Advanced Materials Group Reports Results
RANCHO DOMINGUEZ, Calif.--Feb. 28, 2002--Advanced Materials Group, Inc. (OTCBB:ADMG) today reported final sales and income from operations for the fourth fiscal quarter and fiscal year ended November 30, 2001.Net sales for the fourth quarter of fiscal 2001 were $9.2 million versus $10.1 million for the comparable period of fiscal 2000. The net loss for the fourth quarter of fiscal 2001 was $841,000 compared to net earnings of $396,000 for the fourth quarter of fiscal 2000. The basic and diluted loss per share for the fourth quarter was $0.09 per share on an average of 8.6 million shares, versus basic and diluted income of $0.05 and $0.04 per share, respectively, on an average of 8.6 million shares in the year ago period.
Net sales for the fiscal year 2001 were $38.5 million versus $40.3 million for the comparable period of 2000. The net loss for fiscal year 2001 was $3,386,000, including $1.3 million in non-recurring charges related to the restructuring of the domestic operations in 2001. Without these charges, the net loss for the fiscal year 2001 would have been $2,052,000 compared to net income of $1,173,000 for fiscal year 2000. The basic and diluted loss per share for fiscal year 2001 was $0.39 per share on an average of 8.6 million shares, versus basic and diluted net income per share of $0.14 and $0.13 per share, respectively, on an average of 8.6 million shares in fiscal year 2000.
Chief Executive Officer Comments on Results
Commenting on the results, Advanced Materials Group CEO and President, Steve Scott said, "Fourth quarter 2001 was negatively impacted relative to last year's performance by a sharp decline in domestic sales revenue and margins. The Company experienced significant pricing pressures during the past year. This price erosion was coupled with lower customer volumes at the Company's domestic locations leading to lower capacity utilization and corresponding poorer labor and overhead absorption for the domestic operations. The Company has responded to declining U.S. volumes by relocating manufacturing capacity from plants in Texas and Colorado to its California facilities during the second half of fiscal 2001. This restructuring resulted in a $1.3 million charge that added significantly to costs during fiscal 2001. The final closure of the Texas plant occurred in October 2001.
The benefits from the reduced overhead were not realized in fiscal 2001. The breakeven sales level for domestic operations has been reduced by over thirty percent due to plant consolidations, process improvement, and job consolidations. The domestic organization which is now structured to be profitable once domestic sales volumes increase, should complement the growing, profitable operations in Singapore and Ireland over the course of fiscal 2002."
Advanced Materials Group, Inc. is a leading manufacturer and fabricator of specialty foams, foils, films and pressure-sensitive adhesive components for a broad base of customers in the computer, medical, automotive and aerospace industries both in the U.S. and abroad.
Some statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. In addition to the factors discussed, the following are among other factors that could cause actual results to differ materially: general business conditions, competitive factors, concentration of sales in markets and customers, concentration of raw materials suppliers, delays or cancellations in orders, fluctuations in margins, timing of significant orders, and other risks and uncertainties outlined by management in the Company's most recent Form 10-K.
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Fiscal Year Ended
November 30, November 30,
2001 2000 2001 2000
Net sales $ 9,200,000 $10,114,000 $38,483,000 $40,329,000
Cost of sales 8,768,000 8,617,000 35,102,000 34,152,000
Gross profit 432,000 1,497,000 3,381,000 6,177,000
Operating expenses:
Selling, general and
administrative 1,092,000 1,139,000 4,484,000 4,463,000
Restructuring charges -- -- 1,334,000 --
Depreciation and
amortization 86,000 81,000 344,000 286,000
Total operating
expenses 1,178,000 1,220,000 6,162,000 4,749,000
Income (loss) from
operations (746,000) 277,000 (2,781,000) 1,428,000
Other income (expense):
Interest expense (104,000) (140,000) (501,000) (523,000)
Foreign exchange loss (12,000) (113,000) 13,000 (67,000)
Other, net 5,000 (22,000) (51,000) (59,000)
Total other income
and expenses (111,000) (275,000) (539,000) (649,000)
Income (loss) before
income taxes (857,000) 2,000 (3,320,000) 779,000
Income tax expense 16,000 (273,000) 66,000 (273,000)
Income (loss) from
continuing operations (841,000) (271,000) (3,386,000) 506,000
Net income from
discontinued operations -- 667,000 -- 667,000
Net income (loss) $ (841,000) $ 396,000 $(3,386,000) $ 1,173,000
Basic earnings per common share
Income (loss) from
continuing
operations $ (0.09) $ (0.03)$ (0.39) $ 0.06
Income from
discontinued
operations -- 0.08 -- 0.08
Net income (loss)
per share $ (0.09) $ 0.05 $ (0.39) $ 0.14
Diluted earnings per common share
Income (loss) from
continuing
operations $ (0.09) $ (0.03)$ (0.39) $ 0.06
Income from
discontinued
operations -- 0.07 -- 0.07
Net income (loss)
per share $ (0.09) $ 0.04 $ (0.39) $ 0.13
Basic weighted average
common shares
outstanding 8,671,272 8,656,200 8,671,272 8,599,723
Diluted weighted average
common shares
outstanding 8,671,272 8,800,392 8,671,272 8,784,412
ADVANCED MATERIALS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 1,303,000 $ 1,101,000
Accounts receivable, net 6,401,000 7,753,000
Inventories, net 3,551,000 4,962,000
Income taxes receivable 3,000 267,000
Prepaid expenses and other 305,000 364,000
Total current assets 11,563,000 14,447,000
Property and equipment, net 2,654,000 3,007,000
Goodwill, net 387,000 451,000
Other assets 168,000 152,000
Total assets $14,772,000 $18,057,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,457,000 $ 5,952,000
Accrued liabilities 838,000 902,000
Restructuring reserve 406,000 --
Deferred income 255,000 273,000
Line of credit 2,788,000 3,455,000
Current portion of long-term obligations 708,000 490,000
Total current liabilities 11,452,000 11,072,000
Term loans, net -- 892,000
Convertible debentures 405,000 405,000
Restructuring reserve 647,000 --
Deferred compensation, net 1,129,000 1,056,000
Capital lease obligations, net 234,000 341,000
Total liabilities 13,867,000 13,766,000
Commitments and contingencies
Stockholders' equity:
Preferred stock -- $.001 par value;
5,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock -- $.001 par value;
25,000,000 shares authorized;
8,671,272 shares issued and
outstanding at
November 30, 2001 and 2000 9,000 9,000
Additional paid-in capital 7,083,000 7,083,000
Accumulated deficit (6,187,000) (2,801,000)
Total stockholders' equity 905,000 4,291,000
Total liabilities and
stockholders' equity $14,772,000 $18,057,000