Southwall Announces Earnings for First Quarter
PALO ALTO, Calif.--April 22, 2002--Southwall Technologies Inc.Selected First Quarter Highlights
| -- | Southwall generated revenues of $19.3 million in the first quarter of 2002 compared to revenues of $17.7 million in the first quarter of 2001. |
| -- | Southwall recorded net profit of 2002 of $1.2 million compared to a net loss of $1.1 million for the first quarter of 2001 |
| -- | Earnings per share increased to $0.13 per diluted share from a net loss of $ 0.15 per diluted share in the first quarter of 2001 |
Southwall Technologies Inc. , a global developer, manufacturer and marketer of thin-film coatings for the automotive glass, electronic display and architectural markets today reported financial results for the quarter ended March 31, 2002.
Revenues for the first quarter of 2002 were $19.3 million, an increase of $1.5 million, or 9 percent, from the $17.7 million in the first quarter of 2001. Sequentially revenues declined 6 percent from $20.5 million in the fourth quarter of 2001. Automotive product sales were down by 12 percent from the first quarter of 2001. The decline was due to less sales volume and lower average prices of products sold. Electronic display product sales increased 15 percent from the comparable quarter of 2001. Southwall recorded $2.0 million of sales in the first quarter of 2002 of its newly introduced film for use in plasma display panels. Architectural product sales were up 24 percent from the same quarter of 2001.
Net income for the first quarter of 2002 was $1.2 million, or $0.13 per diluted share, compared to a net loss of $1.1 million, or $0.15 per diluted share, in the comparable period last year. The year over year increase in net income was primarily due to higher operating margins as a result of yield improvement and cost reduction programs put in place in the Palo Alto and Tempe manufacturing facilities, and increased revenue from the Company's German operations. The increase in net income from these factors was partially offset by higher operating expenses. Sequentially net income declined $1.0 million, or 45%, from $2.2 million in the fourth quarter of 2001. While gross margins were comparable in the first quarter of 2002 and the fourth quarter of 2001, lower sales volume in the first quarter of 2002 resulted in this decrease in net income from the fourth quarter of 2001. Additionally, operating expenses were higher in the first quarter of 2002 than the fourth quarter of 2001 due to higher selling, general and administrative costs and increased research and development expenses.
"The year over year improvement in financial performance is the direct result of improved operating performance in all of our manufacturing plants," stated Mr. Thomas G. Hood, President and Chief Executive Officer. "We now have the production capacity to actively seek additional business in the automotive and architectural glass markets. The success of our plant in Germany has freed up our domestic production capacity and allowed us to accelerate our product development efforts and improve our ability to meet the delivery schedules of our customers. I am also pleased that our lower cost structure in our German plant allows us to be more competitive in the European marketplace for our automotive and architectural products. Additionally, increased sales of our electronic display products, particularly our sales of the recently introduced film for plasma display panels, is encouraging. At the same time we remain concerned about the overall softness in the world's economy. While we traditionally experience a slowdown in the first quarter, we expect this will continue into the next quarter."
"We will continue to carefully monitor our costs and expenses during these uncertain times," said Mr. Robert R. Freeman, Senior Vice President and Chief Financial Officer, "as we focus on maintaining profitable operations and generating positive cash flow. This has allowed us to improve our liquidity and leverage ratios and strengthen our balance sheet."
Conference Call Information
When: Wednesday April 24, 2002
Time: 8:00am Pacific Daylight Time
Dial-In Number: 1-877-481-7179 (USA/Canada)
1-706-634-0663 (International)
Name of call: Southwall Technologies Inc.
Leader: Tom Hood
Playback Number: 1-800-642-1687; 1-706-645-9291 (International)
(2 Hours after Completion of Call)
ID Number: 3931370
Playback Dates: April 24 to May 1
About Southwall Technologies Inc.
Southwall Technologies (www.southwall.com) 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 products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall exports advanced thin film coatings to over 25 countries around the world for use in products manufactured by such companies as Audi, BMW, DaimlerChrysler, Renault, Peugeot-Citroen, Volvo, Saint-Gobain Sekurit, Pilkington, and Mitsubishi Electric.
This press release may contain forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995), 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 shipments to customers will be materially less than anticipated, that yields and throughputs will not be improved and production targets may not be met, or that the Company's automotive, electronic display or architectural markets will soften, as well as risks associated with its failure to meet covenants under credit facilities and strains on the Company's liquidity. Further risks are detailed in the Company's filing with the Securities and Exchange Commission, including those set forth in the Company's most recent Form 10-K filed on April 1, 2002.
CONSOLIDATED BALANCE SHEET
(dollars in thousands, except per share data)
March 31, December 31,
2002 2001
------------ ------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,713 $ 3,362
Restricted cash 1,120 1,602
Accounts Receivable, net of allowance
for bad debts of $411 and $389 10,239 9,020
Inventories, net 7,053 6,151
Other current assets 2,932 3,471
------------ ------------
Total current assets $24,057 $23,606
Property, plant and equipment, net 47,326 47,841
Other assets 1,684 1,711
------------ ------------
Total assets $73,067 $73,158
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank line of credit $ 4,606 $ 2,974
Accounts payable 8,757 10,338
Accrued compensation 2,535 2,794
Other accrued liabilities 5,567 5,656
Government grants advanced 771 941
Current portion long-term debt 7,579 8,315
Long-term debt reclassified to current 5,000 0
------------ ------------
Total current liabilities 34,815 31,018
Long term Debt 8,800 14,513
Other 1,166 1,175
------------ ------------
Total liabilities 44,781 46,706
------------ ------------
Stockholders' equity:
Common stock, $0.001 par value, 20,000
shares authorized; issued and
outstanding 8,311 and 7,889 9 8
Capital in excess of par value 53,467 52,614
Notes receivable (103) (88)
Other Comprehensive Income
Translation loss on subsidiary (356) (172)
Accumulated deficit (24,731) (25,910)
------------ ------------
Total stockholders' equity 28,286 26,452
------------ ------------
Total liabilities and
stockholders' equity $73,067 $73,158
============ ============
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars and shares in thousands,
except per share data)
March 31, April 1,
2002 2001
------------ ------------
(Unaudited) (Unaudited)
Net revenues $19,269 $17,713
------------ ------------
Costs and expenses
Cost of sales 12,425 14,849
Research and development 1,777 1,425
Selling, general and administrative 3,745 2,656
------------ ------------
Total costs and expenses 17,947 18,930
------------ ------------
Income (loss) from operations 1,322 (1,217)
Interest (expense), net 378 864
Other income (expense), net (466) (757)
Income (loss) before provision
for income taxes 1,234 (1,110)
Provision for income taxes 53 21
------------ ------------
Net income (loss) $ 1,181 ($1,131)
============ ============
Net income (loss) per share:
Basic $ 0.14 ($0.15)
Diluted $ 0.13 ($0.15)
Weighted average shares of common stock
and dilutive common stock equivalents:
Basic 8,417 7,743
Diluted 9,277 7,743