PT Announces Second Quarter 2013 Financial Results
"Quarterly GAAP Profit and Sequential Revenue Growth of 13%"
ROCHESTER, NY--(Marketwired - Aug 8, 2013) - PT (NASDAQ: PTIX), a leading global provider of advanced network communications solutions, today announced its unaudited financial results for the second quarter 2013.
Revenue in the second quarter 2013 amounted to $7.1 million, compared to $5.0 million in the second quarter 2012. Revenue amounted to $13.4 million for the six months ended June 30, 2013 and in the corresponding period in 2012.
On the basis of generally accepted accounting principles (GAAP), net income in the second quarter 2013 amounted to $.2 million, or $.02 per diluted share, including amortization of purchased intangible assets of $.02 per share; a charge for impairment of software development costs of $.01 per share; and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding. GAAP net loss in the second quarter 2012 amounted to ($1.8 million), or ($.16) per basic share, including amortization of purchased intangible assets of $.03 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding.
The GAAP net loss for the six months ended June 30, 2013 amounted to ($.7 million), or ($.06) per basic share, including amortization of purchased intangible assets of $.04 per share; a restructuring charge of $.02 per share; a charge for impairment of software development costs of $.01 per share, and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding. The GAAP net loss for the six months ended June 30, 2012 amounted to ($1.5 million), or ($.13) per basic share, including amortization of purchased intangible assets of $.05 per share and stock-based compensation expense of $.01 per share, based on 11.1 million shares outstanding.
The non-GAAP net income in the second quarter 2013 amounted to $.6 million, or $.06 per diluted share, compared to a non-GAAP net loss of ($1.4 million), or ($.12) per basic share in the second quarter 2012. The non-GAAP net income for the six months ended June 30, 2013 amounted to $.3 million, or $.03 per diluted share, compared to a net loss of ($.8 million), or ($.07) per basic share for the six months ended June 30, 2012. Please refer to the reconciliations between GAAP and non-GAAP financial measures contained in this release.
On June 30, 2013, the Company had cash and investments amounting to $12.3 million, working capital of $17.0 million and no long-term debt.
"Following our 19% sequential revenue growth in the first quarter, we are pleased to report 13% sequential quarterly revenue growth in the second quarter and GAAP profitability," said John Slusser, president and chief executive officer. "We also continue to be gratified by the level of market activity we are seeing associated with our overall SEGway® Signaling Systems portfolio for both Diameter and SS7 signaling. Making a strong push into the Diameter Signaling market is our key 2013 initiative and during the quarter we added new Diameter customers, expanded the breadth of our Diameter solution set and filled several important sales and marketing positions."
About PT (www.pt.com)
PT (NASDAQ: PTIX) is a global supplier of advanced, high availability network communications solutions. Its SEGway® Diameter and SS7 Signaling Systems provide tightly integrated signaling and advanced routing capabilities and applications that uniquely span the mission critical demands of both existing and next-generation 4G LTE and IMS telecommunications networks. The Company's IPnexus® Multi-Protocol Gateways and Servers enable a broad range of IP-interworking in data acquisition, sensor, radar, and control applications for aviation, weather and other infrastructure networks. Established in 1981, PT is headquartered in Rochester, NY and markets and sells its products worldwide through its direct sales organization as well as through channel partners that include major telecommunications equipment vendors, government prime contractors and value-added resellers.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements which reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions of those Sections. The Company's future operating results are subject to various risks and uncertainties and could differ materially from those discussed in the forward-looking statements and may be affected by various trends and factors which are beyond the Company's control. These risks and uncertainties include, among other factors, business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers and the potential loss of key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results, the reliance on a limited number of third party suppliers, limitations of PT's manufacturing capacity and arrangements, the protection of PT's proprietary technology, errors or defects in our products, the effects of pending or threatened litigation, the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign regulations, possible loss or significant curtailment of significant government contracts or subcontracts, possible effects related to compliance with new conflict-free mineral regulations, and potential material weaknesses in internal control over financial reporting. In addition, during weak or uncertain economic periods, customers' visibility deteriorates causing delays in the placement of their orders. These factors often result in a substantial portion of PT's revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter. Forward-looking statements should be read in conjunction with the most recent audited Consolidated Financial Statements, the Notes thereto, Risk Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company, as contained in the Company's Annual Report on Form 10-K, and other documents filed with the Securities and Exchange Commission.
Non-GAAP Financial Measures
As a supplement to the GAAP-based consolidated financial statements contained in this press release, the Company is providing a presentation of non-GAAP financial measures which can be useful to investors to gain an overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP financial measures provide useful information to investors by excluding certain expenses the Company believes are not indicative of its core operating results. The non-GAAP financial measures exclude certain expenses such as the effects of (a) amortization of purchased intangible assets, (b) impairment charge - capitalized software, (c) stock-based compensation costs, and (d) restructuring costs.
Management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions and forecasting and planning for future periods. We also consider the use of the non-GAAP financial measures to be helpful in assessing various aspects of our business operations.
Non-GAAP financial measures are not meant to be considered a substitute for the corresponding GAAP financial information and should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial information.
A reconciliation of non-GAAP measures to GAAP measures is included herein.
A conference call will be held on Friday, August 9, at 10:00 a.m., New York time, to discuss the results. All institutional investors can participate in the conference by dialing (866) 494-3746 or (416) 915-1196. The call will be available simultaneously for all other investors at (866) 494-3387 or (416) 915-1198. A digital recording of this conference call may be accessed immediately after its completion from August 9 through August 13, 2013. To access the recording, participants should dial (866) 245-6755 or (416) 915-1035 using passcode 245266. A live webcast of the conference call will be available for two weeks on the PT website at www.pt.com and will be archived to the site within two hours after the completion of the call.
PT is a trademark of Performance Technologies, Inc. The names of actual companies, products, or services may be the trademarks, registered trademarks, or service marks of their respective owners in the United States and/or other countries.
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
June 30, | December 31, | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,799,000 | $ | 7,546,000 | ||||
Investments | 1,963,000 | 4,794,000 | ||||||
Accounts receivable | 6,541,000 | 3,775,000 | ||||||
Inventories | 2,741,000 | 3,615,000 | ||||||
Prepaid expenses and other assets | 1,122,000 | 932,000 | ||||||
Prepaid income taxes | 297,000 | 206,000 | ||||||
Deferred income taxes | 409,000 | 445,000 | ||||||
Total current assets | 22,872,000 | 21,313,000 | ||||||
Investments | 510,000 | 1,969,000 | ||||||
Property, equipment and improvements, net | 1,654,000 | 1,683,000 | ||||||
Software development costs, net | 3,567,000 | 3,716,000 | ||||||
Purchased intangible assets, net | 2,367,000 | 2,835,000 | ||||||
Total assets | $ | 30,970,000 | $ | 31,516,000 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 936,000 | $ | 1,134,000 | ||||||
Accrued expenses | 1,852,000 | 1,664,000 | ||||||||
Deferred revenue | 3,054,000 | 3,002,000 | ||||||||
Fair value of foreign currency hedges | 64,000 | |||||||||
Total current liabilities | 5,906,000 | 5,800,000 | ||||||||
Deferred income taxes | 671,000 | 696,000 | ||||||||
Total liabilities | 6,577,000 | 6,496,000 | ||||||||
Stockholders' equity: | ||||||||||
Preferred stock | ||||||||||
Common stock | 133,000 | 133,000 | ||||||||
Additional paid-in capital | 17,714,000 | 17,591,000 | ||||||||
Retained earnings | 16,426,000 | 17,099,000 | ||||||||
Accumulated other comprehensive income | (62,000 | ) | 15,000 | |||||||
Treasury stock | (9,818,000 | ) | (9,818,000 | ) | ||||||
Total stockholders' equity | 24,393,000 | 25,020,000 | ||||||||
Total liabilities and stockholders' equity | $ | 30,970,000 | $ | 31,516,000 | ||||||
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Sales | $ | 7,107,000 | $ | 5,018,000 | $ | 13,392,000 | $ | 13,374,000 | ||||||||||
Cost of goods sold | 3,597,000 | 2,944,000 | 7,053,000 | 6,741,000 | ||||||||||||||
Impairment of software development costs | 137,000 | 137,000 | ||||||||||||||||
Gross profit | 3,373,000 | 2,074,000 | 6,202,000 | 6,633,000 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Selling and marketing | 1,340,000 | 1,473,000 | 2,735,000 | 3,088,000 | ||||||||||||||
Research and development | 1,028,000 | 1,574,000 | 2,209,000 | 3,273,000 | ||||||||||||||
General and administrative | 804,000 | 857,000 | 1,653,000 | 1,804,000 | ||||||||||||||
Restructuring charges | 243,000 | |||||||||||||||||
Total operating expenses | 3,172,000 | 3,904,000 | 6,840,000 | 8,165,000 | ||||||||||||||
Income (loss) from operations | 201,000 | (1,830,000 | ) | (638,000 | ) | (1,532,000 | ) | |||||||||||
Other (expense) income, net | (10,000 | ) | 29,000 | (19,000 | ) | (1,000 | ) | |||||||||||
Income (loss) before income taxes | 191,000 | (1,801,000 | ) | (657,000 | ) | (1,533,000 | ) | |||||||||||
Income tax (benefit) provision | (2,000 | ) | (47,000 | ) | 16,000 | (68,000 | ) | |||||||||||
Net income (loss) | $ | 193,000 | $ | (1,754,000 | ) | $ | (673,000 | ) | $ | (1,465,000 | ) | |||||||
Basic income (loss) per share | $ | .02 | $ | (.16 | ) | $ | (.06 | ) | $ | (.13 | ) | |||||||
Diluted income per share | $ | .02 | ||||||||||||||||
Weighted average common shares used in basic and diluted net income (loss) per share | 11,116,000 | 11,116,000 | 11,116,000 | 11,116,000 | ||||||||||||||
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES | |||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross Profit Reconciliation | |||||||||||||||
GAAP gross profit | $ | 3,373,000 | $ | 2,074,000 | $ | 6,202,000 | $ | 6,633,000 | |||||||
Amortization of purchased intangible assets(a) | 234,000 | 310,000 | 468,000 | 589,000 | |||||||||||
Impairment charge - capitalized software(b) | 137,000 | 137,000 | |||||||||||||
Stock-based compensation(c) | 4,000 | 3,000 | 9,000 | 6,000 | |||||||||||
Non-GAAP gross profit | 3,748,000 | 2,387,000 | 6,816,000 | 7,228,000 | |||||||||||
Non-GAAP gross profit percentage of sales | 52.7 | % | 47.6 | % | 50.9 | % | 54.0 | % | |||||||
Operating Expense Reconciliation | |||||||||||||||
GAAP operating expenses | 3,172,000 | 3,904,000 | 6,840,000 | 8,165,000 | |||||||||||
Stock-based compensation (c) | (62,000 | ) | (55,000 | ) | (114,000 | ) | (119,000 | ) | |||||||
Restructuring costs(d) | (243,000 | ) | |||||||||||||
Non-GAAP operating expenses | 3,110,000 | 3,849,000 | 6,483,000 | 8,046,000 | |||||||||||
Net Loss Reconciliation | |||||||||||||||
GAAP net income (loss) | 193,000 | (1,754,000 | ) | (673,000 | ) | (1,465,000 | ) | ||||||||
Amortization of purchased intangible assets(a) | 234,000 | 310,000 | 468,000 | 589,000 | |||||||||||
Impairment charge - capitalized software(b) | 137,000 | 137,000 | |||||||||||||
Stock-based compensation(c) | 66,000 | 58,000 | 123,000 | 125,000 | |||||||||||
Restructuring costs(d) | 243,000 | ||||||||||||||
Non-GAAP net income (loss) | $ | 630,000 | $ | (1,386,000 | ) | $ | 298,000 | $ | (751,000 | ) | |||||
Income (loss) per Common Share | |||||||||||||||
GAAP basic net income (loss) per common share | $ | .02 | $ | (.16 | ) | $ | (.06 | ) | $ | (.13 | ) | ||||
Non-GAAP basic(e) net income (loss) per common share | $ | .06 | $ | (.12 | ) | $ | .03 | $ | (.07 | ) | |||||
The Non-GAAP financial measures above, and its reconciliation to our GAAP results for the periods presented, reflect adjustments relating to the following items: | |
(a) | Amortization of purchased intangible assets: a non-cash expense arising from the acquisition of intangible assets that the Company is required to amortize over their expected useful life. The value of purchased intangible assets increased significantly as a result of the acquisition of the USP and SP2000 signaling technologies acquired from GENBAND. |
(b) | Impairment charge - capitalized software: a non-cash charge incurred to write down the recorded balance of capitalized software development projects to their estimated net realizable value. |
(c) | Stock-based compensation costs: a non-cash expense incurred in accordance with share-based compensation accounting guidance. |
(d) | Restructuring costs: costs incurred as a result of restructuring activities taken to bring operating expenses more in line with expected revenues. |
(e) | Basic and diluted net income per common share are identical for the three months ended June 30, 2013 |
