MAJOR recent key accomplishments in its distribution business include: Introduction of the NS6250i, a complete, compact, low end product that is suited for a web security solution for the SMB marketplace Recently announced distribution agreement with Unipalm, the UK and Ireland's foremost specialist distributor of Internet technology solutions The signing of SecureData, a distributor specializing in network security and end-point solutions, to market the NS Series across southern Africa and the Indian Ocean region Appointment of Fusion Distribution, a key distributor of IT security products, to offer the Company�s family of NS Series Appliances in the Middle East �During the quarter, we made significant progress strengthening our sales capabilities through the addition of new channel partners such as Unipalm, SecureData and Fusion, and by progressing relationships with existing channels such as Ingram Micro, which contributed to sales during the quarter.� continued Shortell. �Importantly, we have expanded our relationship with partners, including Microsoft and Websense, with whom we are now actively collaborating through pro-active global marketing programs. We are also working directly with our partners� sales forces to enable them to market their applications on our appliance platforms. Moving forward, we will continue to focus on and leverage these critical areas that directly support the marketing of our NS Series platform.�
Network Engines currently anticipates the following results for its fiscal third quarter ending June 30, 2006, based on current forecasts from certain partners and historical and seasonal trends.
Net revenues in the range of $28 million to $31 million Gross profit in the range of 14 percent to 16 percent of net revenues Operating expenses between $7.3 million and $7.6 million, including an estimated $800,000 of stock-based compensation expense related to SFAS No. 123(R) �We continue to assess initiatives whereby we can increase the revenue growth rate and gain improved leverage from our investments in sales, marketing and product development with a goal of accelerating our path to profitability.�