Net revenue for the fourth quarter of 2008 was $18.6 million, a decrease of 42.1% over net revenue of $32.1 million for the fourth quarter of 2007 and a sequential decrease of 26.8% from net revenue of $25.4 million for the third quarter of 2008.
Net loss for the fourth quarter of 2008 was $14.4 million, or $0.32 per diluted share. Net loss for the fourth quarter includes a $0.8 million intangible asset impairment charge, a $0.5 million restructuring charge, and a $0.5 million impairment loss on a private equity investment. Net loss for the fourth quarter also includes a non-recurring, non-cash charge of $8.6 million due to a valuation allowance against deferred tax assets in accordance with GAAP. The company’s deferred tax assets are derived primarily from net operating loss and R&D tax credit carryforwards. This valuation allowance does not affect the characteristics of the company’s NOLs and tax credits or the ability of the company to use them against future income. Net income for the fourth quarter of 2007 was $3.0 million, or $0.06 per diluted share, and net loss for the third quarter of 2008 was $0.6 million or $0.01 per diluted share.
On a non-GAAP basis, excluding stock-based compensation expense, amortization of acquired intangibles, the intangible asset impairment charge, an impairment loss on a private equity investment, restructuring and other severance-related expenses, and the charge to increase the deferred tax asset valuation allowance, net loss for the fourth quarter of 2008 was $3.3 million, or $0.07 per diluted share. This compares to non-GAAP net income of $4.8 million, or $0.10 per diluted share, for the fourth quarter of 2007 and non-GAAP net income of $0.5 million, or $0.01 per diluted share, for the third quarter of 2008. Non-GAAP net income for the fourth quarter of 2007 excluded stock-based compensation expense, amortization of acquired intangibles, and an impairment loss on a private equity investment, net of taxes. Non-GAAP net income for the third quarter of 2008 excluded stock-based compensation expense, amortization of acquired intangibles, and severance-related expenses, net of taxes.
Non-GAAP net loss for fiscal year 2008 was $2.5 million, or $0.06 per diluted share compared to non-GAAP net income of $8.6 million, or $0.18 per diluted share for fiscal year 2007. Non-GAAP net loss for fiscal year 2008 excludes stock-based compensation expense, amortization of acquired intangibles, the intangible asset impairment charge, in-process research and development expense, an impairment loss on a private equity investment, restructuring and other severance related expenses, and the charge to increase the deferred tax asset valuation allowance. Non-GAAP net income for fiscal year 2007 excluded stock-based compensation expense, amortization of acquired intangibles, an impairment loss on a private equity investment and the loss on liquidation of a foreign branch office, net of taxes.
AnalogicTech reported gross margins of 38.2% for the fourth quarter of 2008, compared to 52.6% for the fourth quarter of 2007 and 50.0% for the third quarter of 2008. Non-GAAP gross margin was 43.3% for the fourth quarter of 2008, compared to 53.6% for the fourth quarter of 2007 and 51.4% for the third quarter of 2008. For fiscal year 2008, gross margin was 48.3%, compared to 53.5% for fiscal year 2007. Non-GAAP gross margin was 50.4% for fiscal year 2008, compared to 54.7% for fiscal year 2007. The company ended the quarter with $109.5 million in cash, cash equivalents, and short-term investments.
The worldwide economic crisis weakened customer demand for our products across our end markets during the fourth quarter, stated Richard K. Williams, president, chief executive officer and chief technology officer of AnalogicTech. We responded swiftly to the downturn with broad-based cost reduction actions. As we take prudent measures to lower expenses, our fundamental business strategies are more focused than ever. We remain dedicated to continuing our product design momentum and strong customer support.
We are pleased that during 2008 we made significant progress on our product diversification strategy. We continued to see an increasing contribution from our ModularBCD products, which comprised 19% of sales during the fourth quarter. Our strong balance sheet combined with the streamlining of our operations position AnalogicTech for long-term growth opportunities.
Business Outlook:
The following statements are based upon management’s current expectations. These statements are forward-looking, and actual results may differ materially. AnalogicTech undertakes no obligation to update these statements.
For the first quarter ending March 31, 2009, AnalogicTech estimates revenue in the range of $13 million to $16 million, and net loss in the range of $0.15 to $0.12 per diluted share on a GAAP basis. The first quarter 2009 estimates include pre-tax quarterly share-based compensation expense in the range of $1.5 to $1.7 million.
