Message #11 From:
NewsBot Date: October 31, 2005 10:15:00 AM
SWTX News Southwall Announces Q3 2005 Earnings
PALO ALTO, Calif.--(BUSINESS WIRE)--Oct. 31, 2005--Southwall Technologies Inc. (OTCBB:SWTX) released its financial results for the third quarter and fiscal 2005 following the close of market on October 31, 2005.
Selected Third Quarter Financial Highlights
-- Third quarter revenues of $12.0 million decreased 25% from $15.9 million in the third quarter of 2004 and decreased 21% from $15.2 million in the second quarter of 2005.
-- Third quarter 2005 gross margin was 34%, a decrease of 2% from the third quarter 2004 and a 1% decrease from the second quarter of 2005 gross margin of 35%.
-- Third quarter 2005 net income before deemed dividend of $15,000 decreased by $2.1 million compared to the third quarter of 2004 and decreased $1.4 million compared to the second quarter of 2005.
-- Third quarter 2005 net loss attributable to common stockholders of $105,000 was $0.00 per fully diluted share, third quarter 2004 net income attributable to common stockholders of $2.1 million was $0.07 per fully diluted share, and second quarter of 2005 net income attributable to common stockholders of $1.3 million was $0.04 per fully diluted share.
"Southwall's third quarter revenues and net income finished on the low range of expectations," commented Thomas G. Hood, President and CEO. "Nonetheless, we continued to enlarge and strengthen our technical staff during the quarter in order to develop a strong product foundation for future growth."
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 # 1185925, 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 # 1185925.
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, Hewlett-Packard, Mitsubishi Electric, Mitsui Chemicals, Peugeot-Citroen, 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 2005 or thereafter, that the Company will suffer a decline in manufacturing or financial effectiveness, 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, 2004, filed on March 30, 2005, and the Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2005, filed on August 5, 2005.
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Nine months ended
Oct. 2, Sept. 26, Oct. 2, Sept. 26,
2005 2004 2005 2004
---------- --------- --------- ---------
Net revenues $ 12,025 $ 15,932 $ 42,844 $ 41,547
Cost of revenues 7,921 10,152 28,979 27,554
---------- --------- --------- ---------
Gross profit 4,104 5,780 13,865 13,993
---------- --------- --------- ---------
Operating expenses:
Research and development 1,334 841 3,047 2,422
Selling, general and
administrative 2,104 2,308 6,461 7,891
Impairment recoveries for
long-lived assets -- (85) (170) (1,513)
---------- --------- --------- ---------
Total operating
expenses 3,438 3,064 9,338 8,800
---------- --------- --------- ---------
Income from operations 666 2,716 4,527 5,193
Interest expense, net (210) (444) (778) (1,754)
Cost of warrants issued -- (491) -- (6,782)
Other income (loss), net 9 53 142 371
---------- --------- --------- ---------
Income (loss) before
provision for income taxes 465 1,834 3,891 (2,972)
Provision (benefit) for
income taxes 450 (298) 782 400
---------- --------- --------- ---------
Net income (loss) 15 2,132 3,109 (3,372)
Deemed dividend on redeemable
preferred stock 120 -- 363 --
---------- --------- --------- ---------
Net income (loss)
attributable to common
stockholders $ (105) $ 2,132 $ 2,746 $ (3,372)
---------- --------- --------- ---------
Net income (loss) per share:
Basic $ 0.00 $ 0.17 $ 0.11 $ (0.27)
Diluted $ 0.00 $ 0.07 $ 0.09 $ (0.27)
Weighted average shares used
in computing net income
(loss) per share
Basic 26,788 12,550 26,727 12,550
Diluted 32,720 31,218 32,999 12,550
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
October 2, December 31,
2005 2004
----------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 8,066 $ 4,547
Restricted cash 417 686
Accounts receivable, net 4,739 6,186
Inventories, net 7,243 8,355
Other current assets 1,056 1,757
----------- -------------
Total current assets 21,521 21,531
Property, plant and equipment, net 17,523 21,110
Restricted cash loans 1,016 1,149
Other assets 1,135 1,157
----------- -------------
Total assets $ 41,195 $ 44,947
=========== =============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt and
capital leases $ 1,327 $ 1,463
Short term obligations 2,996 2,975
Accounts payable 930 2,544
Accrued compensation 1,280 1,378
Other accrued liabilities 5,873 6,643
----------- -------------
Total current liabilities 12,406 15,003
Term debt and capital leases 9,188 11,644
Government grants advanced 417 505
Other long term liabilities 3,073 3,222
----------- -------------
Total liabilities 25,084 30,374
----------- -------------
Series A, redeemable convertible
preferred stock 4,810 4,810
----------- -------------
Stockholders' equity:
Common stock 27 26
Capital in excess of par value 77,953 77,957
Accumulated other comprehensive income:
Translation gain on subsidiary 2,790 4,358
Accumulated deficit (69,469) (72,578)
----------- -------------
Total stockholders' equity 11,301 9,763
----------- -------------
Total liabilities, redeemable preferred
stock and stockholders' equity $ 41,195 $ 44,947
=========== =============
