Phoenix Gold International, Inc. Announces Q3 Revenue
15 July 1997
Phoenix Gold International, Inc. Announces Record Third Quarter Revenue and 139% Increase in Earnings
PORTLAND, Ore., July 15 -- Phoenix Gold International, Inc.
reported record revenue of $8.3 million for the third quarter
ended June 30, 1997, an increase of 10.7% over revenue of $7.5 million in
fiscal 1996's third quarter.
Phoenix Gold also reported an increase of 139% in quarterly net earnings
over the comparable fiscal 1996 quarter. Net earnings increased to $586,000
in the current quarter, or $.17 per share, compared to net earnings of
$245,000, or $.07 per share, last year.
"This quarter's results are gratifying," said Keith A. Peterson, Chairman,
President and Chief Executive Officer. "The rewards of expanding our
management team are becoming increasingly evident."
Speaker sales increased 116.3% over fiscal 1996's third quarter due in
part to the recommencement of XMAX subwoofer sales in the third quarter and
increased distribution of existing products. Accessories sales increased 9.9%
compared to last year's quarter. Sales of electronics products were flat
compared to the same 1996 quarter. Increased sales of car audio electronics
were offset by weaker demand for professional audio electronics. Phoenix Gold
began shipping in the third quarter initial models of its QX Series and XS
Series car amplifiers that are designed to address lower price points.
Gross margin increased to 30.0% in the third quarter from 23.9% in the
second quarter of fiscal 1997. The increase in gross margin in the current
quarter was due principally to leverage from higher sales volume and continued
improvement in labor efficiencies. Gross margin was 31.7% in the third
quarter of fiscal 1996. Selling, general and administrative expenses
decreased $505,000, or 26.6%, in the quarter compared to last year's third
quarter due to continuing cost control programs.
"Our balance sheet also improved substantially in the quarter," said
Joseph K. O'Brien, Chief Financial Officer. Inventories decreased $376,000 to
$7.9 million in the quarter, following the $1.2 million decrease in the second
quarter of fiscal 1997. Working capital increased by $672,000 during the
third quarter.
Phoenix Gold International, Inc. designs, markets and sells innovative,
high quality, high performance electronics, accessories and speakers for the
domestic and international car audio aftermarket, the professional sound
market and the custom audio/video and home theater markets.
This press release contains "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, that 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: business conditions and growth in the car
audio, professional sound and custom audio/video, and home theater markets and
the general economy; competitive factors such as rival products and price
pressures; the failure of new products to compete successfully in existing or
new markets; the failure to achieve timely improvement in the manufacturing
ramp with respect to new products; changes in product mix; availability and
price of components, subassemblies and products supplied by third-party
vendors; and cost and yield issues associated with production at the Company's
factory.
PHOENIX GOLD INTERNATIONAL, INC.
BALANCE SHEETS
June 30, September 30,
1997 1996
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $2,601 $2,599
Accounts receivable, net 5,157,149 5,119,360
Inventories:
Raw materials 3,188,894 4,288,206
Work-in-process 38,247 1,101,414
Finished goods 4,501,863 3,411,342
Supplies 135,956 170,598
7,864,960 8,971,560
Prepaid expenses 297,731 285,777
Deferred taxes 390,000 525,428
Total current assets 13,712,441 14,904,724
Property and equipment, net 3,565,572 3,938,790
Goodwill, net 267,230 296,946
Deferred taxes 233,000 230,333
Other assets 499,729 461,734
Total assets $18,277,972 $19,832,527
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,974,858 $3,529,450
Notes payable 3,672,619 4,278,983
Accrued expenses 565,366 932,767
Current portion of long-term
obligations 390,123 130,334
Total current liabilities 6,602,966 8,871,534
Long-term obligations, net of
current portion 593,706 171,995
Shareholders' equity:
Preferred stock;
Authorized - 5,000,000 shares;
none outstanding -- --
Common stock, no par value;
Authorized - 20,000,000 shares
Issued and outstanding
- 3,458,985 and 3,454,605 shares 7,521,865 7,477,939
Retained earnings 3,559,435 3,311,059
Total shareholders' equity 11,081,300 10,788,998
Total liabilities and shareholders'
equity $ 18,277,972 $ 19,832,527
PHOENIX GOLD INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
1997 1996 1997 1996
Net sales $8,263,509 $7,461,921 $20,099,215 $19,348,725
Cost of sales 5,781,313 5,092,831 15,141,842 13,769,299
Gross profit 2,482,196 2,369,090 4,957,373 5,579,426
Operating expenses:
Selling 871,457 1,082,590 2,383,211 2,411,069
General and
administrative 522,082 815,562 1,781,004 2,010,647
In-process research
and development -- -- -- 1,120,500
Total operating
expenses 1,393,539 1,898,152 4,164,215 5,542,216
Income from
operations 1,088,657 470,938 793,158 37,210
Other income (expense):
Interest expense (131,616) (72,829) (383,951) (112,945)
Other income, net 3,892 -- 5,169 19,495
Total other income
(expense) (127,724) (72,829) (378,782) (93,450)
Earnings (loss) before
income taxes 960,933 398,109 414,376 (56,240)
Income tax benefit
(expense) (375,000) (152,882) (166,000) 22,033
Net earnings (loss) $585,933 $245,227 $248,376 $(34,207)
Net earnings (loss)
per share $0.17 $0.07 $0.07 $(0.01)
Shares used in per
share calculation 3,495,297 3,641,755 3,528,003 3,447,237
SOURCE Phoenix Gold International, Inc.