Message #15 From:
NewsBot Date: July 31, 2006 01:05:00 PM
SWTX News Southwall Announces Earnings in Q2 2006
PALO ALTO, Calif.--(BUSINESS WIRE)--July 31, 2006--Southwall Technologies Inc. (OTCBB:SWTX) released its financial results for the second quarter of fiscal 2006 following the close of market on July 31, 2006.
Selected Second Quarter Financial Highlights
-- Second quarter revenues of $11.3 million decreased 25% from $15.2 million in the second quarter of 2005 and increased 13% from $10.0 million in the first quarter of 2006.
-- Second quarter 2006 gross margin was 36%, an increase of 1% from the second quarter 2005 margin of 35% and a decrease of 2% over first quarter of 2006 gross margin of 37%.
-- Second quarter 2006 net loss was $1.4 million, as compared to second quarter 2005 net income of $1.4 million and a first quarter 2006 net loss of $1.3 million.
-- Second quarter 2006 net loss per fully diluted share was $0.06, as compared to second quarter 2005 net income per fully diluted share of $0.04 and first quarter 2006 net loss per fully diluted share of $0.05.
"We continued to reduce our cost of operations in the second quarter of 2006 by completing the closure of our Palo Alto manufacturing operations in April. Furthermore, in July we completed the relocation of our headquarters to a new location in Palo Alto," commented Thomas G. Hood, President and CEO. "We expect these initiatives to reduce our fixed costs, while we continue to invest in our research and development activities aimed at reducing product costs and developing new products."
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 # 2730991, 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 # 2730991.
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-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 2006 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, 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 June 30, 2006, will be filed on August 14, 2006.
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Six months ended
June 30, July 3, June 30, July 3,
2006 2005 2006 2005
-------- -------- -------- --------
Net revenues $11,337 $15,172 $21,371 $30,819
Cost of revenues 7,268 9,788 13,634 21,058
-------- -------- -------- --------
Gross profit 4,069 5,384 7,737 9,761
-------- -------- -------- --------
Operating expenses:
Research and development 2,071 1,017 3,717 1,713
Selling, general and
administrative 2,525 2,331 5,087 4,357
Impairment charge (recoveries)
for long-lived assets 208 - 208 (170)
Restructuring charges 259 - 711 -
-------- -------- -------- --------
Total operating expenses 5,063 3,348 9,723 5,900
-------- -------- -------- --------
Income (loss) from operations (994) 2,036 (1,986) 3,861
Interest expense, net (189) (297) (381) (568)
Other income (expenses), net 29 (159) 179 133
-------- -------- -------- --------
Income (loss) before provision for
income taxes (1,154) 1,580 (2,188) 3,426
Provision for income taxes 233 185 526 332
-------- -------- -------- --------
Net income (loss) (1,387) 1,395 (2,714) 3,094
Deemed dividend on preferred
stock 122 120 244 243
-------- -------- -------- --------
Net income (loss) attributable to
common stockholders $(1,509) $ 1,275 $(2,958) $ 2,851
======== ======== ======== ========
Net income (loss) per share:
Basic $ (0.06) $ 0.05 $ (0.11) $ 0.11
Diluted $ (0.06) $ 0.04 $ (0.11) $ 0.09
Shares used in computing net income
(loss) per share:
Basic 26,939 26,782 26,882 26,697
Diluted 26,939 33,094 26,882 33,138
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2006 2005
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,211 $ 6,600
Restricted cash 342 402
Accounts receivable, net 5,961 6,780
Inventories, net 5,067 5,879
Other current assets 866 982
------------ ------------
Total current assets 16,447 20,643
Property, plant and equipment, net 17,338 16,857
Restricted cash loans 1,073 995
Other assets 1,162 1,146
------------ ------------
Total assets $ 36,020 $ 39,641
============ ============
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 1,214 $ 1,317
Line of credit 2,996 2,996
Accounts payable 992 1,402
Accrued compensation 670 1,161
Other accrued liabilities 4,195 5,076
------------ ------------
Total current liabilities 10,067 11,952
Term debt 8,832 8,790
Government grants advanced 342 396
Other long term liabilities 2,480 2,564
------------ ------------
Total liabilities 21,721 23,702
------------ ------------
Series A, convertible preferred stock 4,810 4,810
------------ ------------
Stockholders' equity:
Common stock 27 27
Capital in excess of par value 78,057 77,828
Accumulated other comprehensive income:
Translation gain on subsidiary 3,377 2,532
Accumulated deficit (71,972) (69,258)
------------ ------------
Total stockholders' equity 9,489 11,129
------------ ------------
Total liabilities, preferred stock and
stockholders' equity $ 36,020 $ 39,641
============ ============
