GERMANTOWN, Md., Aug. 4 /PRNewswire-FirstCall/ -- Optelecom-NKF,
Inc. (Nasdaq: OPTC), manufacturer of market leading
Siqura® advanced video surveillance solutions, today
reported its results for the second quarter of 2010.
Second Quarter 2010 Financial Results
Revenue for the second quarter totaled $7.7 million U.S. dollars, compared to
$10.0 million for the same quarter
one year earlier. Revenue increased sequentially from $7.2 million, reported in the first quarter of
this year.
Optelecom-NKF reported a net loss of $698
thousand, or $(0.19) per
share, for the quarter ending on June 30,
2010, compared to the net loss of $127 thousand, or $(0.03) per share, one year earlier. Second
quarter results improved sequentially from this year's first
quarter loss of $1.6 million, or
$(0.45) per share.
During the quarter, Optelecom-NKF completed the sale of its
Electro Optics coil manufacturing business. Optelecom-NKF received
$1,150 thousand at the close of the
transaction, with a balance of $250
thousand held in escrow, subject to the completion of a
specified technology transfer. The impact of the Electro Optics
sale is included in this quarter's financial results. The related
gain was offset by $868 thousand in
restructuring charges recorded during the quarter.
Restructuring Initiatives
During the quarter Optelecom-NKF completed several major
restructuring initiatives intended to strengthen Optelecom-NKF's
financial and operational framework, including the following:
- Replaced the geographical sales model and realigned the U.S.
Sales Department to focus on three distinct markets,
Transportation, Government, and Critical Infrastructure, in an
effort to improve customer orientation.
- Consolidated the U.S. manufacturing operations into
Optelecom-NKF's existing Dutch manufacturing facility and a U.S.
based contract manufacturer.
- Streamlined Optelecom-NKF's international headquarters in the
U.S. to leverage existing international operations and perform
critical functions domestically.
These actions are expected to generate annualized savings of
approximately $2.0 million in 2011,
with partial savings expected during the balance of this year.
"We have taken the steps required to put Optelecom-NKF back on
track toward regaining profitability. Our new structure lowers
fixed costs, which should enable Optelecom-NKF to generate earnings
at reduced revenue levels," said Dave
Patterson, Optelecom-NKF's President and CEO. "We are now
concentrating our efforts to drive improved U.S. sales performance.
We have recruited strong leadership and realigned our U.S. sales
teams in a way that addresses the unique needs of the key industry
sectors we serve. I'm pleased that we were able to improve revenues
sequentially even as we significantly reduced our workforce. As
experts in Video over IP and Fiber, we are positioned to facilitate
technology migration strategies for mission-critical applications.
This has worked well for us in the European, Middle Eastern, and
Asia Pacific regions."
Second Quarter Conference Call
Optelecom-NKF will host a conference call to discuss its second
quarter results on Thursday, August 5,
2010, at 10:00 a.m. EDT. To
participate live, go to
http://www.videonewswire.com/event.asp?id=70942
Participant Dial-In (U.S. Toll Free): 1-800-860-2442
Participant International Dial-In: +1-412-858-4600
Parties should ask for: Optelecom-NKF Conference Call
Playback Dial-In (U.S. Toll Free): 1-877-344-7529
Playback International Dial-In: +1-412-317-0088
Playback code: 442794
If you are unable to participate during the live webcast, the
event will be archived at
http://www.videonewswire.com/event.asp?id=70942
Safe Harbor Statement
This press release contains "forward-looking statements," a term
used here as defined in the amended Securities Exchange Act of
1934, and it includes statements relating to the impact of the
restructuring initiatives discussed herein. Forward-looking
statements typically include words such as "expect," "anticipate,"
"believe," "estimate," "intend," "may," "will," and similar
expressions as they relate to Optelecom-NKF or its management.
Forward-looking statements are based on our current expectations
and assumptions. These are subject to risks and uncertainties,
including potential negative effects on our operations and
financial results that might arise from the restructuring
initiatives discussed herein. These risks and uncertainties are
discussed in detail in Optelecom-NKF's recently filed Annual Report
on Form 10-K and other subsequent filings with the Securities and
Exchange Commission. These forward-looking statements are written
from the perspective of the circumstances under and date upon which
they were composed. Optelecom-NKF disclaims any intent or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
About Optelecom-NKF
Optelecom-NKF, Inc. (Nasdaq: OPTC), manufacturer of
Siqura® advanced video surveillance solutions, provides
a full range of network products based on an open technology
platform that simplifies integration and installation. Our
Siqura® solutions offer a perfect blend of ease of use
and processing power, enabling end users to optimize the
effectiveness of their surveillance systems while reducing the
total cost of ownership. All products and solutions are developed
and tested for professional and mission-critical applications, such
as at highway departments, airports, seaports, casinos, public
transport authorities, hospitals, city centers, shopping centers,
military bases, and corporate and government campuses. Founded in
1972, Optelecom-NKF is committed to providing its customers with
expert technical advice and support.
Investor inquiries should be directed to Mr. Rick Alpert at 301-948-7872.
Press inquiries should be directed to Kate Huber, khuber@optelecom-nkf.com tel.
301-444-2294 (for North and Latin
America) or tel. +31 182 592 215 (for Europe, Middle
East, Africa, and
Asia). For more information please
visit our website: www.optelecom-nkf.com
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
AS OF JUNE 30, 2010 AND DECEMBER
31, 2009
|
|
(Dollars in Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash & cash
equivalents
|
|
$ 1,794
|
|
$ 2,344
|
|
|
|
Restricted cash
|
|
255
|
|
1,900
|
|
|
|
Accounts receivable, net of
allowance for doubtful
|
|
|
|
|
|
|
|
|
accounts of $506 and
$386
|
|
6,834
|
|
8,209
|
|
|
|
Inventories, net
|
|
4,281
|
|
4,343
|
|
|
|
Deferred tax asset
|
|
123
|
|
240
|
|
|
|
Prepaid expenses and other
current assets
|
|
785
|
|
893
|
|
|
Total current assets
|
|
14,072
|
|
17,929
|
|
|
|
Property & equipment, less
accumulated depreciation of $5,223 and $5,681
|
|
1,040
|
|
1,593
|
|
|
|
Intangible assets, net of
accumulated amortization of $3,368 and $3,609
|
|
5,335
|
|
6,609
|
|
|
|
Goodwill
|
|
12,647
|
|
14,848
|
|
|
|
Other assets
|
|
187
|
|
209
|
|
TOTAL ASSETS
|
|
33,281
|
|
41,188
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Current portion of notes and
interest payable
|
|
11,057
|
|
1,907
|
|
|
|
Accounts payable
|
|
2,290
|
|
2,012
|
|
|
|
Accrued payroll
|
|
1,228
|
|
1,280
|
|
|
|
Accrued warranty
reserve
|
|
383
|
|
422
|
|
|
|
Other current
liabilities
|
|
2,029
|
|
1,233
|
|
|
Total current
liabilities
|
|
16,987
|
|
6,854
|
|
|
|
Long term notes and interest
payable
|
|
-
|
|
12,818
|
|
|
|
Deferred tax
liabilities
|
|
674
|
|
1,513
|
|
|
|
Other liabilities
|
|
170
|
|
188
|
|
|
Total liabilities
|
|
17,831
|
|
21,373
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common stock, $.03 par
value-shares authorized, 15,000,000; issued and outstanding,
3,697,432 and 3,653,644 shares as of June, 2010, and December 31,
2009, respectively
|
|
111
|
|
110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
17,282
|
|
17,036
|
|
|
|
Accumulated other comprehensive
income
|
|
503
|
|
2,769
|
|
|
|
Treasury stock, 162,672 shares
at cost
|
|
(1,265)
|
|
(1,265)
|
|
|
|
(Accumulated deficit) retained
earnings
|
|
(1,181)
|
|
1,165
|
|
|
Total stockholders'
equity
|
|
15,450
|
|
19,815
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$ 33,281
|
|
$ 41,188
|
|
|
|
|
|
|
|
|
|
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
AND COMPREHENSIVE (LOSS)
INCOME
|
|
FOR THE THREE MONTHS ENDED JUNE
30,
|
|
(Unaudited)
|
|
(Dollars in Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Revenue
|
|
$
7,703
|
|
$ 10,010
|
|
Cost of goods sold
|
|
3,984
|
|
3,962
|
|
|
Gross profit
|
|
3,719
|
|
6,048
|
|
Operating expenses:
|
|
|
|
|
|
|
Sales and marketing
|
|
2,745
|
|
2,877
|
|
|
Engineering
|
|
1,170
|
|
1,089
|
|
|
General and
administrative
|
|
1,377
|
|
1,660
|
|
|
Amortization of
intangibles
|
|
154
|
|
164
|
|
|
Gain on sale of Electro
Optics
|
|
(1,150)
|
|
-
|
|
|
|
Total operating
expenses
|
|
4,296
|
|
5,790
|
|
Net (loss) income from
operation
|
|
(577)
|
|
258
|
|
Other expense, net
|
|
316
|
|
142
|
|
Net (loss) income before income
taxes
|
|
(893)
|
|
116
|
|
(Benefit) provision for income
taxes
|
|
(195)
|
|
243
|
|
Net loss
|
|
$
(698)
|
|
$
(127)
|
|
Basic loss per share
|
|
$
(0.19)
|
|
$
(0.03)
|
|
Diluted loss per
share
|
|
$
(0.19)
|
|
$
(0.03)
|
|
Weighted average common shares
outstanding -basic
|
|
3,685,144
|
|
3,645,037
|
|
Weighted average common shares
outstanding -diluted
|
|
3,685,144
|
|
3,645,037
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(698)
|
|
$
(127)
|
|
Foreign currency
translation
|
|
(1,313)
|
|
1,008
|
|
Comprehensive (loss)
income
|
|
$
(2,011)
|
|
$
881
|
|
|
|
|
|
|
|
|
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
AND COMPREHENSIVE
LOSS
|
|
FOR THE SIX MONTHS ENDED JUNE
30,
|
|
(Unaudited)
|
|
(Dollars in Thousands, Except
Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Revenue
|
|
|
$ 14,856
|
|
$ 18,596
|
|
Cost of goods sold
|
|
7,203
|
|
7,832
|
|
|
Gross profit
|
|
7,653
|
|
10,764
|
|
Operating expenses:
|
|
|
|
|
|
|
Sales and marketing
|
|
5,618
|
|
5,492
|
|
|
Engineering
|
|
2,255
|
|
2,437
|
|
|
General and
administrative
|
|
2,836
|
|
3,204
|
|
|
Amortization of
intangibles
|
|
321
|
|
322
|
|
|
Gain on sale of Electro
Optics
|
|
(1,150)
|
|
-
|
|
|
|
Total operating
expenses
|
|
9,880
|
|
11,455
|
|
Loss from operations
|
|
(2,227)
|
|
(691)
|
|
Other expense, net
|
|
619
|
|
433
|
|
Loss before income
taxes
|
|
(2,846)
|
|
(1,124)
|
|
Benefit for income
taxes
|
|
(500)
|
|
(232)
|
|
Net loss
|
|
$
(2,346)
|
|
$
(892)
|
|
Basic loss per share
|
|
$
(0.64)
|
|
$
(0.24)
|
|
Diluted loss per
share
|
|
$
(0.64)
|
|
$
(0.24)
|
|
Weighted average common shares
outstanding -basic
|
|
3,680,067
|
|
3,643,333
|
|
Weighted average common shares
outstanding -diluted
|
|
3,680,067
|
|
3,643,333
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(2,346)
|
|
$
(892)
|
|
Foreign currency
translation
|
|
(2,266)
|
|
(48)
|
|
Comprehensive loss
|
|
$
(4,612)
|
|
$
(940)
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Addendum
We define Adjusted EBITDA as net income or net loss plus
interest expense, income taxes, foreign exchange gains and losses,
depreciation, and amortization. Adjusted EBITDA is not a measure of
cash flow or liquidity as determined under U.S. Generally Accepted
Accounting Principles (GAAP). We have included this Adjusted EBITDA
as a supplemental disclosure because we believe that it is widely
used by investors, industry analysts, and others as a useful
supplemental measure. Optelecom-NKF calculates and uses Adjusted
EBITDA as an indicator of its ability to generate cash from
reported operating results.
Adjusted EBITDA does not represent funds available for our
discretionary use and is not intended to represent or to be used as
a substitute for net income or cash flows from operations data as
measured under GAAP. The items excluded from Adjusted EBITDA but
included in the calculation of Optelecom-NKF's reported net income
are significant components of the accompanying unaudited
consolidated statements of operations and must be considered in
performing a comprehensive assessment of overall financial
performance. Other companies may calculate Adjusted EBITDA
differently than we do, which may limit its usefulness as a
comparative measure.
The table below presents a reconciliation of net income to
Adjusted EBITDA:
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
(Unaudited)
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net Loss
|
|
$ (698)
|
|
$ (127)
|
|
$ (2,346)
|
|
$ (892)
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
310
|
|
160
|
|
659
|
|
320
|
|
|
|
(Benefit) Provision for income
taxes
|
|
(195)
|
|
243
|
|
(500)
|
|
(232)
|
|
|
|
Foreign exchange gain
(loss)
|
|
6
|
|
(18)
|
|
(40)
|
|
113
|
|
|
|
Depreciation
|
|
188
|
|
240
|
|
392
|
|
480
|
|
|
|
Amortization
|
|
154
|
|
164
|
|
321
|
|
322
|
|
Adjusted EBITDA
|
|
$ (235)
|
|
$ 662
|
|
$ (1,514)
|
|
$ 111
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Optelecom-NKF, Inc.
Copyright g. 4 PR Newswire