WHITE ELECTRONIC DESIGNS CORPORATION 
By Highlights of the quarter and the first half of fiscal 2009 included:
Continuing Operations
-- Q2 revenue of $17.1 million;
-- Q2 non-GAAP income from continuing operations of $1.6 million, or $0.07
per diluted share;
-- First half fiscal 2009 bookings up 36% when compared to the prior year
period and up 28% when compared to second half fiscal 2008;
-- Anti-tamper bookings reached $15.4 million in first half fiscal 2009
exceeding fiscal 2008 full year bookings of $4.8 million
Discontinued Operations
-- Display Systems Division - Assets sold to VIA Optronics;
-- Commercial Product Lines - Disposal concluded;
-- Interface Electronics Division - Production completing June 2009
Second Quarter Fiscal 2009 Results:
For the quarter, the Company's net sales were
Gross margin from continuing operations for the quarter was 43% compared with 41% in the comparable quarter last year. Income from continuing operations for the quarter was
Financial results for the quarter were negatively impacted by expenses of approximately
Loss from discontinued operations for the quarter totaled
Net income, including the loss in connection with the disposal of product lines discussed below, for the second quarter of fiscal 2009 was
As of the end of the second quarter of fiscal 2009, the Company had
(See Exhibit A for Reconciliation of second quarter Non-GAAP measures.)
Six Months Fiscal 2009 Results:
For the six-month period, revenues from continuing operations increased 14% to
Bookings / Backlog
Bookings for continuing operations for the quarter totaled
Anti-tamper bookings for the first half of fiscal 2009 totaled
Backlog at the end of the second quarter of fiscal 2009 was
Discontinued Operations Status
On
Mr. Derse continued, "We are also pleased to have completed the sale of our Display Systems Division and the disposal of our commercial microelectronic product lines while making progress in the disposition of our Interface Electronics Division during the quarter. We have made significant steps forward in executing our strategic plan to redeploy all of our assets - financial, technological and personnel - to become a leading defense electronics provider. We look forward to the second half of the fiscal year with great enthusiasm."
Strategic Alternatives
As previously announced, a special committee of the Company's Board, the Strategic Alternatives Committee, is continuing its exploration and review of strategic alternatives for the Company. The Company continues to work closely with its financial advisor, Jefferies Quarterdeck, a division of Jefferies Co., through this strategic alternatives review.
Consistent with its mandate from the Board, this special committee is continuing 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 this committee's deliberations or recommendations. It is the intent of this committee that, upon completion of its review process, it will make one or more recommendations to the Board regarding strategic alternatives.
Disclosure of Certain Financial Information
"Non-GAAP income from continuing operations" and the related "non-GAAP earnings per share" are non-GAAP financial measures. Regulation G and other provisions of the securities laws regulate the use of financial measures that are not prepared in accordance with generally accepted accounting principles. We believe these measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that - when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our press releases - provide a more complete understanding of factors and trends affecting our business.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. Non-GAAP income from continuing operations, which we reconcile to GAAP income, excludes the recent discontinued proxy contest and shareholder agreement expenses. Non-GAAP earnings per share is derived from non-GAAP income, using the same measures of outstanding shares as are used to calculate earnings per share in accordance with GAAP.
Conference Call
The Company will conduct a conference call today,
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 320647 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=143941. 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 and 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. 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)
April 4, September 27,
2009 2008
---- ----
ASSETS
Current Assets
Cash and cash equivalents $57,057 $52,604
Accounts receivable, less allowance for
doubtful accounts of $198 and $74 15,080 10,508
Inventories 17,498 15,359
Prepaid expenses and other current assets 3,453 2,027
Deferred income taxes 3,120 2,962
Assets held for sale 2,950 12,668
----- ------
Total Current Assets 99,158 96,128
Property, plant and equipment, net 10,516 10,137
Deferred income taxes 2,145 1,900
Goodwill 1,764 1,764
Other assets 67 67
Assets held for sale 1,009 1,662
----- -----
Total Assets $114,659 $111,658
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $4,248 $2,038
Accrued salaries and benefits 1,473 1,490
Other accrued expenses 1,989 1,260
Deferred revenue 3,793 4,016
Liabilities related to assets held for sale 789 2,327
--- -----
Total Current Liabilities 12,292 11,131
Accrued pension liability 696 640
Other liabilities 986 948
Liabilities related to assets held for sale - 101
--- ---
Total Liabilities 13,974 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, 25,378,202 and 25,048,639
shares issued 2,538 2,504
Treasury stock, 2,464,371 and 2,464,371 shares,
at par (247) (247)
Additional paid-in capital 83,435 82,608
Retained earnings 15,203 14,241
Accumulated other comprehensive loss (244) (268)
---- ----
Total Shareholders' Equity 100,685 98,838
-------- --------
Total Liabilities and Shareholders' Equity $114,659 $111,658
======== ========
WHITE ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended Six Months Ended
------------------ ----------------
April 4, March 29, April 4, March 29,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $17,120 $14,605 $30,415 $26,693
Cost of sales 9,827 8,678 17,819 16,254
----- ----- ------ ------
Gross profit 7,293 5,927 12,596 10,439
----- ----- ------ ------
Operating expenses:
Selling, general and
administrative 4,647 3,559 8,438 7,059
Research and development 970 851 2,086 1,760
--- --- ----- -----
Total operating
expenses 5,617 4,410 10,524 8,819
----- ----- ------ -----
Operating income 1,676 1,517 2,072 1,620
Interest income 59 456 306 1,025
--- --- --- -----
Income from continuing
operations, before
income taxes 1,735 1,973 2,378 2,645
Provision for income taxes (582) (650) (732) (766)
---- ---- ---- ----
Income from continuing
operations 1,153 1,323 1,646 1,879
Discontinued operations:
Loss from discontinued
operations, net of tax (341) (657) (8) (974)
Loss on sale of
discontinued operations,
net of tax (676) (2,233) (676) (2,233)
---- ------ ---- ------
Loss from discontinued
operations (1,017) (2,890) (684) (3,207)
------ ------ ---- ------
Net income (loss) $136 $(1,567) $962 $(1,328)
==== ======= ==== =======
Income from continuing
operations per common share:
Basic $0.05 $0.06 $0.07 $0.08
===== ===== ===== =====
Diluted $0.05 $0.06 $0.07 $0.08
===== ===== ===== =====
Loss from discontinued
operations per common share:
Basic $(0.04) $(0.13) $(0.03) $(0.14)
====== ====== ====== ======
Diluted $(0.04) $(0.13) $(0.03) $(0.14)
====== ====== ====== ======
Net income (loss) per
common share:
Basic $0.01 $(0.07) $0.04 $(0.06)
===== ====== ===== ======
Diluted $0.01 $(0.07) $0.04 $(0.06)
===== ====== ===== ======
Weighted average number
of common shares and
equivalents:
Basic 22,883,282 22,421,828 22,816,757 22,567,389
Diluted 23,109,986 22,806,187 23,106,852 22,992,778
Exhibit A
White Electronic Designs Corporation
Income from Continuing Operations and Diluted EPS GAAP to Non-GAAP
Reconciliation
(in thousands, except per share information)
(unaudited)
Three Months Ended
April 4, 2009
-------------
Proxy Contest &
Shareholder
Settlement
GAAP Costs Non-GAAP
------------------------------
Income from continuing operations,
before income taxes $1,735 $669 $2,404
Income tax expense (582) (224) (806)
---- ---- ----
Income from continuing operations $1,153 $445 $1,598
====== ==== ======
Diluted earnings per share $0.05 $0.02 $0.07
===== ===== =====
Diluted shares 23,110 23,110 23,110
Tax rate 34% 34% 34%
Note: Per share data is shown net of tax.
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
