PECO II Reports First-Quarter 2009 Results
PECO II reported net sales of
EBITDA was a loss of
The
Cash provided by operating activities in the first quarter of 2009 was
Bookings increased during the first quarter of 2009, resulting in an increased sales backlog of
“Given the weak economic environment, the Company took aggressive cost action by reducing the workforce by 25 and managing out-of-pocket expenses resulting in a
Heindel added that during the period, the Company continued to expand the versatility of its Quantum(TM) Power System by developing a distribution panel for use in large applications. The Quantum Consolidated System provides up to 24 load distribution positions for one to four Quantum power shelves. Applications for the new product include cell sites, small central offices and controlled environment vaults.
A new outside plant cabinet, the SC1037, was introduced for use in wireless backhaul and fiber termination applications. The SC1037 incorporates PECO’s Quantum and MPS power systems into the configurations.
The Company also developed an enhanced version of its 827E Inverter System. The 24V input system now provides 30 Amps of 120Vac output in a 23-inch shelf, a 50 percent increase in output power.
“PECO II will continue to take aggressive cost actions as necessary during these challenging economic times,” said Heindel. “At the same time, we continue to focus on our industry-leading responsiveness to ensure our customers can continue to rely on PECO II.”
About PECO II, Inc.
PECO II, headquartered in
Forward-Looking Statements
Statements in this release that are not historical fact are forward-looking statements, which involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, a general economic recession; a downturn in our principal customers’ businesses; the growth in the communications industry; the ability to develop and market new products and product enhancements; the ability to attract and retain customers; competition and technological change; and successful implementation of the Company’s business strategy. In addition, this release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. PECO II does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in PECO II’s periodic filings with the Securities and Exchange Commission.
PECO II, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for per-share data)
For the Three Months
Ended March 31,
2009 2008
Net sales:
Product $5,421 $7,290
Services 2,062 1,721
7,483 9,011
Cost of sales (exclusive of depreciation
and amortization):
Product 4,665 6,119
Services 1,775 1,427
6,440 7,546
Gross margin 1,043 1,465
Operating expenses:
Depreciation and amortization 371 381
Research, development and engineering 521 621
Selling, general and administrative 1,769 1,907
2,661 2,909
Loss from operations (1,618) (1,444)
Interest income, net 9 64
Loss before income taxes (1,609) (1,380)
Income tax expense (8) (9)
Net loss $(1,617) $(1,389)
Net loss per common share:
Basic and diluted $(0.57) $(0.51)
Weighted average common shares
outstanding:
Basic and diluted 2,833 2,747
PECO II, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
March 31, December 31,
2009 2008
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $5,478 $5,814
Accounts receivable, net 2,592 4,366
Inventories, net 8,162 8,533
Cost and earnings in excess of billings
on uncompleted contracts 416 622
Prepaid expenses and other current assets 304 267
Assets held for sale 19 28
Restricted cash 1,188 834
Total current assets 18,159 20,464
Property and equipment, at cost:
Land and land improvements 195 195
Buildings and building improvements 4,628 4,628
Machinery and equipment 2,951 2,895
Furniture and fixtures 5,530 5,518
13,304 13,236
Less-accumulated depreciation: (10,199) (10,109)
Property and equipment, net 3,105 3,127
Other assets:
Idle facility 800 800
Intangibles, net 2,480 2,748
Total assets $24,544 $27,139
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Borrowings under line of credit $1,188 $834
Bank overdrafts 103 994
Accounts payable 3,006 3,387
Billings in excess of cost and estimated
earnings on uncompleted contracts 43 235
Accrued compensation expense 1,110 923
Accrued income taxes 49 56
Other accrued expenses 1,534 1,633
Total current liabilities 7,033 8,062
Shareholders' equity:
Common stock, no par value: 150,000,000
shares authorized; 2,832,853 and 2,816,527
shares issued at March 31, 2009 and December
31, 2008, respectively 3,594 3,573
Additional paid-in capital 121,932 121,901
Accumulated deficit (108,015) (106,397)
Total shareholders' equity 17,511 19,077
Total liabilities and shareholders' equity $24,544 $27,139
Attachment A
EBITDA is not a financial measure calculated in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income, operating income or any other financial measure so calculated and presented. We define EBITDA as net income/(loss) before interest expense, taxes, depreciation, amortization, and non-cash stock compensation expense. Other companies may define EBITDA differently. We present EBITDA because we believe it to be an important supplemental measure of our performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management also uses this information internally for forecasting and budgeting. You should not consider EBITDA in isolation, or as a substitute for analysis of our results as reported under GAAP.
Reconciliation of GAAP Net Loss to EBITDA
(unaudited)
For the Three Months
Ended March 31,
(In thousands) 2009 2008
2009 and 2008 EBITDA Breakdown
Net Loss per GAAP $(1,617) $(1,389)
Interest expense $5 $6
Taxes $8 $9
Depreciation/ amortization $371 $381
Non-cash stock-based compensation $51 $63
EBITDA $(1,182) $(930)
SOURCE PECO II, Inc.