Southwall Technologies Announces 41 Percent Year-over-Year Increase in First-Quarter Fiscal 2005 Revenues
PALO ALTO, Calif.
Southwall Technologies
Roween Nacionales, 650-962-9111
rnacionales@southwall.com
Southwall Technologies Inc. (OTCBB:SWTX) released its financial results for the first quarter fiscal 2005 following the close of market on May 2, 2005.
Selected First Quarter 2005 Financial Highlights:
-- Revenues of $15.6 million, an increase of 41% from $11.1 million in the first quarter of 2004 and a decrease of 2% from $16.0 million in the fourth quarter of 2004.
-- Gross profit of $4.4 million, an increase of 68% from $2.6 million in the first quarter of 2004 and a decrease of 36% from $6.8 million in the fourth quarter of 2004.
-- Net income of $1.7 million, an increase of $8.4 million over the first quarter of 2004 and a decrease of $1.5 million, or 47% from the fourth quarter of 2004.
-- Net income per fully diluted share of $0.05, compared to net loss per share of $0.53 in the first quarter of 2004 and net income of $0.10 per fully diluted share in the fourth quarter of 2004.
"Our first quarter 2005 financial results delivered impressive year over year revenue and profit growth. It also represents Southwall's fourth consecutive profitable quarter," said Thomas G. Hood, Southwall's president and chief executive officer. "For the balance of 2005, our focus remains on profitable operations while continuing to build out our longer term growth strategy centered on bringing innovative new products to the three core markets we serve."
In addition, the Company announced today that it has migrated its corporate banking relationship from Pacific Business Funding to Wells Fargo HSBC Trade Bank N.A. effective April 28, 2005. "As a direct result of dramatically improving our financial results over the last year, we were able to move our banking relationship to Wells Fargo effective last Thursday," said Maury Austin, Southwall's chief financial officer. "This change will provide Southwall more potential financing options in addition to lowering our overall cost of financing," added Austin.
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 # 5253121, 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 # 5253121.
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.
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
April 3, March 28,
2005 2004
------------ ------------
Net revenues $15,647 $11,067
Cost of revenues 11,270 8,466
------------ ------------
Gross profit 4,377 2,601
------------ ------------
Operating expenses:
Research and development 696 810
Selling, general and administrative 2,026 3,063
Recoveries for long-lived assets (170) -
------------ ------------
Total operating expenses 2,552 3,873
------------ ------------
Income (loss) from operations 1,825 (1,272)
Interest expense, net (271) (675)
Cost of warrants issued - (4,818)
Other 292 430
------------ ------------
Income (loss) before provision for income
taxes 1,846 (6,335)
Provision for income taxes 147 355
------------ ------------
Net income (loss) 1,699 (6,690)
Deemed dividend on redeemable preferred
stock 123 -
------------ ------------
Net income (loss) attributable to common
stockholders $1,576 ($6,690)
============ ============
Net income (loss) per share:
Basic $0.06 $(0.53)
Diluted $0.05 $(0.53)
Weighted average shares used in computing
net income (loss) per share
Basic 26,613 12,548
Diluted 33,181 12,548
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
April 3, December 31,
2005 2004
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $4,519 $4,547
Restricted cash 475 686
Accounts receivable, net 6,401 6,186
Inventories, net 8,363 8,355
Other current assets 2,354 1,757
------------ ------------
Total current assets 22,112 21,531
Property, plant and equipment, net 19,596 21,110
Restricted cash loans 1,093 1,149
Other assets 1,130 1,157
------------ ------------
Total assets $43,931 $44,947
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt and
capital leases $1,306 $1,463
Short term obligations 2,975 2,975
Accounts payable 2,536 2,544
Accrued compensation 1,001 1,378
Other accrued liabilities 6,164 6,643
------------ ------------
Total current liabilities 13,982 15,003
Term debt and capital leases 10,468 11,644
Government grants advanced 475 505
Other long term liabilities 3,134 3,222
------------ ------------
Total liabilities 28,059 30,374
------------ ------------
Series A, redeemable convertible preferred
stock 4,810 4,810
------------ ------------
Stockholders' equity:
Common stock 26 26
Capital in excess of par value 78,228 77,957
Accumulated other comprehensive income:
Translation gain on subsidiary 3,687 4,358
Accumulated deficit (70,879) (72,578)
------------ ------------
Total stockholders' equity 11,062 9,763
Total liabilities, redeemable preferred
stock and stockholders' equity $43,931 $44,947
