Signal Technology Meets Previous Fourth-Quarter Projections and Affirms 2002 Financial Guidance
DANVERS, Mass.--(BUSINESS WIRE)--Feb. 12, 2002--
Company's Defense Electronics Business
Posts Strong Sales and Gross Margins
Signal Technology Corporation (Nasdaq: STCO), a leading provider of electronics and power management products for wireless communications in the defense, space and commercial markets, today reported its financial results for the fourth quarter and year ended December 31, 2001.
Net sales for the fourth quarter were $25.1 million, compared with $28.0 million in the fourth quarter of 2000. Signal reported a net loss of $932,000 for the fourth quarter of 2001, or $0.09 per share, compared with a loss of $4.0 million, or $0.41 per share, for the same period last year.
For the year ended December 31, 2001, Signal reported net sales of $90.6 million, versus $98.5 million for the comparable period a year ago. Net loss for 2001, including inventory charges and a tax valuation allowance, was $17.7 million, or $1.77 per share, compared with a net loss of $2.5 million, or $0.30 per share, reported for 2000.
Comments on Fourth-Quarter Results:
"Our defense business posted its best quarter of the year," said Chairman and Chief Executive Officer George Lombard. "Shipments of products for electronic warfare, precision guidance and communications applications were particularly strong. These included power management subsystems and transmitters for a number of key Department of Defense aircraft and missile platforms. Our defense business gross margins remained strong, improving sequentially to 36.1 percent as a result of a favorable mix of production deliveries. Signal booked several key defense orders in the fourth quarter, including contracts for power supplies and power management systems ($8.0 million) and microwave and RF components and subsystems ($3.4 million) for platforms such as the Global Hawk UAV, the F-16, F-18 and F-22, the Patriot Missile, and IFICS for use with the Missile Defense System."
"On the commercial side of Signal's business, our strategic push into semiconductor module solutions for wireless phones and PDAs (personal digital assistants) remained solidly on track during the fourth quarter," Lombard said. "Working with our partners in this effort, Northrop Grumman (NYSE: NOC) and Vitesse Semiconductor (Nasdaq: VTSS), we hit all of our milestones for technology transfer and manufacturing. We expect samples of our first HBT (heterojunction bipolar transistor) RFICs (radio frequency integrated circuits) in the first quarter of 2002, followed by key design wins during the third quarter of 2002 and volume production beginning in 2003."
"Although telecom industry capital spending remained slow overall," Lombard said, "we are encouraged by the increased activity in the mobile wireless infrastructure market during the fourth quarter. As the year ended, shipments and bookings of our switched power combiners for cellular/PCS base stations rebounded sharply. We believe these orders may reflect the first signs of an uptick in cellular/PCS base station deployment around the country."
Fourth-Quarter Business Highlights:
-- Power supply and power management contract awards totaled more
than $8.0 million. Significant orders included transmitters
for IFICS for use with the Missile Defense System and power
supplies for the PAC3 Missile.
-- Signal booked more than $1 million in orders for microwave
components for the Patriot Missile System.
-- In microwave and RF components and subsystems, Signal booked
more than $2.3 million in orders for F-16 and F-18 system
electronics support and airborne radar and electronic
countermeasures systems.
-- In its commercial wireless business, during the fourth quarter
and early January, Signal received more than $1 million in
production orders for advanced switched power combiners from a
leading global manufacturer of cellular/PCS base station
infrastructure products. The majority of these orders are
expected to ship in the first quarter of 2002.
-- Signal's strategic initiative to develop semiconductor module
solutions for mobile appliances progressed rapidly during the
fourth quarter. Transfer of the HBT process from Northrop
Grumman to Vitesse Semiconductor proceeded ahead of plan, and
the first HBTs were fabricated on the Vitesse process line,
also ahead of schedule. Signal's first RFICs are expected to
be ready for sampling during the first quarter of 2002.
Business Outlook
"Signal anticipates sales growth of between five percent and 10 percent for its defense business in 2002," Lombard said. "This forecast assumes continuation of current U.S. Department of Defense initiatives related to modernization of existing platforms. These initiatives have generated solid sales and bookings for Signal in recent quarters, and we expect this trend to continue through 2002. Looking farther ahead, we are optimistic about the prospects for increased defense bookings in 2003 and beyond. Our technologies and product development roadmap are aligned with the U.S. military's increasing focus on electronic warfare and intelligence systems, precision guided munitions and missile defense, as well as emerging Homeland Security initiatives. Signal is positioned to accelerate its defense-related sales in line with anticipated increases in spending in these areas."
"In the commercial wireless business, we remain guarded in our assessment of the fixed wireless market," Lombard said. "At the same time, however, we anticipate seeing stronger demand in 2002 for mobile wireless products such as our switched power combiners for base stations. In addition, we will be accelerating our efforts to leverage Signal's radio solutions expertise into mobile appliance semiconductor opportunities, and we expect this strategic initiative to begin generating revenues in 2003."
"With this as background," Lombard continued, "Signal anticipates that revenues for the first quarter of 2002 will be between $17.0 million and $19.0 million. This primarily reflects the difficult year-over-year comparison for commercial wireless revenue, which is expected to be between $1.3 million and $2.0 million in the first quarter. Revenues for the full year 2002 are expected to be between $92 million and $94 million."
"We are planning total R&D investments of $10.3 million in 2002, focusing on opportunities in both the defense and mobile wireless markets," Lombard said. "Coupled with anticipated flat to lower commercial wireless sales through the year, we expect these investments to contribute to a net loss of approximately $2.7 million, or $0.27 per share, for the first quarter of 2002. We anticipate reporting a net loss of between $5.8 million and $6.2 million for the year, or $0.55 to $0.59 per share." |
