SWTX News Southwall Announces Earnings for Q3 2006
PALO ALTO, Calif.--(BUSINESS WIRE)--Southwall Technologies Inc. (OTCBB:SWTX) released its financial
results for the third quarter of fiscal 2006 following the close of
market on October 30, 2006.
Selected Third Quarter Financial Highlights
Third quarter revenues of $9.6 million decreased 20% from $12.0
million in the third quarter 2005 and decreased 15% from $11.3 million
in the second quarter 2006. The decrease in revenues was the result of
supplier quality problems and yield issues with one electronic display
product.
Third quarter 2006 gross margin was 41%, an increase of 7% from the
third quarter 2005 margin of 34% and an increase of 5% over second
quarter 2006 gross margin of 36%.
Third quarter 2006 net loss of $2.7 million included charges of $1.9
million relating to an accrual of leasehold obligations and other
expenses as a result of closing down the Palo Alto manufacturing
facility, $0.3 million relating to a severance package and $0.1
million accrual for settlement of an employee lawsuit. Third quarter
2005 net income was $15,000. Second quarter 2006 net loss of $1.4
million included charges of $0.2 million relating to net impairment
charge for long-lived assets and $0.3 million of restructuring charges.
Third quarter 2006 net loss per fully diluted share was $0.11,
compared to third quarter 2005 net income per fully diluted share of
$0.00 and compared to second quarter 2006 net loss per fully diluted
share of $0.06.
“Our third quarter 2006 gross margin is a
company record high at 41% as we now produce all of our products in our
manufacturing facility in Dresden, Germany. We continue to have good
demand for our products but are now faced with the challenge of
improving our product yields as we transition our Palo Alto products to
Germany,” commented George Boyadjieff,
Chairman and Interim CEO. “We will continue to
reduce operating costs and are committed to returning back to
profitability.”
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 Southwall website at www.southwall.com
and access the CCBN webcast icon by selecting “News
& Events, Press Releases” from the main
menu bar. From here, you can listen to the teleconference, assuming that
your computer system is configured properly.
How to Access the Call
Using access code # 8354340, 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 # 8354340.
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 or that margins may
decline, that there will be a decline in one or more portions of our
business, 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 September 30, 2006, is expected to be filed by
November 14, 2006.
SOUTHWALL TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
Nine months ended
Sept. 30,
Oct. 2,
Sept. 30,
Oct. 2,
2006
2005
2006
2005
Net revenues
$9,597
$
12,025
$
30,968
$
42,844
Cost of revenues
5,667
7,921
19,301
28,979
Gross profit
3,930
4,104
11,667
13,865
Operating expenses:
Research and development
1,659
1,334
5,376
3,047
Selling, general and administrative
4,674
2,104
9,761
6,461
Impairment charge (recoveries) for
long-lived assets
(325)
-
(117)
(170)
Restructuring charges
263
-
974
-
Total operating expenses
6,271
3,438
15,994
9,338
Income (loss) from operations
(2,341)
666
(4,327)
4,527
Interest expense, net
(169)
(210)
(550)
(778)
Other income (expenses), net
(18)
9
161
142
Income (loss) before provision for income taxes
(2,528)
465
(4,716)
3,891
Provision for income taxes
193
450
719
782
Net income (loss)
(2,721)
15
(5,435)
3,109
Deemed dividend on preferred stock
123
120
367
363
Net income (loss) attributable to common stockholders
$
(2,844)
$(105)
$
(5,802)
$
2,746
Net income (loss) per share:
Basic
$
(0.11)
$
0.00
$
(0.22)
$
0.10
Diluted
$
(0.11)
$
0.00
$
(0.22)
$
0.09
Shares used in computing net income (loss) per share:
