|By Business Wire||
|May 12, 2014 04:05 PM EDT||
Pulse Electronics Corporation (NYSE:PULS), a leading provider of electronic components, today reported results for its first quarter ended March 28, 2014.
First Quarter Highlights
- Net sales were $81.7 million, down 3.7 percent from $84.8 million in the prior-year quarter, and down 7.0 percent from $87.8 million in the fourth quarter.
- Operating loss (U.S. GAAP) was $1.4 million compared with a profit of $1.0 million in the prior-year quarter and a profit of $1.2 million in the fourth quarter.
- Non-GAAP operating profit was $0.1 million, compared with $1.6 million in the prior-year quarter and $2.2 million in the fourth quarter.
- Orders increased 6 percent compared with the prior-year quarter, and the book-to-ship ratio in the first quarter was 1.05.
- Completed exchange transactions for $20.7 million of outstanding convertible senior notes, as previously announced.
“While the industry environment remained challenging, our operating results for both revenue and non-GAAP operating profit this quarter were within our guidance, but lower both year over year and sequentially consistent with general industry conditions,” said Pulse Chairman and Chief Executive Officer Ralph Faison. “Orders in the quarter were nicely higher than revenue and ahead of last year’s trend. Smartphone demand remained weak as expected.
“As has been widely reported across our industry by peers and analysts, order rates for network and power that began to strengthen late in the fourth quarter of 2013 continued to grow through the first quarter and provide a positive outlook for Pulse in the coming quarters,” added Mr. Faison. “We believe these increased orders will result in sequential revenue growth in coming months. At the same time, we expect the smartphone market to return to a more normal demand situation that should provide improved opportunity for wireless revenue.
“We continue to maintain our focus on and commitment to EBITDA growth as the company’s primary objective in 2014. We implemented a number of cost and expense reduction actions during the quarter to better align our cost structure with the size of the business, and we will continue to pursue these activities in the second quarter. Our previous cost and expense reductions have significantly reduced the company’s breakeven point, as evidenced by our positive non-GAAP operating profit this quarter despite revenue under $82 million. We believe any future increase in revenue should result in good growth in EBITDA and EBITDA margin.
“Additionally, we continue to address the issues of wireless segment performance. We are currently executing on a new antenna manufacturing technology we have developed and that is already commercially proven. Antennas produced with this technology better meet the needs of the high-end smartphone and mobile device industry both technically and financially. Further, we are optimistic that successful partnerships with our customers will drive improved operating performance in the future,” Mr. Faison concluded.
First Quarter Operating Performance
Net sales were $81.7 million compared to $84.8 million in the prior-year quarter due to ongoing industry weakness in the network and power segments and lower demand for wireless smartphone and wireless infrastructure products. The book-to-ship ratio in the first quarter was substantially above parity, compared to well below parity in the prior-year quarter. Sequentially, net sales decreased 7.0 percent compared to fourth quarter net sales of $87.8 million due primarily to wireless demand weakness, normal first quarter seasonality, and the effects of Chinese New Year.
Cost of sales decreased 0.8 percent to $64.1 million from $64.6 million in the prior-year quarter. The company’s gross profit margin was 21.5 percent compared with 23.8 percent in the prior-year quarter and 21.7 percent in the fourth quarter. Gross profit margin decreased compared to the prior year mainly due to higher production costs, particularly labor costs in China. Sequentially, gross margin was essentially flat as unfavorable cost absorption due to lower volumes and the production effects of Chinese New Year were offset by favorable product mix.
Operating expenses were $17.9 million, a decline of 6.5 percent from the first quarter of 2013, mainly due to results of actions related to the previously announced expense reduction initiative. Operating expenses increased 3.6 percent sequentially mainly due to a favorable adjustment to compensation expense in the prior quarter.
Operating loss (U.S. GAAP) was $1.4 million compared with a profit of $1.0 million in the first quarter of 2013, mainly due to lower gross profit and $1.0 million of severance costs in the current-year quarter associated with production cost and operating expense reductions. Non-GAAP operating profit was $0.1 million compared with $1.6 million in the prior-year quarter and $2.2 million in the fourth quarter.
The company had $20.6 million of cash and cash equivalents at March 28, 2014 compared with $26.9 million at December 27, 2013. The decrease in cash mainly reflects the payment of cash consideration for the previously announced convertible bond exchange transactions, refinancing transaction fees and expenses, capital expenditures, and working capital needs.
The company will conduct a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today. The conference call will be available via telephone and the Internet. The dial-in number is 1-800-860-2442 (international 1-412-858-4600). A link to the earnings press release, the Internet web cast and a slide presentation that will accompany management’s prepared remarks will be available on the “Investor Information” section of the company’s web site www.pulseelectronics.com for two weeks.
About Pulse Electronics Corporation
Pulse Electronics is the electronic components partner that helps customers build the next great product by providing the needed technical solutions. Pulse Electronics has a long operating history of innovation in magnetics, antennas and connectors, as well as the ability to ramp quickly into high-quality, high-volume production. The company serves the wireless and wireline communications, power management, military/aerospace and automotive industries. Pulse Electronics is a participating member of the IEEE, SFF, OIF, HDBaseT Alliance, CommNexus, and MoCA. Visit the Pulse Electronics website at www.pulseelectronics.com.
This press release contains statements, including projections of future business objectives and financial results, that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These forward-looking statements are based on the company's current information and expectations. There can be no assurance these forward-looking statements, including, without limitation, that the company will have the ability to execute its business strategy and grow its business or that orders will be filled, will be achieved. Actual results may differ materially due to the risk factors listed from time to time in the company's SEC reports including, but not limited to, those discussed in its Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. All such risk factors are incorporated herein by reference as though set forth in full. The company undertakes no obligation to update any forward-looking statement.
In this press release and in other public statements, Pulse presents certain non-GAAP financial measures. These non-GAAP financial measures have limitations and may not be comparable with similar non-GAAP financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Set forth in Schedule A are the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures. These reconciliations should be carefully evaluated. Prior disclosures of non-GAAP figures may not exclude the same items and as such should not be used for comparison purposes. Management believes that these measures enhance investors' understanding of the company's financial performance and the comparability of the company's operating results to prior periods, as well as against the performance of other companies.
Copyright © 2014 Pulse Electronics Corporation. All rights reserved. All brand names and trademarks are properties of their respective holders.
|CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)|
|(in thousands, except per-share data)|
|Three Months Ended|
|Cost of sales||64,126||64,625|
|Severance, impairment and other associated costs||961||19|
|Operating (loss) profit||(1,368||)||950|
|Interest expense, net||(7,118||)||(5,114||)|
|Other expense, net||(73||)||(2,532||)|
|Loss before income taxes||(8,559||)||(6,696||)|
|Income tax expense||(472||)||(434||)|
|Less: Net earnings (loss) attributable to non-controlling interest||14||(14||)|
|Net loss attributable to Pulse Electronics Corporation||(9,045||)||(7,116||)|
|Basic shares outstanding||12,650||7,957|
|Basic loss per share||(0.72||)||(0.89||)|
|Diluted shares outstanding||12,650||7,957|
|Diluted loss per share||(0.72||)||(0.89||)|
|BUSINESS SEGMENT INFORMATION (UNAUDITED)|
|Three Months Ended|
|Total net sales||81,652||84,806|
|Operating (loss) profit|
|Operating profit (loss) excluding severance, impairment and other associated costs, and legal reserve costs||(396||)||1,007|
|Severance, impairment and other associated costs||961||19|
|Operating (loss) profit||$||(1,368||)||$||950|
|FINANCIAL POSITION (UNAUDITED)|
|Cash and cash equivalents||$||20,555||$||26,902|
|Accounts receivable, net||57,656||62,185|
|Prepaid expenses and other current assets||18,329||18,966|
|Net property, plant and equipment||26,890||27,955|
|Current portion of long-term debt||1,570||22,315|
|Accrued expenses and other current liabilities||36,384||36,335|
|Other long-term liabilities||23,292||22,841|
|Total liabilities and deficit||$||177,173||$||188,834|
|NON-GAAP MEASURES (UNAUDITED)|
|(in thousands, except per-share amounts)|
|1. Operating (loss) profit excluding severance, impairment and other associated costs, legal reserve costs, and non-cash stock-based compensation expenses|
|Operating (loss) profit||$||(1,368||)||$||950|
|Pre-tax severance, impairment and other associated costs||961||19|
|Pre-tax non-cash stock-based compensation expenses||506||579|
|Pre-tax legal reserve||11||38|
|Operating (loss) profit excluding severance, impairment and other associated costs, legal reserve costs, and non-cash stock-based compensation expenses||110||1,586|
|2. Net loss per diluted share excluding severance, impairment and other associated costs, legal reserve costs, and non-cash stock-based compensation expenses|
|Net loss per diluted share||$||(0.72||)||$||(0.89||)|
|After-tax severance, impairment and other associated costs, per share||0.05||0.00|
|After-tax non-cash stock-based compensation expenses, per share||0.03||0.05|
|After-tax legal reserve, per share||0.00||0.00|
|Net loss per diluted share excluding severance, impairment and other associated costs, legal reserve costs, and non-cash stock-based compensation expenses||(0.64||)||(0.84||)|
|3. Adjusted EBITDA||
|Net loss attributable to Pulse Electronics Corporation||$||(9,045||)||$||(7,116||)|
|Income tax expense||472||434|
|Interest expense, net||7,118||5,114|
|Non-cash stock-based compensation expenses||506||579|
|Depreciation and amortization||1,802||1,749|
|Other expense, net||73||2,532|
|Severance, impairment and other associated costs||961||19|
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
May. 31, 2016 08:00 PM EDT Reads: 2,507
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
May. 31, 2016 07:15 PM EDT Reads: 1,002
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
May. 31, 2016 07:15 PM EDT Reads: 1,897
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
May. 31, 2016 07:15 PM EDT Reads: 1,793
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
May. 31, 2016 07:00 PM EDT Reads: 3,331
We’ve been doing it for years, decades for some. How many websites have you created accounts on? Your bank, your credit card companies, social media sites, hotels and travel sites, online shopping sites, and that’s just the start. We do it often without even thinking about it, quickly entering our personal information, our data, in a plethora of systems. Sometimes we’re not even aware of the information we are providing. It could be very personal information (think of the security questions you ...
May. 31, 2016 06:45 PM EDT Reads: 1,144
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
May. 31, 2016 06:45 PM EDT Reads: 3,240
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
May. 31, 2016 06:30 PM EDT Reads: 894
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
May. 31, 2016 05:45 PM EDT Reads: 1,784
As machines are increasingly connected to the internet, it’s becoming easier to discover the numerous ways Industrial IoT (IIoT) is helping to shape the business world. This is exactly why we have decided to take a closer look at this pervasive movement and to examine the desire to connect more things! Now if you need a refresher on IIoT and how it is changing the world, take a moment and listen to Greg Gorbach with ARC Advisory Group. Gorbach believes, "IIoT will significantly change the worl...
May. 31, 2016 05:00 PM EDT Reads: 2,148
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
May. 31, 2016 04:45 PM EDT Reads: 2,660
"What we see what happens when you have a completely networked society and the potential to now drive the value creation and the collaboration and the ecosystems that are possible when you start to be able to connect people and industries together in ways that have never been possible before," explained Esmeralda Swartz, VP of Marketing Enterprise & Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
May. 31, 2016 04:45 PM EDT Reads: 1,903
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...
May. 31, 2016 04:30 PM EDT Reads: 974
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
May. 31, 2016 04:00 PM EDT Reads: 2,730
SYS-CON Events announced today that Zerto will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Zerto is committed to keeping enterprise and cloud IT running 24/7 by providing innovative, simple, reliable and scalable business continuity software solutions. Through the Zerto Cloud Continuity Platform™, organizations can seamlessly move and protect virtualized workloads between public, private and hybrid clou...
May. 31, 2016 03:50 PM EDT Reads: 308