Total revenue for the fourth quarter of 2008 was $20.8 million, a 33% year-over-year increase over the fourth quarter of 2007 and a 4% sequential increase over the third quarter of 2008.

Revenue derived from sales of HomePlug-compatible ICs comprised 95% of total revenue for the fourth quarter of 2008 and grew to $19.8 million, a 32% year-over-year increase over the fourth quarter of 2007, and a 2% sequential increase over the third quarter of 2008. For the full year 2008, revenue derived from sales of HomePlug-compatible ICs comprised 96% of total revenue, and grew to $72.3 million, a 47% increase over 2007.

Intellon reported gross margins of 42.5% for the fourth quarter of 2008 compared with 43.6% in the year ago quarter, and 40.7% in the third quarter of 2008. For the full year 2008, gross margins were 42.7% compared with 44.3% for the prior year.

In accordance with generally accepted accounting principles (GAAP), the company reported net income of $1.6 million, or $0.05 per share (basic and diluted), for the fourth quarter of 2008, compared with a net loss attributable to common shareholders of $4.5 million, or $0.67 per share (basic and diluted), in the fourth quarter of 2007, and net income of $0.5 million, or $0.02 per share (basic and diluted), for the third quarter of 2008.

Non-GAAP net income in the fourth quarter of 2008 was $2.1 million, or $0.07 per share (basic and diluted), compared with non-GAAP net loss of $2.7 million, or $0.09 per share (basic and diluted) in the fourth quarter of 2007, and with non-GAAP net income of $0.9 million, or $0.03 per share (basic and diluted) for the third quarter of 2008. Non-GAAP net income for the full year 2008 was $2.6 million, or $0.09 per share (basic and diluted).

“Despite an increasingly turbulent economic environment, Intellon delivered solid financial results during its first year as a public company, achieving a 44% increase in revenue in 2008 over the prior year and full year net income of $0.03 per share on a GAAP basis,” said Charles E. Harris, Chairman and CEO of Intellon. “Although the fourth quarter was challenging, we accomplished our fourteenth consecutive quarter of revenue growth, delivered GAAP net income of $0.05 per share and ended the year with inventory levels close to year-end 2007 despite our year-over-year revenue growth. Our fourth quarter results were fueled by continued strength in our service provider business, improving gross margins and strong expense management.”

Recent Business Highlights:

Intellon Introduces Third Generation HomePlug AV IC Chipset, which uses 65 nanometer technologies;

Intellon HomePlug AV ICs to be Interoperable with Newly Confirmed IEEE P1901 Baseline Standard;

Intellon Introduces New Firmware for BPL Access and Smart Grid Applications Using HomePlug AV-Class Products;

Sharp Selects Intellon HomePlug ICs for New Adapters that Enable Simple, Secure, High-Speed Home Networks over Existing Electrical Wiring;

Actiontec Selects Intellon’s HomePlug AV-based ICs for Powerline Networking Option in new ADSL Gateway;

Intellon Surpasses 30 Million Shipment Milestones for Powerline Networking ICs;

Monster Selects Intellon HomePlug AV Technology for New Monster® Digital Express PowerNet 200;

Intellon HomePlug AV-based ICs Enable New NETGEAR Powerline Ethernet Adapters with Ease-of-Use Features.