M~Wave Announces Positive Second Quarter Results and Record Six Month Revenues
Moves to Nasdaq National Market System
BENSENVILLE, Ill., Jul 31, 2001 /PRNewswire via COMTEX/ -- M~Wave, Inc. (Nasdaq: MWAV), a value-added service provider of high performance circuit boards used in a variety of digital and high frequency applications, announced net income of $773,000 or $0.17 per share for the second quarter ended June 30, 2001, compared with net income of $758,000 or $0.17 per share a year ago. Net sales for second quarter 2001 were $15.4 million up 29% from the second quarter of 2000.
For the six months ended June 30, 2001, the Company reported net income of $2.8 million or $0.62 per share, compared with net income of $926,000 or $0.20 per share for the six months of 2000. Net sales for the first six months of 2001 were $38 million, up 119% from the comparable period in 2000.
Joseph A. Turek, Chairman and Chief Executive Officer, said: "We have been able to achieve solid growth and good profitability during the first six months of the year; however conditions in the Telecom market continue to fluctuate. We believe we are seeing the bottom of the current economic downturn and expect our revenues during the third quarter of 2001 to range from $7 million to $12 million. Based on discussions with our customers, we remain optimistic that we can still achieve our goal of increasing our annual revenues from $57 million in 2000 to between $60 million and $70 million in 2001."
Cash levels were $850,000 at June 30, 2001 compared with $1.2 million at December 31, 2000. Accounts receivable was up $3.7 million from year-end; inventories were down $6.4 million from year-end and accounts payable was down $1.4 million from year-end.
Capital expenditures relating to the company's new facility in West Chicago, Ill., were $3.6 million for the six months ended June 30, 2001. The Company also reduced debt by $1.3 million in the first six months of 2001. To finance its new facility in West Chicago, M~Wave secured financing of $8.1 million from the Illinois Development Finance Authority's 2001 maximum limit on tax-exempt private activity bonds. The Company expects the West Chicago project to cost approximately $10.0 million. The new facility is expected to be operational by fourth quarter 2001.
Discussing business opportunities and strategies for the coming months, Turek explained: "We are now exploring opportunities in the industrial electronics market, using our Virtual Manufacturing concept. By expanding into other markets with a broader product line, we now compete in a $10 billion market for printed circuit boards. Virtual Manufacturing utilizes a base of 15 Global Partners to supply our printed circuit board requirements at lower cost than other domestic competitors.
"Our goal this year is to sign up three new customers using Virtual Manufacturing, thereby reducing our dependence on Lucent Technologies. In fact, we expect to sign a multiyear, $10 million contract within the next few weeks. We believe our marketing strategy will achieve $100 million in annual revenues within the next two years. We will use our engineering skills and supply chain management strengths to serve our customers in the best possible way."
M~Wave also reminded investors that it maintains an active plan to repurchase its stock and the Company's Board of Directors has authorized management to use its discretion to buy M~Wave stock on the open market from time to time. Turek indicated that he expects M~Wave to repurchase its stock in the open market after the current blackout period is lifted. "We do not believe the stock reflects our above average performance in difficult market conditions," he added.
The Company also announced that effective Wednesday, August 1, 2001 M~Wave will move up from the Nasdaq Small Cap market to the Nasdaq National Market, still traded under the symbol MWAV. "Moving up to the Nasdaq NMS is a tangible measurement of the progress we have made in the past two years," said Turek. "We have developed a unique and exciting business model based on Virtual Manufacturing, and we have posted record results. Our performance continues to be satisfactory even in a difficult economic climate, and we are creating new opportunities for ourselves that we anticipate will pay off handsomely in the future."
Join M~Wave on its quarterly Conference call on Wednesday, August 1, 2001 at 10:00 am CST at 703-871-3085 or 877-747-3510 at least five minutes before start time or log onto www.vcall.com at least 15 minutes before the call begins.
About M~Wave:
Established in 1988 and headquartered in the Chicago suburb of Bensenville, Ill., M~Wave is a value-added service provider of high performance circuit boards. The Company's products are used in a variety of telecommunications applications for wireless and Internet communications. M~Wave services customers like Lucent Technologies and Motorola, Inc. with its patented bonding technology, Flexlink II(TM). The Company trades on the Nasdaq SmallCap market under the symbol "MWAV". Visit the Company on its web site at www.mwav.com .
This news release contains predictions, estimates and other forward- looking statements that involve a number of risks and uncertainties. While this outlook represents our current judgement on the future direction of the business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested above. Factors that could cause actual results to differ include the following: dependence on, and dependence on suppliers and subcontractors for circuit board components; economic conditions; successful award of contracts under bid; a highly competitive environment; design and production delays; cancellation or reductions of contract orders; effective utilization of existing and new manufacturing resources; pricing pressures by key customers; and other factors detailed in the Company's Securities and Exchange Commission filings.
For more information on M~Wave via fax, free of charge, Dial 1-800-PRO-INFO and enter the ticker "MWAV."
M~WAVE, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 June 30
2000 2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,230,999 $849,606
Accounts receivable, net of allowance
for doubtful accounts, 2000- $100,000:
2001- $100,000 12,378,766 16,106,984
Inventories 8,859,795 2,503,294
Refundable income taxes 0 613,445
Deferred income taxes 1,118,242 803,181
Prepaid expenses and other 47,688 72,214
Total current assets 23,635,490 20,948,724
PROPERTY, PLANT AND EQUIPMENT:
Land, buildings and improvements 6,488,057 7,487,222
Machinery and equipment 8,731,449 11,294,893
Total property, plant and equipment 15,219,506 18,782,115
Less accumulated depreciation (6,914,345) (7,711,325)
Property, plant and equipment-net 8,305,161 11,070,790
NOTE RECEIVABLE 195,391 191,558
OTHER ASSETS 54,915 53,550
TOTAL $32,190,957 $32,264,622
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $6,516,541 $5,085,885
Accrued expenses 1,603,474 1,681,284
Accrued income taxes 146,287 0
Current credit line debt 5,500,000 4,091,976
Current portion of long-term debt 3,229,580 3,391,187
Total current liabilities 16,995,882 14,250,332
DEFERRED INCOME TAXES 522,593 522,593
LONG-TERM DEBT 166,506 137,123
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
authorized, 1,000,000 shares; no
shares issued 0 0
Common stock, $.01 par value;
authorized, 10,000,000 shares
6,179,112 shares issued and
4,572,184 shares outstanding at
December 31, 2000, 6,179,112 shares
issued and 4,572,184 shares
outstanding at June 30, 2001 30,895 30,895
Additional paid-in capital 8,439,072 8,439,072
Retained earnings 7,715,283 10,563,881
Treasury stock: 1,606,928 shares,
at cost (1,679,274) (1,679,274)
Total stockholders' equity 14,505,976 17,354,574
TOTAL $32,190,957 $32,264,622
See notes to consolidated financial statements.
M~WAVE, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended June 30,
2000 2001
Net sales $11,973,913 $15,448,962
Cost of goods sold 9,541,214 13,103,481
Gross profit 2,432,699 2,345,481
Operating expenses:
General and administrative 815,471 580,087
Selling and marketing 367,954 457,304
Total operating expenses 1,183,425 1,037,391
Operating income 1,249,274 1,308,090
Other income (expense):
Interest income 18,051 8,000
Interest expense (64,167) (89,354)
Rental income 51,000 51,000
Total other income (expense) 4,884 (30,354)
Income before income taxes 1,254,158 1,277,736
Provision for income taxes 495,791 505,113
Net income $758,367 $772,623
Weighted average shares outstanding 4,561,684 4,572,184
Basic earnings per share $0.17 $0.17
Diluted shares outstanding 4,561,684 4,600,895
Diluted earnings per share $0.17 $0.17
See notes to consolidated financial statements.
M~WAVE, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six months ended June 30,
2000 2001
Net sales $17,346,098 $37,975,082
Cost of goods sold 14,139,450 30,692,535
Gross profit 3,206,648 7,282,547
Operating expenses:
General and administrative 1,150,795 1,465,334
Selling and marketing 549,313 928,333
Total operating expenses 1,700,108 2,393,667
Operating income 1,506,540 4,888,880
Other income (expense):
Interest income 37,890 27,335
Interest expense (115,235) (307,312)
Rental income 102,000 102,000
Total other income (expense) 24,655 (177,977)
Income before income taxes 1,531,195 4,710,903
Provision for income taxes 605,309 1,862,305
Net income $925,886 $2,848,598
Weighted average shares outstanding 4,553,836 4,572,184
Basic earnings per share $0.20 $0.62
Diluted shares outstanding 4,553,836 4,622,937
Diluted earnings per share $0.20 $0.62
See notes to consolidated financial statements.
M~WAVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
2000 2001
OPERATING ACTIVITIES:
Net income $925,886 $2,848,598
Adjustments to reconcile net income
to net cash flows
from operating activities:
Depreciation and amortization 513,000 796,980
Deferred income taxes 0 315,061
Reserve for notes receivable 430,000 0
Changes in assets and
liabilities:
Accounts receivable-trade (3,497,196) (3,728,218)
Inventories (4,745,514) 6,356,501
Income taxes 605,307 (759,732)
Prepaid expenses and other
assets (59,777) (19,328)
Accounts payable 3,764,093 (1,430,656)
Accrued expenses 344,580 77,810
Net cash flows (used in)
provided by operating
activities ($1,719,621) $4,457,016
INVESTING ACTIVITIES:
Purchase of property, plant and
equipment (271,723) (3,562,609)
Net cash flows used in
investing activities ($271,723) ($3,562,609)
FINANCING ACTIVITIES:
Common stock issued upon exercise
of stock options 47,125 0
Credit line debt 1,500,000 (1,408,024)
Net payments on short and long
term debt (180,781) 0
Net borrowings on short and long
term debt 0 132,224
Net cash flows provided by
(used in) financing
activities $1,366,344 ($1,275,800)
NET DECREASE IN CASH AND CASH
EQUIVALENTS ($625,000) ($381,393)
CASH AND CASH EQUIVALENTS - Beginning
of period $2,586,885 $1,230,999
CASH AND CASH EQUIVALENTS - End of
period $1,961,885 $849,606
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for
interest $115,235 $307,312
Income tax payments $0 $2,307,933
See notes to consolidated financial statements.
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SOURCE M~Wave, Inc.
CONTACT: Paul Schmitt, Chief Financial Officer of M~Wave, Inc.,
+1-630-860-3560; General, Tad Gage, +1-312-640-6745, or Analysts and
Investors, Lisa Fortuna, +1-312-640-6779, both of The Financial Relations
Board BSMG Worldwide
URL: mwav.com
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