Network Equipment Technologies (News - Alert), Inc., is reporting its financial results for the fourth quarter and fiscal year 2008, with a 38 percent annual revenue growth, its highest profitability in 10 years.

 

“We accomplished a significant number of the objectives we established for fiscal year 2008,” President and CEO C. Nicholas Keating, Jr. said. “Revenue grew 38 percent, we reached our highest level of profitability in 10 years, and our cash position increased by more than $75 million.”

 

According to the company, total revenue in the fourth quarter was $33.4 million, a 15 percent increase from $29 million in the third quarter, and a 34 percent increase from $25 million in the fourth quarter of the prior fiscal year.

 

NET (News - Alert) has now achieved eight consecutive quarters of revenue growth, with net income in the fourth quarter at $2.8 million, or $.09 per share, compared to net income of $1.5 million, or $.05 per share in the third quarter, and a net loss of $9.5 million or $0.37 per share in the fourth quarter of the prior year.

 

Fiscal 2008 results include the operating results of Quintum (News - Alert) Technologies following its acquisition by the company in December 2007, and other accounting effects of it.

 

Total revenue in the fiscal year was $116.1 million, up from $84.1 million in fiscal 2007, an increase of 38 percent. Net income was $7.1 million or $0.25 per share, compared to a net loss of $16.2 million or $0.65 per share in fiscal 2007.

 

Cash and investment balances at the end of fiscal 2008 were $165.7 million, compared to $161.2 million at the end of the third quarter, and $90.1 million at the end of the prior year. During the third quarter, the company obtained net proceeds of $82 million from an $85 million senior convertible debt offering and used approximately $24 million of cash for the acquisition of Quintum.

 

Non-GAAP net income in the fourth quarter was $2.6 million or $0.09 per share, compared to $1.1 million or $0.04 per share in the fourth quarter of the prior year. Non GAAP net income for the fiscal year was $9.5 million or $0.33 per share, compared to a non-GAAP net loss of $4.8 million or $0.19 per share for the prior year.

 

Non-GAP net income was calculated by excluding non-cash stock-based compensation expense, amortization of intangible assets from the acquisition of Quintum, accretion and other restructure charges resulting from vacating its former manufacturing facility.

 

 “We made a number of operational changes throughout the year to streamline our business and lower our cost structure,” Keating said. “We advanced our products and customer reach through continued investment in internal development and acquisition.”

 

Today, Keating said their products are being offered worldwide to government and enterprise customers in three target markets – voice-over IP, multi-service access, and high-performance computing.

 

Their customer traction in each market is encouraging and they are seeing more pilots convert into programs, Keating said. The integration of Quintum is progressing well and they are already seeing strategic benefits of the combination, he said.

 

"Looking ahead, fiscal year 2009 will be a year of execution for NET. We will continue to invest in our growth through product development and key partnerships, while also keeping our eye out for strategic acquisition opportunities," added Keating.

 

For almost 25 years, Network Equipment Technologies, Inc. has provided voice and data communications equipment for multi-service networks requiring high degrees of versatility, interoperability, security and performance.

 

NET's broad family of products are purpose-built for mixed-service, multi-protocol networks; bandwidth-sensitive site communications; high performance, security-sensitive transmissions; and converged communications.