Signal Technology Reports First-Quarter Financial Results; Company Achieves 13% Increase in Net Sales
DANVERS, Mass.--(BUSINESS WIRE)--April 24, 2001--Signal Technology Corporation (Nasdaq: STCO), a leading provider of electronic products for wireless communications in the commercial, defense and space markets, today reported its financial results for the first quarter ended March 31, 2001.
For the first quarter of 2001, Signal reported a 13% increase in net sales to $22.8 million from $20.3 million for the first quarter of 2000. Net income for the first quarter of 2001 was $170,000, or $0.02 per diluted share, compared with $241,000, or $0.03 per diluted share, for the same period last year. Gross margin increased to $7.3 million during the first quarter of 2001, from $6.9 million a year ago.
"First-quarter sales and earnings were in line with projections despite the widespread and well-publicized slowdown in competitive local exchange carrier ("CLEC") wireless communications capital investment," said George Lombard, chairman and chief executive officer. "However, we believe that our broad product line strongly positions Signal to capitalize on the growth of non-CLEC wireless markets."
"Our defense and commercial shipments were in line with our expectations for the first quarter, and Signal Wireless Group ("SWG") started the first quarter strongly with $16.9 million in bookings," Lombard said. "But the subsequent fall-off in the CLEC-related wireless market was sharper than expected."
"When the first quarter began, we were anticipating temporarily slower first-quarter and possibly second-quarter growth in the point-to-point market," Lombard said. "This was due to shifting production from mid-capacity radios to capture future opportunities in the high-capacity radio market. But the deeper slowdown in wireless capital spending virtually stalled our point-to-point growth."
Lombard continued, "With point-to-point backhaul and cellular base station markets remaining strong, Signal still posted solid year-over-year revenue growth and achieved a number of operational milestones that position us for a return to rapid sales and profitability growth when wireless investment resumes. We believe that the European multipoint access market, in which we have a $7.5 million contract, will grow further in the coming quarters."
First-quarter Highlights
--Signal won a $7.5 million production order for multipoint broadband customer premise equipment ("CPE") from a leading provider of carrier class, fixed wireless broadband access solutions. The company has been selected as the primary supplier of multipoint radio technology for the subscriber end of this customer's fixed wireless MMDS offerings. Prototype testing was started in the first quarter, and volume production is scheduled to begin in the third quarter of 2001.
--Signal began volume production of its innovative, switched power combiners for a new, tier-one manufacturer of PCS/cellular base station equipment. Three other tier-one OEMs continued sampling Signal's switched power combiners, and the company anticipates receiving production orders from these customers in the second quarter. At the same time, two other OEMs began sampling Signal's switched power combiners.
--Signal won a $2.6 million contract from Israeli Aircraft Industries to develop and manufacture an airborne, high-density Ku band communications transmitter. Development of this high-power transmitter is slated for the F-15, F-16, and other fighter aircraft platforms. Follow-on potential orders for this new product should exceed $5.0 million.
Outlook
Lombard continued, "Signal's defense business remains profitable and stable. In addition, we are excited with the progress Signal is making in the emerging market for fixed wireless broadband access with our 3.5 GHz customer premise radio equipment. Multipoint wireless, or `MMDS,' has the potential to dominate the market for last-mile broadband access for homes and small businesses where broadband cable or DSL connectivity is unavailable. The outlook is especially bright in markets outside North America where access to competitive cable or DSL broadband infrastructure is limited. Signal's new European standard 3.5 GHz offering is aimed squarely at one of the most promising segments of this market, providing an attractive combination of high data rates, linearity, low cost and rugged reliability."
"While Signal has achieved its anticipated revenues and earnings for the first quarter, the near elimination of CLEC-related point-to-point radio shipments for the balance of the year causes us to reduce our projected full-year revenues and EPS to between $110 million and $115 million and $0.19, respectively," Lombard said. "Second-quarter 2001 revenues and EPS are now expected to be $26 million and a loss of $0.05, respectively. While CLEC-related products were our highest volume and highest margin wireless products, our broad commercial wireless customer base and product line is still anticipated to produce approximately $30 million in revenues in 2001 - a 54% increase over last year."
First-quarter Conference Call
Signal will host its first-quarter conference call this morning at 11:00 a.m., Eastern Time. The call will be broadcast live on the company's Web site at sigtech.com. |
