The revenue for the quarter ended December 27, 2008 was $3.3 million and net income was $320,000, or $0.03 per share and $0.02 per diluted share. This compares with revenues of $3.2 million and net income of $252,000, or $0.02 per share and diluted share for the quarter ended December 29, 2007. Net income in the fourth quarter of 2008 included income tax benefits of $261,000, compared to net income tax benefits of $102,000, in the fourth quarter of 2008 2007.
CPS Technologies is pleased to have attained year-to-year revenue growth of 19% and net income growth of 55% in the midst of a very challenging external economic environment. In 2008, after a record in the second quarter of 2008, revenues declined in the third quarter of 2008 and in the fourth quarter of 2008, but the company managed costs carefully thereby ensuring profitability in both third quarter of 2008 and in the fourth quarter of 2008. As the external environment worsened customers reduced deliveries and drained inventories throughout the supply chain. The company believes that as of mid-first quarter 2009, it is once again seeing underlying demand. The company continues to carefully manage costs in this uncertain external environment.
Looking at 2008, as a whole, the revenue increased for all primary product lines except components for cellular telephone basestations which are nearing end-of-life. Revenues were up for flip-chip heatspreaders, baseplates for the motor controllers and hermetic packages for telecommunications and military applications. The revenues from components utilized in motor controllers for hybrid and electric vehicles were up considerably as the first hybrid automobiles with motor controllers built on company’s baseplates were introduced to the market. The company continues to achieve design wins in these areas which will generate future growth. In addition, in the fourth quarter of 2008, the company began to recognize revenue from its cooperative agreement with the Army Research Laboratory related to armor development.
Although the near-term economic environment is uncertain, the company believes longer-term trends bode well for CPS. The company’s products are used in high-power, high-reliability applications. These applications involve energy use or energy generation and our products allow higher performance and improved energy efficiency. The company is indeed an important participant in the growing movement towards alternative energy and green lifestyles. For example, the company’s baseplates are used in mass transit, hybrid and electric cars and wind-turbines for electricity generation; the company’s flip-chip heatspreaders are used in routers and switches for the internet which in turn allows telecommuting. The company believes these markets will continue to grow for some time.
