Phoenix Gold Announces First Quarter
Results
PORTLAND, Ore., Feb. 14 Phoenix Gold International, Inc. today reported net earnings of
$6,000, or $0.00 per diluted share, for its first quarter of fiscal 2001,
which ended December 31, 2000, compared to net earnings of $211,000, or
$0.07 per diluted share, in last year's first quarter. Revenues decreased
19% for the three months ended December 31, 2000 to $5.6 million from
$7.0 million in the comparable quarter a year ago.
"The revenue shortfall adversely affected our results for the quarter,"
stated Keith A. Peterson, Chairman, President and Chief Executive Officer.
"The combination of decreased sales to a significant customer and continuing
softness in the international marketplace created a difficult operating
environment for the Company. We do expect improved results in the latter half
of the fiscal year as we realize the benefits from the purchase of AudioSource
and the introduction of new products."
"We expect to begin shipping our new contractor series of pro sound
amplifiers this month," continued Mr. Peterson. "We received positive
comments about these products during last month's National Association of
Music Merchants show. We also introduced our new line of car audio products,
the Tantrum series, to our dealers and distributors at the recent Consumer
Electronics Show in Las Vegas. Additionally, we are introducing several new
electronic, speaker and accessory products during the remainder of fiscal
2001."
"AudioSource will enable the Company to enter new markets and distribution
channels," disclosed Timothy G. Johnson, Executive Vice President and Chief
Operating Officer. "We are aggressively pursuing the opportunities it
presents to leverage our combined product offerings. It should also provide
some balance to our normally seasonal operating cycle."
The Company also provided the following information on its first quarter
sales and outlook for fiscal 2001. Domestic sales decreased $914,000, or
18%, to $4.3 million, primarily due to a $657,000 decrease in sales of
electronics to a significant customer. Additionally, sales of speakers to a
domestic OEM customer decreased during the quarter. The amount and timing of
purchase orders from these customers may fluctuate from quarter to quarter.
The Company expects improved sales to the significant customer during its
second fiscal quarter. International sales decreased $430,000, or 24%, to
$1.3 million due to continuing softness in all of the Company's international
markets. The Company expects international sales for fiscal 2001 to remain at
levels lower than historically achieved.
Phoenix Gold also disclosed that Dr. Stephen P. Leigh joined the Company
as Vice President of Engineering. Dr. Leigh has over ten years of experience
in designing amplifiers and speakers for the audio market. His previous
experience includes engineering and manufacturing responsibilities for
Esoteric Audio USA and Precision Power, Inc.
The Company also announced that it had adopted Emerging Issues Task Force
guidelines for accounting for shipping and handling fees and costs. Net sales
and cost of sales amounts reported in prior periods have been reclassified to
conform to the current presentation. The reclassification had no effect on
previously reported gross profit, net earnings or shareholders' equity.
Phoenix Gold International, Inc. designs, manufactures, markets and sells
innovative, high quality, high performance electronics, accessories and
speakers for the audio market.
This press release may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including,
without limitation, statements as to expectations, beliefs and future
financial performance, and are based on current expectations and are subject
to certain risks, trends and uncertainties that could cause actual results to
vary from those projected, which variances may have a material adverse effect
on the Company. Among the factors that could cause actual results to differ
materially are the following: competitive factors; potential fluctuations in
quarterly results and seasonality; the adverse effect of reduced discretionary
consumer spending; dependence on a significant customer; the need for the
introduction of new products and product enhancements; dependence on
suppliers; control by current shareholders; high inventory requirements;
business conditions in international markets; the Company's dependence on key
employees; the need to protect intellectual property; environmental
regulation; and the potential delisting of the Company's common stock, as well
as other factors discussed in Exhibit 99.1 to the Phoenix Gold International,
Inc. Annual Report on Form 10-K for the fiscal year ended September 24, 2000
which exhibit is hereby incorporated by reference. Given these uncertainties,
readers are cautioned not to place undue reliance on the forward-looking
statements. The Company does not intend to update its forward-looking
statements.
PHOENIX GOLD INTERNATIONAL, INC.
BALANCE SHEETS
(Unaudited)
Dec. 31, Sept. 30,
2000 2000
ASSETS
Current assets:
Cash and cash equivalents $79,421 $1,653,683
Accounts receivable, net 4,321,570 4,170,885
Inventories:
Raw materials and work-in-process 2,758,652 2,598,709
Finished goods and supplies 4,158,174 3,146,151
6,916,826 5,744,860
Prepaid expenses 368,549 229,049
Deferred taxes 350,000 315,000
Total current assets 12,036,366 12,113,477
Property and equipment, net 850,030 807,139
Goodwill, net 316,951 138,459
Deferred taxes 615,000 610,000
Other assets 553,954 285,127
Total assets $14,372,301 $13,954,202
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit $345,338 $--
Accounts payable 968,441 797,249
Accrued payroll and benefits 418,401 557,099
Other accrued expenses 426,100 346,318
Income taxes payable 19,911 40,910
Total current liabilities 2,178,191 1,741,576
Deferred gain on sale of facility 833,659 858,178
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock;
Authorized - 5,000,000 shares; none outstanding -- --
Common stock, no par value;
Authorized - 20,000,000 shares
Issued and outstanding -
3,026,945 and 3,026,945 shares 6,550,928 6,550,928
Retained earnings 4,809,523 4,803,520
Total shareholders' equity 11,360,451 11,354,448
Total liabilities and shareholders' equity $14,372,301 $13,954,202
PHOENIX GOLD INTERNATIONAL, INC.
STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
December 31,
2000 1999
Net sales $5,630,957 $6,975,646
Cost of sales 4,277,414 5,174,877
Gross profit 1,353,543 1,800,769
Operating expenses:
Selling 795,467 926,769
General and administrative 577,778 531,387
Total operating expenses 1,373,245 1,458,156
Income (loss) from operations (19,702) 342,613
Other income (expense):
Interest income 28,837 8,360
Interest expense (2,832) --
Other income, net 3,700 --
Total other income (expense) 29,705 8,360
Earnings before income taxes 10,003 350,973
Income tax expense (4,000) (139,000)
Net earnings $6,003 $211,973
Earnings per share - basic and diluted $0.00 $0.07
Average shares outstanding - basic and diluted 3,026,945 3,156,721
