Gennum Corporation (Gennum) has reported revenues of $126.9 million for the year-end 2008, up 25%, compared with the revenues of $101.8 million in the previous year-end. It has also reported net earnings of $27 million, or $0.76 per share, for the year-end 2008, compared with the net loss of $4.4 million, or $0.12 loss per share, in the previous year-end.
Gross margin as a percentage of revenue remained strong through to the end of the year as productivity programs and positive revenue mix offset price pressures in the marketplace. Throughout 2008, we continued to invest aggressively in new product development. To drive sales growth, Gennum now has six regional offices and fifteen channel partners; all located close to major customers and fastgrowth markets. Our increased investment in research and development generated twenty seven new products, five times more than we delivered in 2007.
The slow-down in the global economy began to impact the company’s revenue in the fourth quarter. As a result, consolidated revenues showed a sequential decline of about 9% from the prior quarter but were still up 2% over the same quarter in 2007. In addition, the global liquidity crisis has impacted negatively on our investments in Toumaz and Cellpoint Connect. During the quarter, we took an impairment charge against the value of our Toumaz common shares and provided fully against our note, loan receivable and the share repurchase agreement from Cellpoint which, in combination, reduced our after-tax earnings by $2.4 million in the quarter and the year.
Earnings from continuing operations before provisions on loans and investments for the year was $22.0 million, or $0.62 per share, representing a 5.4% increase over 2007. Earnings from continuing operations before provisions on loans and investments for the quarter was $5.1 million compared to $4.9 million for the same period last year.
The cash and cash equivalents balance at November 30, 2008 was $48.7 million, an increase of $14.6 million from the end of the 2007 fiscal year. This increase was primarily due to strong cash from operations, the sale of VXP in the first quarter of 2008 and the sale of the company’s corporate office land and building in the third quarter of 2008.
“Gennum had an exceptional 2008. I am pleased that our team accomplished many critical milestones including delivering five times as many new products versus the prior year, expanding our customer base and delivering solid financial results, “ said Dr. Franz Fink, president and chief executive officer of Gennum. “As with many of our peers in the semiconductor industry, we are currently seeing a weakening in customer demand as the global economy continues to decline. As a result, we have taken proactive measures to reduce our operating expenses. We are continuing to aggressively fund R&D critical to our long-term success and to deliver a significant number of new products in 2009. Our solid financial position allows us to be flexible in our investments to drive future growth. I am confident that we have the resources to continue to invest in key projects that offer the greatest opportunity to deliver value to our customers and shareholders.”
New product introductions and business developments:
In the fourth quarter of 2008 and early in 2009, Gennum launched several new products to further expand its CDR and ActiveConnect portfolio. Gennum participated in new technology demonstrations and announced it is partnering with a leading consumer OEM to integrate ActiveConnect into nextgeneration HDMI cable products.
Gennum Partners with Monster Cable to Deliver World’s Highest Performance Cabling Solutions: Monster is leveraging Gennum’s ActiveConnect technology for its new Hyper- Speed product line. Monster unveiled six new products that leverage Gennum’s ActiveConnect technology all of which will be available in April of 2009. Monster will use ActiveConnect technology in its future HDMI cabling and switching solutions in its high performance lines. Additionally, Monster and Gennum jointly demonstrated at the Consumer Electronics Show, 50 feet of cable that can distribute signals up to 21 gigabits per second (Gbps). The new cabling technology is capable of running twice the rate of today’s HDMI 1.3 specification and is the highest performance HDMI cabling technology ever publicly demonstrated.
Gennum Expands ActiveConnect Product Portfolio with New Connectivity Solution for DisplayPort Cable Products: DisplayPort is rapidly emerging in a variety of electronic devices including laptops, PCs, media servers, DVRs, home theater displays and commercial signage displays. Many of these applications require cables as long as 100 feet and have therefore been unable to take advantage of the multimedia quality that DisplayPort offers. By leveraging ActiveConnect technology, Gennum can extend DisplayPort Cable Lengths by up to 15 times.
Gennum Enables High Performance Computing Solution with World’s First Quad 10 Gbps Clock and Data Recovery (CDR) Product: Gennum announced the industry’s first quad 10 Gbps CDR solution, designed to restore and clean digital signals at extremely high data rates for applications such as next-generation high performance computing and networking interconnects. The end result is the highest level of performance and signal integrity for emerging Inifiniband QDR and 40 gigabit Ethernet (GbE) and 100 GbE applications.
Gennum and AMCC Announce Interoperability for High-speed, Power-Efficient Data Center Connectivity: AMCC and Gennum jointly demonstrated interoperability of a new technology which showcases the ability for Service Providers to leverage their existing fiber base to enable 10 Gbps Ethernet traffic over much farther distances, while significantly reducing their hardware investment. Gennum’s innovative Receive Optical Sub-Assembly (ROSA) solution provides unparalleled performance in a low cost, plug-and-play single assembly that is enabling 10GbE adoption.