Message #64 From:
Jason Date: April 16, 2008 07:29:46 AM
Nighthawk Systems Reports Full Year and Fourth Quarter 2007 Earnings
Nighthawk Delivers Record Quarterly and Annual Revenue and
Achieves Positive Shareholder Equity
Nighthawk Initiates Guidance for 2008
Nighthawk Systems, Inc. (OTCBB: NIHK) (“Nighthawk”),
a leading provider of wireless and IP-based control devices and
solutions, today reported financial results for its full year and fourth
quarter ended December 31, 2007. Over the last twelve months the Company
delivered sequential quarterly revenue growth, completed the acquisition
and integration of a new business line, right-sized the Company and
achieved positive stockholders’ equity for the
first time in its operating history.
Revenues for the full year 2007 increased 84 percent to a record $1.7
million as compared to $899,000 for 2006. The revenue growth was led by
shipments of the Company’s flagship CEO700
remote disconnect units to new and repeat customers; sales of its
utility products more than doubled from the previous year level. While
Nighthawk considers the utility market its largest source of revenues
and anticipates an acceleration of the growth from this business in
2008, the Company additionally expects to generate significant revenues
from a number of initiatives it introduced in 2007, including new
opportunities with fault-tolerant, mission critical control systems for
emergency notification and monitoring purposes. Nighthawk also expects
significant revenue and cash flow contribution from the newly acquired
set-top box product line.
The Company reported a net loss before non-operating costs related to
funding efforts for 2007 of $3.3 million versus a net loss of $3.7
million for 2006. The Company incurred non-cash costs associated with a
$6 million preferred stock funding conducted during the fourth quarter
of 2007 of approximately $2.6 million. Including the funding costs, the
Company incurred a net loss applicable to common stockholders of $5.9
million or $0.05 per basic share in 2007 as compared to a net loss
applicable to common stockholders of $3.7 million or $0.05 per common
share in 2006. The Company’s gross profit on
revenue in 2007 was $378,000 yielding a gross margin of approximately 23
percent. The Company anticipates a meaningful increase in its gross
margins during 2008 as it achieves economies of scale from increased
sales, as well as improvements implemented in its manufacturing process.
Revenues for the fourth quarter of 2007 increased to a record $735,000,
a two and a half-fold increase compared to the same period in 2006 and
the sixth sequential quarter of revenue growth. As a result, the Company’s
net loss for the fourth quarter decreased to $991,000 from $1.1 million
in the comparable period in 2006.
The $6 million funding during the fourth quarter provided cash for the
acquisition of the set-top box operation and necessary working capital
subsequent to the acquisition. The funding led to the strengthening of
the Company’s balance sheet and a positive net
equity position of $3.6 million at December 31, 2007. Even with the
integration of the set-top business during the fourth quarter, selling,
general and administrative (“SG&A”)
expenses fell by 13% during 2007 compared to 2006. The Company
implemented operational efficiencies and costs management controls such
that it expects SG&A levels will remain fairly constant for the
foreseeable future.
H. Douglas Saathoff, Nighthawks Chief Executive Officer, commented, “Our
goal over the next several quarters is to achieve production economies
as we increase contract volumes, introduce new Nighthawk capabilities
that could provide both pricing flexibility and enhanced performance,
and continue to fine-tune our balance sheet. We anticipate consistent
sequential quarterly growth in revenues and progress towards
profitability. Now that we have completed the integration of a material
contributor to our future growth, we are able to concentrate on
enhancing both cash flows and the bottom line. We are projecting
revenues for 2008 of approximately $10 million and anticipate delivering
positive cash flows and profitability by the fourth quarter.
About Nighthawk Systems, Inc.
Nighthawk is a leading provider of intelligent devices and systems that
allow for the centralized, on-demand management of assets and processes.
Nighthawk products are used throughout the United States in a variety of
mission critical applications, including remotely turning on and off and
rebooting devices, activating alarms, and emergency notification,
including the display of custom messages. Nighthawk’s
IPTV set top boxes are utilized by the hospitality industry to provide
in-room standard and high definition television and video on demand.
Individuals interested in Nighthawk Systems can sign up to receive email
alerts by visiting the Company’s website at www.nighthawksystems.com.
Forward-looking statements
Statements contained in this release, which are not historical facts,
including statements about plans and expectations regarding business
areas and opportunities, acceptance of new or existing businesses,
capital resources and future business or financial results are
"forward-looking" statements. You should not place undue reliance on
these forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties, including, but not limited to,
customer acceptance of our products, our ability to raise capital to
fund our operations, our ability to develop and protect proprietary
technology, government regulation, competition in our industry, general
economic conditions and other risk factors which could cause actual
results to differ materially from those projected or implied in the
forward-looking statements. Although we believe the expectations
reflected in the forward-looking statements are reasonable, they relate
only to events as of the date on which the statements are made, and our
future results, levels of activity, performance or achievements may not
meet these expectations. We do not intend to update any of the
forward-looking statements after the date of this press release to
conform these statements to actual results or to changes in our
expectations, except as required by law.
NIGHTHAWK SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
2007
2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
428,484
$
270,910
Accounts receivable, net
313,644
167,577
Inventories
359,636
112,513
Other current assets
93,684
206,758
TOTAL CURRENT ASSETS
1,195,448
757,758
Furniture, fixtures and equipment, net
269,619
17,994
Intangible assets, net
1,218,677
20,270
Debt issuance costs
310,428
291,571
Goodwill
3,397,537
-
$
5,196,261
$
329,835
TOTAL ASSETS
$
6,391,708
$
1,087,593
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable
$
327,668
$
214,666
Accrued expenses
502,822
524,813
Deposits and other
218,148
-
Line of credit and notes payable:
Line of credit
18,892
19,792
Convertible notes, net of discount of $883,117 in 2007 and
$1,160,195 in 2006
1,135,061
1,901,122
Other notes
558,320
347,508
TOTAL LIABILITIES (all current)
2,760,911
3,007,901
STOCKHOLDERS' EQUITY (DEFICIT)
Series A Preferred stock; $0.001 par value; 5,000,000 shares
authorized; no shares issued and outstanding
-
-
Series B Preferred stock; $0.001 par value; 1,000,000 shares
authorized; 600,000 shares issued and outstanding, liquidation
preference of $6 million
5,417,699
-
Common stock; $0.001 par value; 200,000,000 shares authorized;
134,433,060 issued and outstanding
134,433
85,681
Additional paid in capital
13,091,713
9,719,022
Accumulated deficit
(15,013,048
)
(11,725,011
)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
3,630,797
(1,920,308
)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
