The revenues were $9.8 million for fourth quarter 2008, compared with $14.4 million for fourth quarter 2007 and $17.0 million for third quarter 2008. The net loss, calculated in accordance with accounting principles generally accepted in the US (GAAP), for the fourth quarter 2008 was $11.1 million or $1.19 per share, compared with net loss for the fourth quarter 2007 of $1.1 million, or $0.09 per share, and net loss for the third quarter 2008 of $999,000, or $0.11 per share.

During the fourth quarter, due to macroeconomic business environment and decline in its stock price, the company recorded a non-cash charge of $6.2 million to reflect an impairment of its goodwill and the intangible assets. This impairment charge is subject to the final valuation analysis, which is anticipated to be completed prior to the filing of the company’s 2008 annual report on Form 10-K. The impairment is not anticipated to result in any current or future cash usage.

The non-GAAP net loss for the fourth quarter 2008 was $3.0 million, or $0.32 per share, compared with non-GAAP net income for the fourth quarter 2007 of $282,000, or $0.02 per diluted share, and non-GAAP net income for the third quarter 2008 of $334,000, or $0.03 per diluted share.

For the fourth quarter 2008, the non-GAAP net loss was calculated by excluding non-cash stock-based compensation expense of $1.0 million, amortization of intangible assets of $328,000, non-cash charges of $573,000 related to the corporate reorganization of Allgon Microwave (including a provision for the bad debt of $315,000 and inventory impairment charge of $258,000) and a goodwill and intangible asset impairment of $6.2 million. For the fourth quarter 2007, non-GAAP net income was calculated by excluding non-cash stock-based compensation expense of $1.0 million and amortization of intangible assets of $328,000. For the third quarter 2008, the non-GAAP net income was calculated by excluding non-cash stock-based compensation expense of $1.0 million and amortization of intangible assets of $328,000.

The cash, cash equivalents and investments as of December 31, 2008 were $45.3 million, compared with $44.1 million as of September 30, 2008.

The Full Year 2008 Results:

For 2008, revenues attributable to customers in the telecom markets were $38.7 million and revenues attributable to the customers in defense electronics, homeland security and other non-telecom markets were $19.6 million.

The non-GAAP net loss for year ended December 31, 2008 was $2.6 million, or $0.28 per share, compared with non-GAAP net loss for year ended December 31, 2007 of $208,000, or $0.02 per share. For 2008, the non-GAAP net loss was calculated by excluding non-cash stock-based compensation expense of $4.1 million, amortization of intangible assets of $1.3 million, the non-cash charges of $573,000 related to the corporate reorganization of Allgon Microwave and a goodwill and intangible asset impairment of $6.2 million.

Our full year 2008 revenues of $58.3 million increased 3 percent over 2007 despite the weakness experienced in the fourth quarter as a result of the macroeconomic situation and, in particular, the weak demand from our telecommunications customers, said Ed Keible, Endwave’s chief executive officer and president. We are pleased that our diversification efforts into the defense and security markets are gaining traction, which resulted in substantial year-over-year revenue gains for that business.

We expect uncertainty in the global economy and the credit markets to persist, which will result in total 2009 revenues declining from 2008 levels. In light of the projected decline, we will be reducing expenses through restructuring and downsizing. Fortunately, our cash position is strong and, we believe, will enable us to weather the current environment, added Keible.