 0.02 � Diluted net income (loss) per share $
(0.07 ) � $ 0.01 � Shares used in calculating basic net income
(loss) per share � 9,142,180 � � � 11,549,789 � Shares used in
calculating diluted net income (loss) per share � 9,142,180 � � �
14,832,462 � � 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
� March 31, 2008 � March 31, 2007 GAAP net loss $ (1,936 ) � $ (780
) Cost of product revenues, amortization of intangible assets � 149
� � � 113 � Cost of product revenues, stock-based compensation
expense � 174 � � � 105 � Amortization of intangible assets � 179 �
� � 39 � Research and development, stock-based compensation expense
� 226 � � � 151 � Selling, general and administrative, stock-based
compensation expense � 605 � � � 586 � Non-GAAP net income (loss) $
(603 ) � $ 214 �
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