8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): February 7, 2008

INTERPHASE CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Texas
(State or Other Jurisdiction of Incorporation)

0-13071
(Commission File Number) 75-1549797
(IRS Employer Identification No.)

2901 North Dallas Parkway, Suite 200, Plano, Texas
(Address of Principal Executive Offices) 75093
(Zip Code)

(214) 654-5000
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(C))

Item 2.02 Results of Operations and Financial Condition.

On February 7, 2008, Interphase Corporation issued a press release regarding its financial results for the quarter ended and year ended December 31, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and is being furnished, not filed, under Item 2.02 of this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 — Press Release Dated February 7, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Interphase Corporation
	By:	/s/ Thomas N. Tipton Jr.
Date: February 7, 2008	Title: Chief Financial Officer,
	Vice President of Finance and Treasurer

EXHIBIT INDEX

Exhibit 99.1 Press Release dated February 7, 2008 (filed herewith)

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

PR Contact:	Investor Contact:
Julie Parenzan	Joseph Hassett
Interphase Corporation	Interphase Corporation
214-654-5000	866-630-INPH
pr@iphase.com	ir@iphase.com

Interphase Announces 2007 Fourth Quarter and Full Year Financial Results

PLANO, Texas — February 7, 2008 — Interphase Corporation (NASDAQ: INPH), a leading international supplier of next-generation networking technologies, today reported financial results for its fourth quarter and full year ended December 31, 2007.

Revenues for the fourth quarter of 2007 were $9 million, representing an 11% increase over revenues for the fourth quarter of 2006 of $8.1 million. Fourth quarter 2007 revenues increased 7% compared to revenues of $8.4 million in the third quarter of 2007. Interphase revenues continue to be driven by the strength in our broadband telecom product portfolio, which rose 20% to $7.7 million in the fourth quarter of 2007 compared to $6.4 million for the fourth quarter of 2006. Our enterprise product line revenues increased to $917,000 compared to $885,000 on a year to year basis. Gross margin for the fourth quarter of 2007 was 53% compared to 56% for the fourth quarter of 2006. The reduction in gross margin was driven mainly by the ramp up of a new broadband product that was aggressively priced to a new Tier 1 Telecom Equipment Manufacturer (TEM) customer. The company recorded a net loss in the fourth quarter 2007 of $430,000, or $(0.07) per share, as compared to a net income of $458,000, or $0.07 per share in the fourth quarter of 2006. The fourth quarter net loss included a one time charge of approximately $220,000 related to a software license procured for a product that was subsequently discontinued, as well as non-recurring charges of approximately $215,000 for organizational changes related to the Company’s operations in France.

“We have ended the year with a high water mark in terms of revenue generation in the fourth quarter of 2007, with an improved quarterly revenue performance each quarter since the early setback in the first quarter of 2007. In spite of this setback, we were able to diversify our customer base and product portfolio across a broad range of applications in the telecommunications infrastructure. We have completed a year of strong execution with a focus on delivering to our customers a portfolio of AdvancedTCA, AdvancedMC and rack mount server PCI-x and PCI-e products as well as media converter appliances”, said Greg Kalush, president and chief executive officer of Interphase Corporation. “As our Tier 1 customers complete the integration activity associated with mergers and finalize the rationalization

of their product portfolios, we are hopeful that the demand picture will stabilize. Many of our customers have noted that they have seen growth in their emerging markets, and in some cases they are leveraging their existing platforms to quickly address the delivery of basic communications and wireless services in these markets. We have seen increased pressure to help our customers cost-reduce their legacy platforms for use in emerging market deployments, as these tend to be very cost sensitive and competitive markets. We will continue to support our customers in these projects. In the very near future, we anticipate production shipments of the packet accelerator portfolio of products that we announced during the fourth quarter. These solutions address our customer’s need for line-rate packet processing, security processing and content inspection which are critical needs of service providers all over the world who deliver advanced communication services over broadband networks. During 2007, we have diligently worked to round out our comprehensive portfolio of products and expand our customer base. I am very proud of the performance of this team in 2007, and look forward with anticipation to solid execution in 2008.”

For the full year 2007, revenues were $30.8 million compared to $33.4 million for the full year 2006 representing an 8% decline. Gross margin for the year ended December 31, 2007 was 57% compared to 54% for the year ended December 31, 2006. Net loss for 2007 was $1.2 million or $(0.19) per share, compared to a net income of $2.1 million or $0.33 per share for 2006. The company’s balance sheet continues to be solid with a working capital position of approximately $27.7 million, including cash and marketable securities position of $20.6 million on December 31, 2007.

About Interphase Corporation

Interphase Corporation (NASDAQ: INPH) is a leading provider of robust building blocks, highly integrated subsystems and innovative gateway appliances for the converged communications network. Building on a 30-year history of providing advanced I/O solutions for telecom and enterprise applications, and addressing the need for high speed connectivity, Interphase has established a key leadership role in delivering next generation AdvancedTCA^® (ATCA), MicroTCA™ and AdvancedMC™ (AMC) solutions to the marketplace. Headquartered in Plano, Texas with sales offices across the globe, Interphase clients include Alcatel-Lucent, Emerson, Ericsson, Fujitsu Ltd., Hewlett Packard, Motorola Inc., Nokia Networks, Nortel Networks Ltd. and Samsung. Interphase is a contributor member of the Scope Alliance and the Communications Platform Trade Association (CP-TA). Additional information about Interphase and its products is available on the company’s Web site at www.interphase.com.

Interphase is an Affiliate member of the Intel^® Communications Alliance. The Intel Communications Alliance is a member-based program comprised of communications and embedded developers and solution providers. Members are committed to providing a strategic supply of standards-based solutions to the communications and embedded market segments. For more information, please visit: www.intel.com/go/ica.

Safe Harbor

This press release contains forward-looking statements with respect to financial results and certain other matters. These statements are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation, fluctuations in demand, the quality and price of similar or comparable networking products, access to sources of capital, general economic conditions in the company’s market areas, and that future sales and growth rates for the industry and the company could be lower than anticipated.

###

Interphase, the Interphase logo, SlotOptimizer and iNAV are trademarks or registered trademarks of Interphase Corporation. All other trademarks are the property of their respective owners.

Condensed Consolidated Financial Statements

Interphase Corporation

Condensed Consolidated Statements of Operations
(amounts in thousands, except per-share amounts)

	Three Months Ended Dec. 31,						Twelve Months Ended Dec. 31,
	2007			2006			2007			2006
Revenues	$	9,006		$	8,123		$	30,780		$	33,403
Gross margin		4,787			4,538			17,591			18,126
Research and development		2,896			2,361			10,216			8,226
Sales and marketing		1,406			1,365			5,614			5,405
General and administrative		1,425			879			4,692			3,926
Total operating expenses		5,727			4,605			20,522			17,557
(Loss) income from operations		(940	)		(67	)		(2,931	)		569
(Loss) income before income tax		(739	)		302			(1,803	)		1,681
Net (loss) income		(430	)		458			(1,194	)		2,086
Net (loss) income per diluted share	$	(0.07	)	$	0.07		$	(0.19	)	$	0.33
Weighted average common and dilutive shares		6,307			6,748			6,161			6,254

Selected Consolidated Balance Sheet Information
(amounts in thousands)

	Dec. 31, 2007		Dec. 31, 2006
Cash and marketable securities	$	20,569	$	22,530
Accounts receivable, net		7,550		5,824
Inventories		2,886		1,921
Net property, plant and equipment		1,084		976
Total assets		36,180		34,062
Total liabilities		8,918		8,262
Total shareholders’ equity	$	27,262	$	25,800