For the fourth quarter of 2005, ended December 31, 2005, PowerDsine Ltd. reported, sales were $7.2 million, compared to sales of $10.9 million for the third quarter of 2005 and sales of $11.6 million for the fourth quarter of 2004. This decrease in sales is a result of an unexpected weakness in midspan sales during the fourth quarter.
The Company reported a net loss for the fourth quarter of 2005 of $(1.7) million, or $(0.09) per diluted share, compared with a net profit of $0.9 million, or $0.04 per diluted share, for the third quarter of 2005, and a net profit of $1.0 million, or $0.05 per diluted share, for the fourth quarter of 2004.
Commenting on the results, Igal Rotem, Chief Executive Officer of PowerDsine, said, "As we had announced in mid-December, sales of our PoE midspan products, particularly to OEM customers, declined significantly during the fourth quarter and weighed on our overall performance for the year. Despite what we believe is a temporary setback, we are optimistic with respect to the long-term potential of the PoE market and PowerDsine's position as one of the leaders in this emerging industry."
Mr. Rotem continued, "With new products released during the fourth quarter, we are further strengthening PowerDsine's position within the PoE market. New integrated solutions such as our 4-channel PoE integrated circuit further broaden the reach of PowerDsine's technology with products developed for specific market segments."
He concluded, "We are confident in our ability to leverage the opportunities that exist in the integrated space, which we believe presents the greatest potential for long-term growth, while working to grow our midspan business. Our performance in the fourth quarter was disappointing; however, we remain confident about our future growth as a leader in the Power over Ethernet market."
Net loss for the fourth quarter of 2005 includes $0.5 million of non-cash stock-based compensation expense, compared to $0.5 million of non-cash stock-based compensation expense in the third quarter of 2005, and $0.6 million of non-cash stock-based compensation expense in the fourth quarter of 2004.
Non-GAAP net income excludes the effects of non-cash stock-based compensation expense. Non-GAAP net loss for the fourth quarter of 2005 was $(1.2) million, or $(0.05) per share, compared to non-GAAP net income for the third quarter of 2005 of $1.4 million, or $0.07 per share, and non-GAAP net income for the fourth quarter of 2004 of $1.6 million, or $0.08 per share. The number of shares used to compute non-GAAP net income (loss) per share for the three-month and full year periods ended December 31, 2005 was 21.4 million.
As of December 31, 2005, the Company had cash, cash equivalents and marketable debt securities of $76.5 million compared to $80.8 million as of December 31, 2004. This decrease was caused primarily due to a one-time payment of withholding taxes resulting from employees' exercise of share options, which occurred during the first quarter of 2005.
