Squeezed out a penny. Revenues still rising. Very clear why stock has collapsed. Interest expense very high. It's possible they've overdone the borrowing. 10Q will warrant careful study. Bob B
Subj: WPI Group, Inc. Announces Fiscal 1999 First Quarter Results
Date: 1/29/99 8:36:11 AM EST
WPI Group, Inc. Announces Fiscal 1999 First Quarter Results
MANCHESTER, N.H.--(BUSINESS WIRE)--Jan. 29, 1998--WPI Group,
Inc. today announced that fiscal 1999 first quarter revenues for the
period ended December 27, 1998 increased 12% to $24,354,000 from
$21,971,000 for last year's comparable quarter. Net income was $38,000
for this year's first quarter, compared to $912,000 for the same three
months of 1998. First quarter 1999 earnings per share were $0.01, on a
diluted basis, compared to $0.15 for the 1998 first quarter. Reported
results for the quarter were affected by a one-time interest charge of
approximately $330,000, ($0.04 per share), related to the
renegotiation of the terms of WPI's credit line.
Commenting on the results of the first fiscal quarter, WPI Group,
Inc. Chairman and CEO, Michael Foster, said: "Although disappointing
when compared to our first quarter fiscal 1998, these results are in
line with what we had anticipated for the first quarter.
"We expect improved results for the balance of fiscal 1999, based
on several factors. First, our new, Husky rugged Windows CE handheld
computer, which we are introducing worldwide in February, has met with
substantial initial interest among a large number of leading global
companies. This new product is aimed at the fast-growing demand for
rugged, general-purpose computers to support mobile business
applications worldwide. This interest has come from both potential
business partners who would resell the product with their own
hardware, software or service offerings, as well as from direct,
end-user customers. We believe this product will have a significant
positive effect on our overall sales of handheld computers in 1999.
Other areas where we anticipate improved fiscal 1999 sales include:
MPSI diagnostic products for agriculture and construction equipment;
mobile computers for field service operations; and electronic ballasts
for medical endoscopy and fiberoptic lighting.
"We have completed the reorganization of our Information
Solutions and Industrial Technology Groups announced in our Fourth
Quarter 1998 Press Release. Our rugged, handheld terminal and computer
operations are now fully integrated into a single, worldwide business
unit, headquartered in Coventry, England, under the WPI Husky
Technology banner. With more concentrated management resources, we are
now better able to manage our rugged handheld business as a global
entity. This will permit us to realize cost savings beginning
immediately, while improving our competitive position worldwide.
Simultaneously, the integration of our power conversion equipment and
electronic ballast operations into a single business unit has already
resulted in significant cost savings and additional synergy among our
various products, customer sets and target markets. This will result
in more opportunity for value-added sales. The reorganizations in both
operating Groups will not require any one-time charges and we believe
that they will have a positive impact on profitability during fiscal
1999."
WPI Group, Inc. (WPIC: NASDAQ) manufactures and markets high,
value-added products used in mission-critical systems through two
operating groups: Information Solutions and Industrial Technology.
Information Solutions offers the world's broadest range of rugged,
handheld terminals, PCs and notebook computers designed for use in
harsh environments across a wide array of industries and it supplies
applications software in selected vertical markets. It also provides
industry-leading diagnostic hardware and software to the
transportation industry. The Industrial Technology Group manufactures
avionics components and subsystems, inertial sensors, panel meters,
industrial power conversion systems, electronic ballasts and precision
solenoids for a variety of industrial and consumer products.
The statements contained in this release concerning the company's
goals, strategies and expectations for business and financial results
are "forward-looking statements" based on current expectations. No
assurances can be given that the results in any forward-looking
statements will be achieved and actual results could differ
materially. Please review the reports that the Company files with the
Securities and Exchange Commission for information concerning factors
which could affect the Company's business.
-0-
*T
WPI GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
Dec. 27, Dec. 28,
1998 1997
NET SALES $24,354,254 $21,970,619
COST OF GOODS SOLD 13,900,846 13,171,676
GROSS PROFIT 10,453,408 8,798,943
OPERATING EXPENSES:
Research and new product development 1,423,444 1,182,467
Selling, general and administration 7,357,375 5,418,610
Total operating expenses 8,780,819 6,601,077
OPERATING INCOME 1,672,589 2,197,866
OTHER INCOME (EXPENSE):
Interest expense (1,451,367) (849,516)
Default interest expense (327,695) --
Foreign currency exchange gain (loss) 146,796 (22,162)
Other, net 18,449 14,458
INCOME BEFORE PROVISION FOR
INCOME TAXES 58,772 1,340,646
PROVISION FOR INCOME TAXES 21,150 429,000
NET INCOME $37,622 $911,646
EARNINGS PER SHARE:
Basic $ 0.01 $ 0.15
Diluted $ 0.01 $ 0.15
SHARES USED IN COMPUTATION OF EARNINGS
PER SHARE:
Basic 6,030,804 6,006,298
Diluted 6,119,780 6,254,146
*T
--30--bh/ny* tia
CONTACT: Michael Foster, Chairman & CEO
Dennis Deegan, President & COO
603/627-3500
or
Contact:
Devin Sullivan 212-836-9608 (The Equity Group Inc.)
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