Endwave Reports Second Quarter 2007 Financial Results
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 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
mary@summitirgroup.com
- 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
SOURCE Endwave Corporation