Revenue for the fourth quarter of 2004 was up 22% to $7.9 million from $6.5 million in the same period of 2003. Revenue from the Company's core business consisting of semiconductor components, multi-chip modules and RFID reader modules increased 28% to $7.7 million from $6.0 million in the same period last year.
Revenue for the year ended December 31, 2004 was up 22% to $32.3 million from $26.6 million for 2003. Revenue from the Company's core business for 2004 was up 47% to $29.8 million from $20.2 million for 2003.
On a U.S. GAAP basis, the Company reported a net loss of $4.0 million for the fourth quarter of 2004 or $0.07 per common share. This compares to a $3.0 million net loss or $0.05 per common share for the fourth quarter of 2003.
Net loss under U.S. GAAP for the year ended December 31, 2004 was $9.1 million or $0.15 per common share. This compares to a net loss in 2003 of $14.3 million or $0.25 per common share.
On a non-GAAP basis, the Company's net loss for the fourth quarter of 2004 was $3.5 million or $0.06 per common share, compared to net loss of $3.3 million or $0.06 per common share in the same period in 2003. A complete reconciliation of non-GAAP adjustments is included as a schedule attached to this release.
The Company's net loss for the year ended December 31, 2004 on a non-GAAP basis was $10.9 million or $0.18 per share. This compares to a non-GAAP loss for the year ended December 31, 2003 of $14.6 million or $0.26 per share.
As of December 31, 2004, the Company has cash, cash equivalents and short-term investments of $43.1 million with no long-term debt outstanding.
"In the fourth quarter, we initiated production shipments of our MPR5000 and MPR6000 RFID reader modules," said Michael Farese, Ph.D., Chief Executive Officer and President of WJ Communications. "In January 2005, we completed the acquisition of Telenexus Inc. that should significantly add to our RFID products and technology portfolio and will enable us to further capitalize on this growing market opportunity. In our wireless infrastructure business, we introduced and initiated production shipments during the fourth quarter of our new ECM168 power amplifier to a major Chinese OEM."
"Through strategic acquisitions during 2004 and early 2005 and continued development of new products, we significantly increased our estimated total addressable market to over $1 billion from $500 million," added Dr. Farese. "During the year, we introduced 42 new semiconductor and RFID products and had 230 design wins. We also posted significant year over year revenue growth in our core business of 47%. While rapidly growing our core business, we also made significant improvements in our business model as our gross margins improved to 53% in 2004 from 42% in 2003."
Recent highlights include: -- In January 2005, the Company completed its acquisition of Telenexus, Inc. of Richardson, TX. Telenexus is an RFID company that develops high quality, innovative RFID products for a broad range of industries and markets. -- Operationally, the Company during Q4 2004: -- Initiated volume production for its ECM168 12V power amplifier module to a major OEM in China. The ECM168 is ideally suited for PAS/PHS base station applications. -- Commenced production deliveries of its multi-protocol RFID reader modules, the MPR5000 and MPR6000. These products represent the industry's first multi-protocol EPC Class 0/1 RFID Cards in a compact PCMCIA Type II package. -- Announced the introduction of AH22S, a new high dynamic range CATV amplifier. The AH22S combines superior gain flatness, high linearity, and broad bandwidth, making it ideal for CATV distribution, cable modem, and laser diode driver applications. -- Announced that all products in the popular SOT-89 package are now available in the environmentally friendly lead-free/green/RoHS-compliant packages. The company now offers over 80% of its available devices in lead-free and green packaging. -- The Company had 65 new design wins in the quarter with key OEMs such as Ericsson, Motorola, Lucent, Andrew, Powerwave and JRC. -- The Company also strengthened its Board of Directors and Management team: -- Two new independent members were added to the Board of Directors. On October 14th, 2004 the Company appointed Catherine P. Lego to the Board who brings over 26 years of finance and management experience with expertise in the telecommunications industry. On January 27th, 2005 the Company appointed Jan Loeber to the Board who brings over 30 years of telecommunications industry experience. -- On December 16th, 2004, the Company announced the appointment of semiconductor industry veteran Ephraim Kwok to the position of Senior Vice President and Chief Financial Officer. Mr. Kwok has substantial experience serving as CFO of both public and private semiconductor companies.
"Looking forward, we are optimistic regarding our RFID business from our multi-protocol RFID reader modules together with the expanded product offerings from our acquisition of Telenexus. However, RFID is an emerging market and sales are expected to be lumpy in the short term. In wireless infrastructure, we expect modest growth as the industry deploys the next generation of wireless networks," said Dr. Farese. "These factors lead us to give a revenue guidance range at this time of $7.7 million to $8.5 million for the first quarter of 2005. We anticipate that the first quarter revenue will be primarily composed of sales of our core business consisting of semiconductor and RFID products."
Use of Non-GAAP Financial Information
The non-GAAP information presented is based upon our unaudited consolidated statements of operations for the periods shown, with certain adjustments. This presentation is not in accordance with, or an alternative for, U.S. Generally Accepted Accounting Principles (GAAP) and may not be consistent with the presentation used by other companies. However, WJ believes non-GAAP reporting provides meaningful insight into the Company's on-going economic performance and therefore uses non-GAAP reporting internally as meaningful data in evaluating and managing our operations. WJ has chosen to provide this supplemental information to investors to enable them to perform additional comparisons of operating results and business trends among different reporting periods on a consistent basis, independent of regularly reported non-cash charges and infrequent or unusual events.
About WJ Communications
WJ Communications Inc. is a leading designer and supplier of RF semiconductors and RF modules for telecommunications, RF identification (RFID), and cable network systems worldwide. WJ's highly reliable amplifiers, mixers, RF integrated circuits (RFICs), chipsets and multi-chip modules (MCMs) products are used to transmit, receive and process signals that enable current and next generation wireless and wireline services. WJ's RFID reader modules are used to transmit, receive and process RFID signals in RFID readers. For more information visit www.wj.com or call 408-577-6200.