M~Wave Announces Third Quarter Results
BENSENVILLE, Ill., Oct. 30 /PRNewswire/ -- M~Wave, Inc. (Nasdaq: MWAV - news), a value-added service provider of high performance circuit boards used in a variety of digital and high frequency applications, announced a net income of $479,000 or $0.11 per share, for the third quarter ended September 30, 2001.
For the nine months ended September 30, 2001, the Company reported a net profit of $3,327,000 or $0.73 per share, compared with a net income of $2,120,000 or $0.47 per share for the nine months ended September 30, 2000. Net sales for the nine months ended September 30, 2001 were $46,586,000, up 31% from the nine months ended September 30, 2000.
Cash levels decreased from $1,231,000 at December 31, 2000 to $1,149,000 at September 30, 2001. Accounts receivable was down $1,543,000 and inventories were down $6,349,000 from year-end. Accounts payable was down $3,473,000 from year-end. Capital expenditures, relating to the new facility in West Chicago, were $5,142,000 for the nine months ended September 30, 2001. The Company also reduced debt by $2,452,000 in the first nine months of 2001.
Joseph A. Turek, Chairman and Chief Executive Officer, said: ``In these uncertain economic times our focus is on profitability. This was our eighth consecutive profitable quarter. It is satisfying that even at these present sales levels, we have become efficient enough to still maintain profitability. We believe our market is at its lowest level and expect growth in our revenue base to begin as early as the second quarter of 2002. We now expect our annual revenues for 2001 will range from $51 million to $56 million.''
M~Wave maintains an active plan to repurchase its stock and the Board of Directors has authorized the purchase of an additional 50,000 shares of its common stock. The Company repurchased approximately 116,000 shares of its stock during the third quarter of 2001.
Join M~Wave on its quarterly Conference call on Wednesday, October 31, 2001 at 10:00 am CST at 703-871-3597 or 888-792-1093 at least five minutes before start time or on www.vcall.com .
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 and digital applications. M-Wave services customers like Lucent Technologies, Motorola, Inc. and Celestica with its patented bonding technology, Flexlink IITM. The Company trades on the Nasdaq National 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.
M~WAVE, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended September 30,
2000 2001
Net sales $18,122,341 $8,611,111
Cost of goods sold 15,046,305 6,934,527
Gross profit 3,076,036 1,676,584
Operating expenses:
General and administrative 597,633 579,071
Selling and marketing 491,662 265,041
Total operating expenses 1,089,295 844,112
Operating income 1,986,741 832,472
Other income (expense):
Interest income 41,456 25,523
Interest expense (104,711) (102,679)
Rental income 51,000 17,000
Total other income (expense) (12,255) (60,156)
Income before income taxes 1,974,486 772,316
Provision for income taxes 780,551 293,451
Net income $1,193,935 $478,865
Weighted average shares outstanding 4,567,732 4,544,689
Basic earnings per share $0.26 $0.11
Diluted shares outstanding 4,567,732 4,570,689
Diluted earnings per share $0.26 $0.10
See notes to consolidated financial statements.
M~WAVE, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine months ended September 30,
2000 2001
Net sales $35,468,439 $46,586,193
Cost of goods sold 29,185,755 37,627,062
Gross profit 6,282,684 8,959,131
Operating expenses:
General and administrative 1,748,428 2,044,405
Selling and marketing 1,040,975 1,193,374
Total operating expenses 2,789,403 3,237,779
Operating income 3,493,281 5,721,352
Other income (expense):
Interest income 79,346 52,858
Interest expense (219,946) (409,991)
Rental income 153,000 119,000
Total other income (expense) 12,400 (238,133)
Income before income taxes 3,505,681 5,483,219
Provision for income taxes 1,385,860 2,155,756
Net income $2,119,821 $3,327,463
Net income per share basic and
diluted $0.47 $0.73
Weighted average shares 4,558,502 4,562,918
See notes to consolidated financial statements.
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
M~WAVE, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 September 30
2000 2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,230,999 $1,148,663
Accounts receivable, net of
allowance for doubtful accounts,
2000- $100,000: 2001- $100,000 12,378,766 10,835,295
Inventories 8,859,795 2,510,611
Refundable income taxes 0 583,624
Deferred income taxes 1,118,242 645,651
Prepaid expenses and other 47,688 66,956
Total current assets 23,635,490 15,790,800
PROPERTY, PLANT AND EQUIPMENT:
Land, buildings and improvements 6,488,057 8,056,035
Machinery and equipment 8,731,449 12,305,571
Total property, plant and
equipment 15,219,506 20,361,606
Less accumulated depreciation (6,914,345) (8,109,815)
Property, plant and
equipment-net 8,305,161 12,251,791
NOTE RECEIVABLE 195,391 191,558
OTHER ASSETS 54,915 354,750
TOTAL $32,190,957 $28,588,899
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $6,516,541 $3,043,263
Accrued expenses 1,603,474 1,214,219
Accrued income taxes 146,287 0
Current credit line debt 5,500,000 1,355,161
Current portion of long-term debt 3,229,580 2,813,267
Total current liabilities 16,995,882 8,425,910
DEFERRED INCOME TAXES 522,593 522,593
LONG-TERM DEBT 166,506 2,275,333
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 4,476,297
shares outstanding at
September 30, 2001 30,895 30,895
Additional paid-in capital 8,439,072 8,439,072
Retained earnings 7,715,283 11,042,746
Treasury stock: 1,702,815
shares, at cost (1,679,274) (2,147,650)
Total stockholders' equity 14,505,976 17,365,063
TOTAL $32,190,957 $28,588,899
See notes to consolidated financial statements.
M~WAVE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September 30,
2000 2001
OPERATING ACTIVITIES:
Net income $2,119,821 $3,327,463
Adjustments to reconcile net income
to net cash flows
from operating activities:
Depreciation and amortization $845,500 $1,195,470
Deferred income taxes $131,442 $472,591
Reserve for notes receivable $446,692 $0
Changes in assets and
liabilities:
Accounts receivable-trade ($4,432,709) $1,543,471
Inventories ($4,325,724) $6,349,184
Income taxes $1,254,416 ($729,911)
Prepaid expenses and other
assets ($77,246) ($315,270)
Accounts payable $4,930,223 ($3,473,278)
Accrued expenses $1,152,070 ($389,255)
Net cash flows provided by
operating activities $2,044,485 $7,980,465
INVESTING ACTIVITIES:
Purchase of property, plant and
equipment ($554,485) ($5,142,100)
Proceeds from notes receivable $3,308 $0
Net cash flows used in
investing activities ($551,177) ($5,142,100)
FINANCING ACTIVITIES:
Common stock issued upon exercise
of stock options $90,437 $0
Net borrowings (payments) on credit
line debt $1,500,000 ($4,144,839)
Proceeds on issuance of long term
debt $0 $3,472,972
Payments on short and long term
debt ($271,172) ($1,780,458)
Purchase treasury stock $0 ($468,376)
Net cash flows used in
(provided by) financing
activities $1,319,265 ($2,920,701)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $2,812,573 ($82,336)
CASH AND CASH EQUIVALENTS - Beginning
of period $2,586,885 $1,230,999
CASH AND CASH EQUIVALENTS - End of
period $5,399,458 $1,148,663
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for
interest $219,946 $409,991
Income tax payments $0 $2,414,033
See notes to consolidated financial statements.
SOURCE: M~Wave, Inc.
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