PHAZAR CORP, (Nasdaq: ANTP) announced today the unaudited results of operations for the quarter ended August 31, 2009.
First Quarter Fiscal Year 2010
The Company recognized a net loss of $107,948 or $.05 per share for the first quarter, compared to net income of $93,792 or $.04 per share, in last year’s fiscal first quarter.
Revenues are down $112,860 or 5.6% from $2,009,712 for the first quarter in fiscal year 2009 to $1,896,852 for the same quarter in fiscal year 2010.
On a positive note, gross profit margins increased by 6%, from 38% for the three month period ended August 31, 2008 up to 44% for the three month period ended August 31, 2009. The increase in gross profit margins is attributable to lower raw material costs and an improved product mix. Taking advantage of the lower raw material costs and recognizing the historically low interest rates earned on idle cash balances, we modestly increased finished goods inventory as well.
Sales and administrative expenses are up $295,040, or 38% which included a $217,000 increase in research and development costs quarter over quarter associated with further development of our mesh radio wireless networking product line. Other income is down $73,112, or 59% as the Company no longer has tax-exempt investments in auction-rate securities with high yields.
Commenting on the quarter, Garland P. Asher, Chairman and CEO, said “Given the long lead times in production of much of our product line, 90 to 120 days on average, the lower sales reported in the first quarter reflected the soft bookings we experienced in the February through May period. As bookings have shown modest improvement in the first quarter, revenues should also show similar improvement in the current quarter. Notwithstanding, we continue to aggressively monitor our controllable expenses and husband our cash. Cash balances at quarter end were approximately $2.9 million despite the aforementioned increase in inventory. Also, encouragingly, as discussed below, our backlog increased for the first time in three quarters.”
Backlog of Orders
The Company’s backlog of orders on August 31, 2009, totaled $2,135,560 compared to $1,970,266 at August 31, 2008, an increase of 8.4%. Backlog at our May 31, 2009 year-end was $1,741,746. Incoming orders for the three month period totaled $2,309,869 versus $1,492,888 for the comparable period last year. The Company’s book to ship ratio was 121% for the three month period ended August 31, 2009 compared to 74% for the comparable three month period last year.
More information and analysis of PHAZAR CORP’s financial results will be provided in the management discussion and analysis of financial condition and results of operations in the Form 10-Q for the first quarter ended August 31, 2009, estimated to be filed with the Securities and Exchange Commission on or around October 15, 2009.
The Form 10-Q will also be available at the SEC’s website at www.sec.gov and PHAZAR CORP’S website at www.phazarcorp.com.
Product information is available at www.antennaproducts.com, www.truemeshnetworks.com and www.phazar.com.
The common stock of PHAZAR CORP is listed on the NASDAQ Capital Market under the trading symbol “ANTP”. This press release contains forward-looking information within the meaning of Section 29A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performances and underlying assumption and other statements, which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties, which could cause actual results, or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties, but there can be no assurance that management’s expectations, beliefs or projections will result, or be achieved, or accomplished.
| PHAZAR CORP AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| FOR THE PERIODS ENDED AUGUST 31, 2009 AND AUGUST, 2008 | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| August 31, 2009 | August 31, 2008 | |||||||
| Sales and contract revenues | $ | 1,896,852 | $ | 2,009,712 | ||||
| Cost of sales and contracts | 1,055,118 | 1,253,734 | ||||||
| Gross profit | 841,734 | 755,978 | ||||||
| Gross profit margin % | 44 | % | 38 | % | ||||
| Sales and administration expenses | 1,071,180 | 776,140 | ||||||
| Operating loss | (229,446 | ) | (20,162 | ) | ||||
| Other income | ||||||||
| Interest income | 35,718 | 89,408 | ||||||
| Other income | 14,771 | 34,193 | ||||||
| Total other income | 50,489 | 123,601 | ||||||
| Income (loss) from operations before income taxes | (178,957 | ) | 103,439 | |||||
| Income tax provision (benefit) | (71,009 | ) | 9,647 | |||||
| Net income (loss) | $ | (107,948 | ) | $ | 93,792 | |||
| Basic earnings (loss) per common share | $ | (0.05 | ) | $ | 0.04 | |||
| Diluted earnings (loss) per common share | $ | (0.05 | ) | $ | 0.04 | |||
| Basic weighted average of common shares outstanding | 2,297,334 | 2,360,706 | ||||||
| Diluted weighted average of common shares outstanding | 2,297,334 | 2,360,706 | ||||||
| PHAZAR CORP AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| AUGUST 31, 2009 AND MAY 31, 2009 | ||||||||
| August 31, 2009 | May 31, 2009 | |||||||
| (Unaudited) | (Audited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 2,927,442 | $ | 3,320,647 | ||||
| Accounts receivable: | ||||||||
| Trade, net of allowance for doubtful accounts | ||||||||
| of $2,002 as of August 31, 2009 and May 31, 2009 | 566,399 | 663,499 | ||||||
| Inventories | 2,715,209 | 2,531,816 | ||||||
| Prepaid expenses and other assets | 170,130 | 76,261 | ||||||
| Income taxes receivable | 404,559 | 343,145 | ||||||
| Deferred income taxes | 74,853 | 74,853 | ||||||
| Total current assets | 6,858,592 | 7,010,221 | ||||||
| Property and equipment, net | 1,137,747 | 1,140,141 | ||||||
Long-term deferred income tax | 127,003 | 116,995 | ||||||
| TOTAL ASSETS | $ | 8,123,342 | $ | 8,267,357 | ||||
LIABILITIES AND SHAREHOLDERS'' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 221,257 | $ | 215,840 | ||||
| Accrued expenses | 438,383 | 486,666 | ||||||
| Deferred revenues | - | 16,884 | ||||||
| Total current liabilities | 659,640 | 719,390 | ||||||
| Total liabilities | 659,640 | 719,390 | ||||||
| COMMITMENTS AND CONTINGENCIES | - | - | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
Preferred Stock, $1 par, 2,000,000 shares authorized, none issued | - | - | ||||||
Common stock, $0.01 par, 6,000,000 shares authorized | 23,731 | 23,718 | ||||||
| Additional paid in capital | 4,008,453 | 3,974,476 | ||||||
| Treasury stock, at cost, 74,691 and 71,341 shares in 2010 and 2009 | (215,918 | ) | (205,611 | ) | ||||
| Retained earnings | 3,647,436 | 3,755,384 | ||||||
| Total shareholders’ equity | 7,463,702 | 7,547,967 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS'' EQUITY | $ | 8,123,342 | $ | 8,267,357 | ||||
| PHAZAR CORP AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| FOR THE PERIODS ENDED AUGUST 31, 2009 AND AUGUST 31, 2008 | |||||||
| (Unaudited) | |||||||
| Three Months Ended | |||||||
| August 31, 2009 | August 31, 2008 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income (loss) | $ | (107,948 | ) | $ | 93,792 | ||
Adjustments to reconcile net income (loss) to net cash | |||||||
| Depreciation | 33,595 | 25,965 | |||||
| Stock based compensation | 33,990 | 139,060 | |||||
| Tax benefit for employee stock options | - | ||||||
| Deferred federal income tax | (10,008 | ) | (37,489 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 97,100 | (97,106 | ) | ||||
| Inventory | (183,393 | ) | (241,861 | ) | |||
| Income taxes receivable | (61,414 | ) | 47,135 | ||||
| Prepaid expenses | (93,869 | ) | (28,813 | ) | |||
| Accounts payable | 5,417 | (24,947 | ) | ||||
| Accrued expenses | (48,283 | ) | (24,098 | ) | |||
| Deferred revenues | (16,884 | ) | 76,976 | ||||
| Net cash used by operating activities | (351,697 | ) | (71,380 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchase of property and equipment | (31,201 | ) | - | ||||
| Purchase of treasury stock | (10,307 | ) | - | ||||
| Net cash used in investing activities | (41,508 | ) | - | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from exercise of stock options | - | - | |||||
| Federal income tax benefit-stock options expensed | - | - | |||||
| Net cash provided by financing activities | - | - | |||||
| Net decrease in cash and cash equivalents | (393,205 | ) | (71,380 | ) | |||
| CASH AND CASH EQUIVALENTS, beginning of period | 3,320,647 | 2,446,563 | |||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 2,927,442 | $ | 2,375,183 | |||
Contacts:
Antenna Products Corporation
Kathy Kindle, 940-325-3301
Fax:
940-325-0716
kindle@phazarcorp.com