January 11, 8:09 am Eastern Time
Company Press Release
SOURCE: Innovex, Inc.
Innovex Announces First Quarter Results; Takes $13.8 Million Charge to Restructure Its Manufacturing Network
HOPKINS, Minn., Jan. 11 /PRNewswire/ -- Innovex, Inc. (Nasdaq: INVX - news) today reported revenue of $44.7 million for its first fiscal 2000 quarter, compared to revenue of $22.0 million in the first quarter of fiscal 1999. The company's net loss was $11.2 million in the first fiscal quarter, or $(.75) per share. This compares to net income of $3.0 million or $0.20 per diluted share in the first quarter of fiscal 1999. The loss of $11.2 million for the first fiscal quarter includes a charge of $13.8 million or $0.66 per share related to the restructuring of its manufacturing network. Excluding this charge, the company's loss would have been $1.4 million or $0.09 per share. The company's first quarter financial performance was negatively impacted primarily due to two factors: Y2K customer inventory adjustment activity and the residual effects of ADFlex's cessation of internal prototyping activity. ADFlex was purchased by Innovex in September 1999. In December, one of the company's largest customers directed it to stop making shipments for the last three weeks of the quarter. This customer's shipments have returned to scheduled levels. Another large customer is requesting significantly lower shipments in the first four weeks of the company's fiscal second quarter. The company believes these actions are related to Y2K inventory reductions taking place as its customers' Y2K concerns subside.
In April 1999 former ADFlex management was forced to cease internal prototyping activity in order to conserve cash. ADFlex continued to outsource prototyping until mid-September 1999, when Innovex acquired it. As planned, the company immediately resumed internal prototyping activity. However, the preacquisition lack of internal prototyping caused the company to miss multiple new design qualification opportunities at existing customers in the April to September timeframe. As these new designs ramp-up and old designs reach end-of-life, the company will experience declining revenues until new generations of customer designs enter production later in the second quarter. Internal prototyping activity as planned is restoring new design activity to historical levels. In the first quarter the new design activity related to the ADFlex acquisition was four to five times higher than the months immediately preceding the acquisition.
In its second fiscal quarter the company expects revenue to be approximately 10% below first quarter revenues due to the design-prototype-production revenue time cycle and remaining customer Y2K inventory adjustment activity. In the second quarter the company expects to incur an operating loss similar to its first quarter operating loss excluding the restructuring charges.
''We are clearly disappointed with the results for the first quarter and the expected results for the second quarter,'' said William P. Murnane, Innovex's President and Chief Operating Officer. ''Customer late quarter Y2K inventory year end order adjustments were substantially greater than planned, and the short-term negative revenue impact derived from the lack of internal prototyping activity was larger than expected. The Y2K inventory and prototyping problems should be behind us as we exit the second fiscal quarter, and we are now participating in new design qualifications that should allow us to experience double digit quarter-over-quarter revenue growth in our third quarter and for the remainder of the calendar year,'' stated Murnane.
Innovex, Inc. is a leading supplier of flexible circuit-based interconnect solutions to the computer, networking, communication, storage, consumer medical and other electronic industries. Applications for flex-based interconnects include cellular telephones, hard disk drives, network systems, high-end consumer products, notebook computers, pagers and personal communications systems. Innovex is known worldwide for its excellence in advanced engineering and low cost manufacturing. Except for historical information contained herein, the matters discussed in this release are forward looking statements that involve risks and uncertainties, including the timely availability and acceptance of new products, the impact of competitive products and pricing, and other risks detailed from time to time in both Company's SEC reports, including Innovex, Inc.'s report on Form 10K for the year ended September 30, 1999, and Form 10Q for the quarter ended June 30, 1999 and other Securities and Exchange Commission filings.
INNOVEX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
Three Months Ended
December 31, December 31,
1999 1998
Net sales $44,725 $22,028
Costs and expenses:
Cost of sales 40,009 14,951
Selling, general and administrative 4,236 2,423
Engineering 1,704 922
Restructuring charges 13,785 --
Net interest (income) expense 527 (394)
Net other (income) expense 195 (72)
Income (loss) before income taxes (15,731) 4,198
Provision for income taxes (4,562) 1,203
Net income (loss) ($11,169) $2,995
Net income (loss) per share:
Basic ($0.75) $0.20
Diluted ($0.75) $0.20
Weighted average shares outstanding:
Basic shares 14,824 14,780
Diluted shares 14,824 15,062
INNOVEX, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, September 30,
Assets 1999 1999
Cash and short-term investments $15,665 $25,541
Accounts receivable, net 23,906 28,499
Inventory 13,293 15,892
Other current assets 6,445 6,385
Total current assets 59,309 76,317
Property, plant and equipment, net 81,575 87,158
Intangible & other assets, net 7,678 4,888
Deferred income taxes long term 10,898 10,443
Total assets $159,460 $178,806
Liabilities and
Stockholders' Equity
Current liabilities $37,381 $45,296
Long-term debt 26,693 26,376
Stockholders' equity 95,386 107,134
Total liabilities and
stockholders' equity $159,460 $178,806
SOURCE: Innovex, Inc. |
