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In a release dated April 15, the company stated:
For the fourth quarter of 2008, net sales of $1.8 million decreased 45 percent from net sales of $3.3 million in the fourth quarter of 2007, and increased 5 percent from net sales of $1.7 million in the third quarter of 2008. Net sales related to the company's Device Connectivity products decreased by $823,000, or 41 percent, and increased $34,000, or 3 percent, as compared to the fourth quarter of 2007 and third quarter of 2008, respectively. Net sales related to the company's Device Networking products, including the Airborne wireless product line, decreased by $642,000, or 50 percent, and increased $60,000, or 10 percent as compared to the fourth quarter of 2007 and third quarter of 2008, respectively. The company reported a loss from operations of $39,000 as compared to operating income of $215,000 for the fourth quarter of 2007 and an operating loss of $118,000 for the for the third quarter of 2008. The company's reported a net loss of $77,000 as compared to net income of $84,000 for the prior year's fourth quarter and a net loss of $271,000 for the third quarter of 2008. Total operating expenses incurred in the fourth quarter of 2008 of $848,000 decreased by $276,000, or 25 percent, from the previous year period. The decrease was due primarily to decreases in sales and marketing expenses of $51,000, R&D expense of $111,000, and G&A expenses of $115,000, as the company continued to integrate operating departments since the date of the Merger and align its operating cost structure in response to the current economic environment. During the fourth quarter of 2008, the company capitalized $75,000 of R&D costs incurred for developed software. Additionally, the company recorded a non-cash gain of $77,000 in the current year period compared to a gain of $198,000 in the prior year quarter for the fair value adjustment of the put warrant liability.
Twelve Months Operating Results
- Net sales of $9.2 million for fiscal year 2008 decreased by 25 percent from net sales of $12.1 million for 2007. Net sales related to the company's Device Connectivity products decreased by $2.2 million, or 29 percent, and net sales related to the company's Device Networking products, including the Airborne wireless product line, decreased by $771,000, or 17 percent from the year ended December 31, 2007. The company reported an operating loss of $117,000 for 2008 as compared to an operating profit of $273,000 for 2007. The company reported a net loss for the current year of $799,000 compared to a net loss of $766,000 for the prior year. Interest expense incurred of $695,000 for 2008 included non-cash charges totaling $116,000, for the amortization of deferred financing charges and the accretion of success fees and amortization of the discount on the subordinated debt. The company recorded a non-cash gain of $13,000 during the current year as compared to $415,000 for the prior year for the fair value adjustment of the put warrant liability.
Chief Executive Officer and President Steve Runkel said, "The global economic issues continue to impact key customers in several of our vertical markets, including retail banking and transportation, resulting in declines to our revenue levels on a year over year basis. The operating cost savings initiatives that we implemented in early Q3 have resulted in decreasing our cash flow break even levels to be in line with these reduced revenue levels. In Q4, our revenue for both the Device Connectivity and the Device Networking product lines showed slight improvement over the prior quarter. While this is an encouraging sign we will continue to aggressively manage our expense levels to optimize our operating cash flow."
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