DDL Electronics Records Profitable Results In Fiscal 1998; Highlights Include Sharply Higher EBITDA, Strong Gross Margins and Successful Acquisition of Jolt Technology Inc.
Business Wire - August 25, 1998 08:06
NEWBURY PARK, Calif.--(BUSINESS WIRE)--Aug. 25, 1998--DDL Electronics Inc. (NYSE:DDL) Tuesday reported a profit for the year ended June 30, 1998 on improved sales.
Net income totaled $1,102,000, excluding non-recurring merger expenses of $609,000 related to the acquisition of Jolt Technology. After non-recurring charges, net income totaled $493,000, equal to two cents per share, as compared with a net loss of $868,000, or three cents per share, in the previous fiscal year.
Revenues increased to $53,265,000 from $51,640,000 in fiscal 1997. Results for both years have been restated to reflect the acquisition of Jolt Technology on June 30, 1998, which has been accounted for as a pooling of interests.
For the three months ended June 30, 1998, net income totaled $112,000, excluding non-recurring merger expenses, as compared with a prior year fourth quarter net loss of $414,000. Revenues for the period were $13,432,000, compared with $14,963,000 in the prior year.
According to Gregory L. Horton, president and chief executive officer: "The Company has now registered six consecutive quarters of operating profits and posted net income in five of the last six quarters, excluding the non-recurring merger expenses.
"Our soft sales in the fourth quarter were reflected in the industry as a whole; however, we achieved very strong bookings resulting in record backlog at June 30, 1998 of $36.2 million, an increase of 27% from $28.6 million one year ago. Our gross margin is also strong relative to our industry. We look forward to a very successful year in fiscal 1999 with strong growth in both revenues and profits."
Excluding non-recurring merger expenses, EBITDA (earnings before interest, taxes, depreciation and amortization) rose 28% to $5,176,000 from $4,052,000 in fiscal 1997, and operating profit went up 108% to $2,154,000 from $1,036,000 one year ago.
Horton commented: "DDL has achieved a major turnaround, reflecting the strategy which the new management team put in place two years ago. We are focusing on the high complexity, high mix segment of electronics manufacturing services, building partnership relationships with substantial customers and actively seeking compatible acquisitions that support our strategic focus. The recent Jolt acquisition is highly accretive to earnings per share and a significant plus for DDL."
With headquarters in Newbury Park, DDL Electronics provides original equipment manufacturers (OEMs) with full turnkey integrated design, engineering and electronics manufacturing services (EMS). The Company serves OEMs in the instrumentation, communications, computer, medical and aerospace industries.
EMS operations are located in Southern California, Florida and Northern Ireland. Irlandus Circuits Ltd. of Northern Ireland, a wholly owned subsidiary, fabricates multilayer printed circuit boards.
Certain statements made above are forward-looking in nature and reflect DDL's current expectations and anticipated future plans. Such statements involve various risks and uncertainties that could cause actual results to differ materially from those forecast in the statements. Factors that might cause such differences would include, without limitation, the factors described as "Risk Factors" in the Company's Definitive Proxy Statement dated June 12, 1998 on file with the Securities and Exchange Commission.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except per share amounts)
Three months ended Year ended
June 30, June 30,
1998 1997 1998 1997
Revenues $ 13,432 $ 14,963 $ 53,265 $ 51,640
Cost of goods sold 11,208 12,706 43,933 43,894
Gross profit 2,224 2,257 9,332 7,746
Operating expenses:
Administrative and
selling 1,558 1,558 5,910 5,442
Goodwill amortization 317 317 1,268 1,268
Merger expenses 609 -- 609 --
2,484 1,875 7,787 6,710
Operating income (loss) (260) 382 1,545 1,036
Interest expense (288) (283) (1,101) (1,227)
Debt issue cost
amortization -- (565) -- (937)
Other income, net 51 52 49 260
Income (loss) before
income taxes (497) (414) 493 (868)
Provision for income taxes -- -- -- --
Net income (loss) $ (497) $ (414) $ 493 $ (868)
Basic and diluted earnings
(loss) per share $ (.02) $ (.01) $ .02 $ (.03)
Average shares (in 000s) 29,248 27,817 29,026 27,506
Supplemental information:
EBITDA $ 537 $ 1,159 $ 4,567 $ 4,052
CONSOLIDATED BALANCE SHEET
(In thousands)
June 30,
1998 1997
Current assets:
Cash and cash equivalents $ 4,413 $ 5,398
Accounts receivable, net 9,786 9,647
Costs and estimated earnings in excess
of billings on uncompleted contracts 4,785 3,161
Inventories, net 2,446 3,327
Prepaid expenses and deposits 103 140
Total current assets 21,533 21,673
Property, plant and equipment, net 6,875 7,247
Goodwill, net 3,171 4,439
Other assets 251 310
$ 31,830 $ 33,669
Current liabilities:
Bank lines of credit payable $ 4,441 $ 1,378
Current portion of long-term debt 1,214 4,167
Accounts payable 7,795 9,093
Other current liabilities 3,638 3,947
Total current liabilities 17,088 18,585
Long-term debt 7,186 9,445
Stockholders' equity:
Paid-in capital 32,500 30,008
Accumulated deficit (24,294) (23,678)
Foreign currency translation adjustment (650) (691)
Total stockholders' equity 7,556 5,639
$ 31,830 $ 33,669
CONTACT: DDL Electronics Inc., Newbury Park
Rick Vitelle, 805/376-9415 ext. 142
or
Foley/Freisleben LLC
John Foley, 213/892-6322
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