Revenues totaled $20.1 million for the fourth quarter, which ended December 31, 2006, a tenth straight quarter of increased revenues. Fourth quarter 2006 revenues represented an increase of 56% over the fourth quarter of 2005 and 11% sequentially over the third quarter of 2006.
Annual revenue for 2006 was $68.6 million, representing a 75% increase over annual revenue for 2005. Net income for the fourth quarter of 2006, calculated in accordance with generally accepted accounting principles ("GAAP"), was $0.9 million or $0.04 per diluted share compared with net income of $0.4 million or $0.03 per diluted share for the fourth quarter of 2005 and net income of $0.2 million or $0.01 per diluted share for the third quarter of 2006.
Annual net losses for 2006 and 2005 were $1.9 million and $9.3 million, respectively. The results for 2006 and 2005 included beneficial conversion feature charges related to the issuance of preferred stock and warrants. These non-cash charges were calculated in accordance with GAAP and are expected to be non-recurring. The results for 2006 and 2005 also include non-cash, employee stock-based compensation expenses.
Pro forma net income before stock-based compensation was $1.5 million for the fourth quarter of 2006, compared to pro forma net income of $0.6 million for the fourth quarter of 2005 and $0.7 million for the third quarter of 2006. Pro forma net income before beneficial conversion feature charges and stock-based compensation for 2006 was $3.4 million.
Pro forma net loss before beneficial conversion feature charges and stock-based compensation for 2005 was $6.8 million. A reconciliation of Occams GAAP and pro forma financial results, together with a statement of how management uses the non-GAAP financial information, is set forth below.
The company also finished the fiscal year by surpassing one million ports shipped. The company believes its fiscal year end results reflect increasing interest among telecommunications service providers in upgrading their networks to offer IPTV, Triple Play and other new, innovative services.
"Occams focus on offering IP- and Ethernet-based technologies allowing telco service providers to bring exciting services to residential and business subscribers bore outstanding returns for Occam in 2006, said Bob Howard-Anderson, Occams president and chief executive officer. Achieving our millionth port shipped was among the years highlights.
Occam Networks Inc. (OTC: OCNW - message board)