White Electronic Designs Corporation News
White Electronic Designs Corporation Reports Financial Results for the Second Quarter of Fiscal Year 2008
Net sales for the second quarter of fiscal 2008 were
During the first six months of fiscal 2008, net sales were
On
Based on market factors and the consideration being discussed in connection with the disposal of the product lines, the Company concluded that a charge for impairment of intangibles is required under generally accepted accounting principles. Accordingly, the Company has recorded a non-cash, pre- tax impairment charge of approximately
Including the above charges, total net loss for the second quarter of fiscal 2008 was
Including the noted charges in connection with the disposal of the product lines, the Company reported a net loss for the six months ended
Hamid Shokrgozar, Chairman and Chief Executive Officer of the Company commented, "We are pleased with the results of the quarter given the significant changes that the Company is currently undergoing. Net sales grew by 13% compared to last year's second quarter. Income from continuing operations for the quarter increased over 50% to
"From a strategic standpoint, we determined it was necessary to focus, to a greater extent, our resources, expertise and R&D capabilities in our core military microelectronics business," continued Mr. Shokrgozar. "We are a recognized leader in the defense microelectronics sector and we believe that we can build on that market leadership position and create enhanced value for our loyal shareholders.
"During the second quarter of fiscal 2008, the Company received new orders of
Revenues for military/industrial microelectronic products shipped during the quarter increased 25% to
Military/industrial sales in the display segment were
Commercial sales in the display segment, primarily led by the specialized Tablet PC markets, were
The Company's balance sheet remained strong during the quarter with cash and cash equivalents totaling
Research and development expenses for the second quarter of fiscal 2008 totaled
Selling, general and administrative expenses for the second quarter of fiscal 2008 were
Our gross margins as a percentage of total net sales during the three months ended
Key Microelectronic segment awards during the quarter included: — Received a $1.8 million contract to provide multi-chip modules for the European Fighter Aircraft. — Received approximately $1.0 million of sustaining business interest and development of AT applications in conjunction with GPS receivers for three key programs, including the development and delivery of a munitions based GPS system. — Received multiple orders totaling over $7.0 million for contracts to provide various military grade multi-chip modules for major programs. Key Display segment awards during the quarter included: — Received follow-on orders totaling $0.8 million to provide Max-Vu(TM) technology for use in mobile laptop PCs. Max-Vu(TM) provides a means of optimizing contrast and viewability of Active-Matrix Liquid Crystal Displays (AMLCDs) in high ambient lighting conditions. — Received follow-on display enhancement orders totaling over $1.0 million for rugged display enhancement applications for transportation, commercial avionics and medical applications. — Received multiple follow-on electromechanical and interface related product orders for various military applications totaling approximately $1.3 million. Listed below are our fiscal 2008 strategic initiatives and an update for each: — Pursuit of Circuit Card Assembly (\"CCA\") for military customers. Update: As previously disclosed, we have finalized the layout of a complete GPS receiver, including RF, power supplies, and signal conditioning. We have also recently acquired additional equipment which now gives us four high-end SMT lines. The original $0.8 million pre-production order for the delivery of prototypes of a complete CCA for use in a GPS communications receiver, which was received in fiscal year 2007, is being processed as planned. The prototype for the customer's qualification process has been built and is under test evaluation. We expect these prototypes to be delivered by the end of our third quarter fiscal 2008. Additionally, during the first quarter of fiscal 2008, we received a follow-on production contract totaling over $1.0 million for the continuation of this program. We will continue our efforts to create CCA manufacturing partnerships with additional customers. — Next generation Anti-Tamper (\"AT\") technology. Update: The new coating process continues to develop on schedule, and we are setting up the additional equipment and process development for new material sets. We estimate completion in the summer of 2008. Meanwhile, we continue to secure AT based production orders using our existing technology. — Next generation display enhancement technology, Max-Vu(TM) II technology. Update: We transitioned into the engineering sample phase of our new process during the quarter. We provided samples to four potential customers and delivered a prototype to another for testing. Due to a lower cost structure, we believe we will be able to penetrate markets not previously served by our Max-Vu(TM) I process. We estimate that the new Max-Vu(TM) II process will be part of the production process by the end of fiscal year 2008. — Fully integrated Touch Panel display products. Update: We continue to demonstrate sunlight readable (\"SR\") display systems with integrated touch sensors to customers. We have developed SR touch prototypes for several leading PC manufacturers and have qualified a sensor-bonded LCD for one of these manufacturers. These displays have very low reflectance while retaining excellent brightness, enabling their use in very high brightness environments. By utilizing our Max-Vu(TM) optical bonding process, the clarity and contrast of these display systems are excellent and the stiffness and strength of the display system are substantially enhanced, increasing the ruggedness of the display and the quality of the touch or pen feel when using the touch sensor. We anticipate future orders from these demonstrations, samples and prototypes. — Continue the stock repurchase program. Update: In April 2008, we announced our third repurchase program to acquire up to an additional 10%, or approximately 2.2 million shares, of the Company's outstanding common stock. The timing and amount of any repurchases under this program will depend on market conditions and corporate and regulatory considerations. The duration of the program is twenty-four months and will be funded from available working capital. — Pursuing strategic alternatives. Update: We believe our current decision to dispose of our IED and commercial microelectronics product lines will increase shareholder value. We will continue to evaluate various strategic alternatives to further increase shareholder value. This includes mergers and/or acquisitions that we believe could expand and augment our existing businesses, and other related activities.
Conference Call
The Company will conduct a conference call to review the results of the quarter today at
About WEDC
White Electronic Designs Corporation designs and manufactures innovative high technology components, systems, and branded products for military, industrial, medical and commercial markets. Our Microelectronic products include high-density memory packages and advanced self contained multi-chip and system-in-a-chip modules that are used in a growing range of applications across the Company's markets. White Electronic Designs also produces anti-tamper security coatings for mission-critical semiconductor components in defense applications. Our Display segment designs and manufactures enhanced and reinforced high-legibility flat-panel displays for commercial, medical, defense and aerospace systems. The segment also designs and manufactures digital keyboard and touch-screen operator-interface systems, and electromechanical assemblies for commercial, industrial and military systems. White is headquartered in
Cautionary Statement
This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words, "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward looking statements included in this press release include our expectations that we will achieve growth in fiscal 2008 and that the bulk of such growth will occur in the second half of the fiscal year; that we will achieve military microelectronics sales growth for the balance of fiscal 2008; that financial results in the coming quarters will benefit as a result of our backlog and improved bookings; that our bookings in the quarter will translate into future sales; that the prototypes related to CCA for military customers will be completed by the end of our third quarter of fiscal 2008; that we will be able to penetrate markets not previously served by our Max-Vu(TM) I process; that the Max-Vu (TM)II process will be part of our production process by the end of fiscal 2008; that the next generation AT technology for military and commercial applications will be completed in the summer of 2008; that future orders will be received as a result of demonstrations, samples and prototypes of our Touch Panel display products; that the Company will realize its estimated value of the discontinued operations; that the Company will make repurchases of its common stock pursuant to its current repurchase program; and that the Company will achieve the strategic alternatives that it is pursuing. These forward-looking statements speak only as of the date the statement was made and are based upon management's current expectations and beliefs and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified, that could cause actual results to differ materially from those described in the forward-looking statements. In particular, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: The difficulties associated with successfully integrating acquired businesses and technologies, reductions in demand for the Company's products, the loss of a significant customer, the inability to procure required components, any further downturn in the high technology data and telecommunications industries, reductions in military spending or changes in the acquisition requirements for military products, the termination or amendment of the new contracts awarded during the quarter, the inability to develop, introduce and sell new products or the inability to develop and implement new manufacturing technologies, and changes or restrictions in the practices, rules and regulations relating to sales in international markets.
Additionally, other factors that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements are included in to the Company's Annual Report on Form 10-K for the year ended
Contact: Hamid Shokrgozar Lytham Partners, LLC Chairman and CEO White Electronic Designs Corporation Joe Diaz, Joe Dorame, Robert Blum (602) 437-1520 (602)889-9700 hamid@wedc.com diaz@lythampartners.com WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) March 29, September 29, 2008 2007 ASSETS Current Assets Cash and cash equivalents $45,774 $48,652 Accounts receivable, less allowance for doubtful accounts of $234 and $223 12,913 13,200 Inventories 21,390 22,919 Prepaid expenses and other current assets 2,363 723 Deferred income taxes 4,809 2,767 Assets held for sale 10,968 13,835 Total Current Assets 98,217 102,096 Property, plant and equipment, net 11,487 10,685 Deferred income taxes 1,541 2,104 Goodwill 5,306 5,306 Other assets 117 118 Assets held for sale 1,742 4,470 Total Assets $118,410 $124,779 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $3,487 $4,385 Accrued salaries and benefits 1,128 1,155 Other accrued expenses 1,684 2,447 Deferred revenue 6,078 4,736 Liabilities related to assets held for sale 2,036 3,142 Total Current Liabilities 14,413 15,865 Accrued pension liability 201 271 Other liabilities 1,205 1,222 Liabilities related to assets held for sale 126 1,049 Total Liabilities 15,945 18,407 Commitments and Contingencies Shareholders' Equity Preferred stock, 1,000,000 shares authorized, no shares issued - - Common stock, $0.10 stated value, 60,000,000 shares authorized, 24,898,151 and 24,841,586 shares issued 2,490 2,484 Treasury stock, 2,451,192 and 1,828,412 shares, at par (245) (183) Additional paid-in capital 81,246 83,787 Retained earnings 18,900 20,228 Accumulated other comprehensive income 74 56 Total Shareholders' Equity 102,465 106,372 Total Liabilities and Shareholders' Equity $118,410 $124,779 WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended March 29, March 31, March 29, March 31, 2008 2007 2008 2007 Net sales $20,876 $18,501 $38,539 $34,666 Cost of sales 13,280 12,039 25,472 22,573 Gross profit 7,596 6,462 13,067 12,093 Operating expenses: Selling, general and administrative 4,404 4,279 8,617 8,403 Research and development 1,337 1,365 2,709 2,515 Total operating expenses 5,741 5,644 11,326 10,918 Operating income 1,855 818 1,741 1,175 Interest income 456 651 1,025 1,302 Income from continuing operations before income taxes 2,311 1,469 2,766 2,477 Provision for income taxes (754) (455) (797) (704) Income from continuing operations 1,557 1,014 1,969 1,773 Discontinued operations: Income (loss) from discontinued operations, net of tax (891) 155 (1,064) (400) Loss on sale of discontinued operations, net of tax (2,233) - (2,233) - Income (loss) from discontinued operations (3,124) 155 (3,297) (400) Net income (loss) $(1,567) $1,169 $(1,328) $1,373 Income from continuing operations per common share: Basic $0.07 $0.04 $0.09 $0.07 Diluted $0.07 $0.04 $0.09 $0.07 Income (loss) from discontinued operations per common share: Basic $(0.14) $0.01 $(0.15) $(0.02) Diluted $(0.14) $0.01 $(0.15) $(0.02) Net income (loss) per common share: Basic $(0.07) $0.05 $(0.06) $0.06 Diluted $(0.07) $0.05 $(0.06) $0.06 Weighted average number of common shares and equivalents: Basic 22,421,828 23,516,502 22,567,389 23,668,611 Diluted 22,806,187 23,959,578 22,992,778 24,174,099
SOURCE White Electronic Designs Corporation
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