WHITE ELECTRONIC DESIGNS CORPORATION 
By PHOENIX, Aug. 12 /PRNewswire-FirstCall/ -- White Electronic Designs Corporation (Nasdaq: WEDC) reported financial results for the third quarter ended July 4, 2009.
Highlights of the quarter and the first nine months of fiscal 2009 included:
Continuing Operations
-- Q3 revenue of $16.6 million;
-- Q3 bookings of $18.2 million;
-- Anti-tamper component only bookings reached $12.6 million for the first
nine months of fiscal 2009;
-- Circuit card assemblies with anti-tamper component bookings were $6.2
million for the first nine months of fiscal 2009;
-- Circuit card assemblies with anti-tamper component shipments ramped to
$1.8 million in Q3 up from $0.1 million in Q1 of fiscal 2009; and
-- Backlog at the end of the Q3 reaches $45.7 million.
Discontinued Operations
-- Interface Electronics Division - Production and shipments completed end
of June 2009 .
Third Quarter Fiscal 2009 Results:
For the quarter, the Company's net sales were $16.6 million, a 12% increase when compared to $14.8 million in the third quarter of fiscal 2008.
Gross margin from continuing operations for the quarter was 37% compared with 44% in the third quarter of fiscal 2008. Income from continuing operations for the quarter was $0.4 million, or $0.02 per diluted share, compared to income from continuing operations of $1.7 million, or $0.07 per diluted share, in the third quarter of fiscal 2008.
Financial results for the quarter were impacted by expenses associated with the retirement of our former chairman of the Board of Directors, Edward White, expenses for our ERP system upgrade and expenses supporting process and organizational revisions as part of the structural upgrade of the business in support of higher volume manufacturing. Additionally, a continued decline in interest rates reduced our interest income and a valuation allowance recorded against some expiring net operating losses increased our tax expense for the quarter.
Loss from discontinued operations for the quarter totaled $0.1 million, or $(0.01) per diluted share, versus a loss of $3.7 million, or $(0.16) per diluted share, in the third quarter of fiscal 2008.
Net income for the third quarter of fiscal 2009 was $0.2 million or $0.01 per diluted share, compared to net loss of $2.0 million, or $(0.09) per diluted share, in the third quarter of fiscal 2008.
Roger Derse, Chief Financial Officer and member of the interim Office of the President, said, "While we absorbed some additional costs this quarter, overall we are pleased with the outcome of the quarter and the current direction of the Company. Revenue is now incorporating integrated circuit card assemblies with our anti-tamper components as well as our traditional individual components with our anti-tamper technology. We also completed the production and sales activity at our Columbus facility, the last of our discontinued operations.
"The traction that we are achieving as a premier defense circuit card integrator comes, however, with a reduction in earnings for the quarter. Adjustments in personnel, modifications of information systems and structural revisions were required to position us as an advanced supplier of these products. Our focus on Lean Six Sigma manufacturing will allow us to efficiently produce the volumes that we are anticipating going forward."
As of the end of the third quarter of fiscal 2009, the Company had $58.8 million in cash and no debt. Due to the continued decline in interest rates, the Company has experienced a significant drop in interest income which has historically contributed to its operating income. Interest in the third quarter of fiscal 2009 was $61,000 compared to $242,000 in the third quarter of fiscal 2008. Interest income is expected to remain lower for the remainder of fiscal 2009.
Nine Months Fiscal 2009 Results:
For the nine month period, revenues from continuing operations increased 13% to $47.0 million in fiscal 2009 from $41.5 million for the comparable period in fiscal 2008. The Company reported income from continuing operations for the nine month period of $2.0 million, or $0.09 per diluted share, compared to income of $3.6 million, or $0.16 per diluted share for the third quarter of fiscal 2008. The nine month period has been collectively impacted by the added expenses and reduced interest income noted above for the third quarter and the shareholder agreement costs expensed in the second quarter of fiscal 2009.
Bookings / Backlog
Bookings for continuing operations for the quarter totaled $18.2 million compared to $11.6 million in the third quarter of fiscal 2008. The first nine months of fiscal 2009 bookings totaled $55.1 million and resulted in a book-to-bill ratio of 1.17:1. The bookings amount represents a 42% increase over the first nine months of fiscal 2008 bookings.
Total anti-tamper bookings for the first nine months of fiscal 2009 totaled $18.8 million, a significant improvement from $4.8 million of anti-tamper bookings for all of fiscal 2008. Our reference to anti-tamper includes the growing integrated circuit card/GPS receiver boards which include our anti-tamper components. Anti-tamper component only bookings totaled $12.6 million and integrated circuit card assemblies with anti-tamper components totaled $6.2 million for the first nine month period of fiscal 2009.
Total backlog at the end of the third quarter of fiscal 2009 was $45.7 million compared to $35.9 million at the end of the third quarter of fiscal 2008.
Dan Tarantine, Executive Vice President of Sales and Marketing and member of the interim Office of the President, said, "We have attained bookings this year through the end of the third quarter that almost match our total bookings for fiscal 2008. Our anti-tamper business continues to be strong with growth expectations leading into fiscal 2010. We are executing to our strategic vision pertaining to products that target greater participation in defense electronics with a specific focus in weapon and communication platforms."
Conference Call
The Company will conduct a conference call today, Wednesday, August 12, 2009 at 4:30 pm ET to review the financial results of the quarter.
Interested parties can access the call by dialing (877) 407-8031 (domestic) or (201) 689-8031 (international). A replay of the call will be available at (877) 660-6853 (domestic) or (201) 612-7415 (international), account number 286, access number 330019 for 7 days following the call.
A live web cast of the call will be available at http://www.investorcalendar.com/IC/CEPage.asp?ID=148445. The online replay will be available shortly after the end of the call and can be reached at http://www.vcall.com. After accessing the Vcall site enter the Company's symbol, WEDC. The webcast will be archived for the following 3 months.
About White Electronic Designs Corporation
White Electronic Designs (NASDAQ: WEDC) delivers sophisticated multi-chip semiconductor packages, high-efficiency memory devices and build-to-print electromechanical assemblies for defense and aerospace applications. The ability to address the unique size, performance and quality requirements for technology creators in the defense and aerospace market has established White Electronic Designs as a customer-focused solutions provider. Capabilities include design, manufacturing and obsolescence management for advanced defense electronics solutions, including die stacking and secure microelectronics, as well as complex circuit card assembly services. Headquartered in Phoenix, Arizona, White Electronic Designs operates world class development and production centers in Arizona and Indiana. To learn more about us, visit our website at http://www.whiteedc.com.
Cautionary Statement
This press release contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words, "believe," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Specific forward looking statements in this press release include but are not limited to the Company's expectations related to: anticipated reduction in defense programs not likely affecting programs that the Company focuses on, the Company's book-to-bill ratio, that the focus on Lean Six Sigma will allow the Company to efficiently produce the anticipated volumes, and the continued growth of anti-tamper in fiscal 2010. Additionally, other factors that could materially and unexpectedly affect the Company's results are set forth in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on our forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this press release, or to reflect the occurrence of unanticipated events. WEDC-F
Financial Tables on the Following Pages
WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share data)
July 4, September 27,
2009 2008
---- ----
ASSETS
Current Assets
Cash and cash equivalents $58,758 $52,604
Accounts receivable, less allowance for
doubtful accounts of $186 and $74 12,607 10,508
Inventories 17,571 15,359
Prepaid expenses and other current assets 2,334 2,027
Deferred income taxes 4,293 2,962
Assets held for sale 2,605 12,668
----- ------
Total Current Assets 98,168 96,128
Property, plant and equipment, net 10,696 10,137
Deferred income taxes 1,164 1,900
Goodwill 1,764 1,764
Other assets 67 67
Assets held for sale 722 1,662
--- -----
Total Assets $112,581 $111,658
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $3,649 $2,038
Accrued salaries and benefits 1,562 1,490
Other accrued expenses 1,836 1,260
Deferred revenue 2,665 4,016
Liabilities related to assets held for sale 699 2,327
--- -----
Total Current Liabilities 10,411 11,131
Accrued pension liability 224 640
Other liabilities 849 948
Liabilities related to assets held for sale - 101
--- ---
Total Liabilities 11,484 12,820
------ ------
Commitments and Contingencies
Shareholders' Equity
Preferred stock, 1,000,000 shares authorized,
no shares issued - -
Common stock, $0.10 stated value, 60,000,000
shares authorized, 25,404,367 and 25,048,639
shares issued 2,540 2,504
Treasury stock, 2,464,371 and 2,464,371
shares, at par (247) (247)
Additional paid-in capital 83,608 82,608
Retained earnings 15,427 14,241
Accumulated other comprehensive loss (231) (268)
---- ----
Total Shareholders' Equity 101,097 98,838
------- ------
Total Liabilities and Shareholders'
Equity $112,581 $111,658
======== ========
WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended Nine Months Ended
------------------ -----------------
July 4, June 28, July 4, June 28,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $16,620 $14,807 $47,035 $41,500
Cost of sales 10,472 8,357 28,291 24,611
------ ----- ------ ------
Gross profit 6,148 6,450 18,744 16,889
----- ----- ------ ------
Operating expenses:
Selling, general and
administrative 4,433 3,556 12,871 10,615
Research and development 1,019 971 3,105 2,731
----- --- ----- -----
Total operating expenses 5,452 4,527 15,976 13,346
----- ----- ------ ------
Operating income 696 1,923 2,768 3,543
Interest income 61 242 367 1,267
--- --- --- -----
Income from continuing
operations, before
income taxes 757 2,165 3,135 4,810
Provision for income taxes (407) (467) (1,139) (1,233)
---- ---- ------ ------
Income from continuing
operations 350 1,698 1,996 3,577
Discontinued operations:
Loss from discontinued
operations, net of tax (62) (2,942) (70) (3,916)
Loss on sale of discontinued
operations, net of tax (64) (785) (740) (3,018)
--- ---- ---- ------
Loss from discontinued
operations (126) (3,727) (810) (6,934)
---- ------ ---- ------
Net income (loss) $224 $(2,029) $1,186 $(3,357)
==== ======= ====== =======
Income from continuing
operations per common share:
Basic $0.02 $0.08 $0.09 $0.16
===== ===== ===== =====
Diluted $0.02 $0.07 $0.09 $0.16
===== ===== ===== =====
Loss from discontinued
operations per common share:
Basic $(0.01) $(0.17) $(0.04) $(0.31)
====== ====== ====== ======
Diluted $(0.01) $(0.16) $(0.04) $(0.30)
====== ====== ====== ======
Net income (loss) per
common share:
Basic $0.01 $(0.09) $0.05 $(0.15)
===== ====== ===== ======
Diluted $0.01 $(0.09) $0.05 $(0.15)
===== ====== ===== ======
Weighted average number of
common shares and
equivalents:
Basic 22,920,939 22,440,431 22,850,616 22,525,069
Diluted 23,039,639 22,756,198 23,138,611 22,866,801
Company Contact: Investor Contact:
Roger Derse Lytham Partners, LLC
Interim Office of the President, Joe Diaz, Robert Blum, Joe Dorame
Chief Financial Officer 602-889-9700
602-437-1520 wedc@lythampartners.com
rderse@wedc.com
SOURCE White Electronic Designs Corporation
