Phoenix Gold Announces Second Quarter
Results
PORTLAND, Ore., April 20 Phoenix Gold International, Inc. today reported a net loss for
the second quarter of fiscal 2001 which ended March 31, 2001. The net loss
was $157,000, or $0.05 per diluted share, for the three months ended
March 31, 2001 as compared to net earnings of $241,000, or $0.08 per diluted
share, in last year's second quarter. Revenue for the second quarter of
fiscal 2001 was $6.0 million, a decrease of 8% from revenue of $6.6 million in
the second quarter of fiscal 2000.
"As previously disclosed, a slowing domestic market as well as continuing
softness in international markets has created a difficult sales environment,"
stated Keith A. Peterson, Chairman, President and Chief Executive Officer.
"International sales decreased 26% while domestic sales, which benefited from
a full quarter of sales of AudioSource products, decreased 2%. We are
encouraged by the initial success of the recent AudioSource acquisition."
"We began shipping our new contractor series of professional sound
amplifiers earlier this month," continued Mr. Peterson. "Further, we are
nearing the completion of several new product development activities,
including our new Tantrum series of car audio amplifiers and Titanium series
of car audio speakers. We expect these products to begin to ship in the
third quarter."
The Company also provided the following information on its second quarter
and outlook for fiscal 2001: International sales decreased $425,000 to
$1.2 million. Softness was displayed in all major international markets.
Domestic sales decreased $117,000 to $4.8 million as a result of decreased
sales of Phoenix Gold and Carver Professional products offset in part by the
first full quarter of sales of AudioSource products. Phoenix Gold acquired
certain assets of AudioSource on December 15, 2000. Sales of electronics to a
significant customer and speakers to a domestic OEM customer were essentially
unchanged from a year ago. The amount and timing of purchase orders from
these customers may fluctuate from quarter to quarter. The Company expects
international sales for fiscal 2001 to remain at levels lower than
historically achieved and domestic sales to remain soft due to the current
economic environment. Sales of AudioSource products and sales of new products
are expected to partially offset the expected lower sales of older products.
Phoenix Gold also reported that on April 12, 2001, the Nasdaq Stock
Market, Inc. notified the Company that its common stock had failed to maintain
a minimum market value of public float of $1 million over the last
30 consecutive trading days as required for continued listing on the Nasdaq
SmallCap Market. The Company was provided until July 10, 2001 to regain
compliance with this rule or request a hearing with the Nasdaq Listings
Qualifications Panel. The Company was able to regain compliance when it was
previously notified in November 2000 that it also failed to meet this
requirement.
Phoenix Gold International, Inc. designs, manufactures, markets and sells
innovative, high quality, high performance electronics, accessories and
speakers for the audio market. The Company sells its products under the brand
names Phoenix Gold, Carver Professional and AudioSource.
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)
March 31, September 30,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $1,001 $1,653,683
Accounts receivable, net 3,811,478 4,170,885
Inventories:
Raw materials and work-in-process 2,905,444 2,598,709
Finished goods and supplies 3,744,971 3,146,151
6,650,415 5,744,860
Prepaid expenses 374,487 229,049
Deferred taxes 390,000 315,000
Total current assets 11,227,381 12,113,477
Property and equipment, net 850,402 807,139
Goodwill, net 304,572 138,459
Deferred taxes 620,000 610,000
Other assets 520,948 285,127
Total assets $ 13,523,303 $ 13,954,202
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $661,444 $797,249
Accrued payroll and benefits 439,259 557,099
Other accrued expenses 409,892 346,318
Income taxes payable -- 40,910
Total current liabilities 1,510,595 1,741,576
Deferred gain on sale of facility 809,139 858,178
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 4,652,641 4,803,520
Total shareholders' equity 11,203,569 11,354,448
Total liabilities and
shareholders' equity $ 13,523,303 $ 13,954,202
PHOENIX GOLD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Six Months Ended
March 31 March 31
2001 2000 2001 2000
Net sales $6,045,836 $6,588,249 $11,676,793 $13,563,895
Cost of sales 4,640,786 4,704,618 8,918,200 9,879,495
Gross profit 1,405,050 1,883,631 2,758,593 3,684,400
Operating expenses:
Selling 1,050,788 913,768 1,846,255 1,840,537
General and
administrative 606,609 573,553 1,184,387 1,104,940
Total operating
expenses 1,657,397 1,487,321 3,030,642 2,945,477
Income (loss) from
operations (252,347) 396,310 (272,049) 738,923
Other income (expense):
Interest income 193 3,300 29,030 11,660
Interest expense (3,732) -- (6,564) --
Other income, net 4 -- 3,704 --
Total other income
(expense) (3,535) 3,300 26,170 11,660
Earnings (loss) before
income taxes (255,882) 399,610 (245,879) 750,583
Income tax benefit
(expense) 99,000 (159,000) 95,000 (298,000)
Net earnings (loss) $(156,882) $240,610 $(150,879) $452,583
Earnings (loss) per share
- basic and diluted $(0.05) $0.08 $(0.05) $0.15
Average shares outstanding
- basic and diluted 3,026,945 3,048,212 3,026,945 3,102,466
