These news releases may no longer be correct because of changes in circumstances. The company assumes no responsibility to update the content of these releases to reflect subsequent events or information.
<< Back
| REMEC Announces Fourth Quarter and Full Year FY 2004 Results |
SAN DIEGO--(BUSINESS WIRE)--March 24, 2004--REMEC Inc. (NASDAQ: REMC) today announced financial results for its fourth quarter and fiscal year ended January 31, 2004. Net sales for the quarter and full year were $113 million and $385 million, respectively, as compared to $75 million and $247 million, respectively, for the prior year. The company's sales from the fourth quarter and year ended January 31, 2004 increased 51% and 56%, respectively, from the prior year. Sales in the company's Defense and Space business segment of $23 million and $89 million respectively for the quarter and the year were up $3.7 million and $10 million compared to the prior year. Fourth quarter Commercial sales of $90 million were up from $55 million a year earlier and full year sales were $296 million compared to $169 million for the prior year. The company reported net losses of $34.7 million for the fourth quarter and $49.4 million for the full fiscal year. The losses for the fourth quarter and the full year compare to losses of $35.8 million and $63.8 million, respectively, for the same periods last year. The fourth quarter loss consisted of an operating loss of $8.3 million partially offset by $4.0 million from a gain on the sale of certain securities and charges totalling $30.4 million. Restructuring/impairment of long-lived assets and related charges, plus manufacturing transition costs to lower cost labor markets and new product start-up costs, totalled $20.9 million. This is on the lower end of the $20 to $23 million range announced in the company's February 10 Press Release. In this release Inventory write-downs and reserve adjustments were identified as a risk, but not quantified. Inventory adjustments plus receivable reserves negatively impacted earnings by $9.5 million. Of this total, $8.4 million was related to inventory and $1.1 million to receivables. The $8.3 million operating loss was approximately $4.0 million greater than expected due in large part to continuing margin pressures in the commercial businesses. The near term cash impact of the fourth quarter charges will be approximately 50% of the total. Additionally, the inventory provisions have lowered the company's expectations reporting the amount of cash that can be realized from inventory reductions. Commenting on the quarter, Bob Shaner, the company's interim CEO, stated, "Our top line performance has been excellent but our top priority is to return the company to profitability while driving shareholder value. We are clearly operating in a challenging marketplace. Our markets are growing but margin pressures continue. The difficult actions we have taken at year-end will give us a significant boost toward our goal of achieving solid profitability but there is a great deal more to do in order to achieve this goal. We must improve our gross margins and bring our operating expenses in line. We will do this by focusing on our core businesses and driving performance improvements through product innovation and a relentless drive to excellence throughout the company." The company's operations and restructuring activities resulted in a net loss of $(34.7) million for the fourth quarter of fiscal 2004, or $(0.56) per diluted share as compared to $(35.8) million, or $(0.70) per diluted share in the comparable prior year period. For the fiscal year ending January 31, 2004, the company's net loss was $(49.4) million, or $(0.84) per diluted share as compared to $(63.8) million, or $(1.36) per diluted share in the year earlier period. Results for the fourth quarter and full year of fiscal 2004 included a $4.5 million gain on the sale of certain securities. Gross profit for the quarter ending January 2004 declined $13.6 million, to $0.6 million from $14.3 million in the fourth quarter of the previous year. Excluding $20.0 million in charges related to inventories and other restructuring charges, fiscal 2004 fourth quarter gross profit was $20.6 million or 18% of sales. For the twelve months ended January 31, 2004, gross profit increased $26.8 million, from $35.1 million in fiscal 2003 to $61.9 million in fiscal 2004, an increase of 77%. Gross profit margin increased from 14% in fiscal 2003 to 16% in fiscal 2004. Excluding fourth quarter restructuring charges, the company's gross profit increased $46.8 million to $89.1 million, Fiscal 2004 Gross profit margin excluding restructuring charges in the fourth quarter was 21.3% as compared to 14.2% in the prior year. Operating expenses for the fourth quarter increased from $24.4 million in the fourth quarter of fiscal 2003 to $39.4 million in the fourth quarter of fiscal 2004. Fourth quarter fiscal 2004 operating expenses included $10.4 million of charges related to the company's previously announced restructuring program. Excluding the impact of the restructuring charges, fourth quarter operating expenses were $29.0 million, an increase of $4.6 million from the prior year fourth quarter. Excluding fourth quarter charges, operating expenses for the fourth quarter of 2004 were 26% of sales as compared to 28% in the prior year. Cash and cash investments at the end of January 2004 totaled $56 million. Inventory decreased from $83 million at the end of the third quarter to $79 million at the end of the fourth quarter, however, this reduction was due entirely to $15 million in inventory related charges discussed above. Excluding these items inventory actually grew approximately $11 million. Accounts receivable were $69 million at year-end, up approximately $5 million from the prior quarter. Most of this increase was volume related as there were approximately 55 days sales in receivables, essentially the same as the previous quarter end. For more information Management will be holding a conference call to discuss quarterly earnings on March 24, at 2:00 p.m. Pacific Daylight Time (Los Angeles). To participate on the conference call within the U.S., call 800-474-8920, confirmation code 754323. From outside the U.S., call 719-457-2727, confirmation code 754323, ten 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 Web site at www.remec.com. Then, click on "Live Webcast-Q4 Earnings Call." 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
(UNAUDITED)
(In thousands, except per share data)
Three months Twelve months Three months
ended ended ended
------------------------------------------------------
January January January January October November
31, 31, 31, 31, 31, 1,
2004 2003 2004 2003 2003 2002
------------------------------------------------------
Net sales $112,888 $74,589 $384,535 $246,588 $104,098 $59,448
Cost of sales 112,259 60,337 322,650 211,533 81,206 52,597
------------------------------------------------------
Gross profit $629 $14,252 $61,885 $35,055 $22,892 $6,851
% 0.6% 19.1% 16.1% 14.2% 22.0% 11.5%
Operating
expenses:
Selling, general
and
administrative 19,571 10,756 60,039 42,393 12,937 10,499
Research and
development 13,036 10,111 50,034 34,568 12,160 8,846
Restructuring
and asset
impairment
charges 6,814 3,569 7,192 4,228 - 659
------------------------------------------------------
Total operating
expenses 39,421 24,436 117,265 81,189 25,097 20,004
Loss from
operations (38,792) (10,184) (55,380) (46,134) (2,205) (13,153)
Interest income
(expense) 75 658 451 1,426 54 274
Other income
(expense) 4,043 (1,764) 5,247 (521) (2,081) 911
------------------------------------------------------
Loss before
income taxes (34,674) (11,290) (49,682) (45,229) (4,232) (11,968)
Income tax
expense
(benefit) (19) 24,497 (274) 18,565 (148) -
------------------------------------------------------
Net loss $(34,655)$(35,787)$(49,408)$(63,794) $(4,084)$(11,968)
======================================================
Net loss per
common share:
Basic $(0.56) $(0.70) $(0.84) $(1.36) $(0.07) $(0.26)
======================================================
Diluted $(0.56) $(0.70) $(0.84) $(1.36) $(0.07) $(0.26)
======================================================
Shares used in computing
net loss per common
share:
Basic 61,357 51,125 59,132 46,784 59,260 45,489
======================================================
Diluted 61,357 51,125 59,132 46,784 59,260 45,489
======================================================
REMEC INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
January October January
31, 31, 31,
2004 2003 2003
--------- --------- ---------
ASSETS
Cash and cash equivalents $45,550 $46,339 $64,900
Short-term investments 10,295 12,989 12,449
Accounts receivable, net 68,644 63,703 48,335
Notes and other receivables 7,723 7,177 4,818
Inventories, net 79,496 83,056 53,117
Other current assets 3,902 3,943 5,201
--------- --------- ---------
Total current assets 215,610 217,207 188,820
Property, plant and equipment, net 79,961 75,995 86,182
Restricted cash 569 569 17,049
Goodwill, net 65,212 47,434 36,679
Intangible assets, net 3,259 3,531 3,950
Other assets 2,589 5,746 6,046
--------- --------- ---------
$367,200 $350,482 $338,726
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $60,551 $53,062 $33,444
Accrued expenses and other current
liabilities 50,068 34,178 40,353
--------- --------- ---------
Total current liabilities 110,619 87,240 73,797
Deferred income taxes and other long-
term liabilities 3,999 3,384 2,358
Shareholders' equity 252,582 259,858 262,571
--------- --------- ---------
$367,200 $350,482 $338,726
========= ========= =========
CONTACT: SOURCE: REMEC Inc. |