PHOENIX, Feb. 11 /PRNewswire-FirstCall/ -- White Electronic Designs Corporation (Nasdaq: WEDC) reported financial results for the first quarter ended January 3, 2009.

First Quarter Fiscal 2009 Results:

For the quarter, the Company reported revenues from continuing operations of $13.3 million, compared to $12.1 million from continuing operations in the first quarter of the previous year. Gross margin from continuing operations for the quarter was 40% compared with 37% in the comparable quarter last year. Income from continuing operations for the quarter was $0.5 million, or $0.02 per diluted share, compared to income from continuing operations of $0.6 million, or $0.02 per diluted share, in the first quarter of fiscal year 2008.

Revenues from discontinued operations in the first quarter were $6.5 million. Income from discontinued operations for the quarter totaled $0.3 million, or $0.01 per diluted share.

On a total basis, revenues for the first quarter of fiscal 2009 were $19.8 million compared to $23.3 million in the first quarter of fiscal 2008. Net income for the first quarter of fiscal 2009 was $0.8 million, or $0.04 per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, in the first quarter of 2008.

Cash generated from operations continues to be positive. As of the end of the first quarter of fiscal 2009, the Company had $58.5 million in cash, an increase of $5.9 million over the $52.6 million of cash on hand at the end of fiscal 2008. However, due to the dramatic decrease in interest rates, the Company has experienced a significant drop in interest income which has historically contributed to our operating income. Interest in the first quarter of fiscal 2009 was $0.2 million, or $0.01 per diluted share compared to $0.6 million, or $0.02 per diluted share, in the first quarter of fiscal 2008. Interest income is expected to remain lower in fiscal 2009.

Bookings / Backlog

Bookings for continuing operations for the quarter totaled $19.5 million, compared to $17.3 million in the previous quarter - an increase of 13% - and $15.5 million in the comparable quarter last year. The bookings activity for the quarter yielded a book-to-bill ratio of 1.5:1.

Dan Tarantine, Executive Vice President of Sales and Marketing and member of the interim Office of the President, said, "Bookings for the quarter included $6.1 million of anti-tamper products. These anti-tamper orders, coupled with the previously announced $4 million order for products used in the K9 self-propelled howitzer - a South Korean military program - and $9.4 million of orders across several other programs demonstrate the recent strength of the defense electronics market. Due to the overall uncertainty in the economy, the new administration may be challenged to reduce select defense programs. Our products cross numerous programs that are required to support secure communications, improve guidance of munitions to minimize collateral damage and enhance war fighter safety. We believe that the programs that utilize our leading-edge components are unlikely targets for reductions. It is on this basis we feel that our book-to-bill ratio will be greater than 1.0:1 for fiscal 2009."

Backlog at the end of the first quarter of fiscal 2009 increased 16% to $44.8 million, compared to $38.6 million at the end of fiscal 2008.

Roger Derse, Chief Financial Officer and member of the interim Office of the President, said, "We are pleased with the results of the quarter, particularly in light of the difficult macro-economic landscape. With revenues increasing by 10% versus last year's first quarter and our book-to-bill ratio for the quarter coming in at 1.5:1, we are off to a strong start for the new year. Our strategy to focus our operations in the defense electronics business continues to achieve traction."

Shareholder Settlement

As previously reported this month, the Company has reached a settlement agreement with a shareholder group that includes Wynnefield Capital, Caiman Partners and their respective affiliates. Under the terms of the agreement, among other things, the Company's Board of Directors ("Board") has been expanded from five to seven directors and the Board has appointed Brian Kahn, founder and investment manager of Caiman Partners, and Mel Keating, former president and chief executive officer of Alliance Semiconductor Corporation as directors. This shareholder group has withdrawn its proposed slate of nominees for the Company's 2009 Annual Meeting, terminated its proxy solicitation and agreed to typical standstill provisions. At least one of the new members is now on each of the Board's standing and ad hoc committees.

Mr. Derse commented, "Brian and Mel bring substantial experience and financial knowledge to the Board, and we look forward to working closely with them and benefiting from their perspectives. We are pleased that this matter has been resolved and that management is able to continue to focus on driving shareholder value."

Discontinued Operations Status

During fiscal year 2008, the Company made a strategic decision to dispose of its Display Systems Division (DSD), Interface Electronics Division (IED) and its commercial microelectronics product lines to focus operations in the defense electronics market. These operations are reported as discontinued operations for all periods presented in the consolidated financial statements.

The Company continues to actively market its discontinued operations. "Numerous buyers have visited our IED location in Columbus, Ohio," continued Mr. Derse. "Unfortunately, there are several similar businesses on the market. We would like to initiate a transaction by the end of March 2009. The disposition of our commercial microelectronics product lines is expected to be completed by the end of March 2009. We have a buyer currently conducting due diligence at DSD. We are also driving to a March 2009 disposition of this operation."

Strategic Alternatives

As previously announced, a special committee of the Company's Board, the Strategic Alternatives Committee, is continuing in its exploration and review of strategic alternatives for the Company. Brian Kahn has recently been added as a member of this committee. The Company continues to work closely with its financial advisor Jefferies Quarterdeck, a division of Jefferies Co., through this strategic alternatives review. Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal advisor.

Consistent with its mandate from the Board, the committee is continuing in its thorough review of all strategic alternatives, including the Company continuing as an independent public company, merging with or acquiring another public or private defense electronics company, or being acquired by a strategic or financial investor. The Strategic Alternatives Committee is giving due consideration and deliberation with respect to all opportunities that are available to the Company with the goal of identifying what it believes is the best strategy for the Company and is committed to completing the process as expeditiously as possible, while ensuring that all alternatives are given appropriate consideration. Therefore, the Company will not commit to a specific timetable for completion of the committee's deliberations or recommendations. It is the intent of the committee that, upon completion of its review process, it will make one or more recommendations to the Board regarding strategic alternatives.

CEO Search

Upon conclusion of the Strategic Alternatives Committee's review of alternatives, the Board will finalize its search for a chief executive officer, as appropriate, based upon a specification reflecting the direction the Board intends to take the Company on a go forward basis.

Annual Meeting

The Company will hold its 2009 annual meeting on May 7, 2009 at 11:00 MST at the corporate headquarters in Phoenix, Arizona. The record date for such meeting is March 20, 2009.

Conference Call

The Company will conduct a conference call today, Wednesday, February 11, 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 311557 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=140218. 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 market has established White Electronic Designs as a customer-focused solutions provider. Capabilities include design, manufacturing and obsolescence management for advanced embedded component solutions, including die stacking and secure microelectronics, as well as complex circuit card assembly services. 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, disposal of discontinued operations in fiscal year 2009, the likely benefits of a more efficient operating structure, the possibility that the review of strategic alternatives will identify or result in a transaction involving the Company or any other strategic action by the Company and the likely results or success of our search for a chief executive officer. 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 


    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


                      Financial Tables on the Following Pages




                 WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                      (Unaudited)
                           (In thousands, except share data)


                                                     January 3,  September 27,
                                                        2009          2008
    ASSETS
    Current Assets
      Cash and cash equivalents                        $58,527      $52,604
      Accounts receivable, less allowance for
       doubtful accounts of $63 and $74                  8,363       10,508
      Inventories                                       15,447       15,359
      Prepaid expenses and other current assets          2,644        2,027
      Deferred income taxes                              2,948        2,962
      Assets held for sale                               9,570       12,668
               Total Current Assets                     97,499       96,128
    Property, plant and equipment, net                  10,260       10,137
    Deferred income taxes                                2,068        1,900
    Goodwill                                             1,764        1,764
    Other assets                                            67           67
    Assets held for sale                                 1,678        1,662
               Total Assets                           $113,336     $111,658

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts payable                                  $2,967       $2,038
      Accrued salaries and benefits                        884        1,490
      Other accrued expenses                             1,262        1,260
      Deferred revenue                                   4,126        4,016
      Liabilities related to assets held for sale        2,071        2,327
               Total Current Liabilities                11,310       11,131
    Accrued pension liability                              659          640
    Other liabilities                                      949          948
    Liabilities related to assets held for sale             54          101
               Total Liabilities                        12,972       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, 25,320,702 and 25,048,639
       shares issued                                     2,532        2,504
      Treasury stock, 2,464,371 and 2,464,371
       shares, at par                                     (247)        (247)
      Additional paid-in capital                        83,273       82,608
      Retained earnings                                 15,065       14,241
      Accumulated other comprehensive loss                (259)        (268)
               Total Shareholders' Equity              100,364       98,838

               Total Liabilities and Shareholders'
                Equity                                $113,336     $111,658



                 WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (Unaudited)
                    (In thousands, except share and per share data)

                                                   Three Months Ended
                                               January 3,     December 29,
                                                  2009           2007

    Net sales                                   $13,295        $12,088
    Cost of sales                                 7,992          7,576
    Gross profit                                  5,303          4,512
    Operating expenses:
      Selling, general and administrative         3,791          3,500
      Research and development                    1,116            909
        Total operating expenses                  4,907          4,409
    Operating income                                396            103
    Interest income                                 247            569
    Income from continuing operations before
     income taxes                                   643            672
    Provision for income taxes                     (150)          (116)
    Income from continuing operations               493            556
    Discontinued operations:
      Income (loss) from discontinued
       operations, net of tax                       332           (317)
    Net income                                     $825           $239
    Income from continuing operations per common
     share:
      Basic                                       $0.02          $0.02
      Diluted                                     $0.02          $0.02
    Income (loss) from discontinued operations
     per common share:
      Basic                                       $0.01         $(0.01)
      Diluted                                     $0.01         $(0.01)
    Net income per common share:
      Basic                                       $0.04          $0.01
      Diluted                                     $0.04          $0.01
    Weighted average number of common
     shares and equivalents:
      Basic                                  22,754,984     22,712,950
      Diluted                                23,015,291     23,268,958

SOURCE White Electronic Designs Corporation