Network Engines Reports 1Q08

Net revenues of $54.3 million, an increase of 100% percent compared to $27.2 million in the fiscal first quarter of 2007, in line with guidance of $52 million to $56 million.

Gross profit of 17.9 percent of net revenues compared to 19.2 percent in the fiscal first quarter of 2007, above guidance of 16 to 17 percent.

Operating expenses of $8.6 million, including $533,000 of stock-based compensation expense and $420,000 of acquisition related amortization of intangible assets. Operating expenses were in line with guidance of between $8.5 million to $9.0 million, which did not include an estimate for amortization expense. Operating expenses compared to $5.8 million, which included $572,000 of stock based compensation, in fiscal first quarter of 2007.

Net income on a GAAP basis was $1.2 million, or $0.03 per share, which included $587,000 of stock-based compensation charges and $420,000 of amortization expenses. Net income on a GAAP basis compared to a net loss of $(114,000), or $(0.00) per share, in the first fiscal quarter of 2007.

Non-GAAP net income, which excludes the stock-based compensation and amortization expense, was $2.2 million, or $0.05 per share, exceeding guidance of between $900,000 and $1.5 million. Non-GAAP net income compared to $498,000, or $0.01 per share, in the first quarter of 2007.