Revenue grows in disappointing fourth quarter

Endwave Corp has reported financial results for its fourth quarter and full year ended 31st December 2006. Revenues were US $13.3 million for the fourth quarter of 2006, compared with $13.1 million for the fourth quarter of 2005 and $18.8 million for the third quarter of 2006. Net loss, calculated in accordance with accounting principles generally accepted in the USA (GAAP), for the fourth quarter of 2006 was $870,000, or $0.08 per share, compared with net loss for the fourth quarter of 2005 of $152,000, or $0.01 per share, and net income for the third quarter of 2006 of $911,000, or $0.06 per diluted share.

Non-GAAP net income for the fourth quarter of 2006 was $229,000, or $0.02 per diluted share, compared with non-GAAP net income for the fourth quarter of 2005 of $78,000, or $0.01 per diluted share, and non-GAAP net income for the third quarter of 2006 of $2.0 million, or $0.14 per diluted share.

For the fourth quarter of 2006, non-GAAP net income was calculated by excluding non cash stock-based compensation expense of $748,000 incurred as a result of the Company's adoption of SFAS123(R), the expensing of $200,000 of capitalised transaction costs and amortisation of intangible assets of $151,000.

For the full year, total revenues were $62.2 million, compared with $48.7 million for 2005.

GAAP net loss for the year ended 31st December 2006 was $1.3 million, or $0.12 per share, compared with GAAP net loss for 2005 of $874,000, or $0.08 per share.

Non-GAAP net income for the year ended 31st December 2006 was $2.9 million, or $0.21 per diluted share, compared with a nonGAAP net income for the year ended 31st December 2005 of $562,000, or $0.05 per diluted share.

For 2006, non-GAAP net income was calculated by excluding non-cash stock-based compensation expense of $3.3 million incurred as a result of the Company's adoption of SFAS123, the expensing of $200,000 of capitalised transaction costs, amortisation of intangible assets of $605,000 and loss on sale of assets of $84,000.

As of 31st December 2006, cash, cash equivalents and short-term investments had increased by approximately $900,000 to $67.6 million from a balance of $66.7 million at 30th September 2006.

'We are pleased to report that despite a disappointing fourth quarter, we experienced substantial revenue growth during 2006'.

'This growth was driven by Endwave's ability to exploit outsourcing trends and increase our available market through innovative technology and manufacturing leadership', said Ed Keible, Endwave's CEO and President.

'Taking the year as a whole, demand for our telecommunications products remained particularly strong as we posted the second consecutive year of telecom revenue growth in excess of 30%'.

'In the defence and homeland security markets, we continue to build our presence and see major opportunities for deploying our technologies into emerging programmes and applications'.