Aura Announces Results for Year Ending February 28, 2002 - Reports 24% Revenue Growth
EL SEGUNDO, Calif.--(BUSINESS WIRE)--May 29, 2002--AURA SYSTEMS,
INC. (OTC BB:AURA) announced today results for the fiscal year ending
February 28, 2002.
Net revenues in fiscal 2002 totaled $3.1 million, an increase of
24% over net revenues in fiscal 2001 of $2.5 million. In fiscal 2001
and 2002, virtually all of the revenue recorded came from the
AuraGen(R) product line. The AuraGen(R) is based on patented
state-of-the-art technology developed by Aura Systems, Inc. and
provides a complete electric power solution.
The net loss for fiscal 2002 was $24.9 million ($.08 per share) as
compared to a net loss of $20.9 million ($.08 per share) in the
previous year. The Company's net loss in the fourth quarter of fiscal
2002 was $15.7 million as compared to a net loss of $6.9 million in
fiscal 2001. The increase in the loss was primarily due to previously
announced restructuring activities.
"The Company made difficult decisions, closing and discontinuing
all of our joint ventures and subsidiary companies, eliminating
investment in our non-core lines of business in order to focus on
growing the top-line revenue and becoming a profitable company in the
future," said Joshua Hauser, President and CEO, "Much of the deficit
in Fiscal 2002 can be attributed to adjustments to inventory, write
downs of non-productive assets, and reserves for future liabilities.
Additional steps have been taken since February 28, 2002, when the new
management team was put into place to position the business."
Carl Albert, Chairman of the Board, said, "We transitioned the
management of the Company three months ago and since then made
progress toward our goal of creating a strategically focused
enterprise with a strong balance sheet and a viable future growth
plan". Mr. Albert added, "We have come a long way in a short period of
time, and I am very optimistic that the corporate leadership team can
continue to streamline our operations and seize the substantial
revenue opportunities that are provided by the increase in worldwide
acceptance of the AuraGen(R) family of products."
The higher revenue in fiscal 2002 resulted from a wider acceptance
of the AuraGen(R). Revenues increased in virtually all industries
served by Aura. Revenues in the fourth quarter are a negative $928,000
due to the return of the product from one customer following a
collection proceeding by Aura. The Company has fully accounted for
this return in the fourth quarter.
The fiscal year net loss of $24.9 million resulted from total net
expenses incurred of $28.5 million, partially offset by a gross profit
of $1.6 million and a gain on debt extinguishment of $1.9 million. The
total expenses included amounts from recurring operations that
included significant costs such as depreciation of $5.5 million, $2.8
million in legal costs, and $2.3 million of net interest. The fiscal
2002 year-end results include a number of one-time charges for
impaired assets and recognition of liabilities that were recorded in
the fourth quarter. The fourth quarter loss of $15.7 million included
the impairment of the Company tooling in the amount of $4.6 million,
which was the remaining net book value to have been amortized over the
next fiscal year. Non-core investments owned by the Company were
written-down to their net realizable value resulting in a loss of $1.4
million. The Company recorded a charge of $3.1 million relative to
prepaid media advertising. The inventory reserve was increased by $1.5
million as a result of the Company's annual review of the net
realizable value expected to be recovered. The Company recorded a
liability relative to the future severance payments to the former
management amounting to $1.1 million.
Aura had previously announced on March 5, 2002 that it had
restructured and retired approximately $15.3 million of debt and
accrued interest. The extraordinary pre-tax gain for the early
extinguishment of debt was estimated to be $5.5 million. In the first
quarter of fiscal 2003, the Company raised $4.2 million through a
capital transaction. Several of these same investors participated in
the funding to retire the $15.3 million in debt. As a result of price
protection clauses in the restructuring, these investors are entitled
to receive additional shares of common stock. Therefore, in the fourth
quarter the Company recognized other income of $1.3 million for a
transaction fee paid to Aura and an extraordinary gain of $1.0
million, which reflects the net liability for the additional shares
issued.
The Company currently expects AuraGen(R) sales in fiscal 2003 to
exceed revenues recorded for fiscal 2002. In addition, the net loss is
expected to be significantly less than the current year net loss with
improved operating cash flows. These expectations are based upon the
Company's focused efforts on growing revenue and minimizing the costs
incurred. Future costs are expected to be lower due to a reduction in
labor and labor related costs, the elimination of depreciation and
amortization expense relative to non-productive assets, reduced legal
and litigation expenses, the elimination of interest expense on a
majority of the debt, and other future actions based upon the
strategic and operational focus of Aura Systems, Inc. Increased sales
and marketing expenses are expected to offset a portion of these cost
savings. |
