Network Engines Posts Results

CANTON, Mass. -- Network Engines, Inc. (NASDAQ: NENG), a leading provider of storage and security server appliance products and services, today reported financial results for its fiscal second quarter ended March 31, 2007.

Second Quarter Financial Performance

• Net revenues of $29.3 million, above guidance of $25 million to $28 million and compared to $28 million in the fiscal second quarter of 2006.
• Gross profit of 20.8 percent of net revenues, above guidance of 18 to 19 percent and compared to 15.4 percent in the fiscal second quarter of 2006.
• Operating expenses of $6.2 million, including $608,000 of stock-based compensation expense, at the low end of guidance of $6.2 to $6.5 million. Operating expenses for the fiscal second quarter of 2006 were $7.2 million including $742,000 of stock-based compensation expense.
• Net income on a GAAP basis was $365,000 or $0.01 per share, including $648,000 in stock-based compensation expenses, better than the guided range of a net loss of $(800,000) to $(1.1) million on a GAAP basis. Net income on a GAAP basis compared to a net loss of $(2.5) million, or $(0.06) per share, in the second fiscal quarter of 2006.