WENATCHEE, Wash., April 6 /PRNewswire/ -- Pacific Aerospace &
Electronics, Inc. (Nasdaq: PCTH) has announced record sales for its third
quarter ended February 28, 1999. Net sales increased 113% to $27.2 million for
the quarter, compared to $12.8 million for the same quarter last year.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") were
approximately $2.5 million for the third quarter, compared to $1.8 million for
the same quarter last year. At the same time however, net income for the third
quarter decreased to a loss of $1.3 million, compared to income of $1.3
million for the same period last year. Details of the Company's reported
results for both the third quarter and nine months are shown in the financial
information included elsewhere in this release.
The significant increase in net sales for the third quarter is primarily
attributable to the $15.2 million revenue contribution from Aeromet
International. Aeromet was acquired in late July 1998 and provides high
quality components and assemblies to most of the major aerospace and defense
companies in Europe, including the Airbus manufacturing group of companies.
At the same time, the Company experienced an approximate $1.9 million decline
in revenue during the third quarter from domestic commercial aerospace and
transportation markets, $1.3 million of which primarily relates to the Boeing
Company, model 747 aircraft, and the effect of the so-called "Asia economic
crisis." The Company has reacted to this revenue decline by reducing its
workforce and adjusting controllable capacity cost factors.
The decrease in comparative profitability of $2.6 million between results
in the third quarter this year versus last year is primarily attributable to
the revenue decline in commercial aerospace business and the increase in
interest expense associated with the financing costs of acquiring Aeromet
International. The following table reflects selected third quarter financial
information.
Third quarter selected financial results:
Q31999 Q31998
(In thousands, except per share data)
Net Sales $27,248 $12,783
EBITDA 2,509 1,805
Interest Expense (2,548) (197)
Income from Operations 659 1,278
Net Income (loss) (1,285) 1,252
EPS (diluted) $(0.07) $ 0.09
Net sales for the nine-month period ended February 28, 1999 increased
108% to $76.9 million, compared to $37.0 million for the same period last
year. Of the increase, $35.8 million was contributed by Aeromet International,
the Company's UK-based subsidiary, acquired in late July 1998. EBITDA prior to
non-recurring adjustments was $8.5 million for the nine-month period, compared
to $4.8 million for the same period last year. Net income for the nine-month
period was a loss of $8.3 million, compared to income of $2.9 million for the
same period last year. The following table reflects selected financial
information as reported, as well as adjusted for the previously reported
non-recurring impaired inventory charge in the second quarter of fiscal 1999,
and charges for ESC and Orca made in the first quarter of fiscal 1999.
Year-to-date selected financial results:
YTD 1999 YTD 1998
(In thousands, except per share data)
Net Sales $76,903 $36,987
EBITDA 6,859 4,826
EBITDA excluding non-recurring charges 8,459 4,826
Interest Expense (6,300) (526)
Income from Operations 2,024 3,455
Income from Operations excluding
non-recurring charges 3,624 3,455
Net Income (loss) (8,272) 2,892
Net Income (loss) excluding
non-recurring charges (2,262) 2,892
EPS (diluted) $ (0.49) $ 0.24
EPS (diluted) excluding non-recurring
charges $ (0.13) $ 0.23
"Our third quarter was considerably impacted by the trickle-down effect to
the Boeing supplier base of Boeing's production challenges, order
cancellations and deferred deliveries of commercial aircraft from Asian based
customers," said Nick Gerde, Vice President Finance & CFO. "We believe that
the recent revenue decline has stabilized in the early portion of our fourth
quarter, and that our quick and decisive reaction to reducing costs to match
lower production levels has minimized the negative impact on profits. We also
believe that the aerospace segment of our business will strengthen in the
first quarter of fiscal 2000, based both upon marketing and sales initiatives
for new business development and completion of inventory reassessments by
Boeing."
"During our third quarter, we responded quickly to changing market
conditions in our domestic aerospace businesses," commented Don Wright,
President & CEO. "At the same time, our UK based Aeromet International
aerospace business remains on target and strengthening its position as a key
supplier to European aerospace and defense companies. We believe our strategic
objective of continuing to build a world class manufacturing organization is
intact and being realized. We have recently appointed an experienced Vice
President of Operations, Werner Hafelfinger, to oversee and focus operations
of the Company's U.S. and European Aerospace Groups and its Electronics Group.
We expect to see the benefits of Werner's efforts in the coming months, and
believe the outlook remains extremely positive."
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Quarter Ended Nine Months Ended
February 28, February 28,
1999 1998 1999 1998
Net Sales $27,248 $12,783 $76,903 $36,987
Cost of Sales 22,446 9,137 62,605 26,964
Gross Profit 4,802 3,646 14,298 10,023
Operating Expenses 4,143 2,368 12,274 6,568
Income from Operations 659 1,278 2,024 3,455
Other Income and Expense, net (2,373) (1,154) (12,680) (1,422)
Net Income Before Taxes (1,714) 124 (10,656) 2,033
Provision for Income Taxes 429 1,128 2,384 859
Net Income (Loss) (1,285) 1,252 (8,272) 2,892
Net Income (Loss) Per Share
Basic $(0.07) $0.10 $(0.49) $0.24
Diluted (0.07) 0.09 (0.49) 0.23
Shares used in Computation
Of Net Income (Loss) Per Share
Basic 18,591 12,422 16,903 11,704
Diluted 18,591 13,441 16,903 12,370
EBITDA $2,509 $1,805 $6,859 $4,826
EBITDA Per Share $ 0.13 $ 0.13 $ 0.41 $ 0.39
Consolidated Balance Sheets
(In Thousands)
February 28, May 31,
1999 1998
(Unaudited) (Audited)
ASSETS
Cash $ 7,599 $11,461
Accounts Receivable 21,314 9,375
Inventories 26,851 16,184
Other Current Assets 1,945 658
Total Current Assets 57,709 37,678
Property, Plant & Equipment, net 47,784 26,335
Patents, Intangibles & Other 52,910 14,567
Total Assets $158,403 $78,580
LIABILITIES And SHAREHOLDERS' EQUITY
Accounts Payable $10,033 $6,748
Other Current Liabilities 7,277 5,331
Total Current Liabilities 17,310 12,079
Long-Term Debt, net 80,600 9,059
Net Capital Leases, Deferrals & Other 1,933 1,300
Total Liabilities 99,843 10,359
Common Stock 19 15
Additional Paid-in Capital 70,790 57,830
Accumulated other comprehensive
income(loss) (2,707) (436)
Accumulated Deficit (9,542) (1,267)
Total Shareholders' Equity 58,560 56,142
Total Liabilities & Equity $158,403 $78,580
Pacific Aerospace & Electronics, Inc. is a diversified, international
manufacturing company that develops, manufactures and markets high-performance
electronics and metal components and assemblies for the aerospace, defense,
electronics and transportation industries. The Company's primary businesses
are organized into three operational and marketing units. The Electronics
Group develops, manufactures and sells a broad range of precision components,
filtering devices, electronic assemblies, and explosively bonded materials
designed to operate with a high degree of reliability in harsh environments
such as the ocean, space and the human body. The Aerospace Group provides
machined and cast aluminum and metal parts and component assemblies for
commercial and military aircraft, heavy trucking and automotive uses,
primarily in the United States. The Aeromet Group provides magnesium and
aluminum precision cast parts and formed titanium and aluminum sheet products
to the aerospace, defense and motorsport industries, primarily in Europe.
The Company's common stock trades on the Nasdaq National Market System
under the symbol "PCTH," and its warrants trade under the symbol "PCTHW."
NOTE: Forward-looking statements in this release concerning trends or
anticipated operating results are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are not guarantees of future performance and are subject to risks
and uncertainties related to the Company's operations. These risks and
uncertainties include, but are not limited to, competitive factors (including
the possibility of increased competition or technological development,
competitors, and price pressures); legal factors (such as limited protection
of the Company's proprietary technology and changes in government regulation);
and the Company's dependence on key personnel and significant customers.
SOURCE Pacific Aerospace & Electronics, Inc.
-0- 04/06/99
/CONTACT: Donald A. Wright, President/CEO of Pacific Aerospace
& Electronics, Inc., or Nick A. Gerde, Vice President Finance/CFO,
509-667-9600, or fax, 509-667-9696, both of Pacific Aerospace & Electronics,
Inc./
(PCTH)
CO: Pacific Aerospace & Electronics, Inc.
ST: Washington
IN: ARO
SU: ERN
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