Exhibit 99.1
Endwave Reports Third Quarter 2004 Financial Results
Endwave Meets Guidance and Generates Over $400,000 in Cash from Operations
SUNNYVALE, Calif., Nov. 2 /PRNewswire-FirstCall/ -- Endwave Corporation
(Nasdaq: ENWV), a leading provider of radio frequency (RF) subsystems for
carrier-class cellular backhaul infrastructure, broadband wireless networks,
homeland security and defense systems, today reported financial results for
its third quarter ended September 30, 2004.
Endwave reported revenues of $7.6 million for the third quarter of 2004,
compared with revenues of $7.6 million for the second quarter of 2004 and $8.2
million for the third quarter of 2003. Cash, cash equivalents and short-term
investments as of September 30, 2004 decreased by $5.0 million, primarily as a
result of the acquisition of JCA Technology for $5.9 million in cash, to $26.6
million, from a balance of $31.6 million at June 30, 2004.
Net loss for the third quarter of 2004 was $2.0 million, or $0.21 per
share, compared with net loss for the second quarter of 2004 of $429,000, or
$0.04 per share, and a net loss for the third quarter of 2003 of $735,000, or
$0.08 per share. Pro forma net loss for the third quarter of 2004 was $1.2
million, or $0.12 per share, compared with pro forma net loss for the second
quarter of 2004 of $344,000, or $0.04 per share, and a pro forma net loss for
the third quarter of 2003 of $85,000, or $0.01 per share.
For the third quarter of 2004, pro forma net loss was calculated by
excluding the amortization of intangible assets of $148,000, a write-off of
in-process research and development of $320,000, a write-off for the
impairment of long lived assets of $389,000, and a restructuring benefit of
$4,000. For the second quarter of 2004, pro forma net loss was calculated by
excluding the amortization of deferred stock compensation charge of $85,000.
For the third quarter of 2003, pro forma net loss was calculated by excluding
a restructuring charge of $490,000, impairment of long lived assets of
$139,000, and the amortization of deferred stock compensation charge of
$21,000. Management believes that excluding the items described above may
permit investors to better compare results from period to period and more
accurately assess the company's prospects.
"We met our revenue guidance during this seasonally slow third quarter,
and generated over $400,000 in cash flow from operating activities with higher
than forecasted gross margin," said Ed Keible, Endwave's CEO and President.
"For the fourth quarter, Endwave is pleased to project $10 to $12 million in
revenues based on growth in all of our markets. Additionally, multiple new
product introductions in the fourth quarter are expected to generate
significant increases in 2005 sales," added Keible.
Endwave Third Quarter 2004 Summary:
-- Revenues were $7.6 million, level with second quarter 2004 revenues.
-- Revenues attributable to sales to customers in defense, homeland
security, and other non-telecom markets comprised 20% of total
revenues, or $1.5 million, for the third quarter of 2004.
-- Shipped products to approximately 100 customers during the quarter.
Our largest customers for the quarter were Nokia, Powerwave
(formerly Allgon), Nera, and Stratex Networks.
-- Gross margin was 29% in the third quarter, exceeding our guidance of
24% to 26%.
-- Acquired JCA Technology for $5.9 million in cash in July 2004, and
transitioned JCA manufacturing operations to our facility in Diamond
Springs, California.
-- Received qualification approval on prototype deliveries of
integrated transceivers to a major European wireless telecom OEM for
use in their next-generation PDH radios.
-- Secured an early production contract for the RF Switching Network in
SafeView's Security Screening Checkpoint System, and began the
production transition to our offshore manufacturing partner.
-- Announced the execution of a purchase order for the production of
millimeter-wave receiver modules in support of next-generation
atmospheric monitoring system.
-- Delivered initial hardware to an E-Band radio customer for use in
Gigabit Ethernet bridges.
-- Successfully completed prototype testing an integrated transceiver
designed with Epsilon(TM) packaging technology.
Endwave will hold its regularly scheduled third quarter earnings call
today at 1:30 p.m. Pacific Time, which will be available via web cast by
logging on to the investor relations section of our website at
http://www.endwave.com/investors . The web cast replay will be available
online after the earnings call at approximately 2:30 p.m. Pacific Standard
Time, and will continue to remain available for 90 calendar days after the
call. An audio telephone replay of the conference call will also be available
approximately one hour following the conclusion of the call, and will continue
to be available for five calendar days by dialing 888-203-1112 (domestically)
or 719-457-0820 (internationally), and entering the confirmation code 981512.
About Endwave
Endwave Corporation develops and manufactures radio frequency (RF)
subsystems for use in high-speed cellular backhaul networks, enterprise
access, homeland security, defense electronics, commercial radar systems, and
other broadband applications. These products include integrated transceivers,
outdoor units, oscillators/synthesizers, high-power cellular switch-combiners,
and RF modules (amplifiers, frequency multipliers, switches, and up/down-
converters). Endwave has more than 35 issued patents covering its core
technologies including semiconductor and proprietary circuit designs. Endwave
Corporation is headquartered in Sunnyvale, CA, with operations in Diamond
Springs, CA; Andover, MA; and Lamphun, Thailand. Additional information about
the company can be accessed from the company's web site at
http://www.endwave.com .
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995:
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. These statements include, but are not limited to, statements
regarding forecasted future financial results. Actual results could differ
materially from the forward-looking statements due to many factors, including
the following: the risks that the integration of acquired business lines,
products and subsidiaries will fail, products will fail to achieve market
acceptance, the timing or existence of customer orders, market volatility and
weakness, customer concentration, delays in the design process, production
delays or cancellations due to product defects or defects in materials
supplied by vendors, the length of our sales cycle, our ability to develop,
introduce and market new products and product enhancements, changes in product
mix or distribution channels; the demand for wireless networking products and
end-user products that incorporate wireless technology; competitive
technologies; and, technological difficulties and resource constraints
encountered in developing, transitioning and/or introducing new products.
Forward-looking statements contained in this press release 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 report on Form 10-K and subsequently filed reports on Form 10-Q.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, December 31,
2004 2003
Assets
Current assets
Cash and cash equivalents $15,629 $13,408
Restricted cash -- 778
Short-term investments 10,984 15,890
Accounts receivables, net 5,458 6,581
Inventories, net 7,625 8,119
Other current assets 292 898
Total current assets 39,988 45,674
Property and equipment, net 2,661 7,260
Other assets, net 125 140
Goodwill and other intangible assets, net 5,843
Total assets $48,617 $53,074
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 2,132 3,088
Warranty accrual 5,031 5,835
Accrued compensation 1,733 1,139
Other accrued liabilities 1,275 1,090
Current portion of notes payable -- 516
Total current liabilities 10,171 11,668
Notes payable, less current portion -- 262
Other long-term liabilities 618 101
Total stockholders' equity 37,828 41,043
Total liabilities and stockholders' equity $48,617 $53,074
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Total revenues $7,594 $8,204 $21,787 $24,331
Costs and expenses:
Cost of product revenues 5,407 5,898 14,635 19,090
Cost of product revenues,
amortization of intangible assets 75 -- 75 --
Research and development 1,395 1,097 3,452 3,643
Selling, general and
administrative 2,204 1,556 5,738 6,788
In-process research and
development 320 -- 320 --
Amortization of intangible assets 73 -- 73 --
Restructuring charges, net (4) 490 2,895 490
Loss (recovery) on building
sublease -- -- (359) 662
Impairment of long lived
assets and other 389 139 389 2,548
Amortization of deferred stock
compensation -- 21 204 617
Total costs and expenses 9,859 9,201 27,422 33,838
Loss from operations (2,265) (997) (5,635) (9,507)
Interest and other, net 231 262 993 404
Net loss $(2,034) $(735) $(4,642) $(9,103)
Basic and diluted net loss per
share $(0.21) $(0.08) $(0.48) $(1.00)
Weighted shares used in per-
share calculation 9,897,077 9,179,749 9,674,842 9,084,222
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in thousands, except share and per share amounts)
(Unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Total revenues $7,594 $8,204 $21,787 $24,331
Costs and expenses:
Cost of product revenues 5,407 5,898 14,635 19,090
Research and development 1,395 1,097 3,452 3,643
Sales, general and
administrative 2,204 1,556 5,738 6,788
Total costs and expenses 9,006 8,551 23,825 29,521
Loss from operations (1,412) (347) (2,038) (5,190)
Interest and other, net 231 262 888 404
Net income (loss) $(1,181) $(85) $(1,150) $(4,786)
Basic net income (loss) per
share $(0.12) $(0.01) $(0.12) $(0.53)
Weighted shares used in basic
per-share calculation 9,897,077 9,179,749 9,674,842 9,084,222
Basis of presentation:
1. Pro forma operating results exclude restructuring charges, loss
(recovery) on building sublease, impairment of long lived assets and
other, amortization of deferred stock compensation, gain on sale of
land and amortization of intangible assets.
ACTUAL TO PRO FORMA NET LOSS RECONCILIATION
(in thousands)
(unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Net loss actual $(2,034) $(735) $(4,642) $(9,103)
Cost of product revenues,
amortization of intangible assets 75 -- 75 --
In-process research and development 320 -- 320 --
Amortization of intangible assets 73 -- 73 --
Restructuring charges, net (4) 490 2,895 490
Loss (recovery) on building sublease -- -- (359) 662
Impairment of long lived assets and
other 389 139 389 2,548
Amortization of deferred stock
compensation -- 21 204 617
Gain on sale of land -- -- (105) --
Net income (loss) pro forma $(1,181) $(85) $(1,150) $(4,786)
SOURCE Endwave Corporation
-0- 11/02/2004
/CONTACT: Julianne Biagini, Chief Financial Officer, +1-408-522-3105, or
Mark Hebeisen, VP Marketing, +1-978-686-4400, ext. 105, both of Endwave
Corporation/
/Web site: http://www.endwave.com /
(ENWV)
CO: Endwave Corporation
ST: California
IN: TLS ITE MLM CPR NET HRD
SU: ERN CCA