Message #20 From:
NewsBot Date: March 2, 2007 01:05:00 PM
SWTX News Southwall Announces Q4 2006 Results
PALO ALTO, Calif.--(BUSINESS WIRE)--Southwall Technologies Inc. (OTCBB:SWTX) announced fourth quarter 2006 revenue of $9.2 million, down 4% from the third quarter of 2006 and down 23% from the fourth quarter of 2005. The revenue decline was primarily due to constrains on machine capacity needed to meet customer demand and supplier quality issues.
Fourth quarter 2006 net loss was $75,000, or a loss of $0.01 per fully diluted share, as compared with net income of $211,000, or $0.01 per fully diluted share, in the fourth quarter of 2005. Fourth quarter 2006 gross margin was 41%, up 10 percentage points from the fourth quarter 2005, primarily due to improving yields and the successful transfer of manufacturing from Palo Alto, California, to its state-of-the-art facility in Germany.
“We are excited about our 2006 gross margin results,” said Dr. R. Eugene Goodson, President and CEO. “They are a direct result of our well-executed manufacturing plan, yield improvement programs, and the focus on improved efficiency throughout the organization. We plan to capitalize on this momentum and drive for even greater operational efficiency as we face a challenge of softening demand on the display market. Our other markets are growing or stable.”
The Company will hold a teleconference at 2:00 p.m. PT / 5:00 p.m. ET today to discuss the results in more detail.
This call will be open to all investors via a webcast accessible at www.southwall.com and by phone. Both phone and webcast replays will be available for approximately one week after the teleconference, beginning approximately two hours after the call ends.
How to Access the Webcast
Go to the Investor Relations page of the Southwall website at www.southwall.com and click on the CCBN webcast icon. From here, you can listen to the teleconference, assuming that your computer system is configured properly.
How to Access the Call
Using access code # 7196089, domestic U.S. callers can dial 877-481-7179, while international callers can dial 706-634-7186. The phone replay will be accessible at 800-642-1687 or 706-645-9291, access code # 7196089.
About Southwall Technologies Inc.
Southwall Technologies Inc. designs and produces thin film coatings that selectively absorb, reflect or transmit light. Southwall products are used in a number of automotive, electronic display and architectural glass products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall is an ISO 9001:2000-certified manufacturer and sells advanced thin film coatings to over 25 countries around the world. Southwall’s customers include Audi, BMW, DaimlerChrysler, DuPont, Mitsui Chemicals, Peugeot-Citroën, Philips, Pilkington, Renault, Saint-Gobain Sekurit, and Volvo.
This press release may contain forward-looking statements, including, without limitation, statements regarding the Company's expectations, beliefs, intentions, or strategies regarding the future. All forward-looking statements in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented. These risks include the possibility that the Company's expected future results will be materially worse than estimated, that the Company may not continue to be profitable in future quarters or may not be able to achieve future long-term growth, that there will be a decline in one or more portions of our business in 2007 or thereafter, that the Company will not be successful in improving operations performance or controlling costs, that the Company will suffer a decline in manufacturing or financial effectiveness, that the Company's new product development will not be successful, that there may be decreasing demand in markets in addition to the electronic display market, and that the Company will not be able to secure additional financing if required, as well as risks associated with its failure to meet potential covenant requirements under future credit facilities. Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2005, filed on March 29, 2006, and the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006, filed on November 13, 2006.
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
Twelve months ended
December 31,
December 31,
December 31,
December 31,
2006
2005
2006
2005
Net Revenues
$ 9,241
$ 11,910
$ 40,209
$ 54,754
Cost of revenues
5,445
8,262
24,746
37,241
Gross profit
3,796
3,648
15,463
17,513
Operating expenses:
Research & Development
1,406
2,057
6,782
5,104
Selling, general and administrative
2,244
1,871
12,005
8,332
Impairment recoveries for long-lived assets
(97)
-
(214)
(170)
Restructuring charges (recoveries)
(59)
-
915
-
Total operating expenses
3,494
3,928
19,488
13,266
Income (loss) from operations
302
(280)
(4,025)
4,247
Interest expense, net
(187)
(195)
(737)
(973)
Other income (loss), net
49
(67)
210
75
Income (loss) before provision for income taxes
164
(542)
(4,552)
3,349
Provision (benefit) for income taxes
239
(753)
958
29
Net income (loss)
(75)
211
(5,510)
3,320
Deemed dividend on preferred stock
122
127
489
490
Net income (loss) attributable to common stockholders
$ (197)
$ 84
$ (5,999)
$ 2,830
Net income (loss) per share:
Basic
$ (0.01)
$ 0.00
$ (0.22)
$ 0.11
Diluted
$ (0.01)
$ 0.01
$ (0.22)
$ 0.10
Weighted average shares used in computing net income (loss) per share:
Basic
27,073
26,790
26,949
26,743
Diluted
27,073
32,375
26,949
32,895
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
December 31,
2006
2005
ASSETS
Current assets:
Cash and cash equivalents
$ 5,524
$ 6,600
Restricted cash
209
402
Accounts receivable, net
3,608
6,780
Inventories, net
5,598
5,879
Other current assets
1,064
982
Total current assets
16,003
20,643
Property, plant and equipment, net
17,232
16,857
Restricted cash loans
1,111
995
Other assets
1,155
1,146
Total assets
$ 35,501
$ 39,641
LIABILITIES, PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt and capital leases
$ 1,059
$ 1,317
Short term obligations
2,996
2,996
Accrued payable
955
1,402
Accrued compensation
859
1,161
Other accrued liabilities
6,449
5,076
Total current liabilities
12,318
11,952
Term debt and capital leases
8,568
8,790
Government grants advanced
220
396
Other long term liabilities
2,550
2,564
Total liabilities
23,656
23,702
Series A, convertible preferred stock
4,810
4,810
Stockholders' equity:
Common stock
27
27
Capital in excess of par value
78,081
77,828
Accumulated other comprehensive income:
Translation gain on subsidiary
3,696
2,532
Accumulated deficit
(74,769)
(69,258)
Total stockholders' equity
7,035
11,129
Total liabilities, preferred stock and stockholders' equity
