Phoenix Gold Announces Improved First Quarter Results
20 January 1999
Phoenix Gold Announces Improved First Quarter Results
PORTLAND, Ore., Jan. 20 -- Phoenix Gold International, Inc.
today reported financial results for its first quarter ended
December 31, 1998. Revenue for the first quarter was $6.7 million, an
increase of 10.0% from revenue of $6.1 million in the first quarter of fiscal
1998. Net earnings were $206,000, or $0.06 per share (basic and diluted) for
the three months ended December 31, 1998 compared to net earnings of $3,000,
or $0.00 per share (basic and diluted), in last year's first quarter.
"A 31% increase in domestic sales significantly improved our financial
results for the first quarter," stated Keith A. Peterson, Chairman, President
and Chief Executive Officer. "Additionally, we achieved increased sales in
each of our product groups of electronics, speakers and accessories. The
sales increase, however, was partially offset by a 22% decrease in
international sales, which was a result of a 47% decrease in sales to Asia."
"Sales to our OEM customers increased 155% as compared to last year's
first quarter," disclosed Timothy G. Johnson, Executive Vice President and
Chief Operating Officer. "We continue to pursue other opportunities to
increase our OEM business. Additionally, the improved operating performance
was a reflection of the restructuring plan implemented in the prior quarter to
improve operating efficiencies."
As previously announced, Phoenix Gold acquired 216,000 shares of its
common stock for approximately $1.625 per share during December 1998. At
December 31, 1998, the book value per share was $3.19.
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 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: business conditions and growth in the car
audio, professional sound and custom audio/video and home theater markets and
the general economy; business conditions in international markets; changes in
the number of customers; the timing and size of orders by dealers,
distributors and OEM customers; 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
December 31, September 30,
1998 1998
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $2,599 $2,602
Accounts receivable, net 4,594,460 4,287,965
Inventories:
Raw materials 2,453,241 2,732,112
Work-in-process 5,923 8,527
Finished goods 3,777,595 4,058,828
Supplies 84,753 87,253
6,321,512 6,886,720
Prepaid expenses 254,438 169,621
Deferred taxes 434,000 446,000
Total current assets 11,607,009 11,792,908
Property and equipment, net 2,316,748 2,522,005
Goodwill, net 207,798 217,702
Deferred taxes 569,000 567,000
Other assets 100,089 108,513
Total assets $14,800,644 $15,208,128
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $1,197,355 $1,781,341
Note payable 1,508,189 900,000
Accrued expenses 642,009 868,423
Current portion of long-term
obligations 218,061 222,529
Total current liabilities 3,565,614 3,772,293
Long-term obligations 887,492 938,233
Shareholders' equity 10,347,538 10,497,602
Total liabilities and
shareholders' equity $14,800,644 $15,208,128
PHOENIX GOLD INTERNATIONAL, INC.
STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
December 31,
1998 1997
Net sales $6,665,935 $6,058,001
Cost of sales 4,944,883 4,643,204
Gross profit 1,721,052 1,414,797
Operating expenses:
Selling 786,681 755,053
General and administrative 542,177 566,278
Total operating expenses 1,328,858 1,321,331
Income from operations 392,194 93,466
Other income (expense):
Interest expense (48,858) (97,439)
Other income, net -- 7,975
Total other income (expense) (48,858) (89,464)
Earnings before income taxes 343,336 4,002
Income tax expense (137,000) (1,000)
Net earnings $206,336 $3,002
Earnings per share - basic
and diluted $0.06 $0.00
Average shares outstanding - basic 3,436,261 3,464,555
Average shares outstanding - diluted 3,436,261 3,485,296