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Press Release Source: Gastar Exploration Ltd. On Wednesday May 19, 2010, 1:10 pm EDT
HOUSTON, May 19 /PRNewswire-FirstCall/ — Gastar Exploration Ltd. (NYSE Amex: GST) today announced that it has successfully drilled the Donelson #4 well, a deep Bossier test in East Texas, to a total depth of 18,700 feet and has logged approximately 138 net feet of pay in the lower Bossier formation. The Donelson #4 well contains five pay zones within the lower Bossier formation that, based on log analysis, have measured porosity up to 20% and high resistivity.
Subject to the availability of frac equipment and crews, we anticipate that the first of potentially four completion stages should be completed and the well turned to sales within 30 to 45 days. Gastar owns a 67% before payout working interest in the well (a 49.7% before payout net revenue interest).
Gastar is also currently drilling the Wildman #6H in East Texas, a horizontal well to test the oil potential in the Glen Rose limestone and expects to reach total depth within two weeks. Gastar has a 100% before payout working interest in the Wildman #6H (an approximate 75% before payout net revenue interest).
J. Russell Porter, Gastar’s President & CEO, commenting on the announcement stated, “The Donelson #4 well has the potential to be another high rate completion and from a volumetric perspective has a gross EUR, based on internal estimates, of over 25 Bcf of natural gas. Based on recent experience from the Deep Bossier play as well as other high rate natural gas plays, we plan on producing the well at a somewhat restricted rate in order to maintain higher gas rates for a longer period of time and hopefully achieve overall higher recoveries of gas in place. Gastar’s net drilling and completion cost for the Donelson #4 well is projected to be $9.8 million, net of expected recoveries from well control insurance for a portion of the costs to sidetrack the well.”
About Gastar Exploration
Gastar Exploration Ltd. is an exploration and production company focused on finding and developing natural gas assets in North America. The Company pursues a strategy combining deep natural gas exploration and development with lower risk CBM and shale resource development. The Company owns and operates exploration and development acreage in the deep Bossier gas play of East Texas and Marcellus Shale play in West Virginia and Pennsylvania. Gastar’s CBM activities are conducted within the Powder River Basin of Wyoming. For more information, visit our web site at http://www.gastar.com/.
Safe Harbor Statement and Disclaimer
This news release includes “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements give our current expectations, opinion, belief or forecasts of future events and performance. A statement identified by the use of forward looking words including “may”, “expects”, “projects”, “anticipates”, “plans”, “believes”, “estimate”, “will”, “should”, and certain of the other foregoing statements may be deemed forward-looking statements. Although Gastar believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. These include risk inherent in natural gas and oil drilling and production activities, including risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to natural gas and oil prices, a material decline in which could cause Gastar to delay or suspend planned drilling operations or reduce production levels; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in natural gas and oil prices; risks relating to unexpected adverse developments in the status of properties; risks relating to the absence or delay in receipt of government approvals or third party consents; and other risks described in Gastar’s Annual Report on Form 10-K and other filings with the SEC, available at the SEC’s website at http://www.sec.gov/. By issuing forward looking statements based on current expectations, opinions, views or beliefs, Gastar has no obligation and, except as required by law, is not undertaking any obligation, to update or revise these statements or provide any other information relating to such statements.
The NYSE Amex has not reviewed and does not accept responsibility for the adequacy of this release.
May 19, 2010 (Business Wire) — Tandy Leather Factory, Inc. (AMEX: TLF) (the “Company”) announced today that it has been approved for listing on the NASDAQ Global Market under the symbol “TLF.” Trading on the NASDAQ Global Market is expected to commence on June 2, 2010. The Company’s common stock will continue to trade on the NYSE Amex until the market close on June 1, 2010.
Jon Thompson, Chief Executive Officer and President of the Company, commented, “We are pleased to announce our listing on the NASDAQ Global Market. We believe the move to NASDAQ will improve the visibility of our stock, enhance trading liquidity in our shares, and provide us with greater exposure to institutional investors.”
Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. The Company distributes its products through its 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 76 Tandy Leather retail stores, located in 36 states and 6 Canadian provinces, one combination wholesale/retail store located in the United Kingdom, and Mid-Continent Leather Sales, one store located in Oklahoma. Its common stock trades on the NYSE Amex with the symbol “TLF.” To be included on Tandy Leather Factory’s email distribution list, go to http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.
This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
PORTLAND, Maine, May 18 /PRNewswire-FirstCall/ — Magellan Petroleum Corporation (Nasdaq: MPET) (ASX: MGN) announced that the Company has signed a term sheet (the “Term Sheet”) with Young Energy Prize S.A. (“YEP”), a Luxembourg corporation, embodying an agreement in principle for an additional equity investment in the Company of $15.6 million. Currently, YEP owns approximately 27% of the outstanding shares of the Company’s Common Stock, calculated as if the warrants to purchase shares of such stock held by YEP were fully exercised. The financing transaction set forth in the Term Sheet, upon completion, would result in YEP owning approximately 33% of the Company’s Common Stock, calculated as if such warrants were fully exercised. The Term Sheet is subject to the negotiation, execution and delivery of definitive documentation and the Company’s receipt of a favorable fairness opinion.
YEP, the Company’s strategic investor since July 2009, is a European firm targeting investments in the exploitation of underdeveloped oil and gas fields and in energy small-cap, equity issues. YEP has informed the Company that it may make its investment in part through the ECP Fund, SICAV-FIS (the “ECP Fund”), a specialized investment fund based in Luxembourg. Closing of YEP’s additional investment is related to the payment of Evans Shoal planning work and the second Evans Shoal disbursement to Santos Limited and will be set to be consistent with the Company’s future commitment dates for Evans Shoal development. The Company expects the closing to occur within 120 days and the Term Sheet contemplates an outside closing date of October 31, 2010.
Magellan’s President and Chief Executive Officer, William H. Hastings said, “This is the first step in the financing process for the purchase of a 40% interest in the Evans Shoal field, offshore Australia. We are working other, parallel initiatives which, when complete, will yield major new investment in the Company. We expect to use the majority of equity funding for the purchase of the field interest and the planning, testing, analysis, and drilling of Evans Shoal subject to the Evans Shoal Joint Venture sanction and approval. A portion of the proceeds will go towards project development in addition to proceeds from other parallel initiatives.”
Walter McCann, Magellan’s Chairman of the Board, stated, “Progress continues with regard to our plans to build a strong Company with new, attractive assets. We remain positive that continued methodical, step-by-step efforts will yield strong value for our shareholders in the future.”
Nikolay V. Bogachev is Chairman and CEO of YEP. Of the financing transaction, he said “YEP continues to believe in Magellan’s business models and, based on recent key progress, wishes to invest further in Magellan.”
J. Thomas Wilson, First Vice President of YEP said, “This is the first step toward an ambitious plan building key assets in strategic, low-cost areas to supply energy for the inevitable future demand growth in Asia.”
Investment Terms
Under the Term Sheet, YEP would acquire an additional 5,200,000 shares of the Company’s Common Stock (the “Shares”) at a price of $3.00 per share (the “Transaction”), pursuant to a securities purchase agreement to be negotiated. The Company would also grant customary registration rights to YEP with respect to the Shares. The Term Sheet also provides for certain percentage-maintenance rights for YEP, certain restrictions on transfers of the Shares and certain standstill obligations. The purchase price is approximately 71% above the closing price of the Company’s Common Stock calculated as of the close of trading on May 17, 2010. After completion of the Transaction, YEP’s ownership position in the Company would include approximately 20.5 million shares and approximately 4.4 million shares issuable under YEP’s existing warrants, or approximately 33% of the outstanding shares of the Company’s Common Stock, calculated as if the warrants held by YEP were fully exercised.
Messrs. Bogachev and Wilson are members of the Company’s Board of Directors and are contemplated to continue to serve.
Canaccord Adams, Inc., of Boston, Massachusetts, is serving as the Company’s financial adviser with respect to the Transaction.
The Company intends to file with the SEC a current report on Form 8-K to announce the signing of the Term Sheet and a subsequent current report on Form 8-K which will include as exhibits copies of the securities purchase agreement and an investor’s agreement providing for registration rights, percentage-maintenance rights, restrictions on transfer and standstill obligations, at such time as those agreements are executed by the parties to the Transaction.
This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy any securities of Magellan. The Shares to be sold to YEP in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States without being registered with the U.S. Securities and Exchange Commission (“SEC”) or through an applicable exemption from SEC registration requirements. The Shares are being offered and sold only to YEP. The Term Sheet provides that Magellan will grant customary registration rights to YEP for the resale of the Shares to be issued in the private placement.
About Magellan
Magellan’s common stock is quoted on the NASDAQ Capital Market (symbol: MPET) and on the Australian Stock Exchange in the form of CDI’s (symbol: MGN). The Company is engaged in the sale of oil and gas resulting from the exploration for and development of oil and gas reserves. Magellan’s most significant assets are its 100% equity ownership interest in Magellan Petroleum Australia Limited (“MPAL”) and its 83.7% interest in all zones surface to deep at the Poplar Dome fields, Roosevelt Co., Montana. MPAL also has signed an agreement to acquire a 40% equity interest in the Evans Shoal gas field, offshore Northern Territory, Australia. Magellan and MPAL also hold various override and working interest holdings elsewhere in the United Kingdom and in Canada.
About YEP
YEP was founded in 2007 by recognized entrepreneur Nikolay V. Bogachev, who has had partnerships with major oil companies in developing earlier investments. YEP is building a portfolio of energy investments worldwide with current efforts within Australia and in Africa. The ECP Fund, SICAV-FIS is a Specialized Investment Fund in Luxembourg – a regulated vehicle under the supervision of the Commission de Surveillance du Secteur Financier (CSSF) there. The ECP Fund, SICAV-FIS is managed by an entity that is independent of its investors.
Forward- Looking Statements
Statements in this release which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. These statements about Magellan and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Among these risks and uncertainties are the likelihood and timing of the closing of the planned YEP common stock investment transaction, pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the profitable integration of acquired businesses, including Nautilus Poplar LLC, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production. In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.
May 19, 2010 (Business Wire) — TranSwitch® Corporation (NASDAQ: TXCC), a leading provider of semiconductor solutions for the converging voice, data and video network, today announced that it has received pre-production orders from a leading Chinese Telecom OEM for its Atlanta™ 80 processor for use in its WiMAX VoIP terminal equipment. The first widespread deployments of the Atlanta™ based WiMax Fixed Wireless Terminals (FWT) will be in Asia and Europe where rollouts are expected to begin during the third quarter of 2010. Deployments follow several months of rigorous field testing of equipment under varying network conditions to ensure interoperability, quality and performance.
The adoption of WiMAX, a fourth generation wireless technology, is rapidly gaining momentum worldwide. According to a recent ABI Research report, 164 mobile WiMAX networks were in trial or commercial operation at the end of 2009, and the number of WiMAX subscribers is expected to grow from approximately 6 million in 2009 to over 30 million by 2011.
“We are delighted to have been selected by our major customer as the vendor of choice for their WiMAX VoIP terminal deployments. The fast growing VoIP market presents strategic growth opportunities for TranSwitch,” said Dr. M. Ali Khatibzadeh, President and CEO of TranSwitch. “Our Atlanta™ and Entropia™ product families offer best-in-class performance in terms of voice quality, power consumption and packet processing in the industry,” concluded Dr. Khatibzadeh.
TranSwitch’s Atlanta™ 80 is well positioned for network deployments worldwide. Last year, Korea’s fastest growing broadband operator, SK Broadband, deployed over a million DECT VoIP terminals based on the Atlanta™ processor. Other service providers are also conducting trials of Atlanta™ 80 based equipment for their networks.
“Atlanta™’s dedicated and optimized VoIP DSPbased technology enables WiMAX terminals to provide consistently high voice quality even under high internet data traffic conditions,” said Mr. Kris Shankar, VP of Sales and Marketing at TranSwitch. “The selection of Atlanta™ in these deployments is a testament to TranSwitch’s leadership in VoIP technology.” Mr. Shankar continued, “With an integrated Digital Signal Processor (DSP) optimized for VoIP, the Atlanta™ 80 product can simultaneously support 100 Mbps wire-speed routing with Network Address Translation (NAT), Security, WiFi, T38 Fax and up to eight voice channels while maintaining excellent voice quality. We are uniquely architected to deliver all these features with little to no impact on overall performance.”
About TranSwitch Corporation
TranSwitch Corporation (Nasdaq: TXCC) designs, develops and markets innovative semiconductors and technologies that provide core functionality and complete solutions for voice, data and video communications network equipment. As a leading supplier to telecom, datacom, cable television and wireless markets, TranSwitch customers include the major OEMs that serve the worldwide public network, the Internet, and corporate Wide Area Networks (WANs). TranSwitch devices are inherently flexible; many incorporating embedded programmable microcontrollers to rapidly meet customers’ new requirements or evolving network standards by modifying a function via software instruction. TranSwitch implements global communications standards in its VLSI solutions and is committed to providing high-quality products and services. TranSwitch, Shelton, CT, is an ISO 9001 registered company. For more information, visit www.transwitch.com.
Forward-looking statements in this release, including statements regarding management’s expectations for future financial results and the markets for TranSwitch’s products, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements regarding TranSwitch, its operations and its financial results involve risks and uncertainties, including without limitation risks associated with acquiring new businesses; of downturns in economic conditions generally and in the telecommunications and data communications markets and the semiconductor industry specifically; risks in product development and market acceptance of and demand for TranSwitch’s products and products developed by TranSwitch’s customers; risks relating to TranSwitch’s indebtedness; risks of failing to attract and retain key managerial and technical personnel; risks associated with foreign sales and high customer concentration; risks associated with competition and competitive pricing pressures; risks associated with investing in new businesses; risks of dependence on third-party VLSI fabrication facilities; risks related to intellectual property rights and litigation; risks in technology development and commercialization; and other risks detailed in TranSwitch’s filings with the Securities and Exchange Commission.
HONG KONG, May 19 /PRNewswire-Asia/ — Global Sources (Nasdaq: GSOL) announced David Gillan will resign as CFO and Director Eddie Heng will return to the company to serve as Interim CFO, effective June 1, 2010.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030303/LNM011LOGO-b )
Global Sources’ chairman and CEO, Merle A. Hinrichs, said: “David plans to pursue personal business opportunities, and we wish him the very best. I am pleased Eddie Heng will return as Interim CFO. Eddie was our CFO for 15 years until his retirement in June 2009 and has served as a director since 2000. He is intimately familiar with the company, and I am confident he will ensure continuity and a smooth transition through to the appointment of a new CFO.”
Mr. Heng joined the company in August 1993 as deputy to the vice president of finance and was the Chief Financial Officer, previously entitled vice president of finance, from 1994 until June 2009. He has been a Director of Global Sources since April 2000. Mr. Heng received an MBA from Shiller International University in London in 1993, is a Singapore Certified Public Accountant, a member of the Institute of Certified Public Accountants, Singapore, and a Fellow Member of The Association of Chartered Certified Accountants in the United Kingdom. Mr. Heng is currently a director and audit committee chairman of Prison Fellowship Singapore, a Christian non-profit organization that provides counselling and skills training to prisoners and financial support to their families. Prior to joining Global Sources, he was the regional financial controller of Hitachi Data Systems, a joint venture between Hitachi and General Motors.
Global Sources’ management and board have begun the search process and are considering both external and internal candidates. Mr. Gillan will continue providing support to the company and the transition process until July 31, 2010.
About Global Sources
Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China. The core business uses English-language media to facilitate trade from Greater China to the world. The other business segment utilizes Chinese-language media to enable companies to sell to, and within Greater China.
The company provides sourcing information to volume buyers and integrated marketing services to suppliers. It helps a community of over 888,000 active buyers source more profitably from complex overseas supply markets. With the goal of providing the most effective ways possible to advertise, market and sell, Global Sources enables suppliers to sell to hard-to-reach buyers in over 240 countries.
The company offers the most extensive range of media and export marketing services in the industries it serves. It delivers information on 4.5 million products and more than 256,000 suppliers annually through 14 online marketplaces, 13 monthly print and 15 digital magazines, over 80 sourcing research reports and 21 specialized trade shows which run 55 times a year across 9 cities.
Suppliers receive more than 136 million sales leads annually from buyers through Global Sources Online (http://www.globalsources.com ) alone.
Global Sources has been facilitating global trade for nearly 40 years. Global Sources’ network covers more than 60 cities worldwide. In mainland China, Global Sources has about 2,500 team members in more than 40 locations, and a community of over 1 million registered online users and magazine readers for its Chinese-language media.
Global Sources Press Contact in Asia:
Camellia So
Tel: +852-2555-5021
Email: cso@globalsources.com
Global Sources Press Contact in U.S.:
James W.W. Strachan
Tel: +1-480-664-8309
Email: strachan@globalsources.com
Global Sources Investor Contact in Asia:
Suzanne Wang
Tel: +852-2555-4747
Email: investor@globalsources.com
Global Sources Investor Contact in U.S.:
Kirsten Chapman & Timothy Dien
Lippert/Heilshorn & Associates, Inc.
Tel: +1-415-433-3777
Email: tdien@lhai.com
SOURCE Global Sources
Press Release Source: Versar, Inc. On Tuesday May 18, 2010, 2:50 pm EDT
SPRINGFIELD, Va.–(BUSINESS WIRE)–Versar, Inc. (NYSE Amex:VSR) has deployed a team of scientists to the Gulf coast region to provide technical support in response to the oil spill in the Gulf of Mexico. Versar was selected due to its rapid response capabilities and over 35 years of ecological monitoring and surveying experience. On-scene Versar scientists will be supported remotely by other Versar divisions with modeling, meteorology, fisheries ecology, sensitive habitat and other technical experts. Versar has expertise in both oil spill response and Natural Resource Damage Assessment (NRDA) and is able to quickly respond to incidents of this magnitude.
Anthony Otten, CEO of Versar said, “It is a privilege to provide our technical services in the Gulf Region to protect our nation’s natural resources. Versar is committed to doing everything possible to assist in this effort.”
VERSAR, INC., headquartered in Springfield, VA, is a publicly held international professional services firm supporting government and industry in national defense/homeland defense programs, environmental health and safety and infrastructure revitalization. VERSAR operates a number of web sites, including the corporate Web sites, http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.versar.com&esheet=6296170&lan=en_US&anchor=www.versar.com&index=1&md5=d229d68127ea1abf1e6a74af7f7f57ed, http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.homelanddefense.com&esheet=6296170&lan=en_US&anchor=www.homelanddefense.com&index=2&md5=551facc64fe3ca8e6afff34146ca30a3, http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.geomet.com&esheet=6296170&lan=en_US&anchor=www.geomet.com&index=3&md5=88ebd518d600cfc108fcce0207985173; http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.viap.com&esheet=6296170&lan=en_US&anchor=www.viap.com&index=4&md5=2047f3f4e0749c7e390e484454d8e99d; http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.dtaps.com&esheet=6296170&lan=en_US&anchor=www.dtaps.com&index=5&md5=4a2dc97dc6c4faa3a238c7faa73ed53e; http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.adventenv.com&esheet=6296170&lan=en_US&anchor=www.adventenv.com&index=6&md5=7bcbdd6752c48e331ec3932ceab640a0, and http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.ppsgb.com&esheet=6296170&lan=en_US&anchor=www.ppsgb.com&index=7&md5=a2210011883de0b84ae34bbecd990501.
This press release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended June 26, 2009. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.
BEIJING, May 18, 2010 (Xinhua News Agency) — China’s largest Internet portal the Sina Corp. (NASDAQ:SINA) (SINA.NASDAQ), saw net profit in the first quarter jumping 149.8 percent year on year to 24.4 million US dollars.
Its EPS stood at 37 cents, compared with 17 cents during the same period last year.
Revenue from advertising gave a strong boost to the Q1 performance. It rose 26 percent to 54.3 million dollars.
Revenue from non-advertising business line remains flat at 30.7 billion dollars.
The company’s net revenue increased 15 percent to 85 million dollars.
Its gross margin climbed from 52.4 percent in Q1 last year to 56.6 percent.
The company expects 90 million to 93 million dollars of net revenue for Q2, of which net revenue excluding the carved-out real-estate advertising business would range from 70 million to 72 million US dollars and revenue from non-advertising business would be 20 million to 21 million US dollars. (Edited by Wu Xiaobo, wuxb@xinhua.org)
BEIJING, May 17 /PRNewswire-Asia/ — Perfect World Co., Ltd. (Nasdaq: PWRD) (“Perfect World” or the “Company”), a leading online game developer and operator based in China, today announced its unaudited financial results for the first quarter ended March 31, 2010.
(Logo: http://photos.prnewswire.com/prnh/20090416/CNTH023LOGO )
First Quarter 2010 Highlights(1)
-- Total revenues were RMB625.0 million (USD91.6 million), an increase of
2.8% from 4Q09 and 47.0% from 1Q09
-- Gross profit was RMB537.9 million (USD78.8 million), an increase of
2.2% from 4Q09 and 45.9% from 1Q09
-- Operating profit was RMB323.2 million (USD47.3 million), an increase of
16.9% from 4Q09 and 40.3% from 1Q09. Non-GAAP operating profit(2) was
RMB344.9 million (USD50.5 million), an increase of 15.6% from 4Q09 and
40.3% from 1Q09
-- Net income attributable to the Company's shareholders was RMB305.2
million (USD44.7 million), an increase of 12.7% from 4Q09 and 41.6%
from 1Q09. Non-GAAP net income attributable to the Company's
shareholders(2) was RMB327.0 million (USD47.9 million), an increase of
11.7% from 4Q09 and 41.6% from 1Q09
-- Basic and diluted earnings per ADS(3) were RMB6.12 (USD0.90) and
RMB5.75 (USD0.84), respectively, as compared to RMB5.44 and RMB5.09,
respectively, in 4Q09, and RMB4.14 and RMB3.96, respectively, in 1Q09.
Non-GAAP basic and diluted earnings per ADS(2) were RMB6.56 (USD0.96)
and RMB6.16 (USD0.90), respectively, as compared to RMB5.88 and RMB5.50,
respectively, in 4Q09, and RMB4.43 and RMB4.25, respectively, in 1Q09
-- Established a wholly-owned subsidiary in Europe to expand the Company's
overseas operating capabilities
(1) The U.S. dollar (USD) amounts disclosed in this press release,
except for those transaction amounts that were actually settled in
U.S. dollars, are presented solely for the convenience of the
reader. The conversion of Renminbi (RMB) into USD in this release
is based on the noon buying rate in The City of New York for cable
transfers in RMB per USD as certified for customs purposes by the
Federal Reserve Bank of New York as of March 31, 2010, which was
RMB6.8258 to USD1.00. The percentages stated in this press release
are calculated based on the RMB amounts.
(2) As used in this press release, non-GAAP operating profit, non-GAAP
net income attributable to the Company's shareholders and non-GAAP
earnings per ADS are defined to exclude share-based compensation
charge from operating profit, net income attributable to the
Company's shareholders and earnings per ADS, respectively. See
"Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-
GAAP Results" at the end of this press release.
(3) Each ADS represents five ordinary shares.
“We are pleased to announce our first quarter 2010 results,” commented Mr. Michael Chi, Chairman and Chief Executive Officer of Perfect World. “Our first quarter results came in line with our previous expectations as our games continued to perform well. Although we experienced some technical complications during some major updates on a recently launched new game, we have solved the problems and are working on a soon-to-be launched major expansion pack with a lot of enhanced content to further drive the user base. This was a valuable experience for us, and we will try our best to avoid similar issues in future developments for both new and existing games. Despite this occurrence and the adverse seasonality factors, we continued to grow the popularity of some of our existing games to deliver sequential growth.”
“We continue to focus on investing in our R&D team to further strengthen our game development capabilities. By doing so, we are able to deliver a strong and sustainable pipeline of notably differentiated games that span the 3D, 2.5D and 2D market segments. Our specialized game engines and production studios allow us to remain highly competitive in the industry as we build franchises that include flagship titles in each of these market segments.”
“Our overseas expansion continues to progress and we are quite satisfied with the development so far. We continued to sign new licensing agreements with various overseas game operators and are strengthening our penetration worldwide. Our U.S. operations are also progressing well. We recently launched ‘Battle of the Immortals’ in North America through our wholly-owned subsidiary in the U.S. The initial feedback has been very positive. Furthermore, in April, we acquired C&C Media Co., Ltd. (“C&C Media”), our long-term Japanese operation partner, to capture the growth opportunities in Japan and further expand our overseas operating capabilities.”
“As a part of our growth strategy, we continuously monitor the market for acquisition opportunities that will generate synergies with our core business. I am excited to announce some recent developments on this front. We recently made a strategic investment to acquire a majority stake in Runic Games, Inc. (“Runic Games”), a top-tier game development studio based in the U.S., to further strengthen our R&D capabilities. By collaborating more closely with Runic’s professional team, we seek to combine their creativity and expertise in game development with our deep understanding of the online game market to create global titles. We also exercised an option to increase our stake in Chengdu Ye Net Science and Technology Development Co., Ltd. (“Ye Net”), a web game developer and operator. Through enhanced control, we believe we will have greater flexibility to generate valuable synergies between the web game business and our core business.”
“We are excited about the prospects that our industry presents and believe we are well-positioned to capture future opportunities. We will continue to dedicate our strong resources to longer-term projects to effectively lengthen the life cycle of both new and existing games that meet the expectations from game players around the world. Our long-term oriented management team is committed to driving the sustainable growth of our Company while increasing value for our shareholders.”
First Quarter 2010 Financial Results
Total Revenues
Total revenues were RMB625.0 million (USD91.6 million) in 1Q10, an increase of 2.8%, or RMB17.1 million, from RMB607.9 million in 4Q09, and an increase of 47.0%, or RMB199.9 million, from RMB425.1 million in 1Q09.
Online game operation revenues were RMB569.7 million (USD83.5 million) in 1Q10, an increase of 5.2%, or RMB27.9 million, from RMB541.8 million in 4Q09, and an increase of 51.0%, or RMB192.5 million, from RMB377.2 million in 1Q09. The sequential growth in online game operation revenues was primarily attributable to the continued popularity of some of the Company’s existing games and a series of successful in-game promotions and marketing activities.
The aggregate average concurrent users (ACU) for games under operation in mainland China was approximately 993,000 in 1Q10, as compared to 1,157,000 in 4Q09 and 615,000 in 1Q09. The active paying customers (APC) for games operated in mainland China under the item-based revenue model was approximately 1,670,000 in 1Q10, as compared to 2,188,000 in 4Q09 and 1,464,000 in 1Q09. The average revenue per active paying customer (ARPU) for games operated in mainland China under the item-based revenue model was RMB306 in 1Q10, as compared to RMB223 in 4Q09 and RMB244 in 1Q09. ACU and APC decreased by 14.2% and 23.7%, respectively, from 4Q09. This was mainly due to some technical complications that occurred during some major updates on a recently launched new game, as well as the adverse seasonality factors and more aggressive anti-cheating efforts adopted by the Company. However, the Company still managed to increase ARPU by 37.2% from 4Q09 through a series of successful promotions.
Overseas licensing revenues were RMB53.4 million (USD7.8 million) in 1Q10, as compared to RMB61.7 million in 4Q09 and RMB48.0 million in 1Q09. The decrease from 4Q09 was mainly attributed to a decline in usage-based royalty fees due to adverse seasonality in certain overseas markets, and a decrease in initial license fees as the Company did not commercially launch any game in overseas market in 1Q10.
Film, television and other revenues were RMB2.0 million (USD0.3 million) in 1Q10, as compared to RMB4.5 million in 4Q09 and Nil in 1Q09.
Cost of Revenues
The cost of revenues was RMB87.1 million (USD12.8 million) in 1Q10, as compared to RMB81.5 million in 4Q09 and RMB56.4 million in 1Q09.
The online game related cost was RMB87.1 million (USD12.8 million) in 1Q10, as compared to RMB79.8 million in 4Q09 and RMB56.4 million in 1Q09. The increase from 4Q09 was mainly due to an increase in staff related cost and depreciation expense.
The film, television and other cost was RMB24.9 thousand (USD3.6 thousand) in 1Q10, as compared to RMB1.7 million in 4Q09 and Nil in 1Q09.
Gross Profit and Gross Margin
Gross profit was RMB537.9 million (USD78.8 million) in 1Q10, an increase of 2.2%, or RMB11.5 million, from RMB526.4 million in 4Q09, and an increase of 45.9%, or RMB169.2 million, from RMB368.7 million in 1Q09. Gross margin was 86.1% in 1Q10, as compared to 86.6% in 4Q09 and 86.7% in 1Q09.
Operating Expenses
Operating expenses were RMB214.8 million (USD31.5 million) in 1Q10, as compared to RMB249.8 million in 4Q09 and RMB138.3 million in 1Q09. The decrease in operating expenses from 4Q09 was mainly attributed to lower sales and marketing expenses, and was partially offset by higher general and administrative expenses and R&D expenses.
Sales and marketing expenses decreased by 34.1%, or RMB42.5 million, from RMB124.7 million in 4Q09 to RMB82.2 million (USD12.0 million) in 1Q10. This was largely due to lower advertising and promotional expenses as the Company did not launch new game in 1Q10. In addition, the decrease from 4Q09 was also attributable to the special charge of approximately RMB17.5 million in 4Q09 associated with a change in the estimated useful lives of certain intangible assets acquired from InterServ which are related to outsourcing services.
R&D expenses increased by 1.2%, or RMB0.9 million, from RMB76.9 million in 4Q09 to RMB77.8 million (USD11.4 million) in 1Q10. The increase from 4Q09 was primarily due to an increase in staff cost as the Company continued to expand its R&D talent pool.
General and administrative expenses increased by 13.5%, or RMB6.5 million, from RMB48.3 million in 4Q09 to RMB54.8 million (USD8.0 million) in 1Q10. The increase from 4Q09 was mainly due to an increase in professional service expenses.
Operating Profit
Operating profit was RMB323.2 million (USD47.3 million) in 1Q10, an increase of 16.9%, or RMB46.6 million, from RMB276.5 million in 4Q09, and an increase of 40.3%, or RMB92.8 million, from RMB230.4 million in 1Q09. Non-GAAP operating profit was RMB344.9 million (USD50.5 million) in 1Q10, an increase of 15.6%, or RMB46.5 million, from RMB298.5 million in 4Q09, and an increase of 40.3%, or RMB99.1 million, from RMB245.8 million in 1Q09.
Total Other Income
Total other income was RMB10.5 million (USD1.5 million) in 1Q10, as compared to RMB11.8 million in 4Q09 and RMB5.0 million in 1Q09.
Income Tax Expense
Income tax expense was RMB28.7 million (USD4.2 million) in 1Q10, as compared to RMB17.5 million in 4Q09 and RMB19.9 million in 1Q09. Beijing Perfect World Software Co., Ltd. (“PW Software”), the Company’s wholly-owned subsidiary, is qualified as a high and new technology enterprise and was entitled to a tax exemption in 2007, 2008 and 2009 and enjoys a 50% reduction of its applicable corporate income tax rate in 2010. The corporate income tax applied to PW Software in 1Q10 caused the increase in income tax expense from 4Q09. If PW Software will continue to be qualified as high and new technology enterprise from 2011 to 2012, it will continue to be entitled to a 50% reduction of its applicable corporate income tax rate from 2011 to 2012.
Net Income Attributable to the Company’s Shareholders
Net income attributable to the Company’s shareholders was RMB305.2 million (USD44.7 million) in 1Q10, an increase of 12.7%, or RMB34.3 million, from RMB270.8 million in 4Q09, and an increase of 41.6%, or RMB89.7 million, from RMB215.4 million in 1Q09. Non-GAAP net income attributable to the Company’s shareholders was RMB327.0 million (USD47.9 million) in 1Q10, an increase of 11.7%, or RMB34.2 million, from RMB292.8 million in 4Q09, and an increase of 41.6%, or RMB96.1 million, from RMB230.9 million in 1Q09.
Basic and diluted earnings per ADS were RMB6.12 (USD0.90) and RMB5.75 (USD0.84), respectively, in 1Q10, as compared to RMB5.44 and RMB5.09, respectively, in 4Q09, and RMB4.14 and RMB3.96, respectively, in 1Q09. Non- GAAP basic and diluted earnings per ADS were RMB6.56 (USD0.96) and RMB6.16 (USD0.90), respectively, in 1Q10, as compared to RMB5.88 and RMB5.50, respectively, in 4Q09, and RMB4.43 and RMB4.25, respectively, in 1Q09.
Cash and Cash Equivalents
As of March 31, 2010, the Company had RMB1,876.9 million (USD275.0 million) of cash and cash equivalents, as compared to RMB1,567.2 million as of December 31, 2009. The increase was mainly due to net cash inflow generated from the Company’s online game operations.
Recent Developments
Acquisition of C&C Media Co., Ltd.
In April 2010, the Company acquired C&C Media, a Japanese online game operator, to capture the growth opportunities in Japan and expand the Company’s overseas operating capabilities. C&C Media is currently operating six games in Japan, including four games developed by Perfect World.
Investment in Runic Games, Inc.
In May 2010, the Company acquired a majority stake in Runic Games, a specialized developer of PC-based entertainment software in the U.S., at the consideration of approximately US$8.4 million. Runic Games has a team of experienced developers, including leads on “Diablo,” “Diablo II,” “Diablo II: Lord of Destruction,” “Fate,” “Hellgate: London” and “Mythos.” Runic Games has developed and released a single-player action-RPG “Torchlight,” and is currently developing the MMORPG version of “Torchlight.” This strategic investment will allow the Company to further enhance its strong R&D capabilities, and leverage Runic Games’ creative and professional development team to create global titles through enhanced control and a closer collaboration.
Investment in Chengdu Ye Net Science and Technology Development Co., Ltd.
In April 2010, Chengdu Perfect World Network Technology Co., Ltd. (“Chengdu PW Network”), an entity controlled by the Company, exercised an option to acquire an additional stake in Ye Net, a web game developer and operator. Following the completion of the transaction, the Company’s effective equity stake in Ye Net will be increased to 80%. This investment provides the Company with enhanced control and greater flexibility in generating synergies between the web game business and the Company’s core business.
Business Outlook
Based on the Company’s current operations, total revenues for the second quarter of 2010 are expected to be between RMB594 million and RMB625 million, representing an increase of 14% to 20% on a year-over-year basis, and a flat to mild decline on a sequential basis. In order to lengthen the life cycle of the Company’s existing games to maintain sustainable growth, the Company decided to decelerate some of the in-game promotions and monetization activities in the second quarter to further nurture the games and grow user base. In addition, this also reflects the impact of suspending game services in response to the one-day national mourning on April 21, 2010 for earthquake victims in Yushu, Qinghai Province.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principals in the United States, or GAAP, this press release presents non-GAAP operating profit, non-GAAP net income attributable to the Company’s shareholders and non-GAAP earnings per ADS by excluding share-based compensation charge from operating profit, net income attributable to the Company’s shareholders and earnings per ADS, respectively. The Company believes these non-GAAP financial measures are important to help investors understand the Company’s operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company’s core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation charge has been and will continue to be incurred and is not reflected in the presentation of the non-GAAP financial measures. It should be considered in the overall evaluation of our results. None of the non-GAAP measures is a measure of net income attributable to the Company’s shareholders, operating profit, operating performance or liquidity presented in accordance with GAAP. We compensate for these limitations by providing the relevant disclosure of our share-based compensation charge in our reconciliations to the most directly comparable GAAP financial measures, which should be considered when evaluating our performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure are set forth at the end of this release.
Conference Call
Perfect World will host a conference call and live webcast at 8:00 am Eastern Daylight Time (8:00 pm, Beijing time) on Monday, May 17, 2010.
The dial-in details for the live conference call are as follows:
-- U.S. Toll Free Number: 1-866-519-4004
-- International Dial-in Number: +65-6723-9381
-- Mainland China Toll Free Number: 10-800-819-0121
-- Hong Kong Toll Free Number: 80-093-0346
-- U.K. Toll Free Number: 080-8234-6646
Conference ID: PWRD
A live and archived webcast of the conference call will be available on the Investor Relations section of Perfect World’s website at http://www.pwrd.com .
A telephone replay of the call will be available after the conclusion of the conference call through 10:00 am Eastern Daylight Time, May 24, 2010.
The dial-in details for the replay are as follows:
-- U.S. Toll Free Number: 1-866-214-5335
-- International Dial-in Number: +61-2-8235-5000
Conference ID: 7973 (PWRD)
About Perfect World Co., Ltd. ( http://www.pwrd.com )
Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and operator based in China. Perfect World primarily develops online games based on proprietary game engines and game development platforms. The Company’s strong technology and creative game design capabilities, combined with extensive knowledge and experiences in the online game market, enable it to frequently introduce popular games that are designed to cater to changing customer preferences and market trends promptly. The Company’s current portfolio of self-developed online games includes massively multiplayer online role playing games (“MMORPGs”): “Perfect World,” “Legend of Martial Arts,” “Perfect World II,” “Zhu Xian,” “Chi Bi,” “Pocketpet Journey West,” “Battle of the Immortals” and “Fantasy Zhu Xian;” and an online casual game: “Hot Dance Party.” While a substantial portion of the revenues are generated in China, the Company’s games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America. The Company also generates revenues from game operations in North America and Japan. The Company plans to continue to explore new and innovative business models and remains deeply committed to maximizing shareholder value over time.
Safe Harbor Statements
This press release contains forward-looking statements. These statements constitute forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the management’s quotations and “Business Outlook” contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, our limited operating history, our ability to develop and operate new games that are commercially successful, the growth of the online game market and the continuing market acceptance of our games and in-game items in China and elsewhere, our ability to protect our intellectual property rights, our ability to respond to competitive pressure, our ability to maintain an effective system of internal control over financial reporting, changes of the regulatory environment in China, and economic slowdown in China and/or elsewhere. Further information regarding these and other risks is included in Perfect World’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. All information provided in this press release and in the attachments is as of May 17, 2010, and Perfect World does not undertake any obligation to update any forward- looking statement as a result of new information, future events or otherwise, except as required under applicable law.
For further information, please contact:
Perfect World Co., Ltd.
Vivien Wang
Investor Relations Officer
Tel: +86-10-5885-1813
Fax: +86-10-5885-6899
Email: ir@pwrd.com
http://www.pwrd.com
Christensen Investor Relations
Kathy Li
Tel: +1-480-614-3036
Fax: +1-480-614-3033
Email: kli@christensenir.com
Roger Hu
Tel: +86-10-5971-2001
Fax: +86-10-5971-2001
Email: rhu@christensenir.com
Perfect World Co., Ltd.
Unaudited Consolidated Balance Sheets
December 31, March 31, March 31,
2009 2010 2010
RMB RMB USD
Assets
Current assets
Cash and cash equivalents 1,567,165,156 1,876,900,991 274,971,577
Restricted cash 5,033,996 5,047,708 739,504
Short-term investments 30,000,000 -- --
Accounts receivable, net 90,435,732 63,408,486 9,289,532
Due from related parties 159,100 159,100 23,309
Prepayment and other
assets 54,262,066 72,924,572 10,683,666
Deferred tax assets 3,048,654 3,464,697 507,588
Total current assets 1,750,104,704 2,021,905,554 296,215,176
Non current assets
Equity investments 30,471,237 28,964,386 4,243,369
Film and television
cost 14,508,195 16,625,800 2,435,729
Property, equipment, and
software, net 244,069,532 249,285,971 36,521,136
Construction in progress 771,265,335 784,651,843 114,953,829
Intangible assets, net 36,930,233 54,796,424 8,027,839
Goodwill 116,256,000 116,256,000 17,031,850
Prepayments and other
assets 42,516,514 56,700,243 8,306,754
Deferred tax assets 2,895,739 2,857,116 418,576
Total assets 3,009,017,489 3,332,043,337 488,154,258
Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable 92,131,878 69,967,910 10,250,507
Advances from customers 88,944,437 104,008,285 15,237,523
Salary and welfare payable 99,629,630 45,207,092 6,622,973
Taxes payable 35,503,484 45,865,801 6,719,476
Accrued expenses and other
liabilities 40,055,495 83,923,838 12,295,092
Due to related party 5,650,616 5,657,757 828,878
Deferred revenues 280,584,152 280,307,267 41,065,848
Deferred tax liabilities 22,488,342 23,921,819 3,504,618
Total current liabilities 664,988,034 658,859,769 96,524,915
Deferred revenues 28,479,618 25,967,324 3,804,290
Total liabilities 693,467,652 684,827,093 100,329,205
Shareholders' Equity
Ordinary shares (US$0.0001
par value, 10,000,000,000
shares authorized, 49,171,190
Class A ordinary shares issued
and outstanding, 199,957,195
Class B ordinary shares issued
outstanding as of December 31,
2009; 10,000,000,000 shares
authorized, 44,171,190 Class A
ordinary shares issued and
outstanding, 206,132,945 Class
B ordinary shares issued and
outstanding as of March 31,
2010) 198,506 199,309 29,199
Additional paid-in capital 381,099,428 407,572,908 59,710,643
Statutory reserves 181,563,507 181,563,507 26,599,594
Accumulated other
comprehensive loss (65,453,442) (65,238,302) (9,557,605)
Retained earnings 1,799,851,169 2,105,015,331 308,391,007
Total Perfect World
Shareholders' Equity 2,297,259,168 2,629,112,753 385,172,838
Non-controlling interests 18,290,669 18,103,491 2,652,215
Total Shareholders' Equity 2,315,549,837 2,647,216,244 387,825,053
Total Liabilities and
Shareholders' Equity 3,009,017,489 3,332,043,337 488,154,258
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Operations
Three months ended
March 31, December 31, March 31, March 31,
2009 2009 2010 2010
RMB RMB RMB USD
Revenues
Online game
operation
revenues 377,173,678 541,773,555 569,713,235 83,464,683
Overseas
licensing
revenues 47,968,592 61,651,444 53,377,895 7,820,020
Film, television
and other
revenues -- 4,474,322 1,952,484 286,045
Total Revenues 425,142,270 607,899,321 625,043,614 91,570,748
Cost of revenues
Online game
related cost (56,442,843) (79,781,617) (87,105,440) (12,761,206)
Film, television
and other cost -- (1,735,088) (24,887) (3,646)
Total cost of
revenues (56,442,843) (81,516,705) (87,130,327) (12,764,852)
Gross profit 368,699,427 526,382,616 537,913,287 78,805,896
Operating expenses
Research and
development
expenses (56,958,268) (76,912,046) (77,808,074) (11,399,114)
Sales and
marketing
expenses (50,924,583)(124,655,400) (82,159,508) (12,036,612)
General and
administrative
expenses (30,438,140) (48,280,933) (54,795,477) (8,027,700)
Total operating
expenses (138,320,991)(249,848,379) (214,763,059) (31,463,426)
Operating profit 230,378,436 276,534,237 323,150,228 47,342,470
Other income/
(expenses)
Investment loss (625,045) (1,279,762) (1,506,851) (220,758)
Interest income 3,274,619 5,169,231 5,258,399 770,371
Others, net 2,359,971 7,874,430 6,766,026 991,243
Total other income 5,009,545 11,763,899 10,517,574 1,540,856
Profit before tax 235,387,981 288,298,136 333,667,802 48,883,326
Income tax
expense (19,942,929) (17,534,886) (28,690,818) (4,203,290)
Net income 215,445,052 270,763,250 304,976,984 44,680,036
Add: Net loss
attributable to
non-controlling
interests -- 86,162 187,178 27,422
Net income
attributable to
the Company's
shareholders 215,445,052 270,849,412 305,164,162 44,707,458
Net earnings per
share, basic 0.83 1.09 1.22 0.18
Net earnings per
share, diluted 0.79 1.02 1.15 0.17
Net earnings per
ADS, basic 4.14 5.44 6.12 0.90
Net earnings per
ADS, diluted 3.96 5.09 5.75 0.84
Shares used in
calculating basic
net earnings per
share 260,412,419 248,945,580 249,384,104 249,384,104
Shares used in
calculating
diluted net
earnings
per share 271,768,450 265,982,221 265,565,857 265,565,857
Total share-based
compensation cost
included in:
Cost of revenues (1,079,899) (1,149,174) (1,693,246) (248,066)
Research and
development
expenses (6,976,521) (11,363,609) (9,404,410) (1,377,774)
Sales and
marketing
expenses (1,595,196) (1,602,599) (2,271,910) (332,842)
General and
administrative
expenses (5,766,248) (7,839,431) (8,423,397) (1,234,053)
Perfect World Co., Ltd.
Unaudited Consolidated Statements of Cash Flows
Three months ended
March 31, December 31, March 31, March 31,
2009 2009 2010 2010
RMB RMB RMB USD
Cash flows from
operating
activities:
Net income 215,445,052 270,763,250 304,976,984 44,680,036
Adjustments for:
Share-based
compensation
cost 15,417,864 21,954,813 21,792,963 3,192,735
Depreciation and
amortization
expense 9,370,560 32,447,920 17,836,399 2,613,085
Exchange loss 49,792 113,749 261,907 38,370
Investment loss 625,045 1,279,762 1,506,851 220,758
Loss from disposal
of property,
equipment, and
software 67,569 399,425 116,071 17,005
Changes in assets
and liabilities:
Accounts
receivable (19,038,659) 48,265,298 26,856,675 3,934,581
Current
prepayments
and other
assets (6,622,458) 9,939,338 (16,375,737) (2,399,094)
Deferred tax
assets (75,319) (3,573,707) (395,925) (58,004)
Film and
television
cost -- (14,508,195) (2,117,605) (310,235)
Due from/to
related
parties -- (565,138) 7,141 1,046
Non-current
prepayments
and other
assets 1,050,366 747,629 (14,499,468) (2,124,215)
Accounts
payable 11,651,065 1,582,299 (20,794,672) (3,046,481)
Advances from
customers (2,690,605) (26,140,988) 15,065,334 2,207,116
Salary and
welfare
payable (25,700,751) 21,649,640 (54,413,418) (7,971,728)
Taxes payable 35,855,955 8,812,168 10,371,267 1,519,421
Accrued
expenses
and other
liabilities 5,868,313 (1,137,447) 43,930,792 6,435,992
Deferred
revenues 26,784,532 3,303,923 (2,592,055) (379,744)
Deferred tax
liabilities (18,139,092) 2,741,097 1,433,477 210,009
Deferred
government
grants -- (1,450,000) -- --
Net cash provided
by operating
activities 249,919,229 376,624,836 332,966,981 48,780,653
Cash flows from
investing
activities:
Purchase of
property,
equipment,
and software (14,221,383) (48,302,540) (35,135,276) (5,147,422)
Purchase of
intangible
assets -- (1,313,235) (20,492,670) (3,002,237)
Decrease of
restricted
cash 135,361,200 -- -- --
Cash paid for
business
acquisitions,
net of cash
acquired (154,554,000) -- -- --
Purchase of
short-term
investments (40,000,000) -- -- --
Maturities
of short-term
investments -- 40,000,000 30,000,000 4,395,089
Decrease in loan
receivable -- 3,780,000 -- --
Net cash used
in investing
activities (73,414,183) (5,835,775) (25,627,946) (3,754,570)
Cash flows from
financing
activities:
Exercise of
share options 334,433 2,304,395 2,306,091 337,849
Repurchase of
Company
shares (523,583,215) -- -- --
Net cash (used
in) / provided
by financing
activities (523,248,782) 2,304,395 2,306,091 337,849
Effect of
exchange rate
changes on
cash and cash
equivalents 110,412 87,971 90,709 13,289
Net (decrease) /
increase in
cash (346,633,324) 373,181,427 309,735,835 45,377,221
Cash and cash
equivalents,
beginning
of the period 1,333,075,731 1,193,983,729 1,567,165,156 229,594,356
Cash and cash
equivalents,
end of the
period 986,442,407 1,567,165,156 1,876,900,991 274,971,577
Supplemental
disclosures
of cash flow
information:
Cash paid during
the period for
income taxes (2,575,784) (16,849,182) (14,420,198) (2,112,602)
Perfect World Co., Ltd.
Reconciliation of GAAP and Non-GAAP Results
Three months ended
March 31, December 31, March 31, March 31,
2009 2009 2010 2010
RMB RMB RMB USD
GAAP operating profit 230,378,436 276,534,237 323,150,228 47,342,470
Share based compensation
charge 15,417,864 21,954,813 21,792,963 3,192,735
Non-GAAP operating
profit 245,796,300 298,489,050 344,943,191 50,535,205
GAAP net income
attributable to the
Company's shareholders 215,445,052 270,849,412 305,164,162 44,707,458
Share based compensation
charge 15,417,864 21,954,813 21,792,963 3,192,735
Non-GAAP net income
attributable to the
Company's shareholders 230,862,916 292,804,225 326,957,125 47,900,193
GAAP net earnings per
ADS
- Basic 4.14 5.44 6.12 0.90
- Diluted 3.96 5.09 5.75 0.84
Non-GAAP net earnings
per ADS
- Basic 4.43 5.88 6.56 0.96
- Diluted 4.25 5.50 6.16 0.90
ADSs used in calculating
net earnings per ADS
- Basic 52,082,484 49,789,116 49,876,821 49,876,821
- Diluted 54,353,690 53,196,444 53,113,171 53,113,171
May 17, 2010 (PR Newswire) —
AMARILLO, Texas, May 17 /PRNewswire-FirstCall/ — Hastings Entertainment, Inc. (Nasdaq: HAST), a leading multimedia entertainment retailer, today reported results for the three months ended April 30, 2010. Net earnings were approximately $1.0 million, or $0.11 per diluted share, for the first quarter of fiscal 2010 compared to net earnings of approximately $1.7 million, or $0.17 per diluted share, for the first quarter of fiscal 2009. Net earnings for the first quarter of fiscal 2010 included revenue of approximately $0.2 million related to gift card breakage. Hastings began recognizing gift card breakage revenue in the fourth quarter of fiscal 2009.
Both operating income and adjusted operating income for the first quarter were approximately $1.5 million as compared to approximately $3.1 million in the first quarter of the prior year. Adjusted operating income excludes gift card breakage revenue and stock compensation expense. Earnings before interest, taxes, property and equipment depreciation expense and amortization (“EBITDA”) was approximately $5.9 million for the first quarter of fiscal 2010 as compared to approximately $8.0 million for the same period in the prior year. Adjusted EBITDA, which excludes gift card breakage revenue and stock compensation expense, was approximately $5.8 million for the first quarter of fiscal 2010 compared to approximately $8.0 million for the same period in the prior year.
Reconciliations of non-GAAP financial measures to comparable GAAP financial measures are included in the tables following the financial statements in this release.
“We are pleased with our comparable store revenue increase of 4.9%,” said John Marmaduke, Chief Executive Officer and Chairman. “Consumer spending has increased and we are cautiously optimistic about future revenue growth as the economy improves. Our new rental pricing strategy continues to drive growth in rental units which were up 9.7% for the first quarter. However, our rental unit increase was not enough to offset our lower price points. During the first quarter we have seen over sixty competitor store closings in our markets. Over the long-term this will have a positive impact on our rental revenues. Short-term, we are seeing a negative impact due to the majority of these stores running going out of business sales. With the recent announcement of the liquidation of a major chain we are excited about the future of our rental business as we continue to test various pricing strategies.”
Financial Results for the First Quarter of Fiscal Year 2010
Revenues. Total revenues for the first quarter increased approximately $3.4 million, or 2.7%, to $129.1 million compared to $125.7 million for the first quarter of fiscal 2009. Excluding gift card breakage revenue, total revenues for the first quarter of fiscal 2010 increased approximately $3.2 million, or 2.5%. Comparable store sales, which exclude gift card breakage revenue, increased approximately 4.9%. The following is a summary of our revenues results (dollars in thousands):
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Increase (Decrease)
|
|
|
|
Revenues
|
|
Percent Of Total
|
|
Revenues
|
|
Percent Of Total
|
|
Dollar
|
|
Percent
|
|
|
Merchandise Revenue
|
$
|
108,125
|
|
83.8%
|
$
|
104,096
|
|
82.8%
|
$
|
4,029
|
|
3.9%
|
|
|
Rental Revenue
|
|
20,779
|
|
16.1%
|
|
21,597
|
|
17.2%
|
|
(818)
|
|
-3.8%
|
|
| Gift Card Breakage
Revenue |
|
194
|
|
0.1%
|
|
—
|
|
0.0%
|
|
194
|
|
—
|
|
|
Total Revenues
|
$
|
129,098
|
|
100.0%
|
$
|
125,693
|
|
100.0%
|
$
|
3,405
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
Comparable-store revenues (“Comp”)
|
|
|
Total
|
4.9%
|
|
|
|
Merchandise
|
6.3%
|
|
|
|
Rental
|
-1.7%
|
|
|
|
|
|
Below is a summary of the Comp results for our major merchandise categories:
|
|
|
Three Months Ended April 30,
|
|
|
2010
|
|
2009
|
|
| Video Games |
25.2%
|
|
-10.4%
|
|
| Hardback Cafe |
15.6%
|
|
8.5%
|
|
| Movies |
11.1%
|
|
-5.7%
|
|
| Consumables |
9.4%
|
|
4.5%
|
|
| Trends |
8.9%
|
|
6.0%
|
|
| Electronics |
4.1%
|
|
2.2%
|
|
| Books |
-1.2%
|
|
-0.2%
|
|
| Music |
-4.8%
|
|
-15.2%
|
|
|
|
|
|
|
|
Prior year Comp sales have been revised to reflect current year classification of Comp sale categories. Video Game Comps increased 25.2% for the quarter, primarily due to strong sales of new and used video games for the Nintendo Wii, Playstation 3, and XBOX 360 platforms and increased video game hardware and accessory sales, partially offset by lower sales of older generation video games. Titles that helped drive sales during the quarter included God of War 3, Heavy Rain, Battlefield Bad Company 2, Final Fantasy XIII, and Dante’s Inferno. Hardback Cafe Comps increased 15.6% for the quarter, resulting from increased sales of specialty cafe drinks. Movie Comps increased 11.1% for the quarter, primarily resulting from increased sales of new and used Blu-ray DVDs, DVD boxed sets, and used DVDs. Consumables Comps increased 9.4% for the quarter, primarily due to strong sales of novelty drinks and fountain drinks. Trends Comps increased 8.9% for the quarter, primarily due to strong sales of “As Seen on TV” products such as the Kymaro and the Big Top Cupcake, strong sales of Hex Bugs, and an increase in sales of action figures, driven primarily by an increase in action figures sold over the internet. The increases were partially offset by lower sales of apparel products, including t-shirts and jewelry. Electronics Comps increased 4.1% for the quarter primarily due to strong sales of new and refurbished iPods, MP3 players, and related accessories including headphones, partially offset by lower sales of digital converter boxes. Book Comps decreased 1.2% for the quarter, primarily due to decreased sales of new trade paperbacks and hardbacks, partially offset by an increase in sales of used trade paperbacks and hardbacks. Sales of new hardbacks and trade paperbacks faced a challenging comparison due to strong sales of books from Stephenie Meyer’s The Twilight Saga series during fiscal 2009. Excluding The Twilight Saga series sales, book Comps for the first quarter of fiscal 2010 would have increased 3.2%. Strong performers during the quarter included young readers titles Percy Jackson by Rick Riordan and Diary of a Wimpy Kid by Jeff Kinney, and cooking titles Pioneer Woman by Ree Drummond, Home Cooking with Trisha Yearwood by Trisha Yearwood, and Joy of Cooking by Irma Rombauer. Music Comps decreased 4.8% for the quarter due to lower sales of new and used CDs, resulting directly from a continued industry decline as well as a reduced footprint in twenty-seven stores. Merchandise Comps, excluding the sale of new music, increased 8.2% for the quarter.
Rental Comps decreased 1.7% for the first quarter, primarily due to lower price points, partially offset by fewer promotions offered during the current quarter. Units rented increased approximately 9.7% for the quarter as compared to the prior year. Rental Video Game Comps decreased 2.7% for the period, while Rental Movie Comps decreased 1.3%.
Gross Profit – Merchandise. For the first quarter, total merchandise gross profit dollars increased approximately $0.6 million, or 1.8%, to $33.7 million from $33.1 million for the same period in the prior year, primarily due to higher revenues, partially offset by decreased margin rates. Lower margin rates were partially due to a significant increase in products sold through our proprietary goShip program on the internet that had lower margins than products sold at the stores. As a percentage of total merchandise revenue, merchandise gross profit decreased to 31.2% for the quarter compared to 31.8% for the same period in the prior year, resulting from increased freight costs and shrinkage, partially offset by lower markdown expense. Increased freight costs resulted from increased shipments related to our goShip program.
Gross Profit – Rental. For the first quarter, total rental gross profit dollars decreased approximately $0.8 million, or 5.8%, to $13.1 million from $13.9 million for the same period in the prior year primarily due to lower rental revenues. As a percentage of total rental revenue, rental gross profit decreased to 62.9% for the quarter compared to 64.3% for the same period in the prior year primarily as a result of lower rental revenue as well as increased shrinkage.
Selling, General and Administrative Expenses (“SG&A”). As a percentage of total revenue, SG&A increased to 35.2% for the first quarter compared to 34.9% for the same quarter in the prior year. SG&A increased approximately $1.5 million, or 3.4%, to $45.4 million compared to $43.9 million for the same quarter last year primarily as a result of increased store advertising costs along with increased associate benefit costs (primarily increases in associate health insurance and workers compensation insurance), partially offset by lower depreciation expense.
Interest Expense. For the first quarter, interest expense decreased approximately $0.2 million, or 66.7%, to $0.1 million, compared to $0.3 million for the same period in the prior year primarily as a result of lower interest rates and lower average debt levels outstanding during the period. The average rate of interest charged for the quarter decreased to 1.9% compared to 3.0% for the same period in the prior year.
Income Tax Expense. During the three months ended April 30, 2010, the Company recorded a discrete tax benefit of approximately $0.2 million related to amended state returns resulting from an IRS audit of the Company’s previously filed Federal tax returns. No discrete tax items were recorded during the three months ended April 30, 2009. Primarily as a result of this discrete tax benefit, the effective tax rate for the three months ended April 30, 2010 decreased to 28.3% compared to 39.4% for the same period in the prior year.
Stock Repurchase
On September 18, 2001, we announced a stock repurchase program of up to $5.0 million of our common stock. To date, the Board of Directors has approved increases in the program totaling $22.5 million. During the first quarter of fiscal 2010, we purchased a total of 189,500 shares of common stock at a cost of $955,394, or $5.04 per share. As of April 30, 2010, a total of 3,928,345 shares had been repurchased under the program at a cost of approximately $23.8 million, for an average cost of approximately $6.07 per share. As of April 30, 2010, approximately $3.5 million remained available under the stock repurchase program.
Store Activity
Since March 22, 2010, which was the last date we reported store activity, we have not opened or closed any additional stores.
Fiscal Year 2010 Guidance
“Net earnings for the quarter were better than our internal forecast, which is the basis for our guidance,” said Dan Crow, Vice President and Chief Financial Officer. “Due to continued uncertainty in the retail environment, particularly with respect to the holiday selling season, we are not changing our guidance for the full fiscal year. Consequently, we are reaffirming our guidance of net earnings per share ranging from $0.32 to $0.37 for the full fiscal year ended January 31, 2011.”
Safe Harbor Statement
This press release contains “forward-looking statements.” Hastings Entertainment, Inc. is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the Company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, consumer appeal of our existing and planned product offerings, and the related impact of competitor pricing and product offerings; overall industry performance and the accuracy of our estimates and judgments regarding trends; our ability to obtain favorable terms from suppliers; our ability to respond to changing consumer preferences, including with respect to new technologies and alternative methods of content delivery, and to effectively adjust our offerings if and as necessary; the application and impact of future accounting policies or interpretations of existing accounting policies; unanticipated adverse litigation results or effects; the effects of a continued deterioration in economic conditions in the U.S. or the markets in which we operate our stores; and other factors which may be outside of the company’s control. We undertake no obligation to affirm, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to the company’s annual, quarterly, and periodic reports on file with the Securities and Exchange Commission for a more detailed discussion of these and other risks that could cause results to differ materially.
About Hastings
Founded in 1968, Hastings Entertainment, Inc. is a leading multimedia entertainment retailer that combines the sale of new and used books, videos, video games and CDs, as well as trends merchandise, with the rental of videos and video games in a superstore format. We currently operate 147 superstores, averaging approximately 24,000 square feet, primarily in medium-sized markets throughout the United States.
We also operate www.gohastings.com, an e-commerce Internet Web site that makes available to our customers new and used entertainment products and unique, contemporary gifts and toys. The site features exceptional product and pricing offers. The Investor Relations section of our web site contains press releases, a link to request financial and other literature and access our filings with the Securities and Exchange Commission.
|
Consolidated Balance Sheets
(Dollars in thousands)
|
|
|
|
April 30,
|
|
April 30,
|
|
January 31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
|
| Cash and cash equivalents |
$
|
4,620
|
$
|
3,754
|
$
|
8,863
|
|
| Merchandise inventories, net |
|
152,804
|
|
150,917
|
|
148,149
|
|
| Deferred income taxes |
|
6,777
|
|
10,660
|
|
7,804
|
|
| Prepaid expenses and other current assets |
|
9,364
|
|
10,791
|
|
10,120
|
|
| Total current assets |
|
173,565
|
|
176,122
|
|
174,936
|
|
|
|
|
|
|
|
|
|
| Rental assets, net |
|
13,432
|
|
13,295
|
|
13,127
|
|
| Property and equipment, net |
|
45,616
|
|
54,620
|
|
47,695
|
|
| Deferred income taxes |
|
2,974
|
|
3,461
|
|
1,310
|
|
| Intangible assets, net |
|
391
|
|
391
|
|
391
|
|
| Other assets |
|
1,366
|
|
1,051
|
|
1,341
|
|
|
|
|
|
|
|
|
|
| Total assets |
$
|
237,344
|
$
|
248,940
|
$
|
238,800
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
| Trade accounts payable |
$
|
69,973
|
$
|
69,919
|
$
|
58,068
|
|
| Accrued expenses and other liabilities |
|
26,177
|
|
34,479
|
|
28,128
|
|
| Total current liabilities |
|
96,150
|
|
104,398
|
|
86,196
|
|
|
|
|
|
|
|
|
|
| Long-term debt, excluding current maturities |
|
26,435
|
|
35,270
|
|
38,174
|
|
| Other liabilities |
|
6,262
|
|
5,551
|
|
6,272
|
|
|
|
|
|
|
|
|
|
| Shareholders’ equity |
|
|
|
|
|
|
|
| Preferred stock |
|
–
|
|
–
|
|
–
|
|
| Common stock |
|
119
|
|
119
|
|
119
|
|
| Additional paid-in capital |
|
36,978
|
|
36,702
|
|
36,920
|
|
| Retained earnings |
|
87,902
|
|
81,653
|
|
86,884
|
|
| Accumulated other comprehensive income (loss) |
|
68
|
|
(41)
|
|
37
|
|
| Treasury stock, at cost |
|
(16,570)
|
|
(14,712)
|
|
(15,802)
|
|
| Total shareholders’ equity |
|
108,497
|
|
103,721
|
|
108,158
|
|
|
|
|
|
|
|
|
|
| Total liabilities and shareholders’ equity |
$
|
237,344
|
$
|
248,940
|
$
|
238,800
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Earnings
(In thousands, except per share data)
|
|
|
|
|
|
Three months ended
|
|
|
|
|
April 30,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
| Merchandise revenue |
$
|
108,125
|
$
|
104,096
|
|
|
| Rental revenue |
|
20,779
|
|
21,597
|
|
|
| Gift card breakage revenue |
|
194
|
|
–
|
|
|
| Total revenues |
|
129,098
|
|
125,693
|
|
|
| Merchandise cost of revenue |
|
74,426
|
|
70,994
|
|
|
| Rental cost of revenue |
|
7,705
|
|
7,713
|
|
|
| Total cost of revenues |
|
82,131
|
|
78,707
|
|
|
| Gross profit |
|
46,967
|
|
46,986
|
|
|
| Selling, general and administrative expenses |
|
45,436
|
|
43,898
|
|
|
| Pre-opening expenses |
|
–
|
|
2
|
|
|
| Operating income |
|
1,531
|
|
3,086
|
|
|
| Other income (expense): |
|
|
|
|
|
|
| Interest expense, net |
|
(132)
|
|
(295)
|
|
|
| Other, net |
|
20
|
|
18
|
|
|
| Income before income taxes |
|
1,419
|
|
2,809
|
|
|
| Income tax expense |
|
401
|
|
1,107
|
|
|
| Net income |
$
|
1,018
|
$
|
1,702
|
|
|
| Basic income per share |
$
|
0.11
|
$
|
0.17
|
|
|
| Diluted income per share |
$
|
0.11
|
$
|
0.17
|
|
|
| Weighted-average common shares
outstanding: |
|
|
|
|
|
|
| Basic |
|
9,432
|
|
9,729
|
|
|
| Dilutive effect of stock awards |
|
236
|
|
29
|
|
|
| Diluted |
|
9,668
|
|
9,758
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(Dollars in thousands)
|
|
|
|
|
|
For the Three Months Ended April 30,
|
|
|
|
2010
|
|
2009
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
| Cash flows from operating activities: |
|
|
|
|
|
| Net income |
$
|
1,018
|
$
|
1,702
|
|
| Adjustments to reconcile net income to net
cash provided by operations: |
|
|
|
|
|
| Rental asset depreciation expense |
|
2,654
|
|
3,610
|
|
| Purchases of rental assets |
|
(5,980)
|
|
(4,459)
|
|
| Property and equipment depreciation expense |
|
4,321
|
|
4,850
|
|
| Deferred income taxes |
|
(637)
|
|
(507)
|
|
| Loss on rental assets lost, stolen and defective |
|
470
|
|
202
|
|
| Loss on disposal of other assets |
|
19
|
|
169
|
|
| Non-cash stock-based compensation |
|
143
|
|
51
|
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
| Merchandise inventories |
|
(2,105)
|
|
(145)
|
|
| Other current assets |
|
756
|
|
433
|
|
| Trade accounts payable |
|
12,092
|
|
12,775
|
|
| Accrued expenses and other liabilities |
|
(1,951)
|
|
(6,135)
|
|
| Other assets and liabilities, net |
|
(4)
|
|
823
|
|
| Net cash provided by operating activities |
|
10,796
|
|
13,369
|
|
| Cash flows from investing activities: |
|
|
|
|
|
| Purchases of property, equipment and improvements |
|
(2,260)
|
|
(3,054)
|
|
| Net cash used in investing activities |
|
(2,260)
|
|
(3,054)
|
|
| Cash flows from financing activities: |
|
|
|
|
|
| Net repayments under revolving credit facility |
|
(11,739)
|
|
(9,237)
|
|
| Purchase of treasury stock |
|
(959)
|
|
(94)
|
|
| Change in cash overdraft |
|
(187)
|
|
(4,679)
|
|
| Proceeds from exercise of stock options |
|
106
|
|
–
|
|
| Net cash used in financing activities |
|
(12,779)
|
|
(14,010)
|
|
| Net decrease in cash |
|
(4,243)
|
|
(3,695)
|
|
| Cash at beginning of period |
|
8,863
|
|
7,449
|
|
| Cash at end of period |
$
|
4,620
|
$
|
3,754
|
|
|
|
|
|
|
|
|
|
Balance Sheet and Other Ratios ( A )
(Dollars in thousands, except per share amounts)
|
|
|
|
|
|
April 30, 2010
|
|
April 30, 2009
|
|
| Merchandise inventories, net |
$
|
152,804
|
$
|
150,917
|
|
| Inventory turns, trailing 12 months ( B ) |
|
1.89
|
|
1.81
|
|
|
|
|
|
|
|
| Long-term debt |
$
|
26,435
|
$
|
35,270
|
|
| Long-term debt to total capitalization ( C ) |
|
19.6%
|
|
25.4%
|
|
| Book value ( D ) |
$
|
108,497
|
$
|
103,721
|
|
| Book value per share ( E ) |
$
|
11.22
|
$
|
10.63
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
|
|
2010
|
|
2009
|
|
|
| Comparable-store revenues ( F ): |
|
|
|
|
|
| Total |
4.9%
|
|
-5.9%
|
|
|
| Merchandise |
6.3%
|
|
-5.1%
|
|
|
| Rental |
-1.7%
|
|
-9.3%
|
|
|
|
|
|
|
|
|
|
|
( A )
|
Calculations may differ in the method employed from similarly titled measures used by other companies.
|
|
|
( B )
|
Calculated as merchandise cost of goods sold for the period’s trailing twelve months divided by average merchandise inventory over the same period.
|
|
|
( C )
|
Defined as long-term debt divided by long-term debt plus total shareholders’ equity (book value).
|
|
|
( D )
|
Defined as total shareholders’ equity.
|
|
|
( E )
|
Defined as total shareholders’ equity divided by weighted average diluted shares outstanding for the three month period ended April 30, 2010 and 2009, respectively.
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| ( F ) |
Stores included in the comparable-store revenues calculation are those stores that have been open for a minimum of 60 weeks. Also included are stores that are remodeled or relocated during the comparable period. Sales via the internet are included and closed stores are removed from each comparable period for the purpose of calculating comparable-store revenues. |
CALABASAS, Calif., May 18, 2010 (GLOBE NEWSWIRE) — NetSol Technologies, Inc. (“NetSol”) (Nasdaq:NTWK) (Nasdaq Dubai:NTWK), a U.S. corporation providing global business services and enterprise application solutions to private and public sector organizations worldwide, announced today that the Company’s three founding officers acquired over 1 million shares of NetSol stock through a private transaction. The shares were purchased at the price of $0.87 on May 14, 2010. Najeeb Ghauri, CEO and Chairman, acquired 375,000 shares of stock. Salim Ghauri, President APAC, acquired 350,000 shares. Naeem Ghauri, President NTE, acquired 309,383 shares. Each founder filed an SEC Form 4 to report the acquisition.
About NetSol Technologies, Inc.
NetSol Technologies, Inc. (Nasdaq:NTWK) (Nasdaq Dubai:NTWK) is a worldwide provider of global IT and enterprise application solutions. Since its inception in 1995, NetSol has used its BestShoring™ practices and highly experienced resources in analysis, development, quality assurance, and implementation to deliver high-quality, cost-effective solutions. Specialized by industry, these product and services offerings include credit and finance portfolio management systems, SAP consulting and services, custom development, systems integration, and technical services for the global Financial, Leasing, Insurance, Energy, and Technology markets. NetSol’s commitment to quality is demonstrated by its achievement of the ISO 9001, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a distinction shared by fewer than 100 companies worldwide. NetSol Technologies’ clients include Fortune 500 manufacturers, global automakers, financial institutions, utilities, technology providers, and government agencies. Headquartered in Calabasas, California, NetSol Technologies has operations and offices in Alameda, Adelaide, Bangkok, Beijing, Karachi, Lahore, London, and Riyadh.
To learn more about NetSol, visit www.netsoltech.com.
The NetSol Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7396
NetSol Technologies, Inc. Forward-looking Statements
This press release may contain forward-looking statements relating to the development of the Company’s products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “anticipate,” “intend,” variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company’s actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.
CONTACT: RedChip Companies, Inc.
Investor Relations Contact:
Jon Cunningham
800-733-2447, Ext. 107
407-644-4256, Ext. 107
info@redchip.com
http://www.redchip.com
Press Release Source: Energy, Inc. On Monday May 17, 2010, 6:55 am EDT
GREAT FALLS, Mont.,, May 17 /PRNewswire-FirstCall/ — Energy, Inc. (NYSE Amex: EGAS), a natural gas utility company serving approximately 62,000 customers in six states, today reported financial results for the first quarter ended March 31, 2010. Reported results include the acquisitions of the parent companies of Orwell Natural Gas Company and Northeast Ohio Natural Gas Corp. (NEO), and Brainard Gas Corp., as well as Great Plains Land Development, LTD. (GPL), which Energy, Inc. completed on January 5, 2010.
First Quarter 2010 Consolidated Financial Results
Consolidated net income for the first quarter was $3.7 million, or $0.61 per diluted share, compared with net income of $2.0 million, or $0.46 per diluted share, for the same period in 2009. Earnings growth was driven by strengthened operating performance and customer additions in the Company’s utilities in Maine and North Carolina combined with the acquisition of the Ohio utilities. Net income improved to 10.5% of operating revenues in the 2010 first quarter from 6.3% in the same period the prior year.
Operating income was $6.3 million for the 2010 first quarter, up $2.8 million, or 78%. Approximately $2.3 million of the increase was related to the Ohio utilities acquisition.
Richard M. Osborne, Energy, Inc.’s chairman and chief executive officer, commented, “The results reflect our success at generating improved returns in our organic operations, expanding our customer base and the completion of the acquisition of the Ohio utilities. We believe we can continue to expand our earnings power and grow our customer base by focusing on earning fair returns in our utility operations, allocating our capital where we can capture the best returns and continuing to selectively acquire utilities that would benefit from our operational strength.”
Natural Gas Operations Segment
The Natural Gas Operations segment contributed net income of $3.7 million, or $0.62 per diluted share, in the 2010 first quarter compared with $1.5 million, or $0.36 per diluted share, for the same quarter of 2009. Operating income from this segment in 2010 was $5.9 million, or 49.9% of gross margin, compared with $2.8 million, or 41.3% of gross margin, in 2009. The increased operating income was the result of improved operations in the organic utility businesses, specifically the Maine and North Carolina operations. The Ohio operations had a net income of approximately $1.4 million for the first quarter.
The Natural Gas Operations segment continues to see customer growth as the Company expands its facilities to meet the strong demand for natural gas service. Organic customer growth was approximately 4% in the 2010 first quarter, while the acquisition increased the Company’s customer base by over 50%.
Volumes in the Natural Gas Operations segment for the quarter were 9,770 million cubic feet (MMcf), an increase from 7,401MMcf for the same quarter in 2009.
Marketing and Production Segment
First quarter 2010 operating income for the Marketing and Production segment was $0.4 million, compared with $0.7 million in the first quarter of 2009. The Marketing and Production segment had a first quarter net loss of $0.08 million compared with net income of $0.4 million for the same quarter of 2009. The decline in net income was the result of a jury award of $0.5 million in litigation relating to a gas supply contract that expired in October of 2008.
Pipeline Operations Segment
The Pipeline Operations segment contributed net income of $36,235 for the 2010 first quarter compared with net income of $29,508 for the same quarter in 2009.
Balance Sheet and Cash Management
First quarter 2010 cash and marketable securities of $7.3 million increased 58% compared with the same quarter in 2009, and increased slightly from the December 31, 2009 balance of $7.2 million. Cash provided by operating activities was $10.1 million compared with $14.9 million in the first quarter of 2009. Total net increase in cash was $581,000 as compared with $354,000 in the first quarter of 2009.
For the first quarter ended March 31, 2010, capital expenditures were $1.3 million, compared with $1.9 million in 2009. Capital spending was focused on expanding rate base in the Maine and North Carolina utility operations as the Company captures market share, and for maintenance of existing pipeline systems.
About Energy, Inc.
Energy, Inc. distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 29 billion cubic feet of natural gas to approximately 62,000 customers through regulated utilities operating in Montana, Wyoming, North Carolina, Maine, Ohio and Pennsylvania. The Company markets approximately 2.4 billion cubic feet of natural gas to commercial and industrial customers in Montana and Wyoming on an unregulated basis. The company also has a majority ownership interest in 160 natural gas producing wells and gas gathering assets. In addition, the company owns the Shoshone interstate and the Glacier gathering pipelines located in Montana and Wyoming. The company’s Montana public utility was originally incorporated in 1909 and is headquartered in Great Falls, Montana.
The company’s toll-free number is 800-570-5688. The company’s address is 1 First Avenue South, Great Falls, Montana 59401 and its website is http://www.ewst.com/.
Safe Harbor Regarding Forward-Looking Statements
The company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Energy, Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “believes” and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the company’s business generally include but are not limited to the company’s ability to successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the company’s continued ability to make dividend payments, the company’s ability to implement its business plan, fluctuating energy commodity prices, the possibility that regulators may not permit the company to pass through all of its increased costs to its customers, changes in the utility regulatory environment, wholesale and retail competition, the company’s ability to satisfy its debt obligations, including compliance with financial covenants, weather conditions, litigation risks, and various other matters, many of which are beyond the company’s control, the risk factors and cautionary statements made in the company’s public filings with the Securities and Exchange Commission, and other factors that the company is currently unable to identify or quantify, but may exist in the future. Energy, Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Energy, Inc.’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
NEW YORK, May 17 /PRNewswire-FirstCall/ — Deer Consumer Products, Inc. (Nasdaq: DEER; website: http://www.deerinc.com), one of the world’s largest vertically integrated designers and ODM/OEM manufacturers of home and kitchen electronics marketing to both global and China domestic consumers, announced today the following updates:
$20 Million Share Buyback:
Deer has initiated a stock buyback program, which allows the Company to purchase from time to time in open market transactions, up to $20 million worth of Deer common stock. As of Q1/2010, Deer had more than $75 million in cash (or $2.31 per share in cash) without any long term debts or bank credit needs.
“In light of Deer’s current low valuation for reasons totally irrelevant to our fundamentals, and with our common stock trading at 3 times cash and an estimated mid-single-digit 2010 P/E (price to earnings) multiples, Deer feels strongly about taking proactive actions in enhancing shareholder value. Deer has sufficient cash on hand to fund both the share buyback program and grow our business,” commented Mr. Bill He, Chairman & CEO of Deer.
Deer’s management currently owns approximately 50% of the Company’s entire shares outstanding. All of these management-controlled shares are locked up for 3 years and are restricted from selling to the public market prior to January 2013. Deer management believes its interests are totally aligned with those of the Company’s public shareholders.
Business Updates:
“We see absolutely no signs of a consumer buying slowdown in the high margin Chinese markets for Deer’s products. Our sales tend to grow along with China’s consumer disposal income growth which has been outstanding. Our products are not highly expensive items, such as real estate or automobile investments. Therefore, wealthier Chinese consumers can easily make purchase decisions for Deer products that make their busy lifestyles far more convenient. Deer has a growing presence at two of China’s largest retailers, which collectively represent 8% of China’s total retail electronics sales. Deer is also progressing very well in deepening our sales channels and marketing to the remaining 92% of China’s broader retail space. We are excited and highly positive about our markets and outlook,” said Mr. Bill He.
Deer Raises 2010 Revenues and Earnings Guidance:
“Deer is currently experiencing strong domestic and global sales. Deer’s robust existing and new order flow pipelines will likely result in higher than anticipated earnings growth. We are comfortable with raising Deer’s 2010 earnings guidance to approximately $26 million in net income on revenues of approximately $160 million, with significant growth anticipated in our seasonally strong second half of 2010. We see little execution risk in achieving and potentially exceeding these new earnings growth targets,” concluded Mr. Bill He.
About Deer Consumer Products, Inc.
Deer Consumer Products, Inc. (Nasdaq: DEER; website: http://www.deerinc.com) is a NASDAQ Global Select Market listed U.S. registered public company headquartered in China. Managed by the Company’s founders, Deer has a 15-year operating business as well as a strong balance sheet. Supported by more than 103 patents, trademarks, copyrights and approximately 2,000 company-trained seasonal and full time staff, Deer is a leading designer, ODM/OEM manufacturer and global marketer of quality small home and kitchen electric appliances. Deer’s product lines include blenders, juicers, soy milk makers and a large variety of other home appliances designed to make today’s lifestyles simpler and healthier. With more than 100 global clients/branded products such as Black & Decker, Ariete, Disney, Toastmaster, Magic Bullet, Back to Basics and Wal-Mart, and rapidly expanding China domestic market footprint, Deer has enjoyed rapid sales and earnings growth in recent years.
Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company’s expectations. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Deer’s current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Deer’s filings with the Securities and Exchange Commission.
May 17, 2010 (Business Wire) — ARCA biopharma, Inc. (Nasdaq: ABIO) today announced that it has reached agreement with the U.S. Food and Drug Administration (FDA) regarding a Special Protocol Assessment (SPA) on the design of a clinical trial to assess the safety and efficacy of bucindolol in approximately 3,200 patients with chronic heart failure who have the genotype that appears to respond most favorably to bucindolol. Bucindolol is the Company’s investigational, pharmacologically unique, beta-blocker and mild vasodilator. An SPA is an agreement with the FDA that the proposed trial protocol design, clinical endpoints and statistical analyses are acceptable to support regulatory approval. In November 2009, the Company announced that the FDA has designated as a Fast Track development program the investigation of bucindolol for the reduction of cardiovascular mortality and cardiovascular hospitalizations in a genotype-defined heart failure population. In March 2010, ARCA was awarded a patent from the U.S. Patent and Trademark Office (USPTO) on methods of treating heart failure patients with bucindolol based on genetic testing.
“This SPA agreement with the FDA, the latest in a series of important milestones for ARCA, provides us with a clearly defined development and regulatory pathway for bucindolol in the treatment of genotype-specific heart failure patients,” said Michael R. Bristow, President and Chief Executive Officer of ARCA. “We appreciate the FDA’s approach to identifying a means by which additional bucindolol effectiveness data can be generated in a genotype-defined heart failure population. If the planned study confirms previous observations made in the BEST trial, bucindolol has the potential to become the first genetically targeted heart failure treatment for what we estimate to be the approximately 1.5 million heart failure patients with systolic dysfunction and the genotype that appears to respond most favorably to bucindolol.”
In accordance with the Company’s SPA agreement with the FDA, the bucindolol clinical trial is designed to be an international, multi-center, randomized, double-blind clinical trial with a planned enrollment of approximately 3,200 patients with chronic heart failure who have the genotype that appears to respond most favorably to bucindolol. This genotype is defined as the homozygous state for arginine (Arg/Arg) at amino acid position 389 of the beta-1 adrenergic receptor. In this genotype, all of these beta-1 receptors in the heart have high function and high affinity for norepinephrine, with a relatively large fraction of the receptors having constitutive activity, all of which are properties that the Company believes predispose the patient with this genotype to an enhanced clinical response to bucindolol. Bucindolol is unique among beta-blockers in having been shown to lower systemic norepinephrine levels and facilitate conversion of constitutively active beta-1 Arg receptors to an inactive state, pharmacologic properties that may explain bucindolol’s more favorable response in the beta-1 389 Arg/Arg genotype versus the response in another common genotype of the beta-1 receptor known as 389 Gly.
The trial protocol includes a superiority comparison of bucindolol to the beta-blocker metoprolol CR/XL, which is approved for heart failure and other indications and which has not been shown to exhibit any differentiation of clinical effects in heart failure patients with the beta-1 389 Arg/Arg genotype as compared to the Gly genotypes. The primary endpoint of the planned trial is a composite of cardiovascular mortality and cardiovascular hospitalization. The trial protocol includes two interim data analyses at pre-specified numbers of primary endpoints. If the results of either of the interim analyses meet the pre-specified criteria, ARCA would be able to formally submit a complete response to the FDA’s May 2009 Complete Response Letter and the results of the interim analysis could serve as the clinical effectiveness basis for FDA approval. The first interim data analysis is planned at 630 primary endpoints (57% of the projected total number). The trial protocol estimates reaching the first interim analysis 24-30 months into the trial. The SPA-defined criteria for fulfilling the FDA’s request for additional evidence of effectiveness include a hazard ratio 95% confidence interval upper bound of <0.999 (a p-value of approximately 0.050) and safety comparable to metoprolol CR/XL. Even with a positive outcome at either of the interim analyses, the planned trial is designed to proceed to conclusion, estimated to take a total of 3.5 years (including the time to reach the interim analysis). In order to not influence the planned trial’s subsequent completion, if the results of an interim data analysis are adequate to support potential approval of bucindolol, ARCA’s goal would be to have bucindolol commercially available no sooner than immediately after the conclusion of the trial.
With a clear regulatory and clinical pathway now identified, the Company is continuing to evaluate several options for funding the proposed clinical trial. These options primarily include a strategic partnership, license and/or government funding. In the first quarter of the year, the Company raised approximately $6.8 million, net of offering costs, to provide additional time to effectively pursue these options. As the Company evaluates these options, its primary goal is to identify the most capital efficient path to create stockholder value. Subject to the Company’s ability to obtain sufficient funding, the Company currently expects it could begin the proposed trial in the second half of 2011.
About Special Protocol Assessment (SPA)
An SPA is an agreement with the FDA that the proposed trial protocol design, clinical endpoints and statistical analyses are acceptable to support regulatory approval. For further information regarding the SPA process, please visit the FDA website, www.fda.gov. An SPA agreement is not a guarantee of approval, and there are no assurances that the design of, or data collected from, the planned bucindolol clinical trial will be adequate to obtain the requisite regulatory approvals for the marketing of bucindolol.
About Bucindolol
Bucindolol hydrochloride is a pharmacologically unique beta-blocker and mild vasodilator being developed for the treatment of chronic heart failure (HF). Bucindolol is an oral tablet formulation, dosed twice daily. Bucindolol is considered part of the beta-blocker class because of its property of blocking beta-1 as well as beta-2 receptors in the heart, preventing these receptors from binding with other molecules that would otherwise activate the receptor. Clinical data to date suggest that bucindolol is well-tolerated in patients with advanced HF, which the Company believes is due to bucindolol’s mild vasodilator effects.
About Heart Failure
Heart failure, or HF, is a chronic, progressive condition in which a problem with the structure or function of the heart impairs its ability to supply sufficient blood flow to the meet the body’s needs for blood and oxygen. Common causes of heart failure include myocardial infarction and other forms of ischemic heart disease, hypertension, valvular heart disease and cardiomyopathy. Heart failure is one of the largest health care problems in the United States and the rest of the world. Industry sources estimate that about 5.7 million Americans have HF and nearly 670,000 new patients are diagnosed annually. In addition, HF is the underlying reason for approximately 12 to 15 million annual visits to physicians, 6.5 million annual hospital days and over $37 billion in direct and indirect annual healthcare costs.
Beta-blockers are part of the current standard of care for HF, and are considered to be among the most effective drug classes for the disease. However, a significant percentage of eligible patients in the United States is not being treated with, or does not tolerate or respond well to, the beta-blockers currently approved for the treatment of HF. ARCA believes that new therapies for which patient response can be predicted before a drug is prescribed can help improve the current standard of practice in the treatment of HF.
About ARCA biopharma
ARCA biopharma is dedicated to developing genetically targeted therapies for heart failure and other cardiovascular disease. The Company’s lead product candidate, bucindolol hydrochloride, is an investigational, pharmacologically unique beta-blocker and mild vasodilator being developed for heart failure. ARCA has identified common genetic variations that it believes predict individual patient response to bucindolol, giving it the potential to be the first genetically-targeted heart failure treatment. ARCA is collaborating with Laboratory Corporation of America to develop the companion genetic test for bucindolol. For more information please visit www.arcabiopharma.com.
Safe Harbor Statement
This press release contains “forward-looking statements” for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the significance of the SPA agreement, which is not a guarantee of approval; the impact of the SPA on the likelihood of receiving marketing approval for bucindolol; the protection provided by the patent for methods of treating heart failure patients with bucindolol based on genetic testing; the timing and outcome of the Company’s bucindolol clinical trial; the significance of Fast Track designation; regulatory review and potential approval of the Company’s New Drug Application for bucindolol; the prospects for ARCA’s providing sufficient information in a timely manner as requested in the FDA’s Complete Response Letter; and, the Company’s ability to fund future operations. Such statements are based on management’s current expectations and involve risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, the risks and uncertainties associated with: the Company’s financial resources and whether they will be sufficient to meet the Company’s business objectives and operational requirements; the Company’s ability to complete a strategic transaction to support the continued development bucindolol, and/or obtain additional financing; the Company’s ability to identify, develop and achieve commercial success for products and technologies; risks related to the drug discovery and the regulatory approval process; and, the impact of competitive products and technological changes. These and other factors are identified and described in more detail in ARCA’s filings with the SEC, including without limitation the Company’s annual report on Form 10-K for the year ended December 31, 2009, the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2010 and subsequent filings. The Company disclaims any intent or obligation to update these forward-looking statements.
May 17, 2010 (Business Wire) — Virtual Radiologic Corporation (NASDAQ:VRAD), a national radiology practice and a leader in the development of radiologist workflow technology, and Providence Equity Partners, a leading global private equity firm that manages over $22 billion in equity capital, today announced that they have entered into a definitive agreement under which Providence will acquire all of the outstanding common stock of vRad for $17.25 per share in cash. The offer price represents a premium of 41.7 percent over the 30-day average closing stock price of $12.18 as of May 14, 2010, and a premium of 54.9 percent over the three month average closing stock price of $11.13. Based on the per share consideration, the transaction is valued at approximately $294 million.
vRad’s board of directors unanimously approved the agreement and recommends that shareholders vote in favor of the transaction. vRad’s co-founder and Chief Medical Officer, Dr. Eduard Michel, who owns 6.0% of the Company’s outstanding common shares, and Generation Partners, which owns 25.3% of the Company’s common shares, have executed Voting Agreements pursuant to which they have agreed to vote in favor of the transaction. The transaction is expected to be completed in the third quarter of 2010, subject to customary closing conditions, and regulatory and shareholder approvals. Upon completion, vRad will become a private company, wholly owned by Providence.
“We believe that this transaction provides an attractive, all-cash valuation that is in the best interests of our stockholders,” said Rob Kill, vRad’s Chairman and Chief Executive Officer. “We are very pleased to have an experienced partner in Providence who shares our commitment to delivering the highest quality patient care backed by industry-leading service levels.”
“vRad is an innovative company that is using its unique, proprietary technology and intense focus on quality and reliability to transform the way radiologic care is delivered,” said Peter O. Wilde, a managing director at Providence. “Rob has assembled a talented team at the company, and we look forward to working with him to continue to deliver value to the company’s clients over the long-term.”
Goldman, Sachs & Co. is serving as financial advisor and Oppenheimer Wolff & Donnelly LLP is serving as legal counsel to Virtual Radiologic. Weil, Gotshal & Manges LLP is serving as legal counsel to Providence Equity Partners.
Additional Information and Where to Find It
The proposed transaction will be submitted to Virtual Radiologic’s stockholders for their consideration, and Virtual Radiologic will file with the SEC a proxy statement to be used to solicit stockholder approval of the proposed transaction, as well as other relevant documents concerning the proposed transaction. VIRTUAL RADIOLOGIC STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain a free copy of the proxy statement, as well as other filings containing information about Virtual Radiologic, at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement and the SEC filings that will be incorporated by reference in the proxy statement can also be obtained, without charge, by directing a request to: Virtual Radiologic Corporation, 11995 Singletree Lane, Suite 500, Eden Prairie, MN 55344, Attention: Investor Relations, or by telephone at (952) 595-1100 or by e-mail to info@virtualrad.com.
Virtual Radiologic and its directors and certain executive officers may be deemed to be participants in the solicitation of proxies from Virtual Radiologic’s stockholders in respect of the proposed transaction. Information about the directors and executive officers of Virtual Radiologic and their respective interests in Virtual Radiologic by security holdings or otherwise is set forth in its proxy statements and Annual Reports on Form 10-K previously filed with the SEC. Investors may obtain additional information regarding the interests of the participants by reading the proxy statement regarding the acquisition when it becomes available. Each of these documents is, or will be, available for free at the SEC’s web site at www.sec.gov and at the Investor Relations page of Virtual Radiologic’s web site at www.virtualrad.com.
About Providence Equity Partners
Providence Equity Partners is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. The principals of Providence manage funds with over $22 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm’s inception in 1989. Significant investments include Archipelago Learning, Bresnan Broadband Holdings, Casema, Com Hem, Digiturk, Education Management Corporation, eircom, Hulu, Idea Cellular, ikaSystems Corporation, Kabel Deutschland, NexTag, Ono, PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision, VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees Entertainment and Sports Network. Providence is headquartered in Providence, RI (USA) and has offices in New York, London, Los Angeles, Hong Kong and New Delhi. Visit www.provequity.com for more information.
About Virtual Radiologic
Virtual Radiologic Corporation (vRad) is a national radiology practice working in partnership with local radiologists and hospitals to optimize radiology’s pivotal role in patient care. vRad’s more than 140 radiologists serve 1,200+ facilities (21% of U.S. hospitals), reading 2.7 million studies annually. Delivering access to extensive subspecialty coverage, vRad contributes to improved quality of patient care. And with its next-generation technology, vRad enhances productivity, helping to lower the overall cost of care while expediting time to diagnosis and treatment. For more information, visit www.vrad.com.
Safe Harbor for Forward-Looking and Cautionary Statements
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, in particular, statements about our plans, objectives, strategies and prospects regarding, among other things, our business and results of operations. These statements can be identified by the use of words such as “will,” “believe,” “expect,” and “anticipate” and similar terms or expressions of future expectation. These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Virtual Radiologic Corporation to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. For example, among other things, conditions to the closing of the transaction may not be satisfied and the transaction may involve unexpected costs, liabilities, or delays, any of which could cause the transaction to not be consummated. Additional examples of such risks and uncertainties are set forth in our Annual Report on Form 10-K, as well as our other filings with the Securities and Exchange Commission. Virtual Radiologic Corporation undertakes no duty to update these forward-looking statements due to new information or as a result of future events.
May 17, 2010 (Business Wire) — Samsung Telecommunications America (Samsung Mobile), the No. 1 mobile phone provider in the U.S.1, and InfoLogix, Inc. (NASDAQ: IFLG), a leading technology provider of enterprise mobility solutions for the healthcare and commercial industries, announced today their plans to collaborate on delivering mobile managed services to customers throughout North America.
As a leader in researching, developing and marketing wireless handsets and telecommunications products throughout North America, Samsung is focused on providing enterprise customers with new solutions to power business applications that drive bottom-line business goals. InfoLogix, in serving more than 2,200 commercial and healthcare organizations throughout North America, has pioneered new mobility offerings to meet the distinctive needs of these organizations for nearly a decade. InfoLogix’s comprehensive Mobile Managed Services offering provides a cost-effective way for enterprises to design, deploy and manage a fully-integrated mobile infrastructure, including wireless monitoring and device management, help desk support, and end-user education and training.
“We are eager to work with InfoLogix to provide enterprise customers with a complete solution for achieving the full benefits of mobility throughout their organizations, both inside and outside the four walls,” said Gavin Kim, vice president of content service and enterprise enablement for Samsung Mobile. “As one of the most respected names in the industry, InfoLogix continues to be at the forefront of mobile advancements and, in collaboration, we look forward to bringing the best in Samsung mobile technology and InfoLogix services to organizations across the country.”
“The combination of Samsung’s advanced mobile technology and InfoLogix’s depth of knowledge in managed services can produce powerful results for enterprise organizations,” said David Gulian, president and CEO of InfoLogix, Inc. “By collaborating with an elite, worldwide leader in mobile communications like Samsung, we have the potential together to create new, groundbreaking mobile solutions that address the day-to-day challenges that organizations face in becoming more efficient, effective and competitive in the global marketplace.”
About Samsung Telecommunications America
Samsung Telecommunications America, LLC, a Dallas-based subsidiary of Samsung Electronics Co., Ltd., researches, develops and markets wireless handsets and telecommunications products throughout North America. For more information, please visit www.samsungmobileusa.com.
About Samsung Electronics
Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2009 consolidated sales of US$116.8 billion. Employing approximately 188,000 people in 185 offices across 65 countries, the company consists of eight independently operated business units: Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, Digital Imaging, Semiconductor and LCD. Recognized as one of the fastest growing global brands, Samsung Electronics is a leading producer of digital TVs, memory chips, mobile phones and TFT-LCDs. For more information, please visit www.samsung.com.
About InfoLogix, Inc.
InfoLogix is a leading provider of enterprise mobility and advanced wireless asset tracking solutions for the healthcare and commercial industries. InfoLogix uses the industry’s most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. InfoLogix is a publicly-traded company (NASDAQ: IFLG).
1 Based upon reported shipment data, according to Strategy Analytics Q4 2009 U.S. Market Share Handset Shipments Report.
ELMA, N.Y., May 14 /PRNewswire-FirstCall/ — Servotronics, Inc. (NYSE Amex: SVT) reported a significant increase in net income to $622,000 (or $0.32 per share Basic – $0.29 per share Diluted) on a 4.6% increase in revenues to $7,884,000 for the first quarter ended March 31, 2010 as compared to net income of $125,000 (or $0.06 per share Basic and Diluted) on revenues of $7,538,000 for the comparable period ended March 31, 2009. The Company primarily attributes the increase in revenues and net income to a combination of several factors such as increased shipments, product mix, cost containment activities and other recession mitigating factors.
As the Company previously reported, certain major manufacturers of commercial aircraft have publicly announced that they have initiated plans to ramp-up production to support forecasted increases in aircraft deliveries in late 2010, 2011 and 2012. Aircraft component suppliers are being advised to increase their manufacturing capabilities to support this forecasted accelerated aircraft production. There is a growing consensus that the world-wide recession is in the early stages of a slow recovery which may or may not be self-sustainable. Also, the Aerospace Industry Association’s report issued in December 2009 was cautiously optimistic and confident in the future of Aerospace.
Government procurements are expected to continue to be volatile and may result in significant period to period performance fluctuations. The Company’s marketing efforts continue to be enhanced by ongoing product developments at both the Advanced Technology Group (ATG) and the Consumer Products Group (CPG). The Company recently expanded its capabilities in its continuing efforts to add product lines and resources to the Company’s inventory of skills and product offerings. The Company’s many ATG aerospace products that are in a wide range of programs are expected to benefit from a recovering Global economy. The CPG’s product developments and expanded capabilities have led to significant government procurements and the expansion of the CPG’s product line.
The Company is composed of two groups – the ATG and the CPG. The ATG primarily designs, develops and manufactures servo control and other components for various commercial and government applications (i.e., aircraft, jet engines, missiles, manufacturing equipment, etc.). The CPG designs and manufactures cutlery, bayonets, machetes and combat, survival, sporting, agricultural, pocket knives and other edged products for both commercial and government applications.
FORWARD-LOOKING STATEMENTS
Certain paragraphs of this release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as those pertaining to the Company’s expectation of new business and success in its entry into new product programs. Forward-looking statements involve numerous risks and uncertainties. The Company derives a material portion of its revenue from contracts with agencies of the U.S. Government or their prime contractors. The Company’s business is performed under fixed price contracts and the following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: uncertainties in today’s global economy and global competition, difficulty in predicting defense appropriations, the vitality and ability of the commercial aviation industry to purchase new aircraft, the willingness and ability of the Company’s customers to fund long-term purchase programs, and market demand and acceptance both for the Company’s products and its customers’ products which incorporate Company-made components. The success of the Company also depends upon the trends that affect the national and international economy. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company assumes no obligation to update forward-looking statements.
May 14, 2010 (Business Wire) — Ultralife Corporation (NASDAQ: ULBI) has received orders valued at approximately $21 million for its SATCOM-On-The-Move systems from a U.S. defense contractor for use in MRAP armored vehicles. Deliveries are expected to begin this quarter and be completed in the fourth quarter of 2010.
“As one of the preferred vendors for critical defense communications systems, we are well positioned to benefit from ongoing demand by the U.S. military for SATCOM systems for use in various military vehicle programs. Because of this standing, our battle-tested, radio independent SATCOM systems have been once again selected for use in MRAP vehicles,” said John D. Kavazanjian, president and chief executive officer. “These orders were not contemplated in our base line revenue plan for 2010 which called for revenue of $177 million. We will provide investors with an update on our outlook for 2010 operating profit and Adjusted EBITDA in our second quarter earnings call.”
About Ultralife Corporation
Ultralife Corporation, which began as a battery company, operates within three business segments: Battery & Energy Products, Communications Systems and Energy Services, and serves its markets with products and services ranging from portable and standby power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem solving, Ultralife serves government, defense and commercial customers across the globe.
Ultralife’s family of brands includes: Ultralife Batteries, Stationary Power Services, RPS Power Systems, ABLE, McDowell Research, RedBlack Communications and AMTI. Ultralife’s operations are in North America, Europe and Asia. For more information on Ultralife, visit www.ultralifecorp.com.
This press release may contain forward-looking statements based on current expectations that involve a number of risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially include: worsening global economic conditions, increased competitive environment and pricing pressures, disruptions related to restructuring actions and delays. The Company cautions investors not to place undue reliance on forward-looking statements, which reflect the Company’s analysis only as of today’s date. The Company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these factors and other factors that could affect Ultralife’s financial results is included in Ultralife’s Securities and Exchange Commission (SEC) filings, including the latest Annual Report on Form 10-K.
May 13, 2010 (Business Wire) — Allied Motion Technologies Inc. (NASDAQ: AMOT) today announced it achieved net income for the quarter ended March 31, 2010 of $734,000 or $0.09 per diluted share compared to a net loss of $730,000 or $.10 per diluted share for the same quarter last year. Revenues for the quarter increased 14% to $17,422,000 compared to $15,295,000 last year. Bookings for the quarter ended March 31, 2010 were $26,229,000 up over 54% when compared to $16,970,000 for the same quarter of last year and up 115% when compared to the $12,204,000 for the quarter ended December 31, 2009. Backlog at March 31, 2010 was $29,082,000, reflecting a 18% increase from March 31, 2009 and a 38.6% increase over backlog at the end of 2009.
Included in the first quarter results was a pretax gain of $685,000 ($436,000 after tax) for the final settlement with the insurance company for the business interruption (BI) losses caused by the fire in October 2008 at Allied’s encoder operation in Chatsworth, Calif. Also included in the first quarter are $230,000 of inefficiencies and incremental non-recurring costs incurred in integrating the encoder operation into Allied’s Emoteq operation in Tulsa, Okla. Excluding the BI gain and the non-recurring costs, the net pretax profit would be $609,000 and the net income would be $438,000.
“We are pleased with the first quarter profit improvement and encouraged by the record new orders as we reported in our first quarter results,” commented Dick Warzala, President and CEO of Allied Motion. “The bookings in the first quarter of 2010 exceeded the previous high achieved in the first quarter of 2006 and are a good indicator that recovery in our served markets is occurring at a faster pace than previously expected. In addition, new project activity is strong and reflects the ongoing development of our core technologies and the release of several new products in the past few years. As we move forward, we will continue with the application of our AST Lean Enterprise Tools to improve our efficiencies and eliminate waste throughout our company.”
Headquartered in Denver, Colorado, Allied Motion designs, manufactures and sells motion control products into applications that serve many industry sectors. Allied Motion is a leading supplier of precision and specialty motion control components and systems to a broad spectrum of customers throughout the world.
The statements in this press release and in the Company’s May 14, 2010 conference call that relate to future plans, events or performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the word “believe,” “anticipate,” “expect,” “project,” “intend,” “will continue,” “will likely result,” “should” or words or phrases of similar meaning. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results of the Company to differ materially from the forward-looking statements. The risks and uncertainties include those associated with the present economic recession in the United States and throughout Europe, general business and economic conditions in the Company’s motion markets, introduction of new technologies, products and competitors, the ability to protect the Company’s intellectual property, the ability of the Company to sustain, manage or forecast its growth and product acceptance, success of new corporation strategies and implementation of defined critical issues designed for growth and improvement in profits, the continued success of the Company’s customers to allow the Company to realize revenues from its order backlog and to support the Company’s expected delivery schedules, the continued viability of the Company’s customers and their ability to adapt to changing technology and product demand, the loss of significant customers or enforceability of the Company’s contracts in connection with a merger, acquisition, disposition, bankruptcy, or otherwise, the ability of the Company to meet the technical specifications of its customers, the continued availability of parts and components, increased competition and changes in competitor responses to the Company’s products and services, changes in government regulations, availability of financing, the ability of the Company’s lenders and financial institutions to provide additional funds if needed for operations or for making future acquisitions or the ability of the Company to obtain alternate financing if present sources of financing are terminated, the ability to attract and retain qualified personnel who can design new applications and products for the motion industry, the ability of the Company to identify and consummate favorable acquisitions to support external growth and new technology, the ability of the Company to establish low cost region manufacturing and component sourcing capabilities, and the ability of the Company to control costs for the purpose of improving profitability. The Company’s ability to compete in this market depends upon its capacity to anticipate the need for new products, and to continue to design and market those products to meet customers’ needs in a competitive world. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements as a prediction of actual results. The Company has no obligation or intent to release publicly any revisions to any forward looking statements, whether as a result of new information, future events, or otherwise.
|
|
|
| ALLIED MOTION TECHNOLOGIES INC. FINANCIAL SUMMARY (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) |
|
|
|
|
|
For the Three Months
Ended March 31, |
| HIGHLIGHTS OF OPERATING RESULTS |
|
2010 |
|
2009 |
| Revenues |
|
$ |
17,422 |
|
|
$ |
15,295 |
|
| Cost of products sold |
|
|
13,017 |
|
|
|
12,506 |
|
| Gross Margin |
|
|
4,405 |
|
|
|
2,789 |
|
| Operating expenses and other |
|
|
3,341 |
|
|
|
3,849 |
|
| Income (loss) before income taxes |
|
|
1,064 |
|
|
|
(1,060 |
) |
| (Provision for) benefit from income taxes |
|
|
(330 |
) |
|
|
330 |
|
|
|
|
|
|
|
|
|
|
| Net Income (loss) |
|
$ |
734 |
|
|
$ |
(730 |
) |
| PER SHARE AMOUNTS: |
|
|
|
|
| Diluted income (loss) per share |
|
$ |
.09 |
|
|
$ |
(.10 |
) |
| Diluted weighted average common shares |
|
|
7,768 |
|
|
|
7,386 |
|
|
|
|
|
|
|
|
|
|
| CONDENSED BALANCE SHEETS |
|
March 31,
2010 |
|
December 31,
2009 |
| Assets |
|
|
|
|
| Current Assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
5,311 |
|
|
$ |
4,470 |
|
| Trade receivables, net |
|
|
8,988 |
|
|
|
7,743 |
|
| Inventories, net |
|
|
8,053 |
|
|
|
7,578 |
|
| Other current assets |
|
|
1,320 |
|
|
|
1,367 |
|
| Total Current Assets |
|
|
23,672 |
|
|
|
21,158 |
|
| Property, plant and equipment, net |
|
|
6,480 |
|
|
|
6,584 |
|
| Deferred income taxes |
|
|
5,564 |
|
|
|
5,649 |
|
| Goodwill and intangible assets, net |
|
|
1,154 |
|
|
|
1,362 |
|
| Total Assets |
|
$ |
36,870 |
|
|
$ |
34,753 |
|
| Liabilities and Stockholders’ Investment |
|
|
|
|
| Current Liabilities: |
|
|
|
|
| Debt obligations |
|
$ |
322 |
|
|
$ |
600 |
|
| Accounts payable and other current liabilities |
|
|
8,659 |
|
|
|
6,537 |
|
| Total Current Liabilities |
|
|
8,981 |
|
|
|
7,137 |
|
| Other long-term liabilities |
|
|
2,510 |
|
|
|
2,594 |
|
| Total Liabilities |
|
|
11,491 |
|
|
|
9,731 |
|
| Stockholders’ Investment |
|
|
25,379 |
|
|
|
25,022 |
|
| Total Liabilities and Stockholders’ Investment |
|
$ |
36,870 |
|
|
$ |
34,753 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months ended
March 31, |
| CONDENSED STATEMENTS OF CASH FLOWS |
|
2010 |
|
2009 |
|
| Cash flows from operating activities: |
|
|
|
|
| Net income (loss) |
|
$ |
734 |
|
|
$ |
(730 |
) |
| Depreciation and amortization |
|
|
496 |
|
|
|
893 |
|
| Changes in working capital balances and other |
|
|
392 |
|
|
|
(1,987 |
) |
| Net cash provided by (used in) operating activities |
|
|
1,622 |
|
|
|
(1,824 |
) |
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
| Purchase of property and equipment |
|
|
(304 |
) |
|
|
(241 |
) |
| Net cash used in investing activities |
|
|
(304 |
) |
|
|
(241 |
) |
|
|
|
|
|
| Net cash (used in) provided by financing activities |
|
|
(198 |
) |
|
|
30 |
|
| Effect of foreign exchange rate changes on cash |
|
|
(279 |
) |
|
|
(43 |
) |
| Net increase (decrease) in cash and cash equivalents |
|
|
841 |
|
|
|
(2,078 |
) |
| Cash and cash equivalents at beginning of period |
|
|
4,470 |
|
|
|
4,196 |
|
| Cash and cash equivalents at March 31 |
|
$ |
5,311 |
|
|
$ |
2,118 |
Press Release Source: Puda Coal, Inc. On Thursday May 13, 2010, 7:30 am EDT
TAIYUAN, China, May 13 /PRNewswire-Asia-FirstCall/ — Puda Coal, Inc. (NYSE:PUDA – News), a supplier of high grade metallurgical coking coal used to produce coke for steel manufacturing in China and consolidator of twelve coal mines in Shanxi Province, today announced its 2010 first quarter financial results.
First Quarter 2010 Highlights
-- First quarter revenue increased 24.6% year over year to $62.0 million
-- Gross profit increased 165.4% year over year to $10.3 million
-- Gross margin increased 8.8% year over year to 16.6%
-- Operating income grew 207.4% year over year to $9.1 million
-- Net income gained 157.3% to $5.4 million, or $0.31 per fully diluted
share, as compared to $2.1 million, or $0.14 per fully diluted share,
in the first quarter of 2009
-- Excluding the $1.2 million in non-cash expense related to the fair
value loss of derivative warrants, adjusted net income increased 215.5%
to $6.7 million, or $0.37 per fully diluted share, as compared to $2.1
million, or $0.14 per fully diluted share, in the same period last year
-- Sales of cleaned coal increased 10.3% year over year to 503,000 metric
tons (MT)
-- Average selling price of cleaned coal grew 12.8% year over year to $123
per MT
“Puda Coal began 2010 with solid revenue and net income growth, thanks to stronger cleaned coal sales volume and higher selling prices reflecting the continuing recovery of China’s steel industry,” commented Mr. Liping Zhu, President and CEO of Puda Coal. “Supported by our coal washing business and coal mine consolidation projects, we are well-positioned for continued growth in the remaining quarters of 2010 and beyond.”
First Quarter 2010 Results
For the quarter ended March 31, 2010, total revenue increased 24.6% to $62.0 million, compared to $49.7 million in the first quarter of 2009. The increase in revenue year over year was driven by the increases in sales volume and the average selling price of cleaned coal. Sales of cleaned coal increased 10.3% to 503,000 MT, compared to 456,000 MT in the first quarter of 2009. The average selling price rose 12.8% to $123 per MT, compared to $109 per MT (after adjusting for exchange rate differences) in the same quarter last year.
Gross profit for the first quarter of 2010 expanded 165.4% to $10.3 million, compared to $3.9 million in the first quarter of 2009. Gross margin gained 8.8% to 16.6%, as compared to 7.8% in the comparable period of 2009.
The increase was mainly attributable to an increase in the average selling price of cleaned coal.
Operating expenses for the first quarter of 2010 grew 30.3% to $1.2 million, compared to $0.9 million in the first quarter of 2009. Selling expenses rose 10.6% year over year to $0.6 million, due to an increase in sales volume. General and administrative expenses increased 63.6% year over year to $0.6 million, primarily due to higher stock compensation expenses. Operating income for the first quarter of 2010 increased 207.4% to $9.1 million, compared to $3.0 million in the comparable period of 2009. Operating margin expanded 7.7% to 14.6% in the first quarter of 2010, compared to 6.9% in the first quarter of 2009.
During the first quarter of 2010, the Company recorded a non-cash expense of $1.2 million related to the loss in fair value of the derivative warrants issued in November 2005, as compared to a corresponding gain of $8,000 in the first quarter of 2009.
Income tax expense for the first quarter of 2010 increased 214.7% to $2.3 million, compared to $0.7 million in the same period last year primarily due to the increase in operating profit of Shanxi Coal to $9.3 million in the first quarter of 2010 (after adjusting for exchange rate differences) from $2.9 million in the first quarter of 2009.
Net income increased 157.3% to $5.4 million, or $0.31 per fully diluted share, compared to $2.1 million, or $0.14 per fully diluted share, in the first quarter of 2009.
Adjusted net income, excluding non-cash gains or losses in the fair value of derivative warrants, rose 215.5% to $6.7 million, or $0.37 per diluted share, compared to adjusted net income of $2.1 million, or $0.14 per diluted share, for the first quarter in 2009. Diluted earnings per share were calculated using weighted average shares of 18,594,264 and 15,378,544 for the quarters ended March 31, 2010 and March 31, 2009, respectively.
Financial Condition
As of March 31, 2010, Puda Coal had $49.4 million in cash and cash equivalents, compared to $19.9 million at year-end 2009. Working capital was $76.0 million and a current ratio of 4.4:1. Long-term debt, excluding the current portion, was $6.2 million. Shareholders’ equity was $108.2 million, an increase from $84.0 million at the end of 2009.
In the first quarter of 2010, the Company generated $13.3 million in cash from operating activities, compared to cash used in operating activities of $14.3 million in the same period last year. Net cash provided by financing activities of $16.3 million for the three months ended March 31, 2010 includes $14.5 million from the sale of 3,284,000 shares of common stock and approximately $2.1 million from the exercise of warrants, which were offset by $0.3 million for the repayment of the long-term debt to Resources Group.
Recent Events
As previously announced by the Company, on May 7, 2010, the Company’s wholly-owned subsidiary, Shanxi Putai Resources Limited Co. (“Putai”) entered into a loan agreement with Mr. Ming Zhao, the founder, significant shareholder and Chairman of the board of directors of Puda Coal. Under the agreement, Mr. Ming Zhao agreed to provide Putai with an unsecured loan in the aggregate principal amount of RMB 240 million (USD $35.2 million) for an 18-month term at an annual interest rate of 6%. The terms of the loan agreement have been reviewed and approved by the Company’s audit committee composed of three independent directors.
As part of the Shanxi provincial government’s policies to consolidate and redevelop the coal mining industry, new guidelines were enacted by the government in February 2010 to require the registered capital of coal mine consolidators to be at least RMB200 million (US$29.3 million). The current registered capital of Shanxi Coal is RMB22.5 million (about US$3.3 million). Since Shanxi Coal has been previously approved as an acquirer and consolidator of two coal mine projects, Shanxi Coal plans to increase its registered capital to RMB500 million (US$73.2 million), 90% of which (i.e., RMB430 million) will be funded by Shanxi Coal’s 90% shareholder, Putai, and 10% of which (i.e., RMB48 million) will be funded by Shanxi Coal’s 10% shareholder, Mr. Ming Zhao and his brother, Mr. Yao Zhao. The loan will be used to pay for the increase of the registered capital of Putai’s 90% subsidiary, Shanxi Puda Coal Group Co., Ltd. (“Shanxi Coal”).
Business Outlook
“We expect the recovering steel industry to fuel demand for coking coal and we have a positive outlook for our coal washing operations in 2010,” said Mr. Zhu. “We continue to make progress on our coal mine consolidation projects. The asset transfers of the Da Wa Coal and Guanyao Coal mines in Pinglu County were completed in April and we will pay for the assets transfer when the additional registered paid-in-capital of Shanxi Coal is confirmed by the Shanxi government office. Pre-construction activities at these two mines are currently underway. We are working closely with the Shanxi government and expect to receive approval for the business license transfers for all eight of the Pinglu County mines in the near term.”
Upcoming Events
Puda Coal will present at the Second Annual China Rising Investment Conference hosted by CCG Investor Relations on May 17, 2010 and Oppenheimer 4th Annual China Dragon Call Conference on May 18, 2010. Both conferences will be held in New York, New York and management will be available for one-one one meetings. Additionally, Puda Coal will hold its annual meeting of stockholders on May 21, 2010 in New York, New York at the New York Times Building. During the meeting of stockholders, the Company will answer questions from investors and analysts.
Conference Call
The Company will host a conference call at 9:00 a.m. ET on Thursday, May 13, 2010 to discuss first quarter 2010 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 409-5558. International callers should dial (706) 679-8017. When prompted by the operator, mention conference passcode 749 192 14. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on Thursday, May 13, 2010 at 10:00 a.m. ET. To access the replay, please dial (800) 642-1687. International callers should dial (706) 645-9291. When promoted, enter conference passcode 749 192 14.
About Puda Coal, Inc.
Puda Coal, through its subsidiaries, supplies premium high grade metallurgical coking coal used to produce coke for steel manufacturing in China. The Company currently possesses 3.5 million metric tons of annual coking coal capacity. The Company has recently moved upstream into coal mining, as a consolidator and acquirer of coal mines in Shanxi Province, including the Pinglu projects and the Jianhe projects. On September 30, 2009, Shanxi Coal, a 90% indirect subsidiary of the Company, was appointed by the Shanxi provincial government as an acquirer and consolidator of eight thermal coal mines located in Pinglu County in southern Shanxi Province. Shanxi Coal plans to consolidate the eight coal mines into five, increasing their total annual capacity from approximately 1.6 million to 3.6 million metric tons. Shanxi Coal received another approval by the Shanxi provincial government to consolidate four additional coking coal mines into one coal mine in Huozhou County. After the completion of the consolidation, the Jianhe project is expected to increase the total annual capacity from 720,000 metric tons to 900,000 metric tons, according to the Shanxi provincial government’s approval. For more information, please visit http://www.pudacoalinc.com
FORWARD-LOOKING STATEMENTS
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. For example, our plan to acquire and consolidate the target coal mines are subject to the risks and uncertainties relating to the market and geological condition, due diligence, negotiation for definitive agreements, etc. which are beyond our control, as well as our management’s ability and capacity to execute our coal mine acquisition strategy and manage the coal mine operations. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Use of Non-GAAP Financial Information
GAAP results for the three months ended March 31, 2010 and 2009 include non-cash gains and losses related to the change in fair value of the Company’s warrants. To supplement the Company’s condensed consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP financial information excluding the impact of these items in this release, which are non-GAAP net income and non-GAAP diluted earnings per share. The Company’s management believes that these non-GAAP measures provide investors with a better understanding of how the results related to the Company’s historical performance. The additional adjusted information is not meant to be considered in isolation or as a substitute for GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies. Management believes that these adjusted financial measures are useful to investors because they exclude non-cash expenses that management excludes when it internally evaluates the performance of the Company’s business and makes operating decisions, including internal budgeting, and performance measurement, as these measures provide a consistent method of comparison to historical periods. As a result, the provision of these adjusted measures allows investors to evaluate the Company’s performance using the same methodology and information as that used by the Company’s management. Moreover, management believes that these adjusted measures reflect the essential operating activities of the Company. Adjusted measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the adjusted financial measure. However, the Company’s management compensates for these limitations by providing the relevant disclosure of the items excluded. A reconciliation of each adjusted measures to the nearest GAAP measure appears in the table below.
PUDA COAL, INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS AND DILUTED EPS
Three months Ended
March 31,
US$ - thousands, except per share 2010 2009
Net income 5,444 2,116
- Non-cash adjustment -
derivative unrealized fair value
loss/(gain) for warrants issued 1,207 (8)
Adjusted net income excluding
non-cash item 6,651 2,108
Per diluted share
- Net income per share $0.31 $0.14
- Non-cash adjustment per share $0.06 $0.00
- Adjusted net income per share $0.37 $0.14
Weighted average shares
outstanding - '000
-diluted 18,594 15,379
PUDA COAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2010 and 2009
(In thousands of United States dollars, except per share data)
Three months ended March 31,
2010 2009
NET REVENUE $61,971 $49,721
COST OF REVENUE 51,697 45,850
GROSS PROFIT 10,274 3,871
OPERATING EXPENSES
Selling expenses 638 577
General and administrative
expenses 558 341
TOTAL OPERATING EXPENSES 1,196 918
INCOME FROM OPERATIONS 9,078 2,953
INTEREST INCOME 22 33
INTEREST EXPENSE (117) (137)
DERIVATIVE UNREALIZED FAIR VALUE
(LOSS)/ GAIN (1,207) 8
INCOME BEFORE INCOME TAXES 7,776 2,857
INCOME TAXES (2,332) (741)
NET INCOME 5,444 2,116
OTHER COMPREHENSIVE INCOME
Foreign currency translation
adjustment (86) (166)
COMPREHENSIVE INCOME $5,358 $1,950
EARNINGS PER SHARE - BASIC $0.31 $0.14
- DILUTED $0.31 $0.14
WEIGHTED AVERAGE NUMBER OF
SHARES
OUTSTANDING - BASIC 17,832,199 15,333,680
- DILUTED 18,594,264 15,378,544
PUDA COAL, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2010 and December 31, 2009
(In thousands of United States dollars)
March 31, December 31,
2010 2009
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $49,393 $19,918
Accounts receivable, net 25,835 25,340
Advances to suppliers
- Related parties 1,114 1,020
- Third parties 2,294 3,552
Inventories 20,034 22,531
Total current assets 98,670 72,361
PREPAYMENTS 6,259 6,259
PROPERTY, PLANT AND EQUIPMENT, NET 13,566 13,986
INTANGIBLE ASSETS, NET 3,923 3,945
INVESTMENT, AT COST 14,650 14,650
TOTAL ASSETS $137,068 $111,201
CURRENT LIABILITIES
Current portion of long-term debt
- Related party $1,300 $1,300
Accounts payable 6,310 4,839
Other payables
- Related parties 1,031 1,031
- Third parties 2,672 2,650
Accrued expenses 885 1,076
Income taxes payable 2,333 1,091
VAT payable 1,306 1,135
Derivative warrants 6,822 7,620
Total current liabilities 22,659 20,742
LONG-TERM LIABILITIES
Long-term debt
- Related party 6,175 6,500
Total long-term liabilities 6,175 6,500
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, authorized
5,000,000 shares, par value $0.01,
issued and outstanding None -- --
Common stock, authorized
150,000,000 shares, par value
$0.001, issued and outstanding
19,638,309 (2009: 15,828,863) 19 15
Paid-in capital 54,125 35,212
Statutory surplus reserve fund 1,366 1,366
Retained earnings 42,677 37,233
Accumulated other comprehensive
income 10,047 10,133
Total stockholders' equity 108,234 83,959
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $137,068 $111,201
For more information, please contact:
Company Contact:
Laby Wu, Chief Financial Officer, Director of Investor Relations
Puda Coal, Inc.
Tel: +86-10-6439-2405
Email: labywu@gmail.com
Web: http://www.pudacoalinc.com
Investor Relations Contact:
Crocker Coulson, President
CCG Investor Relations
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Elaine Ketchmere,
VP of Financial Writing
Tel: +1-310-954-1345
Email: elaine.ketchmere@ccgir.com
Web: http://www.ccgirasia.com
Press Release Source: Baldwin Technology Company, Inc. On Thursday May 13, 2010, 9:09 am EDT
SHELTON, Conn.–(BUSINESS WIRE)–Baldwin Technology Company, Inc. (NYSE Amex: BLD), a global leader in process automation technology for the printing industry, today reported financial results for its fiscal third quarter ended March 31, 2010.
Highlights
Financial
- Third quarter EBITDA of $1,271,000 and net income of $133,000
- Orders up 19% and sales up 9.5% compared to the third quarter of prior year
- Sequential (current quarter versus prior quarter) increase in orders of 6%
Sales & Marketing
- Received first combination order of cloth and brush cleaning systems in Belgium
- Secured additional retrofit orders in China for combination cloth and brush cleaning systems
- Won orders from OEMs and end users for Cobra Spray Dampening systems in China and India
Third Quarter Fiscal 2010 Financial Results
The Company reported net sales of $39.5 million for the third quarter, a 1.9% improvement over net sales of $38.8 million in the previous quarter, and an increase of $3.4 million or 9.5% over net sales of $36.1 million for the third quarter of the prior fiscal year. Currency effects increased sales by $2.3 million, or 6.3% from the same quarter of the prior year.
Net income for the third quarter was $0.1 million or $0.01 per diluted share, compared to a net loss of $13.4 million or $0.88 per diluted share for the comparable quarter of the prior year.
Cash flow from operations in the quarter was ($0.6) million compared to $2.7 million in the third quarter of the prior year.
Orders for the quarter were approximately $36.4 million, compared to $30.5 million in the third quarter of the prior year, an increase of 19%. Backlog as of March 31, 2010 was $30.2 million compared to $33.4 million at December 31, 2009.
Please refer to the schedule following the reported GAAP results which shows a reconciliation of these GAAP results to non-GAAP adjusted results, and the notes below explaining management’s reasons for providing certain non-GAAP financial measures.
Introducing New Consumables
During the next few weeks, Baldwin will be introducing an innovative new line of consumables called CleanPac™ cleaning cloths, for use in either dry or pre-soaked versions for cleaning hands and various items in the pressroom, including blankets, cylinders and other parts of printing presses.
Trade Shows
In a continuation of the “Just Ask” marketing program, Baldwin will be presenting an extensive product portfolio that improves productivity and reduces process costs for the sheet-fed, commercial web, flexo corrugated packaging, newspaper and semi-commercial market sectors at IPEX 2010. This Birmingham U.K. exhibition occurs every four years and will be held this year from May 18 to 25 and draws attendees from around the globe. In March, the Company participated in the Printing South China Exhibition, and in June, Baldwin will be showing products at the Expoprint Latin America 2010 exhibition in Brazil.
Significant Announcements
- Baldwin Secures Large Order for Newspaper Press Equipment (May 10, 2010)
- Baldwin Wins Additional Retrofit Orders (May 11, 2010)
- Baldwin Demonstrates Global Leadership in Process Improvement Technology Driving Press Room Savings at IPEX 2010 (March 10, 2010)
Additional details, copies of these releases and other news are available at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.baldwintech.com&esheet=6289546&lan=en_US&anchor=www.baldwintech.com&index=1&md5=604a6be584837956af7e722e0cbc74b7 .
Comments
President and CEO Karl S. Puehringer said, “Our tight cost controls, as evidenced by continued operating expense reduction, helped return Baldwin to profitability this quarter. We also made solid progress in the execution of our strategy by focusing on opportunities on the installed base, leveraging our technology in emerging countries and further enhancing our business with press room consumables. We received several orders this quarter in China and India for the new Cobra Spray Dampening system, which was developed for production and sale to both OEMs and end users in those local markets. We also secured retrofit orders in China for combination brush and cloth cleaning systems. We are continuing the expansion of our European consumables sales network as we introduce new high performance Prepac® cleaning consumables. Our parts and consumables business has grown and although a recovery in new web press shipments will take longer due to longer lead times, there are first signs of recovery in the sheet fed printing market.”
“Going forward, we are focused on new uses for our technology. I am pleased about an increasing demand for our consumables, primarily driven through our environmentally friendly product offerings and an overall trend in the industry towards shorter runs that require more cleaning. As highlighted above, we are introducing a new consumable, the CleanPac cleaning cloths. We are also pursuing several global projects for supply chain management and standardization and global procurement to reduce material costs. As a market leader, Baldwin offers a complete spectrum of products, related consumables and services through a well established global network in all major markets for print,” Puehringer concluded.
Vice President and CFO John P. Jordan said, “Cash flow from operations during the quarter was slightly less than break even, which was attributable to timing of customer deposits (decreased by $2.5 million). The controllable components of working capital, on the other hand, contributed $0.9 million to operating cash flow.”
“Total debt at March 31, 2010 of $18.7 million is $1.3 million less than at December 31, 2009 and $9.2 million less than at 2009 fiscal year end, resulting primarily from the application of the patent infringement suit settlement proceeds received during the second quarter. The Company has met its EBITDA and liquidity covenants under the Credit Agreement Amendment completed July 31, 2009, but the currency-adjusted net sales for the three months ended April 30, 2010 were less than the amount required under the Agreement. The banks agreed to waive that breach.”
“Operating expenses for the quarter of $11.0 million were $0.6 million lower than third quarter fiscal 2009 operating expenses of $11.6 million after adjusting for a nonrecurring charge in 2009. Excluding the unfavorable currency effect, operating expenses were $1.2 million or 10% lower than prior year adjusted operating expenses. The current year quarter results reflect the full benefit of restructuring and cost reductions that were started during the second and third quarters of fiscal year 2009. Year to date operating expenses were $7.1 million (18%) less than prior year, excluding the unfavorable currency effect and adjusted for a non-recurring charge.”
“The Company is well positioned to leverage its lower cost structure to deliver higher margins from any additional business that should emanate from a recovery when the world’s economies and demand for print equipment recover from the recent economic contraction. We will continue our diligence in managing costs to maintain profitable operations,” Jordan concluded.
Non-GAAP Financial Measures
This release provides GAAP and non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of each of the non-GAAP financial measures contained herein to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company uses these financials measures as an indicator of business performance in maintaining and evaluating the Company’s on-going financial results and trends. The Company believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of the Company’s ongoing operations and liquidity and when planning and forecasting future periods. These non-GAAP measures also facilitate management’s internal comparisons to the Company’s historical operating results and liquidity.
Conference Call and Webcast
The Company will host a conference call to discuss the financial results and business outlook today at 11:00 AM Eastern Standard Time. Call in information is below:
Conference Call Access:
Domestic: 800-619-4043
International: 415-228-5043
Passcode: Baldwin Q3
Rebroadcast Access:
Domestic: 800-925-0173
International: 402-998-0031
An archived webcast of the conference call will also be available on the Company’s web site http://www.baldwintech.com or http://www.investorcalendar.com/IC/CEPage.asp?ID=158393.
Leading the call will be Baldwin President and CEO Karl S. Puehringer and Vice President and CFO John P. Jordan.
About Baldwin
Baldwin Technology Company, Inc. is a leading international supplier of process automation equipment and related consumables for the printing and publishing industries. Baldwin offers its customers a broad range of market-leading technologies, products and systems that enhance the quality of printed products and improve the economic and environmental efficiency of the printing process. Headquartered in Shelton, Connecticut, the Company has operations strategically located in the major print markets and distributes its products via a global sales and service infrastructure. Baldwin’s technology and products include cleaning systems, fluid management and ink control systems, web press protection systems and drying systems and related consumables. For more information, visit http://www.baldwintech.com
A profile for investors can be accessed at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.hawkassociates.com%2Fprofile%2Fbld.cfm.&esheet=6289546&lan=en_US&anchor=www.hawkassociates.com%2Fprofile%2Fbld.cfm.&index=5&md5=d6b1e132e1a3f37b55f141a207aada35 An online investor kit including press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.hawkassociates.com.
To receive free e-mail notification of future Baldwin releases, sign up at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.hawkassociates.com%2Fabout%2Falert%2F&esheet=6289546&lan=en_US&anchor=www.hawkassociates.com%2Fabout%2Falert%2F&index=7&md5=81d43789cead029b4ae1108341051e30.
Cautionary Statement
Certain statements contained in this News Release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenue, gross margins, operating income (loss), EBITDA, asset impairments, expectations concerning the reductions of costs, the level of customer demand and the ability of the Company to achieve its stated objectives. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such factors include, but are not limited to: the severity and length of the current economic downturn, the impact of the economic downturn on the availability of credit for the Company’s customers, the ability of the Company to maintain ongoing compliance with the terms of its amended credit agreement, market acceptance of and demand for the Company’s products and resulting revenue, the ability of the Company to successfully expand into new territories, the ability of the Company to meet its stated financial and operational objectives, the Company’s dependence on its partners (both manufacturing and distribution), and other risks and uncertainties detailed in the Company’s periodic filings with the Securities and Exchange Commission. The words “looking forward,” “looking ahead, ” “believe(s),” “should,” “may,” “expect(s),” “anticipate(s),” “project(s),” ” likely,” “opportunity,” and similar expressions, among others, identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to update any forward-looking statements contained in this news release.
|
Baldwin Technology Company, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited, in thousands, except per share data)
|
|
|
|
|
|
Quarter ended March 31, |
|
|
2010 |
|
2009 |
| Net sales |
|
$ 39,498
|
|
$ 36,087 |
| Cost of goods sold |
|
27,764 |
|
25,816 |
| Inventory reserve adjustment |
|
— |
|
4,250 |
| Gross profit |
|
11,734 |
|
6,021 |
| Operating expenses |
|
11,034 |
|
12,099 |
| Restructuring |
|
— |
|
4,066 |
| Impairment of goodwill |
|
— |
|
5,658 |
| Operating income (loss) |
|
700 |
|
(15,802) |
| Interest expense, net |
|
426 |
|
428 |
| Other expense (income), net |
|
69 |
|
311 |
| Income (loss) before income taxes |
|
205 |
|
(16,541) |
| Provision (benefit) for income taxes |
|
72 |
|
(3,094) |
| Net income (loss) |
|
133 |
|
(13,447) |
| Net income (loss) per share – basic |
|
$ 0.01 |
|
$ (0.88) |
| Net income (loss) per share – diluted |
|
$ 0.01 |
|
$ (0.88) |
| Weighted average shares outstanding – basic |
|
15,526 |
|
15,344 |
| Weighted average shares outstanding – diluted |
|
15,562 |
|
15,344 |
|
|
|
|
|
|
|
Nine Months ended March 31, |
|
|
2010 |
|
2009 |
| Net sales |
|
$ 114,423 |
|
$ 138,283 |
| Cost of goods sold |
|
80,611 |
|
96,304 |
| Inventory reserve adjustment |
|
— |
|
4,250 |
| Gross profit |
|
33,812 |
|
37,729 |
| Operating expenses |
|
34,615 |
|
39,996 |
| Restructuring |
|
— |
|
4,747 |
| Impairment of goodwill |
|
— |
|
5,658 |
| Legal settlement income, net of expenses |
|
9,266 |
|
— |
| Operating income (loss) |
|
8,463 |
|
(12,672) |
| Interest expense, net |
|
2,626 |
|
1,660 |
| Other expense (income), net |
|
271 |
|
(938) |
| Income (loss) before income taxes |
|
5,566 |
|
(13,394) |
| Provision (benefit) for income taxes |
|
1,951 |
|
(1,620) |
| Net income (loss) |
|
3,615 |
|
(11,774) |
| Net income (loss) per share – basic |
|
$ 0.23 |
|
$ (0.77) |
| Net income (loss) per share – diluted |
|
$ 0.23 |
|
$ (0.77) |
| Weighted average shares outstanding – basic |
|
15,455 |
|
15,319 |
| Weighted average shares outstanding – diluted |
|
15,502 |
|
15,319 |
|
Baldwin Technology Company, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
March 31, |
|
June 30, |
| Assets |
|
2010 |
|
2009 |
| Cash and equivalents |
|
$ 11,762 |
|
$ 13,806 |
| Trade receivables |
|
27,785 |
|
29,654 |
| Inventory |
|
20,012 |
|
22,765 |
| Prepaid expenses and other |
|
7,306 |
|
9,445 |
| Total current assets |
|
66,865 |
|
75,670 |
| Property, plant and equipment |
|
5,046 |
|
5,592 |
| Intangible assets |
|
30,806 |
|
31,918 |
| Other assets |
|
13,671 |
|
14,825 |
| Total assets |
|
116,388 |
|
128,005 |
|
|
|
|
|
| Liabilities |
|
|
|
|
| Loans payable |
|
$ 4,279 |
|
$ 4,153 |
| Current portion of long-term debt |
|
468 |
|
3,534 |
| Other current liabilities |
|
34,318 |
|
40,601 |
| Total current liabilities |
|
39,065 |
|
48,288 |
| Long-term debt |
|
13,991 |
|
20,300 |
| Other long-term liabilities |
|
11,214 |
|
11,782 |
| Total liabilities |
|
64,270 |
|
80,370 |
|
|
|
|
|
| Shareholders’ equity |
|
52,118 |
|
47,635 |
| Total liabilities and shareholders’ equity |
|
$ 116,388 |
|
$ 128,005 |
|
Baldwin Technology Company, Inc.
|
|
Consolidated Statements of Cash Flows
|
|
(Unaudited, in thousands)
|
|
|
|
|
|
For the nine months ended March 31, |
|
|
2010 |
|
2009 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
| Net income (loss) |
|
3,615 |
|
(11,774) |
|
Adjustments to reconcile net income (loss) to net cash Provided (used) by operating activities:
|
|
|
|
|
| Depreciation and amortization |
|
1,971 |
|
2,216 |
| Gain on legal settlement |
|
(9,266) |
|
— |
| Proceeds from legal settlement |
|
9,560 |
|
— |
| Restructuring charge |
|
— |
|
4,747 |
| Inventory and accounts receivable charge |
|
— |
|
4,715 |
| Impairment charge |
|
— |
|
5,658 |
| Deferred financing charge |
|
1,183 |
|
— |
| Stock based compensation expense |
|
657 |
|
909 |
| Other non cash items |
|
241 |
|
(2,566) |
| Changes in assets and liabilities |
|
|
|
|
| Accounts and notes receivable |
|
1,453 |
|
14,605 |
| Inventories |
|
2,867 |
|
2,799 |
| Customer deposits |
|
(755) |
|
2,252 |
| Accrued compensation |
|
(553) |
|
(3,730) |
| Payment of restructuring charges |
|
(1,795) |
|
(1,574) |
| Accounts and notes payable, trade |
|
(3,589) |
|
(12,256) |
| Other |
|
3,316 |
|
(3,237) |
| Net cash provided by operating activities |
|
8,905 |
|
2,764 |
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
| Additions of property, plant and equipment |
|
(366) |
|
(766) |
| Additions of patents and trademarks |
|
(97) |
|
(955) |
| Net cash used by investing activities |
|
(463) |
|
(1,721) |
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| Debt borrowings (repayments), net |
|
(9,457) |
|
5,191 |
| Payment of debt financing costs |
|
(752) |
|
— |
| Other financing |
|
(481) |
|
(227) |
| Net cash (used) provided by financing activities |
|
(10,690) |
|
4,964 |
| Effect of exchange rate changes |
|
204 |
|
(592) |
| Net increase (decrease) in cash and cash equivalents |
|
(2,044) |
|
5,415 |
| Cash and cash equivalents at beginning of period |
|
13,806 |
|
9,333 |
| Cash and cash equivalents at end of period |
|
$ 11,762 |
|
$ 14,748 |
| Baldwin Technology Company, Inc. |
| Reconciliation of GAAP Results to Adjusted non-GAAP Results |
| And other non-GAAP financial measures |
| (Unaudited, in thousands, except per share data) |
|
Quarter ended March 31, 2010
|
|
|
|
EBITDA Calculation (1)
|
|
As Reported
|
| Net income |
|
$ 133
|
| Add back: |
|
|
| Provision for income taxes |
|
72 |
| Interest, net |
|
426 |
| Depreciation and amortization |
|
640 |
| EBITDA |
|
$ 1,271 |
|
Quarter ended March 31, 2009
|
|
As Reported
(GAAP)
|
|
Adjustments |
|
As Adjusted
(non-GAAP) (1)
|
| Gross profit |
|
$ 6,021
|
|
$ (4,250) (a) |
|
$ 10,271 |
| Operating (loss) |
|
(15,802) |
|
(14,439) (b) |
|
(1,363) |
| (Loss) before income taxes |
|
(16,541) |
|
(14,439) |
|
(2,102) |
| (Benefit) for income taxes |
|
(3,094) |
|
(2,482) |
|
(612) |
| Net (loss) |
|
(13,447) |
|
(11,957) |
|
(1,490) |
| Net (loss) per share: Basic and Diluted |
|
$ (0.88) |
|
$ (0.78) |
|
$ (0.10) |
|
|
|
|
|
|
|
| (a) Adjustment represents non-routine inventory write-off. |
|
(b) Adjustment includes restructuring costs of $4,066, impairment of goodwill of $5,658, bad debt write-off of $465 and inventory write-off of $4,250
|
|
|
EBITDA Calculation (1)
|
|
As Reported |
|
Adjustments (2) |
|
As Adjusted |
| Net (loss) |
|
$ (13,447) |
|
$ (9,040) |
|
$ (4,407) |
| Add back: |
|
|
|
|
|
|
| (Benefit) for income taxes |
|
(3,094) |
|
(1,333) |
|
(1,761) |
| Interest, net |
|
428 |
|
— |
|
428 |
| Depreciation and amortization |
|
769 |
|
— |
|
769 |
| EBITDA |
|
(15,344) |
|
(10,373) |
|
(4,971) |
|
Nine months ended March 31, 2010
|
|
As Reported
(GAAP)
|
|
Adjustments |
|
As Adjusted
(non-GAAP) (1)
|
| Operating income |
|
$ 8,463
|
|
$ 8,355 (c) |
|
$ 108
|
| Interest expense, net |
|
2,626 |
|
1,183 (d) |
|
1,443 |
| Income (loss) before income taxes |
|
5,566 |
|
7,172 |
|
(1,606) |
| Provision for income taxes |
|
1,951 |
|
1,883 |
|
68 |
| Net income (loss) |
|
3,615 |
|
5,289 |
|
(1,674) |
| Net income (loss) per share: |
|
|
|
|
|
|
| Basic and Diluted |
|
$0.23 |
|
$0.34 |
|
$(0.11) |
|
|
|
|
|
|
|
|
(c) Adjustment represents non-routine charges for special investigation costs of $911 and income associated with a legal settlement, net of expenses, of $9,266.
|
|
(d) Adjustment represents non-routine write-off of debt financing costs.
|
|
|
EBITDA Calculation (1)
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
Net income (loss)
|
|
$ 3,615
|
|
$ 5,289
|
|
$ (1,674)
|
|
Add back:
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
1,951
|
|
1,883
|
|
68
|
|
Interest, net
|
|
2,626
|
|
1,183
|
|
1,443
|
|
Depreciation and amortization
|
|
1,971
|
|
—
|
|
1,971
|
|
EBITDA
|
|
$ 10,163
|
|
$ 8,355
|
|
$ 1,808
|
|
Nine months ended March 31, 2009
|
|
As Reported
(GAAP)
|
|
Adjustments |
|
As Adjusted
(non-GAAP) (1)
|
| Gross profit |
|
$ 37,729
|
|
$ (4,250) (e) |
|
$ 41,979 |
| Operating (loss) income |
|
(12,672) |
|
(15,120) (f) |
|
2,448 |
| (Loss) income before income taxes |
|
(13,394) |
|
(15,120) |
|
1,726 |
| (Benefit) provision for income taxes |
|
(1,620) |
|
(2,738) |
|
1,118 |
| Net (loss) income |
|
(11,774) |
|
(12,382) |
|
608 |
| Net (loss) income per share: |
|
|
|
|
|
|
| Basic and Diluted |
|
$(0.77) |
|
$(0.81) |
|
$0.04 |
|
|
|
|
|
|
|
|
(e) Adjustment represents non-routine inventory write-off.
|
|
(f) Adjustment includes restructuring costs of $4,747, impairment of goodwill of $5,658, bad debt write-off of $465 and inventory write-off of $4,250.
|
|
|
EBITDA Calculation (1)
|
|
As Reported
|
|
Adjustments (2)
|
|
As Adjusted
|
|
Net (loss)
|
|
$ (11,774)
|
|
$ (9,040)
|
|
$ (2,734)
|
|
Add back:
|
|
|
|
|
|
|
|
(Benefit) for income taxes
|
|
(1,620)
|
|
(1,333)
|
|
(287)
|
|
Interest, net
|
|
1,660
|
|
—
|
|
1,660
|
|
Depreciation and amortization
|
|
2,216
|
|
—
|
|
2,216
|
|
EBITDA
|
|
$ (9,518)
|
|
$ (10,373)
|
|
$ 855
|
|
|
|
|
|
|
|
|
Net Debt Calculation (1)
|
|
Mar 31, 2010
|
|
Dec 31, 2009
|
|
Jun 30, 2009
|
|
Loans payable
|
|
$ 4,279
|
|
$ 4,297
|
|
$ 4,153
|
|
Current portion of long-term debt
|
|
468
|
|
1,467
|
|
3,534
|
|
Long-term debt
|
|
13,991
|
|
14,247
|
|
20,300
|
|
Total Debt
|
|
18,738
|
|
20,011
|
|
27,987
|
|
Cash
|
|
11,762
|
|
14,321
|
|
13,806
|
|
Net debt
|
|
$ 6,976
|
|
$ 5,690
|
|
$ 14,181
|
|
|
|
|
|
|
|
|
(1) Gross Profit, Operating income (loss), Income (loss) before income taxes, Provision (benefit) for income taxes, Net income (loss) and net income (loss) per share, as adjusted, as well as EBITDA (earnings before interest, taxes, depreciation and amortization) and Net Debt are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Baldwin’s management believes that EBITDA, Net Debt and the other non-GAAP measures listed above provide meaningful supplemental information regarding Baldwin’s current financial performance and prospects for the future. Baldwin believes that both management and investors benefit from referring to these non-GAAP measures in assessing the performance of Baldwin’s ongoing operations and liquidity, and when planning and forecasting future periods. These non-GAAP measures also facilitate management’s internal comparisons to Baldwin’s historical operating results and liquidity. Our presentations of these measures, however, may not be comparable to similarly titled measures used by other companies. Refer also to the section entitled “Non-GAAP Financial Measures” above.
|
|
|
(2) EBITDA adjustments include adjustments relating to inventory reserves, bad debt reserves, impairment of goodwill and related tax effects.
|
DEERFIELD BEACH, FL — (Marketwire) — 05/13/10 — China Direct Industries, Inc. (“China Direct Industries”) (NASDAQ: CDII), a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution of basic materials, announced today that its wholly owned subsidiary, CDII Trading, Inc. (“CDII Trading”), has entered into a contract to supply manganese ore over the next 12 months to a privately held China-based trading and refining company.
CDII Trading expects to supply manganese ore to its China-based buyer to be obtained under a signed purchase agreement with a Chilean mining company over a twelve-month period. CDII Trading is in the process of finalizing financing for its supplier to produce the required quantity of ore to fulfill this contract and expects to begin the first shipment in July 2010. Upon successful completion of this shipment, CDII Trading expects to supply additional shipments to its China-based buyer on a monthly basis over a twelve-month period. CDII Trading estimates that the sales contract has the potential to generate up to $18 million in revenue over the course of the twelve-month period.
Commenting on these contracts, Mr. Ross A. Friedman, Vice President of Commercial Trading at CDII Trading, stated, “This agreement to secure the quantity of manganese ore from our Chilean miner is pivotal to our future success. Upon completion of the first shipment and the buyer’s approval for future shipments in China, we believe this contract represents a potential long term continuous revenue stream for us. We anticipate it will also set the stage for other similar arrangements for other miners that we are in various stages of negotiations with for numerous ores such as Iron, Chromium and Copper, to name a few. We believe that tapping into the vast mineral reserves in Chile in this fashion will truly be a springboard to a rapid acceleration of growth in our trading operations.”
About China Direct Industries, Inc.
China Direct Industries, Inc. (NASDAQ: CDII), is a U.S. owned holding company operating in China in two core business segments, pure magnesium production and distribution and distribution of basic materials in China. China Direct Industries also provides advisory services to China-based companies in competing in the global economy. Headquartered in Deerfield Beach, Florida, China Direct Industries operates 8 subsidiaries throughout China. This infrastructure creates a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about China Direct Industries, please visit http://www.cdii.net.
About CDII Trading, Inc.
CDII Trading, Inc. was created to facilitate industrial international commodity trading between China and various countries throughout the world. As a subsidiary of a U.S.-based public company, CDII Trading is in a unique position to ensure reliability, continuity, and transparency for effective international trade. For more information about CDII Trading, visit http://www.cdiitrading.com.
DISCLOSURE NOTICE:
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Direct Industries, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding our ability to secure long term sources of manganese ore, completion of the required financing for production and its shipment, approval by the buyer for future shipments, possible future arrangements with other miners and our prospects for future growth.
We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Transition Report on Form 10-K for the nine month period ended September 30, 2010 and our reports on Form 10-Q.
May 12, 2010 (Business Wire) — Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) (“Nexstar” or the “Company”) today reported financial results for the first quarter ended March 31, 2010 as summarized below:
| Summary 2010 First Quarter Financial Highlights |
|
|
|
|
|
|
|
|
|
| ($ in millions) |
|
Three Months Ended
March 31, |
|
|
|
|
2010 |
|
2009 |
|
Change |
| Local Revenue |
|
$ |
41.7 |
|
$ |
35.9 |
|
|
+16.2 |
% |
| National Revenue |
|
$ |
14.7 |
|
$ |
12.1 |
|
|
+21.8 |
% |
| Core Revenue (local and national) |
|
$ |
56.4 |
|
$ |
48.0 |
|
|
+17.6 |
% |
|
|
|
|
|
|
|
| Political Revenue |
|
$ |
3.2 |
|
$ |
0.4 |
|
|
+627.5 |
% |
| e-MEDIA Revenue |
|
$ |
3.0 |
|
$ |
2.4 |
|
|
+25.9 |
% |
| Retransmission Fee Revenue |
|
$ |
7.4 |
|
$ |
5.3 |
|
|
+39.9 |
% |
| Management Fee Revenue |
|
$ |
0.5 |
|
$ |
0.1 |
|
|
+660.4 |
% |
| Trade, Barter and Other Revenue |
|
$ |
5.6 |
|
$ |
5.3 |
|
|
+5.6 |
% |
| Gross Revenue |
|
$ |
76.1 |
|
$ |
61.5 |
|
|
+23.8 |
% |
|
|
|
|
|
|
|
| Net Revenue |
|
$ |
68.6 |
|
$ |
55.5 |
|
|
+23.7 |
% |
|
|
|
|
|
|
|
| Income (loss) from Operations |
|
$ |
9.8 |
|
$ |
(1.3 |
) |
|
NM |
|
|
|
|
|
|
|
|
| Broadcast Cash Flow |
|
$ |
25.6 |
|
$ |
14.2 |
|
|
+80.2 |
% |
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
$ |
20.9 |
|
$ |
7.5 |
|
|
+180.0 |
% |
|
|
|
|
|
|
|
| Free Cash Flow |
|
$ |
8.9 |
|
$ |
(3.5 |
) |
|
NM |
|
CEO Comment
Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, “Nexstar’s record first quarter net revenue reflects solid growth from all of our revenue sources and again demonstrates the value and success of our diversification strategies. Our 23.7% rise in first quarter net revenue drove record first quarter BCF, EBITDA and free cash flow, highlighting the significant operating leverage in our business model.
“Nexstar’s commitment to growing new revenue streams and leveraging our local platform by building out our ‘quadruple play’ of revenue drivers continues to serve us well in the strengthening economy and ad environment. During the first quarter we generated a 17.6% year-over-year increase in aggregate core local and national revenue and a 23.1% rise in gross ad revenue inclusive of political advertising. First quarter 2010 automotive advertising rose 40% on a year-over-year basis and the Company generated a 13% overall increase in billings from its top ten advertising categories in the 2010 first quarter.
“The gains in our core television operations were complemented by continued significant double digit growth in first quarter retransmission fee revenue which rose 39.9% to $7.4 million, a record level of quarterly revenue from this source, and a 25.9% increase in e-MEDIA revenues to $3.0 million, our fourteenth consecutive period of revenue growth for Nexstar’s community web portal strategy. In addition to the solid year-over year revenue growth from these sources, Nexstar recorded approximately $0.5 million of management fee revenue in the 2010 first quarter. In total, these higher margin revenue streams accounted for 15.8% of 2010 first quarter net revenue compared with 13.9% of revenue in the comparable year ago period.
“Our continued focus on expense management and achieving further operating efficiencies resulted in record 2010 first quarter operating income of $9.8 million and free cash flow of $8.9 million compared to negative free cash flow in the year ago period attributable to the loss from operations related to expenses incurred for the exchange offer completed during the 2009 first quarter.
“During and subsequent to the first quarter, we further re-engineered the balance sheet to improve liquidity, extend bank maturities and eliminate pricing increases on certain pieces of our capital structure. In this regard, during the first quarter Nexstar purchased approximately $1.0 million of its outstanding 13% Senior Subordinated Payment In Kind (PIK) notes due 2014 at a discount and in April 2010 we completed an offering of $325.0 million of 8.875% senior secured second lien notes while securing senior secured credit facility amendments. We applied the net proceeds from the offering, together with borrowings and cash on hand, to repurchase approximately $34.3 million of the remaining outstanding 13% PIK notes, to refinance the existing senior secured credit facilities and for general corporate purposes.
“The 2010 first quarter results confirm our expectation that initial increases in core advertising activity achieved in late 2009 will extend throughout 2010. In addition, we believe 2010 presents Nexstar with prospects for continued growth from all of our revenue sources and these prospects underscore the value of our initiatives to transition the traditional television broadcasting operating model into a multi-tiered model of high margin revenue streams. The expected revenue increases combined with operating and cost efficiencies and limited 2010 cap-ex commitments positions Nexstar to generate record free cash flow in 2010 which will be deployed for debt reduction and new value creating initiatives.”
Issuance of Senior Secured Second Lien Notes Due 2017
In April 2010, Nexstar Broadcasting, Inc.(“Nexstar Broadcasting”), a wholly-owned subsidiary, and Mission Broadcasting, Inc.(“Mission”) as co-issuers, completed the issuance and sale of $325 million aggregate principal amount of 8.875% senior secured second lien notes due 2017 (the “Notes”). Nexstar Broadcasting and Mission used the net proceeds of the offering, together with borrowings under Nexstar Broadcasting and Mission’s amended senior secured credit facilities and cash on hand, to repurchase Nexstar Broadcasting’s outstanding senior subordinated payment-in-kind notes due 2014, to refinance Nexstar Broadcasting and Mission’s existing senior secured credit facilities, pay related fees and expenses and for general corporate purposes.
The Notes were issued in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act.
Amendments to Credit Agreements
In April 2010, the Third Amendment to Nexstar Broadcasting’s Fourth Amended and Restated Credit Agreement among Nexstar Broadcasting, Nexstar, and lenders became effective. Under the terms of the Nexstar Credit Agreement, the principal amount available under the revolving credit facility was reduced to $65.0 million, and the Term Loan B was reduced to $61.0 million. In April 2010, the Second Amendment to Mission Broadcasting’s Third Amended and Restated Credit Agreement, together with the Nexstar Credit Agreement, and lenders became effective. Under the terms of the Mission Credit Agreement, the principal amount available under the revolving credit facility was reduced to $10.0 million, and the Term Loan B was reduced to $39.0 million.
As defined in the company’s previous credit agreement, which was in effect on March 31, 2010, the Company’s total debt and senior debt, as defined therein, were $525.9 million and $387.3 million. The applicable total and senior debt leverage ratios were 6.60x and 4.86x, respectively. Pro-forma for the recent financings, the Company’s total debt at March 31, 2010 was $679.7 million and senior secured debt was $440.7 million. The Company’s pro-forma total leverage ratio for March 31, 2010 was 8.53x compared to a total permitted leverage covenant of 10.25x. The amended credit agreement also contains a secured first lien covenant requirement of 2.50x at all times; that pro forma ratio at March 31, 2010 was 1.45x.
The Credit Agreements were amended to, among other things, (i) extend the revolving loan commitments to December 31, 2013 (subject to conditions), (ii) extend the maturity date of the Term Loan B to September 30, 2016 (subject to conditions), (iii) amend the financial covenants and provide additional flexibility thereunder, (iv) permit the incurrence of incremental Term Loan B facilities of up to an aggregate amount equal to $100 million, (v) permit Nexstar Broadcasting and Mission, under certain circumstances to incur indebtedness and make restricted payments, in each case, in part, to repurchase or extinguish existing indebtedness, (vi) provide additional flexibility under the covenants and (vii) relieve the respective borrowers from their obligation to make mandatory prepayments under certain circumstances.
The Nexstar Credit Agreement (i) eliminates the requirement that Nexstar Broadcasting maintain a consolidated minimum interest coverage ratio and a consolidated maximum senior leverage ratio and institutes the requirement to maintain a consolidated maximum first lien indebtedness ratio, based on the aggregate first-lien indebtedness maintained by Nexstar and Mission, and (ii) changes the maximum and minimum covenant levels applicable to such financial ratios. Additionally, the Credit Agreement removes mandatory quarterly principal repayments based on a computation of excess cash flow for the preceding fiscal year.
Tender Offer
In April 2010, the Company completed the cash tender offer to retire $34.3 million (representing 82.47% of the outstanding aggregate principal amount of Notes) of aggregate principal amount of its 13% Senior Subordinated Notes due 2014 at 104.5% on April 30, 2010. In connection with this tender offer, a second supplemental indenture was executed whereby substantially all restrictive covenants and certain event of default provisions were eliminated.
First Quarter Conference Call
Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question and answer session. The dial in number for the audio conference call is 703/639-1420 (domestic and international callers); no access code is needed. In addition, a live audio webcast of the call will be accessible to the public on Nexstar’s web site, www.nexstar.tv and a recording of the webcast will be archived on the site for 90 days following the live event.
Definitions and Disclosures Regarding non-GAAP Financial Information
Broadcast cash flow is calculated as income from operations, plus corporate expenses, depreciation, amortization of intangible assets and broadcast rights (excluding barter), non-cash contract termination fees, non-cash impairment charges, loss (gain) on asset exchange and loss (gain) on asset disposal, net, minus broadcast rights payments.
Adjusted EBITDA is calculated as broadcast cash flow less corporate expenses.
Free cash flow is calculated as income from operations plus depreciation, amortization of intangible assets and broadcast rights (excluding barter), non-cash contract termination fees, non-cash impairment charges, loss (gain) on asset exchange, loss (gain) on asset disposal, net, and non-cash stock option expense, less payments for broadcast rights, cash interest expense, capital expenditures and net cash income taxes.
Broadcast cash flow, adjusted EBITDA and free cash flow results are non-GAAP financial measures. Nexstar believes the presentation of these non-GAAP measures are useful to investors because they are used by lenders to measure the Company’s ability to service debt; by industry analysts to determine the market value of stations and their operating performance; by management to identify the cash available to service debt, make strategic acquisitions and investments, maintain capital assets and fund ongoing operations and working capital needs; and, because they reflect the most up-to-date operating results of the stations inclusive of pending acquisitions, TBAs or LMAs. Management believes they also provide an additional basis from which investors can establish forecasts and valuations for the Company’s business. For a reconciliation of these non-GAAP financial measurements to the GAAP financial results cited in this news announcement, please see the supplemental tables at the end of this release.
About Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting Group currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar’s television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households.
Forward-Looking Statements
This news release includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words “guidance,” “believes,” “expects,” “anticipates,” “could,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this news release, concerning, among other things, changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, our ability to service and refinance our outstanding debt, successful integration of acquired television stations (including achievement of synergies and cost reductions), pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations’ operating areas, competition from others in the broadcast television markets served by the Company, volatility in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this news release might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.
| Nexstar Broadcasting Group, Inc. |
| Condensed Consolidated Statements of Operations |
| (in thousands, except per share amounts) |
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2010 |
|
2009 |
|
|
(Unaudited) |
| Net revenue |
|
$ |
68,626 |
|
|
$ |
55,468 |
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
| Station direct operating expenses, net of trade (exclusive of
depreciation and amortization shown separately below) |
|
|
17,353 |
|
|
|
17,808 |
|
| Selling, general, and administrative expenses (exclusive of
depreciation and amortization shown separately below) |
|
|
18,498 |
|
|
|
16,704 |
|
| Restructure charge |
|
|
– |
|
|
|
356 |
|
| Gain on asset exchange |
|
|
(30 |
) |
|
|
(1,660 |
) |
| Gain on asset disposal, net |
|
|
(24 |
) |
|
|
(591 |
) |
| Trade and barter expense |
|
|
4,579 |
|
|
|
4,212 |
|
| Corporate expenses |
|
|
4,752 |
|
|
|
6,767 |
|
| Amortization of broadcast rights, excluding barter |
|
|
2,362 |
|
|
|
2,095 |
|
| Amortization of intangible assets |
|
|
5,932 |
|
|
|
5,892 |
|
| Depreciation |
|
|
5,380 |
|
|
|
5,196 |
|
|
|
|
|
|
| Total operating expenses |
|
|
58,802 |
|
|
|
56,779 |
|
|
|
|
|
|
| Income (loss) from operations |
|
|
9,824 |
|
|
|
(1,311 |
) |
| Interest expense, including amortization of debt financing costs |
|
|
(11,964 |
) |
|
|
(9,860 |
) |
| Gain on debt retirement |
|
|
94 |
|
|
|
18,567 |
|
| Interest and other income |
|
|
1 |
|
|
|
35 |
|
|
|
|
|
|
| Income (loss) before income taxes |
|
|
(2,045 |
) |
|
|
7,431 |
|
| Income tax expense |
|
|
(1,628 |
) |
|
|
(1,379 |
) |
|
|
|
|
|
| Net income (loss) |
|
$ |
(3,673 |
) |
|
$ |
6,052 |
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net income (loss) per share |
|
$ |
(0.13 |
) |
|
$ |
0.21 |
|
| Basic and diluted weighted average number of shares outstanding |
|
|
28,430 |
|
|
|
28,425 |
|
| Nexstar Broadcasting Group, Inc. |
| Reconciliation Between Actual Consolidated Statements of Operations |
| and Broadcast Cash Flow and Adjusted EBITDA (Non-GAAP Measures) |
| (in thousands) |
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
2010 |
|
2009 |
|
|
(Unaudited) |
|
|
|
|
|
| Income (loss) from operations |
|
$ |
9,824 |
|
|
$ |
(1,311 |
) |
| Add: |
|
|
|
|
| Depreciation |
|
|
5,380 |
|
|
|
5,196 |
|
| Amortization of intangible assets |
|
|
5,932 |
|
|
|
5,892 |
|
| Amortization of broadcast rights, excluding barter |
|
|
2,362 |
|
|
|
2,095 |
|
| Gain on asset exchange |
|
|
(30 |
) |
|
|
(1,660 |
) |
| Gain on asset disposal, net |
|
|
(24 |
) |
|
|
(591 |
) |
| Corporate expenses |
|
|
4,752 |
|
|
|
6,767 |
|
|
|
|
|
|
| Less: |
|
|
|
|
| Payments for broadcast rights |
|
|
2,558 |
|
|
|
2,161 |
|
|
|
|
|
|
| Broadcast cash flow |
|
$ |
25,638 |
|
|
$ |
14,227 |
|
|
|
|
|
|
| Less: |
|
|
|
|
| Corporate expenses |
|
|
4,752 |
|
|
|
6,767 |
|
| Adjusted EBITDA |
|
$ |
20,886 |
|
|
$ |
7,460 |
|
| Nexstar Broadcasting Group, Inc. |
| Reconciliation Between Actual Consolidated Statements of Operations |
| and Free Cash Flow (Non-GAAP Measure) |
| (in thousands) |
|
|
|
|
|
Three Months Ended
March 31, |
|
|
2010 |
|
2009 |
|
|
(Unaudited) |
|
|
|
|
|
| Income (loss) from operations |
|
$ |
9,824 |
|
|
$ |
(1,311 |
) |
|
|
|
|
|
| Add: |
|
|
|
|
| Depreciation |
|
|
5,380 |
|
|
|
5,196 |
|
| Amortization of intangible assets |
|
|
5,932 |
|
|
|
5,892 |
|
| Amortization of broadcast rights, excluding barter |
|
|
2,362 |
|
|
|
2,095 |
|
| Gain on asset exchange |
|
|
(30 |
) |
|
|
(1,660 |
) |
| Gain on asset disposal, net |
|
|
(24 |
) |
|
|
(591 |
) |
| Non-cash stock option expense |
|
|
285 |
|
|
|
429 |
|
|
|
|
|
|
| Less: |
|
|
|
|
| Payments for broadcast rights |
|
|
2,558 |
|
|
|
2,161 |
|
| Cash interest expense |
|
|
8,535 |
|
|
|
8,157 |
|
| Capital expenditures |
|
|
3,793 |
|
|
|
3,234 |
|
| Cash income taxes, net of refunds |
|
|
(30 |
) |
|
|
(2 |
) |
|
|
|
|
|
| Free cash flow |
|
$ |
8,873 |
|
|
$ |
(3,500 |
) |
May 12, 2010 (Business Wire) — AuthenTec (NASDAQ:AUTH), a leading provider of security, identity management and touch control solutions, today reported financial results for the first quarter 2010 ended April 2, 2010.
Highlights:
- First quarter consolidated revenue of $9.2 million, up 30 percent year over year
- Completed acquisition of SafeNet’s Embedded Security Solutions Division
- Introduced two smart sensors, the AES1750 for wireless market and the AES2660 for PCs
- Awarded significant design win with a leading PC OEM for 2011 models
Consolidated revenue was $9.2 million for the first quarter of 2010, a 30 percent increase over the prior year. The first quarter included $900,000 of revenue from AuthenTec’s Embedded Security Solutions, which was acquired from SafeNet, Inc. in late February. AuthenTec’s fingerprint sensor business, now called Smart Sensor Solutions, reported revenue of $8.2 million during the quarter, which was at the midpoint of the $8.0 million to $8.4 million guidance previously provided. Smart Sensor revenue increased 17 percent over the $7.0 million reported in the first quarter of 2009, and was comparable with the $8.3 million recorded in the fourth quarter of 2009. The year-on-year revenue growth in Smart Sensors was driven by increased sales of both PC and wireless products, reflecting improved economic conditions.
GAAP Results:
Under Generally Accepted Accounting Principles (GAAP), consolidated net loss for the first quarter of 2010 was $4.7 million, or $0.16 per diluted share. This compares to a GAAP net loss of $4.5 million, or $0.16 per diluted share, in the first quarter of 2009 and a GAAP net loss of $3.0 million, or $0.10 per diluted share, in the fourth quarter of 2009.
GAAP gross margin in the first quarter improved to 48.5 percent, compared to 48.0 percent in the first quarter of 2009, and 45.5 percent in the fourth quarter of 2009. Total operating expenses on a GAAP basis were $9.2 million, compared to $8.0 million in the first quarter of 2009 and $6.8 million in the fourth quarter of 2009. A reconciliation of GAAP to non-GAAP results is provided in Table 2 following the text of this press release.
Non-GAAP Results:
On a non-GAAP basis, consolidated net loss for the first quarter of 2010 was $2.4 million or $0.08 per diluted share. Non-GAAP net loss for Smart Sensors was approximately $2.4 million and $50,000 for the Embedded Security business. The non-GAAP results exclude certain legal and other costs including those associated with the Embedded Security Solutions acquisition and the UPEK proxy action, along with stock-based compensation and amortization of acquired intangible assets. This compares to a non-GAAP net loss of $3.6 million, or $0.12 per diluted share, in the first quarter of 2009 and non-GAAP loss of $1.7 million, or $0.06 per diluted share, in the fourth quarter of 2009. The sequential increase in operating loss was primarily due to increased legal expenses related to the patent litigation with UPEK and higher costs related to the year-end financial audit.
Non-GAAP gross margin in the first quarter was 50.2 percent, compared to 48.8 percent in the first quarter of 2009 and 46.1 percent in the fourth quarter of 2009. The sequential increase in gross margin was due primarily to one month of Embedded Security revenue contribution, which has a substantially higher margin than Smart Sensors, combined with lower inventory provisions in the Smart Sensor business during the quarter.
Total operating expenses on a non-GAAP basis were $7.1 million, compared to $7.2 million in the first quarter of 2009 and $5.6 million in the fourth quarter of 2009. Excluding $800,000 in operating expenses of the Embedded Security business for one month, operating expenses were lower in the first quarter of 2010 as compared to the first quarter of 2009 primarily due to reductions in the use of contractors and other outside services.
AuthenTec ended the first quarter of 2010 with $45.3 million in cash and investments. This compares to $55.5 million in cash and investments at the end of the fourth quarter of 2009. The use of cash primarily reflects the purchase of the Embedded Security business which included a cash payment of $8.5 million. The Embedded Security acquisition was recorded under purchase accounting based on preliminary valuation estimates which will be further refined in the second quarter.
Business Update:
“We made outstanding progress since our last earnings call in several areas including new product introductions, important design wins in the PC market, continued progress in the wireless market, and finally, the acquisition of SafeNet’s Embedded Security Solutions division,” said AuthenTec CEO Scott Moody. “These factors have moved us closer to our goal of becoming a more comprehensive provider of security, identity management and touch control solutions. The addition of the Embedded Security business greatly strengthens our security and identity management solutions, while also expanding our addressable markets as evidenced by our recently announced security solutions for smart grid infrastructure.
“In our Smart Sensor Solutions business, the investments we have made over the last year are beginning to pay off. The market acceptance of our new PC smart sensors, the small form factor AES1660 and the wider and newly introduced AES2660, has been very positive. Moreover, we will soon be announcing our first PC product using our TouchStone™ packaging technology, which has received wide acceptance in the wireless market and we expect as much in the PC market. In fact, we have already secured our first design win for this new PC product, which we plan to formally introduce in the third quarter.
“In the Smart Sensor wireless market, our revenue increased 80 percent on a sequential basis as a key customer in Japan ramped to production on new mobile phones that integrate our recently introduced AES1750 smart sensor. We have additional designs in the wireless market for this new product, which clearly sets a new bar for aesthetics, durability and cost. We believe that these new opportunities, some direct and some through partners, will result in new phones that could begin shipping as early as the fourth quarter of this year.
“Lastly, I am very pleased to report on two notable new design wins for the 2011 PC cycle. Subsequent to the quarter end, AuthenTec was notified by a significant PC customer that it plans to use AuthenTec’s fingerprint sensors in its next design cycle for the 2011 model year. This significant design win is especially gratifying since it represents the regaining of business from a previous customer. Separately, while we have often noted that AuthenTec sensors were used by eight of the top nine PC OEMs that used fingerprint sensors, we were recently notified by this ninth PC OEM that they had selected both TruePrint® smart sensors and TrueSuite® software for their 2011 model year. Our team is very enthusiastic about being chosen for these opportunities, which could potentially start shipping as early as the fourth quarter of this year with full volume production expected in the first half of 2011.
“As we have communicated previously, we anticipated that 2010 would be a challenging year for us, but our investments in new products and our focus on expanding our overall capabilities are beginning to pay off with design wins and new market opportunities that will contribute to increased revenues starting late this year as these designs move into production. We are presently targeting a return to profitability for early 2011.”
Business Outlook:
Mr. Moody concluded, “Looking ahead to the second quarter of 2010, we expect revenue to increase to a range between $10.4 million and $11.4 million including the first full quarter of revenue from our Embedded Security business. Operating expenses are expected to increase sequentially due to the full quarter of the Embedded Security expenses, as well as some additional expenses related to our expectations of ramping to higher volumes late this year and early in 2011. We expect a second quarter non-GAAP net loss per diluted share of between $0.06 and $0.10.”
First Quarter 2010 Financial Results Webcast and Conference Call:
AuthenTec will host a conference call to discuss its first quarter 2010 financial results and other information that may be material to investors at 5:00 p.m. Eastern Time (ET) today, May 12, 2010. Investors and analysts may join the conference call by dialing 866-383-8008 and providing the participant pass code 45003452. International callers may join the teleconference by dialing +1-617-597-5341 and using the same pass code. A replay of the conference call will be available beginning at 8:00 p.m. ET and will remain available until midnight ET on Wednesday, May 19, 2010. The U.S. replay number is 888-286-8010, with a confirmation code of 65137379. International callers should dial +1-617-801-6888, with the same confirmation code. A live web cast of the conference call will be accessible from the Investor section of the Company’s web site at http://investors.authentec.com. Following the live web cast, an archived version will be made available on AuthenTec’s web site.
Use of GAAP and Non-GAAP Financial Metrics:
To supplement AuthenTec’s consolidated financial statements presented in accordance with GAAP, the Company uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation, certain acquisition-related charges, amortization of certain intangible assets, impairments on investments, and costs related to a reduction in workforce. AuthenTec uses the above non-GAAP financial measures internally to understand, manage and evaluate the business. Management believes it is useful for itself and investors to review, as applicable, both GAAP information and the non-GAAP measures in order to assess the performance of continuing operations and for planning and forecasting in future periods. The presentation of these non-GAAP measures is intended to provide investors with an understanding of the Company’s operational results and trends that enables them to analyze the base financial and operating performance and facilitate period-to-period comparisons and analysis of operational trends. AuthenTec believes the presentation of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered substitutes for or superior to GAAP results. In addition, our non-GAAP financial measures may not be comparable to similarly titled measures utilized by other companies since such other companies may not calculate such measures in the same manner as we do.
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which are provided in Table 2 after the text of this release. For additional information regarding these non-GAAP financial measures, and management’s explanation of why it considers such measures to be useful, refer to the filings made from time to time with the Securities and Exchange Commission.
Forward Looking Statements:
This press release contains statements that may relate to expected future results and business trends that are based upon AuthenTec’s current estimate, expectations, and projections about the industry, and upon management’s beliefs, and certain assumptions it has made that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements relating to our expectations that our Embedded Security acquisition will increase gross margins and accelerate our return to profitability, acceptance of our TouchStone™ packaging technology in the wireless and PC markets, design wins resulting in new product shipments and the timing and volume of such shipments and revenue, margins and net loss for the second quarter. Words such as “anticipates,” “guidance,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “prospects,” “outlook,” “forecast,” and variations of these words or similar expressions are intended to identify “forward-looking statements.” In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are “forward-looking statements.” Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, the Company’s actual results may differ materially and adversely from those expressed in any “forward-looking statement” as a result of various factors. These factors include, but are not limited to: the Company’s ability to integrate the SafeNet embedded business, the Company’s ability to operate the acquired business profitably, demand for, and market acceptance of, new and existing fingerprint sensors, identity management software and embedded security products, the Company’s ability to secure design wins for enterprise and consumer laptops and wireless devices, customer design wins materializing into production programs, the timely introduction of new products, the rate at which the Company increases its activity and opportunities in the wireless market, and additional opportunities in various markets for applications that might use AuthenTec’s products, and changes in product mix, as well as other risks detailed from time to time in its SEC filings, including those described in AuthenTec’s annual report on Form 10-K filed with the SEC on March 17, 2010. These “forward-looking statements” are made only as of the date hereof, and the Company undertakes no obligation to update or revise the “forward-looking statements,” whether as a result of new information, future events or otherwise.
About AuthenTec
AuthenTec provides security, identity management and touch control solutions for enterprise and consumer applications. The Company’s smart sensor products and security solutions are used in virtually every aspect of life, from the PC on your desk to the mobile device in your hand to the server in the cloud. AuthenTec’s newest generation of TruePrint® smart sensors, TrueSuite® identity management software and TrueProtect™ embedded security products (formerly SafeNet Embedded Security Solutions) provide developers and users secure and convenient ways to manage today’s rapidly evolving digital identities and security needs. For more information, visit www.authentec.com or follow us at twitter.com/authentecnews.
| AuthenTec, Inc. |
|
| Consolidated Statements of Operations |
|
| (In thousands, except per share amounts) |
|
| (Unaudited) |
|
| Table 1 |
|
|
|
Three months ended |
|
|
April 2, |
|
|
January 1, |
|
|
April 3, |
|
|
2010 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
9,176 |
|
|
|
$ |
8,315 |
|
|
|
$ |
7,038 |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue |
|
|
4,726 |
|
|
|
|
4,533 |
|
|
|
|
3,663 |
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
|
4,450 |
|
|
|
|
3,782 |
|
|
|
|
3,375 |
|
|
|
|
48.5 |
% |
|
|
|
45.5 |
% |
|
|
|
48.0 |
% |
| Operating expenses: |
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
3,986 |
|
|
|
|
3,400 |
|
|
|
|
3,805 |
|
| Selling and marketing |
|
|
2,266 |
|
|
|
|
1,815 |
|
|
|
|
2,020 |
|
| General and administrative |
|
|
2,953 |
|
|
|
|
1,570 |
|
|
|
|
2,219 |
|
| Total operating expenses |
|
|
9,205 |
|
|
|
|
6,785 |
|
|
|
|
8,044 |
|
|
|
|
|
|
|
|
|
|
|
| Operating loss |
|
|
(4,755 |
) |
|
|
|
(3,003 |
) |
|
|
|
(4,669 |
) |
|
|
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
| Impairment on investments |
|
|
– |
|
|
|
|
(19 |
) |
|
|
|
(28 |
) |
| Interest income |
|
|
40 |
|
|
|
|
49 |
|
|
|
|
175 |
|
| Total other income (expense), net |
|
|
40 |
|
|
|
|
30 |
|
|
|
|
147 |
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
|
$ |
(4,715 |
) |
|
|
$ |
(2,973 |
) |
|
|
$ |
(4,522 |
) |
|
|
|
|
|
|
|
|
|
|
| Net loss per share: |
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(0.16 |
) |
|
|
$ |
(0.10 |
) |
|
|
$ |
(0.16 |
) |
| Diluted |
|
$ |
(0.16 |
) |
|
|
$ |
(0.10 |
) |
|
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
|
|
| Shares used in computing net loss per common share: |
|
|
|
|
|
|
|
|
|
| Basic |
|
|
29,196 |
|
|
|
|
28,685 |
|
|
|
|
28,647 |
|
| Diluted |
|
|
29,196 |
|
|
|
|
28,685 |
|
|
|
|
28,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
April 2, |
|
|
January 1, |
|
|
April 3, |
|
|
2010 |
|
|
2010 |
|
|
2009 |
| Other Financial Metrics: |
|
|
|
|
|
|
|
|
|
| Stock-based compensation expense: |
|
|
|
|
|
|
|
|
|
| Cost of revenue |
|
|
64 |
|
|
|
|
55 |
|
|
|
|
58 |
|
| Research and development |
|
|
229 |
|
|
|
|
254 |
|
|
|
|
320 |
|
| Selling and marketing |
|
|
248 |
|
|
|
|
216 |
|
|
|
|
294 |
|
| General and administrative |
|
|
245 |
|
|
|
|
209 |
|
|
|
|
242 |
|
| Costs related to reduction in workforce |
|
|
|
|
|
|
|
|
|
| Cost of revenue |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Research and development |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Selling and marketing |
|
|
– |
|
|
|
|
38 |
|
|
|
|
– |
|
| General and administrative |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Legal and acquisition related costs |
|
|
|
|
|
|
|
|
|
| General and administrative |
|
|
1,336 |
|
|
|
|
468 |
|
|
|
– |
|
| Amortization of purchased tangible and intangible assets |
|
|
|
|
|
|
|
|
|
| Cost of revenue |
|
|
89 |
|
|
|
|
– |
|
|
|
|
– |
|
| Research and development |
|
|
31 |
|
|
|
|
24 |
|
|
|
|
– |
|
| Selling and marketing |
|
|
25 |
|
|
|
|
– |
|
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
| Impairment on investments |
|
|
– |
|
|
|
|
19 |
|
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AuthenTec, Inc. |
| Non-GAAP Financial Information – Consolidated |
| (In thousands, except per share amounts) |
| (Unaudited) |
| Table 2 |
|
|
Three months ended |
|
|
April 2, |
|
|
January 1, |
|
|
April 3, |
|
|
2010 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
| Net loss on GAAP basis: |
|
$ |
(4,715 |
) |
|
|
$ |
(2,973 |
) |
|
|
$ |
(4,522 |
) |
| Stock-based compensation expense |
|
|
786 |
|
|
|
|
734 |
|
|
|
|
914 |
|
| Costs related to reduction in workforce |
|
|
– |
|
|
|
|
38 |
|
|
|
|
– |
|
| Legal and acquisition related costs |
|
|
1,336 |
|
|
|
|
468 |
|
|
|
|
– |
|
| Amortization of purchased tangible and intangible assets |
|
|
145 |
|
|
|
|
24 |
|
|
|
|
– |
|
| Impairment on investments |
|
|
– |
|
|
|
|
19 |
|
|
|
|
28 |
|
| Net loss on non-GAAP basis: |
|
$ |
(2,448 |
) |
|
|
$ |
(1,690 |
) |
|
|
$ |
(3,580 |
) |
|
|
|
|
|
|
|
|
|
| Non-GAAP basic earnings per share |
|
$ |
(0.08 |
) |
|
|
$ |
(0.06 |
) |
|
|
$ |
(0.12 |
) |
| Non-GAAP diluted earnings per share |
|
$ |
(0.08 |
) |
|
|
$ |
(0.06 |
) |
|
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Financial Information – Smart Sensor Solutions |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
April 2, |
|
|
January 1, |
|
|
April 3, |
|
|
|
2010 |
|
|
|
|
2010 |
|
|
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
| Net loss on GAAP basis: |
|
$ |
(4,476 |
) |
|
|
$ |
(2,973 |
) |
|
|
$ |
(4,522 |
) |
| Stock-based compensation expense |
|
|
786 |
|
|
|
|
734 |
|
|
|
|
914 |
|
| Costs related to reduction in workforce |
|
|
– |
|
|
|
|
38 |
|
|
|
|
– |
|
| Legal and acquisition related costs |
|
|
1,266 |
|
|
|
|
468 |
|
|
|
|
– |
|
| Amortization of purchased tangible and intangible assets |
|
|
22 |
|
|
|
|
24 |
|
|
|
|
– |
|
| Impairment on investments |
|
|
– |
|
|
|
|
19 |
|
|
|
|
28 |
|
| Net loss on non-GAAP basis: |
|
$ |
(2,402 |
) |
|
|
$ |
(1,690 |
) |
|
|
$ |
(3,580 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Financial Information – Embedded Security Solutions |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
April 2, |
|
|
January 1, |
|
|
April 3, |
|
|
2010 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
| Net loss on GAAP basis: |
|
$ |
(239 |
) |
|
|
$ |
– |
|
|
|
$ |
– |
|
| Stock-based compensation expense |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Costs related to reduction in workforce |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Legal and acquisition related costs |
|
|
70 |
|
|
|
|
– |
|
|
|
|
– |
|
| Amortization of purchased tangible and intangible assets |
|
|
123 |
|
|
|
|
– |
|
|
|
|
– |
|
| Impairment on investments |
|
|
– |
|
|
|
|
– |
|
|
|
|
– |
|
| Net loss on non-GAAP basis: |
|
$ |
(46 |
) |
|
|
$ |
– |
|
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AuthenTec, Inc. |
|
|
|
|
|
| Consolidated Balance Sheets |
|
|
|
|
| (In thousands) |
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
| Table 3 |
|
|
|
|
|
|
|
|
|
April 2, |
|
January 2, |
|
|
|
|
2010 |
|
2009 |
| ASSETS |
|
|
|
|
|
| Current assets |
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
17,169 |
|
|
$ |
27,482 |
|
| Short-term investments |
|
|
24,898 |
|
|
|
24,893 |
|
| Accounts receivable, net |
|
|
5,566 |
|
|
|
3,208 |
|
| Inventory |
|
|
|
2,081 |
|
|
|
2,245 |
|
| Other current assets |
|
|
1,838 |
|
|
|
1,123 |
|
| Total current assets |
|
|
51,552 |
|
|
|
58,951 |
|
| Long-term investments |
|
|
3,188 |
|
|
|
3,173 |
|
| Purchased intangible assets |
|
|
8,417 |
|
|
|
998 |
|
| Goodwill |
|
|
|
3,095 |
|
|
|
— |
|
| Other long-term assets |
|
|
10 |
|
|
|
9 |
|
| Property and equipment, net |
|
|
3,505 |
|
|
|
3,048 |
|
| Total assets |
|
$ |
69,767 |
|
|
$ |
66,179 |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| Current liabilities |
|
|
|
|
| Accounts payable |
|
$ |
4,388 |
|
|
$ |
2,458 |
|
| Other accrued liabilities |
|
|
6,928 |
|
|
|
3,380 |
|
| Total current liabilities |
|
|
11,316 |
|
|
|
5,838 |
|
| Deferred rent |
|
|
|
520 |
|
|
|
514 |
|
| Total liabilities |
|
|
11,836 |
|
|
|
6,352 |
|
|
|
|
|
|
|
|
| Stockholders’ equity |
|
|
|
|
| Common stock and additional paid in capital |
|
|
156,170 |
|
|
|
153,350 |
|
| Other comprehensive income (loss) |
|
|
(196 |
) |
|
|
(195 |
) |
| Accumulated deficit |
|
|
(98,043 |
) |
|
|
(93,328 |
) |
|
|
|
|
|
|
|
| Total stockholders’ equity |
|
|
57,931 |
|
|
|
59,827 |
|
| Total liabilities and stockholders’ equity |
|
$ |
69,767 |
|
|
$ |
66,179 |
Press Release Source: FieldPoint Petroleum Corporation On Wednesday May 12, 2010, 1:02 pm EDT
AUSTIN, Texas–(BUSINESS WIRE)–FieldPoint Petroleum Corporation (NYSE AMEX:FPP) announced today its first quarter financial results for the three months ended March 31, 2010.
Ray Reaves, President and CEO of FieldPoint stated, “During this past quarter our oil and natural gas revenues increased 198% over the same period last year as a result of much higher production and oil and natural gas prices. As previously stated, during the past year we significantly improved our balance sheet and prepared the company for future growth.”
Financial Highlights for the Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009:
- Total Revenues increased 189% to $1,836,695 from $634,682;
- Net Income increased to $478,701 compared to a loss of $(79,387); and
- Earnings per share, both basic and fully diluted, increased to $0.06 from a loss of $(0.01).
Mr. Reaves continued, “FieldPoint has a solid cash position which should continue to grow. Once again, the results from this quarter emphasize the effect that market fluctuations have on our financial performance. While upward price movement has been positive for us so far this year, it is a constant reminder to us of the importance of continuing to build our production base. Fortunately, FieldPoint is well positioned financially to allow management to continue its commitment to develop new programs that can materially expand our production levels. To this end, we plan to continue to diligently search for acquisition and development opportunities and we anticipate some level of success in this regard during 2010. We are very optimistic about meeting our growth objectives during the remainder of this year.”
Oil and natural gas sales revenues increased 198% or $1,199,513 to $1,806,129 for the three-month period ended March 31, 2010 from the comparable 2009 period. This was due both to higher oil and natural gas commodity prices as well as increases in sales volumes. Sales volumes increased 58% on a BOE basis, primarily due to production from the acquisitions of properties in the Vacuum and Block Fields during 2009. The higher sales volumes account for approximately $356,000 of the increase in revenues. Average oil sales prices increased 109% to $76.24 for the three-month period ended March 31, 2010 compared to $36.50 for the three-month period ended March 31, 2009. Average natural gas sales prices increased 17% to $6.27 for the three-month period ended March 31, 2010 compared to $5.35 for the three-month period ended March 31, 2009. The higher commodity prices account for approximately $844,000 of the increase in revenues. We anticipate volumes to remain stable in the coming quarters as additional remedial work is completed.
Lease operating expenses increased 60% or $188,291 to $500,495 for the three month period ended March 31, 2010 from the comparable 2009 period. This was primarily due to the increase in new wells acquired in 2009 and the cost associated with mature field production, with increases in workover expense and remedial repairs in 2010 as compared to 2009. The increased volumes account for approximately $181,000 of increase in lease operating expenses. Lifting costs per BOE increased 1% or $0.27 to $18.39 for the period. We anticipate lease operating expenses to increase over the following quarters due to the additional remedial repairs and workover expenses.
Depletion and depreciation increased 79% or $128,000 to $291,000 for the three month period ended March 31, 2010 versus $163,000 in the 2009 comparable period. This was primarily due to new wells acquired in 2009, which increased our depletable base.
General and administrative overhead cost increased 23% or $43,962 to $232,220 for the three-month period ended March 31, 2010 from the three-month period ended March 31, 2009. This was primarily attributable to an increase in professional services during the 2010 period. At this time, due to the stable environment of the Company, we anticipate general and administrative expenses to remain materially constant in the coming quarters.
Other expenses, net for the quarter ended March 31, 2010, were $62,279 compared to other expenses, net of $86,607 for 2009. The net decrease was primarily due to the unrealized losses on investments during the 2009 period that were offset by an increase in interest expense associated with our line of credit for the period ending March 31, 2010. We had approximately $6.7 million outstanding under our line of credit at March 31, 2010, compared with $1.7 million at March 31, 2009.
About FieldPoint Petroleum Corp. http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.fppcorp.com%2F&esheet=6288487&lan=en_US&anchor=www.fppcorp.com&index=1&md5=d0ab88be1d578def6d41fdb2546ba07a
FieldPoint Petroleum Corporation is engaged in oil and natural gas exploration, production and acquisition, primarily in Louisiana, New Mexico, Oklahoma, Texas and Wyoming.
This press release may contain projection and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Any such projections or statement reflect the company’s current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such projections will be achieved and that actual results could differ materially from those projected. A discussion of important factors that could cause actual results to differ from those projected, such as decreases in oil and natural gas prices and unexpected decreases in oil and natural gas production, is included in the company’s periodic reports filed with the Securities and Exchange Commission (at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.sec.gov%2F&esheet=6288487&lan=en_US&anchor=www.sec.gov&index=2&md5=37b47640c616a9e8ad85d82014fc9c76).
|
SELECT BALANCE SHEET DATA
|
| Unaudited |
|
|
March 31, 2010 |
|
December 31, 2009 |
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
1,370,958 |
|
$ |
657,942 |
| Total current assets |
|
$ |
2,550,183 |
|
$ |
1,859,395 |
| Total assets |
|
$ |
18,614,491 |
|
$ |
18,184,311 |
| Total current liabilities |
|
$ |
702,217 |
|
$ |
607,878 |
| Total stockholders’ equity |
|
$
|
9,034,245 |
|
$ |
8,675,081 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
For the Three Months Ended |
|
|
March 31, |
|
|
2010 |
|
2009 |
| REVENUE: |
|
|
|
|
| Oil and natural gas sales |
|
$ |
1,806,129 |
|
|
$ |
606,616 |
|
| Well operational and pumping fees |
|
|
17,066 |
|
|
|
17,066 |
|
| Disposal fees |
|
|
13,500 |
|
|
|
11,000 |
|
| Total revenue |
|
|
1,836,695 |
|
|
|
634,682 |
|
|
|
|
|
|
| COSTS AND EXPENSES: |
|
|
|
|
| Lease operating |
|
|
500,495 |
|
|
|
312,204 |
|
| Depletion and depreciation |
|
|
291,000 |
|
|
|
163,000 |
|
| Accretion of discount on asset retirement obligations |
|
|
20,000 |
|
|
|
8,000 |
|
| General and administrative |
|
|
232,220 |
|
|
|
188,258 |
|
| Total costs and expenses |
|
|
1,043,715 |
|
|
|
671,462 |
|
|
|
|
|
|
| OPERATING INCOME (LOSS) |
|
|
792,980 |
|
|
|
(36,780 |
) |
|
|
|
|
|
| OTHER INCOME (EXPENSE): |
|
|
|
|
| Interest income |
|
|
1,016 |
|
|
|
732 |
|
| Interest expense |
|
|
(63,295 |
) |
|
|
(12,743 |
) |
| Unrealized loss on short-term investments |
|
|
– |
|
|
|
(74,596 |
) |
| Total other expense |
|
|
(62,279 |
) |
|
|
(86,607 |
) |
|
|
|
|
|
| INCOME (LOSS) BEFORE INCOME TAXES |
|
|
730,701 |
|
|
|
(123,387 |
) |
|
|
|
|
|
| Income tax provision – current |
|
|
(168,000 |
) |
|
|
– |
|
| Income tax (provision) benefit – deferred |
|
|
(84,000 |
) |
|
|
44,000 |
|
| Total income tax (provision) benefit |
|
|
(252,000 |
) |
|
|
44,000 |
|
|
|
|
|
|
| NET INCOME (LOSS) |
|
$ |
478,701 |
|
|
$ |
(79,387 |
) |
|
|
|
|
|
| EARNINGS (LOSS) PER SHARE: |
|
|
|
|
| BASIC |
|
$ |
0.06 |
|
|
$ |
(0.01 |
) |
| DILUTED |
|
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
| WEIGHTED AVERAGE SHARES OUTSTANDING: |
|
|
|
|
| BASIC |
|
|
8,332,130 |
|
|
|
8,546,175 |
|
| DILUTED |
|
|
8,332,130 |
|
|
|
8,546,175 |
|
QUEBEC CITY, May 12 /PRNewswire-FirstCall/ – Aeterna Zentaris Inc. (NASDAQ: AEZS, TSX: AEZ) (the “Company”), a late-stage drug development company specialized in oncology and endocrine therapy, today announced that the U.S. Food and Drug Administration (FDA) has approved the Company’s Investigational New Drug (IND) application for its doxorubicin targeted conjugate compound, AEZS-108, in luteinizing hormone releasing hormone (LHRH) receptor positive urothelial (bladder) cancer. Following this approval from the FDA, the Company expects to initiate a Phase 2 clinical trial in this indication in the second half of this year.
The study will be conducted at the Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine with Gustavo Fernandez, M.D., Assistant Professor of Medicine, as the Principal Investigator, and will include up to 64 patients, male and female, with advanced LHRH-receptor positive urothelial (bladder) cancer. The study will be conducted in two parts; the first one will be a dose-finding part in up to 12 patients and then, the chosen dose will be studied for its effect on progression-free survival.
Juergen Engel, Ph.D., President and CEO of Aeterna Zentaris stated, “We are very pleased with the FDA’s approval and excited about this Phase 2 trial in bladder cancer, since it will be our first with AEZS-108 in the United States, and the first one to include male patients. With this upcoming Phase 2 trial, as well as the current Phase 2 trial in advanced ovarian and endometrial cancer conducted in Europe, for which final results are expected before year-end, AEZS-108 has become a major component of our oncology portfolio.”
About AEZS-108
AEZS-108 represents a new targeting concept in oncology using a cytotoxic peptide conjugate which is a hybrid molecule composed of a synthetic peptide carrier and a well-known cytotoxic agent, doxorubicin. The design of this product allows for the specific binding and selective uptake of the cytotoxic conjugate by LHRH-receptor-positive tumors. The binding of AEZS-108 to cancerous cells that express these receptors results in its accumulation and preferential uptake in the malignant tissue.
About Bladder Cancer
According to the National Cancer Institute, bladder cancer is the sixth most common type of cancer. In 2009, there were 70,980 new cases and 14,330 deaths from bladder cancer in the U.S. alone.
About Aeterna Zentaris Inc.
Aeterna Zentaris Inc. is a late-stage drug development company specialized in oncology and endocrine therapy. News releases and additional information are available at www.aezsinc.com.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of the Company to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. Investors should consult the Company’s quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The Company does not undertake to update these forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments except if we are required by a governmental authority or applicable law.
SOURCE AETERNA ZENTARIS INC.
WUXI, Jiangsu Province, China, May 11 /PRNewswire-Asia-FirstCall/ — China Wind Systems, Inc. (Nasdaq: CWS), (“China Wind Systems” or the “Company”), a leading supplier of forged rolled rings and other forged components to the wind power and other industries and industrial equipment primarily to the textile industry in China, today announced guidance for fiscal year 2010.
The Company expects 2010 revenues to be in the range of $76.5 million to $85 million, representing a 43% to 59% increase from $53.5 million in fiscal 2009. Earnings before interest, tax, depreciation and amortization, which is generally referred to as EBITDA and is a non-GAAP financial measure, is expected to be in the range of $22.7 million to $25.2 million, representing a 106% to 129% increase compared to $11.0 million in fiscal 2009. Adjusted net income, which excludes non-cash expenses related to convertible securities and warrants, is anticipated to be between $15.5 million and $16.3 million, representing an increase between 99% and 109%, compared to $7.8 million in fiscal 2009.
The Company anticipates stronger demand for both its traditional forged products and ESR forged products in 2010, as management expects stronger sales of precision forged products used in large wind turbines. The Company anticipates revenue contributed by its wind industry segment will increase by approximately 75%. In addition, the Company expects its dye machine segment to recover in 2010, given the industry’s recovery in early 2010.
“We are pleased to see a healthy flow of customer orders in early 2010,” commented Mr. Jianhua Wu, Chairman and Chief Executive Officer. “As our forging facility becomes more efficient, we anticipate improvement in our profit margins. We believe we have the right strategy in place to cater to the rapidly growing wind power industry in China.”
About China Wind Systems, Inc.
China Wind Systems supplies precision forged components such as rolled rings, shafts and flanges to the wind power and other industries and industrial equipment primarily to the textile industry in China. With its newly finished state-of-the-art production facility, the Company has increased its production and shipment of high-precision rolled rings and other essential components primarily to the wind power and other industries. For more information on the Company, visit http://www.chinawindsystems.com . Information on the Company’s Web site or any other Web site does not constitute a portion of this release.
Safe Harbor Statement
This release contains certain “forward-looking statements” relating to the business of the Company and its subsidiary and affiliated companies. These forward looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
Company Contact:
Ms. Teresa Zhang
Chief Financial Officer
China Wind Systems, Inc.
Tel: +1-877-224-6696 x705
Email: teresa.zhang@chinawindsystems.com
Web: http://www.chinawindsystems.com
Investor Relations Contact:
Mr. Shaun Smolarz
Financial Writer
CCG Investor Relations
Tel: +1-646-701-7444
Email: shaun.smolarz@ccgir.com
Mr. Athan Dounis
Account Manager
CCG Investor Relations
Tel: +1-646-213-1916
Email: athan.dounis@ccgir.com
Web: http://www.ccgirasia.com
May 12, 2010 (Business Wire) — Wavelink Corporation (www.wavelink.com) and InfoLogix, Inc. (NASDAQ: IFLG) today announced a strategic partnership to provide voice-enabled mobile solutions for SAP® customers. Adding voice to SAP warehousing and inventory management transactions will allow hands-free operation that increases safety on the floor, maximizes workflow productivity and improves the accuracy of data input.
By combining the voice capabilities of Wavelink® Speakeasy™ with the expertise of InfoLogix in SAP supply chain execution solutions, customers will have new options for interacting with their SAP applications. The two companies will demonstrate the capabilities of voice-enabled SAP transactions next week at SAPPHIRE NOW (May 16 – 19, 2010) in Orlando.
“We have invested a great deal of time researching voice solutions for SAP supply chain execution applications such as Warehouse Management and Extended Warehouse Management and found Wavelink Speakeasy to be one of the best solutions for both functionality and ease of use,” said Brian M. Thorn, Senior Vice President of InfoLogix.
The Speakeasy voice platform removes proprietary technology barriers by offering complete client-resident, text-to-speech and speech-to-text engines and automated voice features that are device, server, application and network independent. Enterprises can add voice capabilities to existing applications and hardware while avoiding expensive application modification or replacement and the risk and cost of changing existing business processes.
The Global Services Group of InfoLogix specializes in SAP supply chain execution solutions and services that enable organizations to align their critical business processes, increase operational efficiencies and reduce supply chain operation costs. InfoLogix has a high degree of expertise with both the Warehouse Management (WM) and Extended Warehouse Management modules of SAP.
Wavelink president and CEO Lamar Van Wagenen added, “Working with InfoLogix brings new, valuable functionality to SAP and provides Wavelink with an opportunity to expand into additional markets.”
Wavelink and InfoLogix will be demonstrating the voice-enabled solutions for SAP in booth #609 at SAPPHIRE NOW May 16-19. For more information about Wavelink Speakeasy and InfoLogix services in support of SAP solutions, please visit http://www.wavelink.com/speakeasy and http://www.infologix.com.
About Wavelink
Founded in 1992, Wavelink Corporation is the leading provider of multi-vendor mobile application development and mobile device and infrastructure management software. Wavelink’s technology solves the unique challenges involved in deploying, managing and controlling auto-ID data collection (AIDC) systems and RFID, and facilitates peak performance from frontline staff. Wavelink’s emulation product family is the industry standard in providing host connectivity solutions. More than 10,000 companies in the retail, manufacturing, government and logistics industries rely on Wavelink to accelerate application delivery, reduce device management and support costs, and tighten network security. For more information, please visit www.wavelink.com or call 888-697-9283 from the USA and Canada or +800-9283-5465 outside the USA and Canada.
About InfoLogix, Inc.
InfoLogix is a leading provider of enterprise mobility and advanced wireless asset tracking solutions for the healthcare and commercial industries. InfoLogix uses the industry’s most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, Kaiser Permanente, MultiCare Health System and Stanford School of Medicine. InfoLogix is a publicly traded company (NASDAQ: IFLG).
Wavelink is a registered trademark and Speakeasy is a trademark of Wavelink Corporation. SAP, SAPPHIRE and all SAP logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries. All other product and service names mentioned are the trademarks of their respective companies.
CALABASAS, Calif., May 12, 2010 (GLOBE NEWSWIRE) — NetSol Technologies, Inc. (“NetSol”) (Nasdaq:NTWK – News) (Nasdaq Dubai:NTWK), a U.S. corporation providing global business services and enterprise application solutions to private and public sector organizations worldwide, today announced its consolidated financial results for the third quarter ended March 31, 2010 highlighted by an impressive increase in sales and a return to profitability.
Third Quarter Fiscal Year 2010 Consolidated Financial Highlights
- Revenues for the fiscal year 2010 third quarter totaled $8.9 million, up from $5 million for the same period year-over-year, representing an increase of $3.9 million, or 77.8%.
- Net income per share totaled $0.02 versus a loss ($0.19) for the same period a year ago.
- Net revenues from license fees totaled $3.64 million, an increase of 1,022% versus the same period a year ago.
- 100% sequential growth in the core NetSol Financial Suite(TM) license sales.
- Gross margin increased to 61.3% compared to 10.7% in the same period a year ago.
- Operating income increased to $2.58 million as compared to an operating loss of $4.26 million in the same period a year ago.
- EBITDA totaled $1.9 million or $0.05 per diluted share, versus an EBITDA loss of $3.5 million, or a loss of ($0.13) per diluted share, in the year-ago period.
- The Company reiterates previous guidance for fiscal year 2010 projecting revenues in the range of $33.0 million and $35.0 million, representing full-year revenue growth of between 25% and 32% over fiscal year 2009. The Company projects a return to GAAP net income for fiscal year 2010, versus a GAAP net loss of $0.30 per diluted share for fiscal year 2009. License revenues for fiscal year 2010 are projected to increase more than 100% over fiscal year 2009.
Nine-Months Ended March 31, 2010
- Revenues for the nine months ended March 31, 2010 totaled $26.1 million up from $19.6 million for the same period year-over-year representing an increase of $6.5 million or 33%.
- Net revenues from license fees totaled $9.52 million, up from $3.50 million for the same period year-over-year, representing an increase of $6.01 million, or 171.6%.
- Gross margin increased to 59.3% compared to 34.1% in the same period a year ago.
- Operating income increased to $5.42 million as compared to an operating loss of $5.95 million in the same period a year ago.
- EBITDA totaled $4.07 million, or $0.12 per diluted share, versus an EBITDA loss of $3.04 million, or a loss of ($0.11) per diluted share, in the same period a year-ago.
Najeeb Ghauri, NetSol Technologies chairman and chief executive officer, commented: “We are very pleased with our performance in the third fiscal quarter, highlighted by a 78% increase in our sales versus the same period a year ago and a return to quarterly profitability for the first time in six quarters. It is our aim to finish the year completely profitable on the fiscal year analysis. Our financial results continue to deliver material improvements in every major metric of financial health, and we are optimistic about future outlook. Our efforts to invest in our core NetSol Financial Suite (NFS)(TM) throughout the global economic downturn has well positioned the company to leverage the upturn in customer activity that we continue to see, particularly in China and APAC region in general. We enter the end of our fiscal year 2010 with the most positive momentum in the company’s recent history and we see increased interest among our major customers as well as new potential partners in the sector. Additionally, we see excellent opportunities for collaboration and strategic initiatives as we head to the conclusion of the fiscal year 2010.”
BUSINESS HIGHLIGHTS
- NetSol Technologies North America announced the formal launch of smartOCI(TM), a SAP-Compatible Multiple-Catalog Search Engine. The launch will be on May 17, 2010, at the SAP SAPPHIRE Conference in Orlando, Florida, targeting approximately 1,000 SAP SRM platform customers. smartOCI(TM) will be sold on subscription basis with the software delivered as a Software as a Service (SaaS) model.
- NetSol Technologies and Atheeb Group formally launched Atheeb NetSol Limited, a new entity joint venture in the Kingdom of Saudi Arabia. The Atheeb NetSol limited joint venture is focused on market development opportunities around penetrating the software engineering arena in key business sectors such as telecommunications, defense, public sectors and finance, among others.
- NetSol Technologies signed a new agreement with a Chinese finance company that has a major European bank and a multi-billion dollar Chinese financial services group as partners. The client selected NetSol’s NFS BI Module, a unique end-to-end Business Intelligence offering.
- A FORTUNE 50 client upgraded the NetSol Technologies LeasePak License. The highly scalable LeasePak solution offers North American clients the ability to scale from a core platform via modular components.
- NetSol Technologies Thailand won a major contract for the NetSol Financial Suite(TM).
- NetSol Technologies, Ltd. Pakistan has parlayed its reputation as a quality IT company into participation in three new pre-qualified bids in the public sector.
- NetSol Technologies North America downsized its office space from Emeryville to Alameda in California, saving an estimated $5.0 million over the next five years.
Conference Call and Webcast Information
NetSol will host a conference call today, May 12, 2010, at 11:00 a.m. ET (8:00 a.m. PT) to review the quarterly financial and operational performance. Najeeb Ghauri, NetSol Technologies chairman and chief executive officer, will host the call.
To participate in the call please dial (877) 941-1429, or (480) 629-9666 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found at the Company’s website at http://www.netsoltech.com.
A replay of the call will be available for two weeks from 2:00 p.m. May 12, 2010, EDT until 11:59 p.m. EDT on May 26, 2010. The number for the replay is (800) 406-7325, or (303) 590-3030 for international calls; the pass code for the replay is 4294953. In addition, a recording of the call will be available via the Company’s website at http://www.netsoltech.com for one year.
About NetSol Technologies, Inc.
NetSol Technologies, Inc. (Nasdaq:NTWK – News) (Nasdaq Dubai:NTWK) is a worldwide provider of global IT and enterprise application solutions. Since its inception in 1995, NetSol has used its BestShoring(TM) practices and highly experienced resources in analysis, development, quality assurance, and implementation to deliver high-quality, cost-effective solutions. Specialized by industry, these product and services offerings include credit and finance portfolio management systems, SAP consulting and services, custom development, systems integration, and technical services for the global Financial, Leasing, Insurance, Energy, and Technology markets. NetSol’s commitment to quality is demonstrated by its achievement of the ISO 9001, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a distinction shared by fewer than 100 companies worldwide. NetSol Technologies’ clients include Fortune 500 manufacturers, global automakers, financial institutions, utilities, technology providers, and government agencies. Headquartered in Calabasas, California, NetSol Technologies has operations and offices in Alameda, Adelaide, Bangkok, Beijing, Karachi, Lahore, London, and Riyadh.
To learn more about NetSol, visit http://www.netsoltech.com/.
The NetSol Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7396
Use of EBITDA
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. The Company uses EBITDA as a measure of the Company’s operating trends. Investors are cautioned that EBITDA is not a measure of liquidity or of financial performance under Generally Accepted Accounting Principles (GAAP). The EBITDA numbers presented may not be comparable to similarly titled measures reported by other companies. EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP.
NetSol Technologies, Inc. Forward-looking Statements
This press release may contain forward-looking statements relating to the development of the Company’s products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “anticipate,” “intend,” variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company’s actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.
| NetSol Technologies, Inc. and |
|
|
| Subsidiaries Consolidated Balance Sheets |
|
|
|
|
|
|
As of March 31, 2010 |
As of June 30, 2009 |
|
| ASSETS |
Un-audited |
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 4,275,443 |
$ 4,403,762 |
| Restricted Cash |
5,000,000 |
5,000,000 |
| Accounts receivable, net of allowance for doubtful accounts |
13,682,521 |
11,394,844 |
| Revenues in excess of billings |
8,497,742 |
5,686,277 |
| Other current assets |
2,496,949 |
2,307,246 |
| Total current assets |
33,952,656 |
28,792,129 |
| Investment in associates |
244,016 |
— |
| Property and equipment, net of accumulated depreciation |
8,457,622 |
9,186,163 |
| Other assets, long-term |
— |
204,823 |
| Intangibles: |
|
|
Product licenses, renewals, enhancements, copyrights,
trademarks, and tradenames, net |
16,492,134 |
13,802,607 |
| Customer lists, net |
792,040 |
1,344,019 |
| Goodwill |
9,439,285 |
9,439,285 |
| Total intangibles |
26,723,459 |
24,585,911 |
| Total assets |
$ 69,377,753 |
$ 62,769,026 |
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| Current liabilities: |
|
|
| Accounts payable and accrued expenses |
$ 4,642,835 |
$ 5,106,266 |
| Due to officers |
13,911 |
— |
| Current portion of loans and obligations under capitalized leases |
7,134,527 |
6,207,830 |
| Other payables – acquisitions |
103,226 |
103,226 |
| Unearned revenues |
3,449,817 |
3,473,228 |
| Dividend to preferred stockholders payable |
— |
44,409 |
| Convertible notes payable , current portion |
2,983,366 |
— |
| Loans payable, bank |
2,363,507 |
2,458,757 |
| Total current liabilities |
20,691,189 |
17,393,716 |
| Obligations under capitalized leases, less current maturities |
368,709 |
1,090,901 |
| Convertible notes payable less current maturities |
4,084,024 |
5,809,508 |
| Long term loans; less current maturities |
886,316 |
1,113,832 |
| Lease abandonment liability; long term |
867,583 |
— |
| Total liabilities |
26,897,820 |
25,407,957 |
| Commitments and contingencies |
— |
— |
|
|
|
| Stockholders’ equity: |
|
|
| Preferred stock, 5,000,000 shares authorized; |
|
|
| Nil; 1,920 issued and outstanding |
— |
1,920,000 |
Common stock, $.001 par value; 95,000,000 shares authorized;
35,961,883; 30,046,987 issued and outstanding |
35,962 |
30,047 |
| Additional paid-in-capital |
85,203,134 |
78,198,523 |
| Treasury stock |
(396,008) |
(396,008) |
| Accumulated deficit |
(41,351,411) |
(41,253,152) |
| Stock subscription receivable |
(2,107,960) |
(842,619) |
| Common stock to be issued |
251,450 |
220,365 |
| Other comprehensive loss |
(8,193,790) |
(6,899,397) |
| Non-controlling interest |
9,038,556 |
6,383,310 |
| Total stockholders’ equity |
42,479,932 |
37,361,069 |
| Total liabilities and stockholders’ equity |
$ 69,377,753 |
$ 62,769,026 |
|
|
|
| NetSol Technologies, Inc. and Subsidiaries |
|
|
| Consolidated Statements of Operations |
|
|
|
|
|
|
For the Three Months |
For the Nine Months |
|
Ended March 31, |
Ended March 31, |
|
2010 |
2009 |
2010 |
2009 |
| Net Revenues: |
|
|
|
|
| License fees |
$ 3,644,809 |
$ 324,845 |
$ 9,515,338 |
$ 3,502,632 |
| Maintenance fees |
1,739,799 |
1,664,492 |
5,327,852 |
4,771,519 |
| Services |
3,548,348 |
3,033,684 |
11,231,648 |
11,320,846 |
| Total revenues |
8,932,956 |
5,023,021 |
26,074,837 |
19,594,997 |
| Cost of revenues: |
|
|
|
|
| Salaries and consultants |
2,154,369 |
2,629,081 |
6,173,967 |
7,652,671 |
| Travel |
222,136 |
280,390 |
611,343 |
993,290 |
| Repairs and maintenance |
43,364 |
81,536 |
180,086 |
290,436 |
| Insurance |
40,235 |
43,478 |
112,943 |
135,390 |
| Depreciation and amortization |
578,904 |
532,099 |
1,650,676 |
1,615,853 |
| Other |
416,931 |
917,051 |
1,884,426 |
2,208,265 |
| Total cost of revenues |
3,455,939 |
4,483,635 |
10,613,442 |
12,895,905 |
| Gross profit |
5,477,017 |
539,386 |
15,461,395 |
6,699,092 |
| Operating expenses: |
|
|
|
|
| Selling and marketing |
651,485 |
629,145 |
1,671,866 |
2,479,509 |
| Depreciation and amortization |
411,563 |
501,239 |
1,341,947 |
1,476,281 |
| Bad debt expense |
(3,236) |
1,772,188 |
209,604 |
2,420,658 |
| Salaries and wages |
746,095 |
773,757 |
2,214,760 |
2,697,531 |
| Professional services, including non-cash compensation |
242,177 |
257,926 |
549,078 |
877,752 |
| Lease abandonment charges |
(208,764) |
— |
867,583 |
— |
| General and administrative |
1,056,718 |
862,623 |
3,188,901 |
2,693,451 |
| Total operating expenses |
2,896,038 |
4,796,878 |
10,043,739 |
12,645,182 |
| Income (loss) from operations |
2,580,979 |
(4,257,492) |
5,417,656 |
(5,946,090) |
| Other income and (expenses) |
|
|
|
|
| Gain (loss) on sale of assets |
(125,419) |
(127,558) |
(214,520) |
(308,256) |
| Interest expense |
(312,671) |
(466,276) |
(1,153,557) |
(966,746) |
| Interest income |
82,637 |
177,771 |
234,200 |
246,607 |
| Gain on foreign currency exchange rates |
(190,082) |
8,902 |
190,495 |
1,821,754 |
| Share of net income / (loss) in associate |
(23,984) |
— |
(23,984) |
— |
| Beneficial conversion feature |
(458,758) |
(17,225) |
(1,351,972) |
(17,225) |
| Other income |
144,609 |
(984,622) |
62,634 |
(952,482) |
| Total other income (expenses) |
(883,667) |
(1,409,008) |
(2,256,704) |
(176,348) |
| Net income (loss) before non-controlling interest in subsidiary |
1,697,312 |
(5,666,500) |
3,160,952 |
(6,122,438) |
| Non-controlling interest |
(1,097,201) |
689,584 |
(3,235,093) |
(972,238) |
| Income taxes |
(11,064) |
(21,594) |
(48,607) |
(79,631) |
| Net income (loss) |
589,047 |
(4,998,510) |
(122,748) |
(7,174,308) |
| Dividend required for preferred stockholders |
— |
(33,140) |
— |
(100,892) |
| Net income (loss) applicable to common shareholders |
589,047 |
(5,031,650) |
(122,748) |
(7,275,200) |
| Other comprehensive income (loss): |
|
|
|
|
| Translation adjustment |
(439,688) |
(179,358) |
(1,294,393) |
(4,036,926) |
| Comprehensive income (loss) |
$ 149,359 |
$ (5,211,008) |
$ (1,417,141) |
$ (11,312,126) |
|
|
|
|
|
| Net income (loss) per share: |
|
|
|
|
| Basic |
$ 0.02 |
$ (0.19) |
$ (0.004) |
$ (0.27) |
| Diluted |
$ 0.02 |
$ (0.19) |
$ (0.004) |
$ (0.27) |
| Weighted average number of shares outstanding |
|
|
|
| Basic |
35,636,259 |
26,601,587 |
33,893,968 |
26,350,098 |
| Diluted |
36,988,542 |
26,601,587 |
33,893,968 |
26,350,098 |
|
|
|
|
|
| NetSol Technologies, Inc. and Subsidiaries |
|
| Consolidated Cash Flow Statements |
|
|
|
|
For the Nine Months |
|
Ended March 31, |
|
2010 |
2009 |
| Cash flows from operating activities: |
|
|
| Net income (loss) |
$ (122,748) |
$ (7,174,308) |
Adjustments to reconcile net income (loss)
to net cash provided by operating activities: |
|
|
| Depreciation and amortization |
2,992,624 |
3,092,134 |
| Provision for bad debts |
209,604 |
2,420,658 |
| Gain on sale of subsidiary shares in Pakistan |
— |
308,256 |
| Loss on foreign currency exchange rates |
25,900 |
— |
| Share of net (income)/loss from associates |
23,984 |
— |
| Loss on sale of assets |
214,520 |
— |
| Non controlling interest in subsidiary |
3,235,093 |
972,238 |
| Stock issued for notes payable and related interest |
30,207 |
— |
| Stock issued for services |
572,184 |
227,516 |
| Fair market value of warrants and stock options granted |
791,530 |
147,639 |
| Beneficial conversion feature |
1,351,972 |
17,225 |
| Changes in operating assets and liabilities: |
|
|
| Increase/ decrease in accounts receivable |
(2,658,139) |
(3,934,511) |
| Increase/ decrease in other current assets |
(2,703,402) |
3,175,947 |
| Increase/ decrease in accounts payable and accrued expenses |
(52,914) |
588,689 |
| Net cash provided by operating activities |
3,910,415 |
(158,517) |
| Cash flows from investing activities: |
|
|
| Purchases of property and equipment |
(1,458,050) |
(1,501,508) |
| Sales of property and equipment |
232,783 |
13,376 |
| Payments of acquisition payable |
— |
(742,989) |
| Purchase of treasury stock |
— |
(360,328) |
| Investment in associate |
(268,000) |
— |
| Short-term investments held for sale |
— |
— |
| Increase in intangible assets |
(4,562,044) |
(5,281,642) |
| Net cash used in investing activities |
(6,055,311) |
(7,873,091) |
| Cash flows from financing activities: |
|
|
| Proceeds from sale of common stock |
754,509 |
146,652 |
| Proceeds from the exercise of stock options and warrants |
33,750 |
526,569 |
| Purchase of subsidary stock in Pakistan |
— |
(250,000) |
| Finance costs incurred for sale of common stock |
|
|
| Proceeds from convertible notes payable |
3,500,000 |
6,000,000 |
| Redemption of preferred stock |
(1,920,000) |
— |
| Restricted cash |
— |
(5,000,000) |
| Dividend Paid |
(43,988) |
(33,876) |
| Bank overdraft |
(176,377) |
161,134 |
| Proceeds from bank loans |
4,320,534 |
3,843,541 |
| Payments on bank loans |
(484,507) |
(235,486) |
| Payments on capital lease obligations & loans – net |
(3,664,176) |
(467,397) |
| Net cash provided by financing activities |
2,319,746 |
4,691,137 |
| Effect of exchange rate changes in cash |
(303,170) |
(453,178) |
| Net increase in cash and cash equivalents |
(128,319) |
(3,793,649) |
| Cash and cash equivalents, beginning of year |
4,403,762 |
6,275,238 |
| Cash and cash equivalents, end of year |
$ 4,275,443 |
$ 2,481,591 |
Press Release Source: Mercantile Bancorp, Inc. On Tuesday May 11, 2010, 8:30 am EDT
QUINCY, IL–(Marketwire – 05/11/10) – Mercantile Bancorp, Inc. (AMEX:MBR – News)
-- Net Income of $984,000
-- Net Interest Margins Rise Year-Over-Year
-- Loan, Asset Quality Stable
-- Strong Expense Controls Continue at Banks
Mercantile Bancorp, Inc. (AMEX:MBR – News) today reported unaudited net income from both continuing and discontinued operations of $984,000 or $0.11 per share for the quarter ended March 31, 2010 compared with a net loss of $876,000 or $(0.10) per share for the same period in 2009. The Company’s 2009 financial statements have been restated to reflect discontinued operations due to the sale or exchange for debt of three of its subsidiary banks in December 2009 and February 2010.
Net income in first quarter 2010 included a $4.2 million pre-tax gain on the sale of two banks, which was announced in 2009 and closed in February 2010. The results reflect continuing solid operating performance for the Company’s largest subsidiary, Mercantile Bank, and its continuing efforts to reserve aggressively for potential loan losses at Heartland Bank in Leawood, Kansas and Royal Palm Bank, based in Naples, Florida.
The Company reported net interest income from continuing operations of $6.1 million in first quarter 2010, an increase of 27.2% compared with $4.8 million the previous year’s first quarter. This was the second consecutive quarter-over-quarter growth in net interest income, reflecting both improved cost of funds management at its banks and reduced debt at the Company.
“We are encouraged that our strong focus on generating core checking, savings and money market deposits and strategic re-pricing of higher-cost time deposits had an impressive positive impact on net interest income, with net interest margin improving to 2.46% for the first quarter of 2010 compared with 1.81% a year ago,” said Ted T. Awerkamp, President and CEO.
Provision for loan loss expense increased to $4.0 million in first quarter 2010 compared with $2.8 million in the same period in 2009. “We maintained our aggressive approach in building loan loss reserves in the first quarter of 2010, and we have achieved transparency in the loan portfolios of all three subsidiary banks as they have worked through asset quality issues over the past two years,” said Awerkamp. “We continue to receive reductions in valuations of properties that collateralize loans due to the depressed real estate markets, especially in Florida. However, our troubled loans have been identified and we are benefitting from sales on foreclosed properties held for sale at reasonable levels to our marking, so we are beginning to see traction.” Non-performing loans of $46.1 million at March 31, 2010 were essentially stable compared with first quarter 2009, decreasing from $50.8 million at December 31, 2009.
Awerkamp continued, “The exchange of one bank in late 2009 and sale of two banks in early 2010 served to bolster the Company’s capital position, reduce debt and maintain or exceed capitalization requirements at each of the remaining subsidiary banks. Core deposits at our banks have been stable, and in some markets growing, providing access to attractively priced funding for loans. Combined with ongoing expense management, we are well-positioned to maintain lending opportunities to good customers, and react to attractive opportunities.”
The Company reduced noninterest expense from continuing operations to $8.26 million in first quarter 2010 compared with $8.54 million the prior year’s first quarter. Total noninterest income from continuing operations was $1.8 million in first quarter 2010, compared with $2.0 million in first quarter 2009. The decline primarily reflected fewer gains on loan sales year-over-year, due to the slow-down in residential mortgage refinancing. Awerkamp noted the Company leveraged slightly improving economic and investing conditions to increase revenue from both fiduciary activities and brokerage services.
“Our fiduciary and brokerage services are being well-received as investors seek expert advice and investment management capabilities,” said Awerkamp. “As markets continue to be unpredictable and with an uncertain long-term economic outlook, we believe investors and advisors are seeking the additional stability of sound professional advice provided through our unique trust offerings and bankers they know and respect.”
Total assets at March 31, 2010 decreased to $1.0 billion compared with $1.4 billion at December 31, 2009, primarily reflecting the sale of two subsidiary banks in February 2010. Total loans from continuing operations at March 31, 2010 declined to $756.3 million from $776.7 million at December 31, 2009 as the Company continued to eliminate troubled loans and specific lending relationships that were not able to meet stronger credit standards. Total deposits from continuing operations at March 31, 2010 dropped to $885.2 million compared with $954.5 million at year-end 2009, primarily due to the decreased funding required for the loan portfolio and a reduction in higher-cost brokered time deposits.
“We have purposely let certain loans and deposits go at all three banks as part of our strategy to concentrate on optimizing returns,” explained Awerkamp. “We are creating a sound foundation of the highest quality from which to grow during the coming months.”
Subsidiary Bank Operating Highlights
Mercantile Bank continues to generate solid performance despite relatively flat loan demand, noted Awerkamp. The Bank’s served markets, including Quincy, Illinois, St. Joseph, Missouri and Carmel, Indiana did not suffer dramatic economic declines that were seen in other areas of the country, but he said they have not shown any meaningful signs of growth. Mercantile Bank was able to improve net interest income nearly $900,000 year-over-year, in large part due to margin improvement that led to a $1.4 million reduction in interest expense in first quarter 2010 compared to the same period in 2009.
Mercantile Bank continues concentrating on small to mid-size business and agriculture lending in concert with a range of relationship opportunities that generate service revenue and core deposits. “A combination of exceptional customer service and a full range of business banking capabilities enables us to win new business and market share,” explained Awerkamp.
“Heartland Bank’s performance in the first quarter of 2010 showed improvement,” said Awerkamp, reflecting a stabilizing loan portfolio, a reduction in non-accrual loans and continuing operational controls. “Recently identified opportunities to trim overhead costs have put Heartland on an accelerated timetable to reach monthly operational profitability,” he added.
Royal Palm Bank has made significant progress in working through its asset quality issues over the past two years, and while loan losses continued in first quarter 2010, Awerkamp noted there were no unexpected difficulties. The Southwest Florida economy remains severely depressed, with weakness in commercial real estate and declining property values. There have been numerous bank failures in the market, while Royal Palm has maintained a well-capitalized status according to regulatory standards. Core deposits at the Bank have remained stable as its management team focuses on building relationships with small businesses.
“Although we don’t welcome the fact that Southwest Florida banks are failing at unprecedented levels, we do believe this presents a long-term market share opportunity for the surviving banks,” said Awerkamp. “Our new management team has improved control and transparency related to problem loans and the Bank’s basic operations. The improvements made have been overshadowed by a relatively small number of large troubled loans. We have reserved aggressively for these and have maintained a healthy capital position. The ability to work through these loans in unison with capturing quality business opportunities is the key to creating a positive long-term scenario for Royal Palm.”
Outlook
In the coming months, Mercantile Bancorp will maintain its focus on retaining customers, identifying and winning high-quality service and lending relationships, and operational expense controls.
“In first quarter 2010, we were particularly pleased with our success in building net interest margin, and we believe the positive impact of forthcoming expense reductions will generate further benefits as the economy improves and we are able to win new loans and deposits,” said Awerkamp. “Over the past several years, we have built a strong back office with the latest technology, which will provide a significant competitive advantage as Royal Palm and Heartland complete their migration to our systems. As a $1 billion asset holding company, we provide our subsidiary banks with significant advantages over smaller institutions in a highly competitive banking environment.”
About Mercantile Bancorp
Mercantile Bancorp, Inc. is a Quincy, Illinois-based bank holding company with majority-owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operates Mercantile Bank branch offices in Missouri and Indiana. In addition, the Company has minority investments in seven community banks in Missouri, Georgia, Florida, Colorado, California and Tennessee. Further information is available on the company’s website at http://www.mercbanx.com/.
Forward-Looking Statements
This press release may contain “forward-looking statements” which reflect the Company’s current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 (“the Act”) provides a safe harbor for forward-looking statements that are identified as such and are accompanied by the identification of important factors that could cause actual results to differ materially from the forward-looking statements. For these statements, the Company, together with its subsidiaries, claims the protection afforded by the safe harbor in the Act. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. These risks, uncertainties and other factors that may cause actual results to differ from expectations, are set forth in our Annual Report on Form 10-K for the year ended December 31, 2009, as on file with the Securities and Exchange Commission, and include, among other factors, the following: general business and economic conditions on both a regional and national level; fluctuations in real estate values; the level and volatility of the capital markets, interest rates, and other market indices; changes in consumer and investor confidence in, and the related impact on, financial markets and institutions; estimates of fair value of certain Company assets and liabilities; federal and state legislative and regulatory actions; various monetary and fiscal policies and governmental regulations; changes in accounting standards, rules and interpretations and their impact on the Company’s financial statements. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions often signify forward-looking statements. You should not place undue reliance on any forward-looking statements. Any forward-looking statements in this release speak only as of the date of the release, and we do not assume any obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements.
Mercantile Bancorp, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2010 2009
------------- --------------
(In Thousands)
(Unaudited)
ASSETS
Cash and cash equivalents $ 88,205 $ 121,267
Securities 126,950 130,484
Loans held for sale 788 681
Loans, net of allowance for loan losses 736,559 757,138
Premises and equipment 25,221 25,670
Interest receivable 3,703 3,962
Cash surrender value of life insurance 15,149 15,011
Goodwill - -
Other 46,430 50,277
Discontinued operations, assets held for
sale - 285,992
------------- --------------
Total assets $ 1,043,005 $ 1,390,482
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 885,230 $ 954,524
Short-term borrowings 25,899 30,740
Long-term debt 76,858 87,030
Interest payable 4,542 4,114
Other 4,918 4,827
Discontinued operations, liabilities held
for sale - 264,044
------------- --------------
Total liabilities 997,447 1,345,279
------------- --------------
Total Mercantile Bancorp, Inc.
stockholders' equity 42,590 41,302
------------- --------------
Noncontrolling Interest 2,968 3,901
------------- --------------
Total equity 45,558 45,203
------------- --------------
Total liabilities and equity $ 1,043,005 $ 1,390,482
============= ==============
Mercantile Bancorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
------------------------
March 31, March 31,
2010 2009
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(In Thousands)
(Unaudited)
Interest Income:
Loans and fees on loans $ 10,238 $ 11,404
Securities:
Taxable 970 1,182
Tax exempt 210 244
Other 90 83
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Total interest income 11,508 12,913
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Interest Expense:
Deposits 4,171 6,331
Short-term borrowings 187 550
Long-term debt 1,013 1,206
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Total interest expense 5,371 8,087
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Net Interest Income 6,137 4,826
Provision for Loan Losses 3,990 2,785
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Net Interest Income After Provision
for Loan Losses 2,147 2,041
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Noninterest Income:
Fiduciary activities 581 568
Brokerage fees 299 193
Customer service fees 365 365
Other service charges and fees 139 107
Net gains (losses) on sales of assets 8 (10)
Net gains on loan sales 92 517
Net gains on sales of available-for-sale
securities - -
Other 293 243
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Total noninterest income 1,777 1,983
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Noninterest Expense:
Salaries and employee benefits 4,405 4,464
Net occupancy expense 598 600
Equipment expense 563 585
Deposit insurance premium 471 611
Professional fees 491 559
Postage and supplies 148 176
Losses on foreclosed assets 212 102
Other than temporary losses on
available-for-sale and cost method
investments - -
Goodwill Impairment Loss - -
Other 1,372 1,441
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Total noninterest expense 8,260 8,538
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Income (Loss) from Continuing Operations
Before Income Taxes (4,336) (4,514)
Income Tax Expense (Benefit) (1,190) (1,561)
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Income (Loss) from Continuing
Operations (3,146) (2,953)
Income (Loss) from Discontinued Operations 3,197 1,788
Less: Net Income (Loss) attributable to
Noncontrolling Interest (933) (289)
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Net Income (Loss) attributable to Mercantile
Bancorp, Inc. $ 984 $ (876)
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Mercantile Bancorp, Inc.
SELECTED FINANCIAL HIGHLIGHTS
Three Months Ended
------------------------
March 31, March 31,
2010 2009
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(Dollars In Thousands
except share data)
(Unaudited)
EARNINGS AND PER SHARE DATA
Basic Earnings Per Share $ 0.11 $ (0.10)
Weighted average shares outstanding 8,703,330 8,703,330
Cash dividends paid per share N/A N/A
Book value per share $ 4.89 $ 11.26
Tangible book value per share (1) (3) $ 4.78 $ 7.62
Ending number of common shares
outstanding 8,703,330 8,703,330
AVERAGE BALANCES
Assets $ 1,082,957 $ 1,810,526
Securities (3) $ 128,577 $ 129,628
Loans (2) (3) $ 772,837 $ 850,252
Earning assets (3) $ 996,280 $ 1,067,907
Deposits (3) $ 922,610 $ 968,326
Interest bearing liabilities (3) $ 927,654 $ 1,053,326
Stockholders' equity $ 43,280 $ 98,781
END OF PERIOD FINANCIAL DATA
Net interest income (3) $ 6,137 $ 4,826
Loans (2) (3) $ 756,264 $ 843,442
Allowance for loan losses (3) $ 18,917 $ 17,201
PERFORMANCE RATIOS
Return on average assets 0.37% (0.20%)
Return on average equity 9.22% (3.60%)
Net interest margin (3) 2.46% 1.81%
Interest spread (3) 2.30% 1.77%
Efficiency ratio (3) 104% 125%
Allowance for loan losses to loans (2)
(3) 2.50% 2.01%
Allowance as a percentage of
non-performing loans (3) 41% 37%
Average loan to deposit ratio (3) 84% 88%
Dividend payout ratio N/A N/A
ASSET QUALITY
Net charge-offs (3) $ 3,924 $ 4,623
Non-performing loans (3) $ 46,060 $ 46,569
Other non-performing assets (3) $ 18,181 $ 9,668
(1) Net of goodwill and core deposit intangibles
(2) Loans include loans held for sale and nonaccrual loans
(3) 2009 column restated for discontinued operations and
assets/liabilities transferred to Held-for-Sale
SARASOTA, FL — (Marketwire) — 05/10/10 — Sun Hydraulics Corporation (NASDAQ: SNHY) reported financial results for the first quarter 2010 as follows:
(Dollars in millions except net income per share)
April 3 March 28
2010 2009 Increase
Three Months Ended
Net Sales $ 31.6 $ 25.2 25%
Net Income $ 3.3 $ 0.6 450%
Net Income per share:
Basic $ 0.20 $ 0.03 567%
Diluted $ 0.20 $ 0.03 567%
“Due to higher than anticipated activity in March, we exceeded our first quarter sales and earnings estimates,” said Allen Carlson, Sun CEO and president. “Even with the substantial increase in orders, we are able to meet the rising demand. The consistent level of expedited orders indicates to us that inventory throughout the pipeline is exhausted and OEMs are building on an as-needed basis.”
Continuing, Carlson commented, “By mid-April, our U.S. workforce was fully employed and the salary reductions of last year were reinstated. Our global colleagues either have or will return to full employment as needed to meet demand in different geographic areas. We have the capacity to meet increasing demand for the foreseeable future.”
“Sun is well prepared for the rapid increase in demand,” concluded Carlson. “The investments we made last year, including $5.1 million in capital and preserving and investing in our workforce, allow us to respond to our customers’ needs. Sun’s reliable delivery capability and customer service are the cornerstones of our ability to gain market share in the expansion phase of the business cycle.”
Outlook
The Company’s 2010 second quarter sales are expected to be $39 million, an 81% increase in revenue compared to the same period last year, and earnings are expected to be $0.34 to $0.36 per share compared to a loss of $0.03 per share in the same period of the prior year.
Webcast
Sun Hydraulics Corporation will broadcast its Q1 financial results conference call live over the Internet at 9:00 A.M. E.T. tomorrow, May 11, 2010. To listen to the webcast, go to http://investor.sunhydraulics.com/eventdetail.cfm?EventID=80530.
Webcast Q&A
If an individual wishes to ask questions directly during the webcast, the conference call may be accessed by dialing (877) 212-8518. Questions also may be submitted to the Company via email by going to the Sun Hydraulics website, www.sunhydraulics.com, and clicking on Investor Relations on the top menu. Scroll down to the bottom of the page and click on contact email: investor@sunhydraulics.com, which will open an email window to type in your message. Sun management will then answer these and other questions during the Company’s webcast. A copy of this earnings release is posted on the Investor Relations page of our website under “Press Releases.”
Sun Hydraulics Corporation is a leading designer and manufacturer of high performance screw-in hydraulic cartridge valves and manifolds for worldwide industrial and mobile markets. For more information about Sun, please visit our website at www.sunhydraulics.com.
FORWARD-LOOKING INFORMATION
Certain oral statements made by management from time to time and certain statements contained herein that are not historical facts are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and, because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements, including those in Management’s Discussion and Analysis of Financial Condition and Results of Operations are statements regarding the intent, belief or current expectations, estimates or projections of the Company, its Directors or its Officers about the Company and the industry in which it operates, and assumptions made by management, and include among other items, (i) the Company’s strategies regarding growth, including its intention to develop new products; (ii) the Company’s financing plans; (iii) trends affecting the Company’s financial condition or results of operations; (iv) the Company’s ability to continue to control costs and to meet its liquidity and other financing needs; (v) the declaration and payment of dividends; and (vi) the Company’s ability to respond to changes in customer demand domestically and internationally, including as a result of standardization. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will occur.
Important factors that could cause the actual results to differ materially from those in the forward-looking statements include, among other items, (i) the economic cyclicality of the capital goods industry in general and the hydraulic valve and manifold industry in particular, which directly affect customer orders, lead times and sales volume; (ii) conditions in the capital markets, including the interest rate environment and the availability of capital; (iii) changes in the competitive marketplace that could affect the Company’s revenue and/or cost bases, such as increased competition, lack of qualified engineering, marketing, management or other personnel, and increased labor and raw materials costs; (iv) changes in technology or customer requirements, such as standardization of the cavity into which screw-in cartridge valves must fit, which could render the Company’s products or technologies noncompetitive or obsolete; (v) new product introductions, product sales mix and the geographic mix of sales nationally and internationally; and (vi) changes relating to the Company’s international sales, including changes in regulatory requirements or tariffs, trade or currency restrictions, fluctuations in exchange rates, and tax and collection issues. Further information relating to factors that could cause actual results to differ from those anticipated is included but not limited to information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-Q for the quarter ended April 3, 2010, and under the heading “Business” and particularly under the subheading, “Business Risk Factors” in the Company’s Form 10-K for the year ended January 2, 2010. The Company disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)
Three months ended
April 3, March 28,
2010 2009
(unaudited) (unaudited)
Net sales $ 31,605 $ 25,208
Cost of sales 21,485 19,629
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Gross profit 10,120 5,579
Selling, engineering and
administrative expenses 5,156 4,775
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Operating income 4,964 804
Interest income, net (137) (110)
Foreign currency transaction gain, net (27) (8)
Miscellaneous (income) expense, net (20) 199
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Income before income taxes 5,148 723
Income tax provision 1,837 171
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Net income $ 3,311 $ 552
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Basic net income per common share $ 0.20 $ 0.03
Weighted average basic shares outstanding 16,942 16,664
Diluted net income per common share $ 0.20 $ 0.03
Weighted average diluted shares outstanding 16,977 16,694
Dividends declared per share $ 0.090 $ 0.180
SUN HYDRAULICS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
April 3, 2010 January 2,
(unaudited) 2010
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Assets
Current assets:
Cash and cash equivalents $ 26,638 $ 30,314
Restricted cash 131 132
Accounts receivable, net of allowance for
doubtful accounts of $81 and $90 14,367 9,949
Inventories 8,878 7,799
Income taxes receivable - 1,485
Deferred income taxes 575 575
Marketable securities 10,827 7,844
Other current assets 2,398 1,797
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Total current assets 63,814 59,895
Property, plant and equipment, net 55,046 56,633
Other assets 2,913 3,405
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Total assets $ 121,773 $ 119,933
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,265 $ 2,442
Accrued expenses and other liabilities 2,475 2,475
Income taxes payable 37 -
Dividends payable 1,525 1,524
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Total current liabilities 7,302 6,441
Deferred income taxes 5,175 5,191
Other noncurrent liabilities 712 687
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Total liabilities 13,189 12,319
Shareholders' equity:
Common stock 17 17
Capital in excess of par value 42,645 42,210
Retained earnings 66,166 64,383
Accumulated other comprehensive income (244) 1,004
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Total shareholders' equity 108,584 107,614
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Total liabilities and shareholders' equity $ 121,773 $ 119,933
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SUN HYDRAULICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three months ended
April 3, March 28,
2010 2009
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 3,311 $ 552
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,732 1,760
Loss on disposal of assets 1 -
Provision for deferred income taxes (16) (8)
Allowance for doubtful accounts (9) (2)
Stock-based compensation expense 286 228
Stock options income tax benefit (23) -
(Increase) decrease in:
Accounts receivable (4,409) 1,395
Inventories (1,079) 1,314
Income taxes receivable 1,485 (898)
Other current assets (601) 115
Other assets 485 90
(Increase) decrease in:
Accounts payable 823 (41)
Accrued expenses and other liabilities - 476
Income taxes payable 60 -
Other noncurrent liabilities 25 (35)
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Net cash provided by operating activities 2,071 4,946
Cash flows from investing activities:
Capital expenditures (668) (1,236)
Purchases of marketable securities (6,260) (6,230)
Proceeds from sale of marketable securities 3,199 -
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Net cash used in investing activities (3,729) (7,466)
Cash flows from financing activities:
Repayment of debt - (261)
Proceeds from exercise of stock options 28 -
Proceeds from stock issued 98 94
Dividends to shareholders (1,527) (1,503)
Stock options income tax benefit 23 -
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Net cash used in financing activities (1,378) (1,670)
Effect of exchange rate changes on cash and
cash equivalents (641) (456)
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Net decrease in cash and cash equivalents (3,677) (4,646)
Cash and cash equivalents, beginning of period 30,446 35,303
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Cash and cash equivalents, end of period $ 26,769 $ 30,657
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Supplemental disclosure of cash flow information:
Cash paid:
Interest $ - $ 9
Income taxes $ 331 $ 1,077
United United Elimin- Consoli-
States Korea Germany Kingdom ation dated
Three Months
Ended April 3, 2010
Sales to unaffiliated
customers $18,970 $4,192 $ 4,699 $ 3,744 $ - $ 31,605
Intercompany sales 5,097 - 53 338 (5,488) -
Operating income 2,870 626 1,117 336 15 4,964
Depreciation 1,328 22 111 251 - 1,712
Capital expenditures 566 64 5 33 - 668
Three Months
Ended March 28, 2009
Sales to unaffiliated
customers $15,621 $1,960 $ 4,167 $ 3,460 $ - $ 25,208
Intercompany sales 4,156 - 29 465 (4,650) -
Operating income (loss) (550) 86 713 454 101 804
Depreciation 1,370 26 124 233 - 1,753
Capital expenditures 1,131 22 4 79 - 1,236
