On a roll
HOUSTON (Feb. 9) BUSINESS WIRE -Feb. 9, 1998--Reliability Incorporated
(Nasdaq symbol REAL) today announced net income of $2,403,000, or $.40
per share, for the fourth quarter ended December 31, 1997, on revenues
of $14,426,000. Net income for the same quarter in 1996 was $1,522,000
or $.18 per share on revenues of $10,789,000. Earnings per share for
all periods of 1996 and 1997 reflect the effect of a 2 for 1 stock
split that was effective on September 22, 1997.
Net income for the twelve months ended December 31, 1997 was $8,132,000
or $1.25 per share on revenues of $47,220,000. Net income for the same
period in 1996 was $4,846,000 or $.57 per share on revenues of $35,760,
000. Net income per share increased $.22 for the fourth quarter of
1997 and increased $.68 for the year of 1997. The Company purchased 1,
270,000 shares of its common stock on March 12, 1997, resulting in a
decrease in the average shares outstanding for the 1997 periods.
Approximately $.12 and $.29 of the increases for the quarter and twelve
months, respectively, were due to a decrease in the average number of
shares outstanding. Backlog was $14.1 million at December 31, 1997, an
increase of 42% over the $9.9 million at December 31, 1996.
Larry Edwards, President and CEO commented,
"Our fourth quarter, with revenues up 34% and EPS up 122% over the
fourth quarter of 1996, was a great way to end a truly outstanding year
for Reliability. 1997 was a record year for bookings ($51.4 million),
revenues ($47.2 million), operating income ($12.3 million), net income
after tax ($8.1 million), and EPS which was 119% above EPS for 1996.
The business level throughout 1997 was very strong as bookings for new
orders remained above $12 million in each of the four quarters. In
fact, fourth quarter bookings of $13.9 million and revenue of $14.2
million were the highest of all the four quarters in 1997. Our $14.1
million backlog as of December 31, 1997 gives us an excellent start for
1998.
"Demand for the Company's latest Intersect(tm) functional memory tester
and our Criteria(R) 18-HD micrologic system remained very strong in
1997. Even though we increased revenue by 33% in 1997 to meet the
demand in the Testing Products Segment, the backlog increased by 64% to
$11.2 million at December 31, 1997. Our forward look at 1998 indicates
the demand for Testing Products should remain strong.
"The revenue level for our testing Services was at a record $6.3
million for the fourth quarter of 1997, and the unit demand for our
services in Singapore was up significantly. In North Carolina we
installed and qualified all of the equipment required to process 64 Meg
DRAMs. Production quantities were processed in November and December.
However, we were notified in January 1998 that Mitsubishi would be
significantly reducing its output of DRAMs in North Carolina and would
no longer require Reliability's testing services after the first
quarter of 1998. Reliability announced in January that the North
Carolina plant will be closed in April 1998. Although the plant
closure had no impact on 1997 revenues, we estimate we will record
approximately a $500,000 ($0.05 per share) reserve in the first quarter
of 1998, subject to several negotiations, to cover the cost of the
closure. The North Carolina facility accounted for approximately 10%
of our total revenue in 1997.
"The following statements are forward looking, based on our current
expectations, and actual results may differ materially. Although we are
cautiously optimistic about 1998, our current forecast still indicates
that Reliability will report revenue growth for 1998. To meet our
forecast, the demand for Testing Products must be sufficiently strong
to offset the loss in revenue from the closure of our North Carolina
facility. Our forward looking forecast indicates revenues for the
first quarter of 1998 to be approximately $10 million to $11 million,
compared to first quarter 1997 revenues of $6.7 million. We expect EPS
for the first quarter of 1998 to be approximately $0.16 vs. $0.09 for
the first quarter of 1997. We expect gross margins for 1998 as
compared to 1997 will decrease a few percentage points, to
approximately 47%, due to changes in product mix and competitive
pressures on sales prices. We expect R&D expense to increase a little
in 1998 as we invest in new product development, resulting in an
increase in total G&A expense for the full year of 1998 as compared to
1997."
Reliability Incorporated is based in Houston, Texas with operating
facilities in Durham, North Carolina; San Jose, Costa Rica; and
Singapore. Reliability and its subsidiaries manufacture burn-in and
test equipment, automatic loading and unloading equipment and other
peripherals for sale to manufacturers and volume users of integrated
circuits. The Company also manufactures a line of power sources,
including DC-to-DC power converters, and provides conditioning and
testing services for integrated circuits in Singapore and Durham.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: Statements in this document regarding Reliability's
business which are not historical facts are "forward looking
statements" that involve risk and uncertainties, including, but not
limited to, market acceptance of our products and services, the effects
of general economic conditions, the impact of competition, product
development schedules, problems with technology, delivery schedules,
and supply and demand changes for our products and services and our
customers products and services. Actual results may materially differ
from projections. |
