Exhibit 99.1
:
ENDWAVE REPORTS STRONG SECOND QUARTER 2005 FINANCIAL RESULTS
ENDWAVE RETURNS TO PROFITABILITY IN Q2 ON 62% YEAR-OVER-YEAR REVENUE GROWTH
SUNNYVALE, Calif., July 26 /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 ended June 30, 2005.
Endwave reported revenues of $12.2 million for the second quarter of 2005,
compared with revenues of $7.6 million for the second quarter of 2004 and $9.1
million for the first quarter of 2005. Cash, cash equivalents and short-term
investments as of June 30, 2005 were $22.0 million compared with a balance of
$24.8 million at March 31, 2005.
Net income for the second quarter of 2005 was $318,000, or earnings of $0.03
per diluted share, compared with a net loss for the second quarter of 2004 of
$429,000, or a loss of $0.04 per share, and a net loss for the first quarter of
2005 of $847,000, or a loss of $0.08 per share.
Pro forma net income for the second quarter of 2005 was $424,000, or
earnings of $0.04 per diluted share, compared with a pro forma net loss for the
second quarter of 2004 of $344,000, or a loss of $0.04 per share, and a pro
forma net loss for the first quarter of 2005 of $672,000, or a loss of $0.06 per
share.
For the second quarter of 2005, pro forma net income was calculated by
excluding the amortization of intangible assets of $152,000 and a restructuring
benefit of $46,000. For the second quarter of 2004, pro forma net loss was
calculated by excluding the amortization of deferred stock compensation of
$85,000. For the first quarter of 2005, pro forma net loss was calculated by
excluding the amortization of intangible assets of $175,000. 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.
"Endwave's continued momentum in telecom, defense electronics and homeland
security markets produced strong revenue and margin growth that fueled our
profitability in the second quarter," said Ed Keible, Endwave's CEO and
President. "First half revenues are up 50% from last year, with substantial
increases in both legacy and new product sales that will position us well for
sustained growth in the second half of 2005," added Keible.
Endwave Second Quarter 2005 Summary:
-- Recorded quarterly revenues of $12.2 million, 62% higher than the second
quarter of 2004, and 35% higher than the first quarter of 2005.
-- Increased revenues from sales to customers in defense, homeland security
and other non-telecom markets by 237% from the second quarter of 2004, to
$2.6 million, or 21% of total revenues in the second quarter of 2005.
-- Delivered products to over 100 customers during the quarter. The largest
customers for the quarter were Nokia and Siemens.
-- Achieved an overall gross margin of 34% in the second quarter, up from
31% in the first quarter of 2005.
-- Strengthened inventory levels in preparation for continued revenue growth
in the second half of 2005.
-- Secured a follow-on order from SafeView for additional Phase I switch
arrays for use in SafeScout(TM), its advanced personnel screening portal.
-- Initiated the Phase II development contract to engineer next-generation
hardware in preparation for volume production of SafeView's portal
scanner.
-- Received a new sole-source development contract from a major US defense
prime contractor to design and deliver complex RF subsystems for use in
an airborne intelligence system.
Endwave will hold its regularly scheduled second quarter earnings call today
at 1:30 p.m. Pacific Daylight 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 on-line
after the earnings call at approximately 2:30 p.m. Pacific Daylight Time, and
will continue to remain available for approximately 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 5 calendar days by dialing 888-203-1112 (domestically) or
719-457-0820 (internationally), and entering the confirmation code 8420874.
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.
Our RF modules are typically used in high-frequency applications and include
integrated transceivers, amplifiers, synthesizers, oscillators, up and down
converters, frequency multipliers and microwave switch arrays. Endwave has 38
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 Chiang Mai,
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 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: our ability to achieve 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; and our dependence on key personnel. 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 quarterly report 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, December 31,
2005 2004
---------- ------------
Assets
Current assets
Cash and cash equivalents $ 8,474 $ 14,158
Short-term investments 13,550 10,979
Accounts receivable, net 8,385 8,688
Inventories, net 15,880 7,866
Other current assets 785 477
Total current assets 47,074 42,168
Property and equipment, net 1,726 2,394
Other assets 104 125
Goodwill and other intangible assets, net 5,100 5,407
Total assets $ 54,004 $ 50,094
Liabilities and stockholders' equity
Current liabilities
Accounts payable 6,789 3,587
Warranty accrual 4,141 4,488
Accrued compensation 1,890 1,370
Other accrued liabilities 756 1,026
Total current liabilities 13,576 10,471
Other long-term liabilities 462 559
Total stockholders' equity 39,966 39,064
Total liabilities and stockholders' equity $ 54,004 $ 50,094
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,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Total revenues $ 12,242 $ 7,576 $ 21,342 $ 14,193
Costs and expenses:
Cost of product revenues 7,959 5,257 14,134 9,228
Cost of product revenues,
amortization of intangible
assets 113 -- 226 --
Research and development 1,619 1,083 3,111 2,057
Selling, general and
administrative 2,459 1,705 4,733 3,534
Amortization of intangible
assets 39 85 101 --
Restructuring charges, net (46) -- (46) 2,899
Recovery on building
sublease -- -- -- (359)
Amortization of deferred
stock compensation -- -- -- 204
Total costs and expenses 12,143 8,130 22,259 17,563
Income (loss) from
operations 99 (554) (917) (3,370)
Interest and other income, net 219 125 388 762
Net income (loss) $ 318 $ (429) $ (529) $ (2,608)
Basic net income (loss) per
share $ 0.03 $ (0.04) $ (0.05) $ (0.27)
Diluted net income (loss)
per share $ 0.03 $ (0.04) $ (0.05) $ (0.27)
Weighted shares used in
basic per share calculation 10,659,553 9,655,341 10,589,105 9,563,724
Weighted shares used in
diluted per share
calculation 11,699,649 9,655,341 10,589,105 9,563,724
PRO FORMA 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,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Total revenues $ 12,242 $ 7,576 $ 21,342 $ 14,193
Costs and expenses:
Cost of product revenues 7,959 5,257 14,134 9,228
Research and development 1,619 1,083 3,111 2,057
Sales, general and
administrative 2,459 1,705 4,733 3,534
Total costs and expenses 12,037 8,045 21,978 14,819
Income (loss) from
operations 205 (469) (636) (626)
Interest and other income, net 219 125 388 657
Net income (loss) $ 424 $ (344) $ (248) $ 31
Basic net income (loss) per
share $ 0.04 $ (0.04) $ (0.02) $ 0.00
Diluted net income (loss)
per share $ 0.04 $ (0.04) $ (0.02) $ 0.00
Weighted shares used in
basic per share
calculation 10,659,553 9,655,341 10,589,105 9,563,724
Weighted shares used in
diluted per share
calculation 11,699,649 9,655,341 10,589,105 10,443,160
1. Pro forma operating results exclude restructuring charges, recovery on
building sublease, 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 Six months ended
--------------------------- ---------------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net income (loss) - actual $ 318 $ (429) $ (529) $ (2,608)
Cost of product revenues,
amortization of intangible assets 113 -- 226 --
Amortization of intangible assets 39 85 101 --
Restructuring charges, net (46) -- (46) 2,899
Recovery on building sublease -- -- -- (359)
Amortization of deferred stock
compensation -- -- -- 204
Gain on sale of land -- -- -- (105)
Net income (loss) - pro forma $ 424 $ (344) $ (248) $ 31
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 /