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| REMEC Announces Third Quarter FY 2004 Results |
SAN DIEGO--(BUSINESS WIRE)--Dec. 8, 2003--In BW5832 issued Dec. 8, 2003: Add after last graph of release: REMEC, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
October January
31, 31,
2003 2003
--------------------
(unaudited)
ASSETS
Cash and cash equivalents $46,339 $64,900
Short-term investments 12,989 12,449
Accounts receivable, net 63,703 48,335
Notes and other receivables 7,177 4,818
Inventories, net 83,056 53,117
Other current assets 3,943 5,201
--------------------
Total current assets 217,207 188,820
Property, plant and equipment, net 75,995 86,182
Restricted cash 569 17,049
Goodwill, net 47,434 36,679
Intangible assets, net 3,531 3,950
Other assets 5,746 6,046
--------------------
$350,482 $338,726
====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $53,062 $33,444
Accrued expenses and other current liabilities 34,178 40,353
--------------------
Total current liabilities 87,240 73,797
Deferred income taxes and other long-term
liabilities 3,384 2,358
Shareholders' equity 259,858 262,571
--------------------
$350,482 $338,726
====================
The corrected release reads:
REMEC ANNOUNCES THIRD QUARTER FY 2004 RESULTS
REMEC Inc. (NASDAQ: REMC), announced results for its third quarter of fiscal 2004 that ended Oct. 31, 2003. Net sales for the three and nine months ended Oct. 31, 2003 were a record $104.1 million and $271.6 million, respectively, compared to $59.4 million and $172.0 million for the comparable prior year periods. The net loss for the three months ended Oct. 31, 2003, was ($4.1) million, or ($0.07) per diluted share compared to a net loss of $(12.0) million, or ($0.26) per diluted share in the comparable prior year period. The operating loss of $2.2M is approximately 58% lower than the Q2 level. The net loss for the nine months ended Oct. 31, 2003 was ($14.8) million, or ($0.25) per diluted share compared to ($28.0) million, or ($0.62) per diluted share for the same period last year. Discussion of third quarter results:
-- Third quarter sales increased 75% over the comparable prior
year quarter and 21% above the second quarter which results in
five consecutive quarters of sales growth.
-- Commercial and Defense sales were up 105% and 14%,
respectively, from the prior year third quarter.
-- Continued strengthening of demand in core commercial markets
and the acquisition of Paradigm are expected to result in
sales growth in the fourth quarter.
-- The gross profit margin for the quarter was 22%, reflecting
continued industry pricing pressures.
-- The gross profit margin increased from 11.5% reported in
the comparable prior year period as a result of increased
sales volume, productivity improvements and reduced supply
chain costs.
-- Third quarter results benefited from the sale of $1.8 million
of low cost inventory obtained in the acquisition of Spectrian
and the sale of $1.8 million of inventory from a discontinued
product line.
-- Operating expenses of $25.1 million were up $5.1 million, or
25%, from the same period of fiscal 2003. This increase was
primarily the result of the Spectrian acquisition in December
2003 and, to a lesser extent, the acquisition of Himark
Corporation in June 2004.
-- Selling, general and administrative (SG&A) costs were
$12.9 million in the third quarter of fiscal 2004
representing an increase of 23% in comparison to the
comparable prior year period.
-- Research and development costs were $12.2 million for the
quarter representing an increase of 37% in comparison to
the comparable prior year period.
-- Other income reflects a $2.0 million loss relating to foreign
currency forward contracts.
-- Cash and short-term investments decreased by $14.1 million
during the quarter primarily as a result of the sales increase
and the attendant increase in receivables and inventories.
Commenting on the results, Ron Ragland, chairman and chief executive officer of REMEC, said, "We are pleased with our progress during the third quarter. Our customers continue to endorse the REMEC strategy, our product and our partnerships. Key financial performance measures are up and we continue to see strong indicators of business growth as reflected by our 21% sales increase over the second quarter. I am particularly satisfied with the reductions we have made in our operating loss. Much of this improvement is coming from our supply chain focus on material cost reductions and the contribution of our offshore factories. Production levels are up at all locations and our China ramp is proceeding on plan. Despite continued industry pricing pressures, we believe we are on track to achieve profitability in the near term." For more information Management will be holding a conference call to discuss quarterly earnings today, at 2 p.m. Pacific Daylight Time (Los Angeles). To participate on the conference call within the U.S., call 800-289-0730, confirmation code 335722. From outside the U.S., call 913-981-5509, confirmation code 335722, 10 minutes prior to the scheduled time of the call. A simultaneous webcast of the call will also be provided by the company. Log onto the company's website at www.remec.com. Then, click on "Live Webcast-Q3 Earnings Call." To listen to the audio rebroadcast, which will play for seven days, call 888-203-1112 domestically or 719-457-0820 internationally, with the confirmation code 335722. About REMEC REMEC is a designer and manufacturer of high frequency subsystems used in the transmission of voice, video and data traffic over wireless communications networks and in space and defense electronics applications. Statements in this press release that are not historical are forward-looking statements, which involve known and unknown risks and uncertainties. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including, general and industry economic conditions, competition, development factors, operating costs and other risks and uncertainties that are detailed from time to time in our filings with the Securities and Exchange Commission.
REMEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three months ended Nine months ended
--------------------- -------------------
October November October November
31, 1, 31, 1,
2003 2002 2003 2002
----------- --------- --------- ---------
(unaudited)
Net sales $104,098 $59,448 $271,647 $171,999
Cost of sales 81,206 52,597 210,391 151,197
----------- --------- --------- ---------
Gross profit 22,892 6,851 61,256 20,802
Operating expenses:
Selling, general and
administrative 12,937 10,499 40,468 31,637
Research and development 12,160 8,846 36,998 24,457
Restructuring charge -- 659 378 659
----------- --------- --------- ---------
Total operating expenses 25,097 20,004 77,844 56,753
Loss from operations (2,205) (13,153) (16,588) (35,951)
Gain on sale of facility -- -- 945 --
Interest income and other,
net (2,027) 1,185 634 2,012
----------- --------- --------- ---------
Loss before income taxes (4,232) (11,968) (15,009) (33,939)
Credit for income taxes (148) -- (256) (5,932)
----------- --------- --------- ---------
Net loss $(4,084) $(11,968) $(14,753) $(28,007)
=========== ========= ========= =========
Net loss per common share:
Basic $(0.07) $(0.26) $(0.25) $(0.62)
=========== ========= ========= =========
Diluted $(0.07) $(0.26) $(0.25) $(0.62)
=========== ========= ========= =========
Shares used in computing
net loss per common share:
Basic 59,260 45,489 58,382 45,342
=========== ========= ========= =========
Diluted 59,260 45,489 58,382 45,342
=========== ========= ========= =========
REMEC, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
October January
31, 31,
2003 2003
--------------------
(unaudited)
ASSETS
Cash and cash equivalents $46,339 $64,900
Short-term investments 12,989 12,449
Accounts receivable, net 63,703 48,335
Notes and other receivables 7,177 4,818
Inventories, net 83,056 53,117
Other current assets 3,943 5,201
--------------------
Total current assets 217,207 188,820
Property, plant and equipment, net 75,995 86,182
Restricted cash 569 17,049
Goodwill, net 47,434 36,679
Intangible assets, net 3,531 3,950
Other assets 5,746 6,046
--------------------
$350,482 $338,726
====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $53,062 $33,444
Accrued expenses and other current liabilities 34,178 40,353
--------------------
Total current liabilities 87,240 73,797
Deferred income taxes and other long-term
liabilities 3,384 2,358
Shareholders' equity 259,858 262,571
--------------------
$350,482 $338,726
====================
CONTACT: REMEC Inc., San Diego
Winston Hickman, 858-560-1301
SOURCE: REMEC Inc.
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