Earnings out:
Tuesday April 20, 4:13 pm Eastern Time
Company Press Release
Smartflex Reports First Quarter Results
TUSTIN, Calif.--(BUSINESS WIRE)--April 20, 1999--Smartflex Systems, Inc. (Nasdaq:
SFLX - news) today announced net revenues of $23.2 million for the first quarter ended
March 31, 1999, a decrease of 37 percent from the $37.0 million reported in last year's
comparable quarter.
The net loss for the first quarter of fiscal 1999, which includes expenses related to a recently announced restructuring plan, was
$4.9 million or $0.75 per share, compared to net income of $828,000, or $0.13 per share for the comparable period in the
prior year. The pre-tax restructuring charge recorded in the first quarter totaled $3.8 million dollars. Net loss for the quarter,
exclusive of restructuring, was $1.0 million dollars or $0.16 per share.
The decrease in revenues, as compared to the same period in the prior year, was primarily due to continued softness in the data
storage industry. Although revenues from the acquisition of certain entities of Tanon Manufacturing Inc. (Tanon) are 100
percent non-storage related, decreases in the data storage business more than offset the additional non-storage revenues. Gross
margin as a percent of revenues was 9.0 percent, compared to 11.2 percent in the same period in the prior year and 10.9
percent in the prior quarter. Results for the first quarter include two months of operations from Tanon.
Smartflex Systems, Inc., headquartered in Tustin, California, is a leader in providing automated electronics manufacturing
services. Smartflex services optimize and accelerate product realization - the process from product concept through volume
manufacturing.
Smartflex's specialty manufacturing skills allow the company to help its telecommunications, computer, and medical electronics
customers meet their goals of smaller packaging, reduced cost, and faster delivery to the marketplace. Smartflex serves
customers worldwide from its factories and technology centers in Cebu, Philippines; Monterrey and Guadalajara, Mexico;
Singapore; West Long Branch, New Jersey; Methuen, Massachusetts; and Santa Clara, Morgan Hill, Fremont and Tustin,
California. For more information contact the company's website at smartflex.com.
This release contains forward-looking statements, including each statement of management's opinions, expectations, plans, and
objectives for future operations that involve risks and uncertainties. Actual results could differ materially from these expectations
as a result of various factors, and therefore we caution investors against ascribing undue weight thereto. The factors include, but
are not limited to, the ability to effectively identify, investigate, conclude, integrate and manage acquisitions or large-scale
projects, to manage the transition of manufacturing operations, qualification of manufacturing processes, efficient utilization of
manufacturing facilities and financial resources, the ability to retain and attract qualified personnel, international currency
fluctuations, and future financial, economic, competitive and market conditions and their potential direct or indirect effect,
including cancellations of orders included in backlog. These and other factors are also discussed in Smartflex Systems' 10-K,
10-Q and other filings made previously or from time to time with the Securities and Exchange Commission.
SMARTFLEX SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except share data)
Quarter Ended
March 31
1999 1998 % Change
----------------------------------------------------------------------
Net revenues $23,152 $37,005 (37)
Cost of revenues 21,061 32,860 (36)
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Gross margin 2,091 4,145 (50)
Costs and expenses:
Marketing and sales expense 1,157 930 24
General and
administrative expense 2,853 2,081 37
Restructuring expense 3,847 --
----------------------------------------------------------------------
Operating (loss)income (5,766) 1,134
Interest income 316 263 20
Interest expense (310) (62) 400
Other expense (161) (73) 121
----------------------------------------------------------------------
Income (loss) before income taxes (5,921) 1,262
Income tax (benefit) provision (1,067) 434
----------------------------------------------------------------------
Net (loss) income $(4,854) $ 828
----------------------------------------------------------------------
Net (loss) income per share -basic &
diluted $(0.75) $0.13
----------------------------------------------------------------------
Shares used in computing net (loss)
income per share: basic 6,453 6,371
diluted 6,485 6,462
----------------------------------------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollar amounts in thousands) March 31, December 31,
1999 1998
Assets
Cash and short-term investments $20,100 $27,356
Accounts receivable, net 13,467 11,209
Inventories 9,293 3,927
Other current assets 7,413 5,973
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Total current assets 50,273 48,465
Property and equipment, net 20,245 18,475
Goodwill, net 14,529 4,089
Other assets 1,318 1,262
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Total assets $86,365 $72,291
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Liabilities and Stockholders' Equity
Accounts payable $11,992 $ 7,050
Accrued liabilities 11,905 7,546
Current portion of
notes payable to bank 1,150 1,150
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Total current liabilities 25,047 15,746
Long-term portion of
notes payable to bank 10,306 4,463
Other notes payable
and long-term liabilities 4,846 1,063
Total stockholders' equity 46,166 51,019
------------------------------------------- ------- -------
Total liabilities $86,365 $72,291
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