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Taitron Reports Fourth Quarter and Year-end Results; Appoints New Chief Financial Officer
Wednesday, March 24, 1999 08:13 AM Mail this article to a friend new!
LOS ANGELES--(BUSINESS WIRE)--March 24, 1999--Taitron Components Inc. (Nasdaq:TAIT) Wednesday announced financial results for its fourth quarter and year ended Dec. 31, 1998.
Net sales for the fourth quarter were $6.8 million compared with $8.8 million a year ago. Net income for the same period was $221,000, or $0.03 per diluted share, compared with $384,000, or $0.06 per diluted share, last year. Net sales for the year were $30.8 million compared with $33.9 million a year earlier. Net income for 1998 was $1.5 million, or $0.24 per diluted share, compared with $1.9 million, or $0.27 per diluted share, in 1997.
The company announced the appointment of Steven H. Dong as chief financial officer, succeeding David Batt who has resigned from the company to pursue other opportunities. Prior to joining Taitron, Dong practiced as a certified public accountant specializing in assisting publicly held companies with high level accounting projects.
Earlier, Dong served as chief financial officer for NuOasis Resorts Inc. and affiliates (OTC:NUOA), and prior as an assurance manager for the independent accounting firm of Coopers & Lybrand LLP, Newport Beach, Calif. He graduated with a bachelor of science degree in accounting from Babson College, Wellesley, Mass.
Commenting on the company's results, Stewart Wang, president and chief executive officer, said: "The ongoing Asian economic situation continued to have a significant effect on our sales for both the quarter and the year. To offset our reliance on the Asian markets, the company is stepping up its efforts to target new opportunities in the electronics industry."
Wang noted that the company completed an agreement during 1998 to form a joint venture with Adelsa, S.A. DE C.V. to market and sell electronic components in Mexico. Adelsa is a leading marketing company supplying semiconductors, electronic components and PCBs to the Mexican electronics industry.
The joint venture is named Taitron Components Mexico, S.A. DE C.V., and has its headquarters and warehouse located near Mexico City. The company expects to record sales from the joint venture in the first quarter of 1999.
"The joint venture represents a major opportunity to take advantage of the fast growing electronics industry in Mexico which, according to the Mexican Investment Board, represents a market worth $21 billion per year," Wang said.
Wang said results for the quarter and year were impacted by a decrease in Selling, General and Administrative expenses related to reduced commissions and advertising expenses, offset by an increase in interest expense due to additional bank borrowings for purchasing the company's new Oracle Application System, financing the company's stock repurchase program and investment in the joint venture with Adelsa.
Wang added that the company completed the year with a strong balance sheet, reporting more than $25.2 million in working capital and a current ratio of 2.6 to 1 as of Dec. 31, 1998. He also noted that, under a previously announced stock repurchase program, the company had purchased approximately 824,000 Class A common shares through March 15, 1999, for an approximate amount of $2.4 million in aggregate.
Taitron, based in Santa Clarita, Calif., is the "Discrete Components Superstore." The company distributes a wide variety of transistors, diodes and other discrete semiconductors, optoelectronic devices and passive components utilized by other electronic distributors, original equipment manufacturers and contract equipment manufacturers.
Certain statements in this news release are forward-looking in nature and are subject to certain risks and uncertainties. Actual results could differ materially from those expressed in any of these forward-looking statements. Such risks and uncertainties include, but are not limited to, economic, competitive, governmental, political, technological factors, the success of the company's joint venture in Mexico and other risks detailed from time to time in the company's Securities and Exchange Commission reports, including, but not limited to, the Report on Form 10-K.
TAITRON COMPONENTS INC. Statements of Earnings (In thousands, except share and per share data)
Three Months Ended Year Ended Dec. 31, Dec. 31, 1998 1997 1998 1997
Net sales $ 6,820 $ 8,752 $ 30,828 $ 33,945
Cost of goods sold 5,003 6,395 21,991 24,293
Gross profit 1,817 2,357 8,837 9,652
Selling, general & administrative expenses 1,409 1,475 5,333 5,641
Earnings from operations 408 882 3,504 4,011
Interest expense, net 133 277 1,065 956
Other expense (income), net (107) (12) (83) (15)
Earnings before income taxes 382 617 2,522 3,070
Income tax expense 161 233 1,023 1,220
Net earnings $ 221 $ 384 $ 1,499 $ 1,850
Basic earnings per share $ 0.03 $ 0.06 $ 0.24 $ 0.28
Diluted earnings per share $ 0.03 $ 0.06 $ 0.24 $ 0.27
Basic weighted average shares outstanding 6,272,538 6,496,874 6,277,697 6,643,975Diluted weighted average shares outstanding 6,281,753 6,582,761 6,286,912 6,732,856
CONTACT: Taitron Components Inc., Santa Clarita Steven H. Dong, 661/257-6060 or Pondel Parsons & Wilkinson, Los Angeles Gary S. Maier, 310/207-9300
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