Phoenix Gold Announces 135% Increase in Second Quarter Earnings
14 April 1999
Phoenix Gold Announces 135% Increase in Second Quarter Earnings
PORTLAND, Ore., April 14 -- Phoenix Gold International, Inc.
today reported a 135% increase in its net earnings for the
second quarter of fiscal 1999 which ended March 31, 1999 over the second
quarter of fiscal 1998. Net earnings were $160,000, or $0.05 per diluted
share, for the three months ended March 31, 1999 compared to net earnings of
$68,000, or $0.02 per diluted share, in last year's second quarter. Revenue
for the second quarter of fiscal 1999 was $6.2 million, a decrease of
6.3% from revenue of $6.6 million in the second quarter of fiscal 1998.
"We were able to achieve improved earnings despite a decrease in sales in
the second quarter," stated Keith A. Peterson, Chairman, President and Chief
Executive Officer. "The actions to reduce expenses that we took over six
months ago have increased operating efficiencies in nearly all areas of the
Company. It is unfortunate that a 10% increase in domestic sales was more than
offset by a 38% decrease in international sales."
"We have obtained an additional OEM customer during the second quarter,"
disclosed Timothy G. Johnson, Executive Vice President and Chief Operating
Officer. "This new customer and increases in sales to our existing OEM
customers contributed to a 198% increase in sales to our OEM customers as
compared to last year's second quarter. Additionally, we are introducing
several new electronics, speakers and accessories products over the next
several months, including our new ZEROpoint ZX titanium series of car audio
amplifiers."
"We continue to improve our balance sheet," commented Joseph K. O'Brien,
Chief Financial Officer. "The Company generated positive cash flow from
operations during the first half of fiscal 1999 which allowed us to reduce
both current and long-term liabilities by $1.4 million. This is a
31% reduction during the past six months."
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.
NOTE: 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
March 31, September 30,
1999 1998
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $2,599 $ 2,602
Accounts receivable, net 3,919,912 4,287,965
Inventories:
Raw materials 2,294,735 2,732,112
Work-in-process 8,682 8,527
Finished goods 3,646,583 4,058,828
Supplies 67,253 87,253
6,017,253 6,886,720
Prepaid expenses 294,504 169,621
Deferred taxes 410,000 446,000
Total current assets 10,644,268 11,792,908
Property and equipment,
net 2,191,329 2,522,005
Goodwill, net 197,892 217,702
Deferred taxes 565,000 567,000
Other assets 170,780 108,513
Total assets $ 13,769,269 $ 15,208,128
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 794,065 $ 1,781,341
Line of credit 700,000 900,000
Accrued payroll and
benefits 341,083 420,209
Other accrued expenses 377,581 448,214
Current portion of
long-term obligations 214,890 222,529
Total current
liabilities 2,427,619 3,772,293
Long-term obligations 834,393 938,233
Shareholders' equity 10,507,257 10,497,602
Total liabilities and
shareholders' equity $ 13,769,269 $ 15,208,128
PHOENIX GOLD INTERNATIONAL, INC.
STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
March 31 March 31
1999 1998 1999 1998
Net sales $6,200,066 $6,613,495 $12,866,001 $12,671,496
Cost of sales 4,526,449 4,825,618 9,471,332 9,468,822
Gross profit 1,673,617 1,787,877 3,394,669 3,202,674
Operating expenses:
Selling 795,642 967,358 1,582,323 1,722,411
General and
administrative 572,467 619,173 1,114,644 1,185,451
Total operating
expenses 1,368,109 1,586,531 2,696,967 2,907,862
Income from operations 305,508 201,346 697,702 294,812
Other income (expense):
Interest expense (39,789) (87,351) (88,647) (184,790)
Other income. net -- -- -- 7,975
Total other income
(expense) (39,789) (87,351) (88,647) (176,815)
Earnings before income
taxes 265,719 113,995 609,055 117,997
Income tax expense (106,000) (46,000) (243,000) (47,000)
Net earnings $159,719 $67,995 $366,055 $70,997
Earnings per share
basic and diluted $0.05 $0.02 $0.11 $0.02
Average shares
outstanding
- basic 3,248,745 3,464,745 3,342,503 3,464,650
Average shares
outstanding
- diluted 3,248,745 3,464,745 3,342,503 3,465,587