EX-99.1
Published on July 29, 2003
Exhibit 99.1
Contact: |
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Stacey Peterson |
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Chief Financial Officer |
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714/241-0303 |
TTM TECHNOLOGIES, INC. REPORTS PROFITABLE SECOND QUARTER 2003
ON SEQUENTIAL REVENUE GAINS AND MARGIN IMPROVEMENT
SANTA ANA, CA July 29, 2003 TTM Technologies, Inc. (Nasdaq: TTMI), a leading manufacturer of time-critical and technologically advanced printed circuit boards, today reported results for the second quarter ended June 30, 2003.
Second-Quarter Results
Second quarter 2003 revenue increased 76 percent to $41.0 million, compared to $23.3 million for the second quarter of 2002, due to the acquisition of Advanced Circuits, Inc. (ACI) in the fourth quarter of 2002. Sequentially, from the first quarter to the second quarter of 2003, revenues increased 3.6 percent.
For the second quarter of 2003, quick-turn business decreased to 29 percent of total revenues, compared to 44 percent for the second quarter of 2002, because of the addition of ACI with its focus on high technology, standard lead time PCBs. Sequentially, quick-turn business increased slightly from 28 percent of total revenues in the first quarter of 2003. The remaining 71 percent of sales in the second quarter of 2003 represents standard lead time business.
Gross margins increased to 15.7 percent in the second quarter of 2003, compared to 9.4 percent for the same period in 2002 and 11.4 percent in the first quarter of 2003. This improvement reflects a sales mix shift towards more technologically sophisticated products, better fixed cost absorption and lower raw material costs.
Year-over-year, general and administrative expenses increased from $1.3 million to $2.8 million due to the inclusion of ACI. Sequentially, general and administrative expenses declined 1.7 percent due to a reduction in expenses associated with the integration of ACI, which is essentially complete.
TTM posted an operating profit of $735,000 for the second quarter of 2003, compared to an operating loss of $1.9 million for the second quarter of 2002 and an operating loss of $1.3 million in the first quarter of 2003.
Net income for the second quarter of 2003 was $432,000, or $0.01 per diluted share. This result compared favorably with a net loss of $1.3 million, or $0.03 per diluted share, for the second quarter of 2002 and a net loss of $150,000, or breakeven on a per-share basis, for the first quarter of 2003. Results in the first quarter of 2003 included an extraordinary gain of $824,000, or $0.02 per share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2003 was $3.0 million, up from $776,000 for the second quarter of 2002 and $897,000 in the first quarter of 2003.
The ACI acquisition has exceeded our expectations, said Kent Alder, President and CEO of TTM Technologies. The integration of our acquisition of ACI is largely complete and has gone extremely well.
Our sequential revenue growth reflects TTMs ability to capture market share and to capitalize on cross-selling opportunities created by the ACI acquisition, continued Alder. Moreover, in the second quarter, we were able to translate our top-line success into profitable bottom-line performance due to our ongoing cost control, cost benefits associated with our greater buying power, and more efficient operations.
Financial Strength
Due to our strong, positive cash flow from operations, our balance sheet strengthened even further, said Alder. At the end of the second quarter, TTM had cash of $32.0 million and debt of $10.0 million, a net increase of $13.1 million from cash of $18.9 million and debt of $10.0 million at year-end 2002. In addition, TTMs revolving credit facility remained undrawn at the end of the quarter.
Outlook
Market conditions appear to have stabilized in the electronics industry, concluded Alder. In the near term, we anticipate continued revenue gains for TTM and expect to remain profitable in the third quarter. Looking forward, we expect increasing new business and market share gains during the fourth quarter due to recent plant closures and some improvement in overall business conditions.
For the third quarter of 2003, TTM is estimating revenues of $42 million to $44 million and earnings per share of $0.01 to $0.03 per share.
Conference Call/Webcast
TTM Technologies, Inc. is a leading supplier of time-critical and technologically advanced printed circuit boards to original equipment manufacturers and electronics manufacturing services companies. TTM stands for time-to-market, representing how the companys time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market.
The company will conduct a conference call to discuss its second-quarter performance and outlook today at 4:30 p.m. Eastern/1:30 p.m. Pacific time. The call will be simulcast and available for replay until August 5, 2003, on the companys Web site, www.ttmtech.com.
This release contains forward-looking statements that relate to future events or performance. These statements reflect the companys current expectations, and the company does not undertake to update or revise these forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied in this or other company statements will not be realized. Furthermore, readers are cautioned that these statements involve risks and uncertainties, many of which are beyond the companys control, which could
cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, but are not limited to, the companys dependence upon the electronics industry, the companys dependence upon a small number of customers, general economic conditions and specific conditions in the markets TTM addresses, including the slowdown in the technology sector and related excess capacity, the unpredictability of and potential fluctuations in future revenues and operating results, the companys ability to successfully integrate the ACI acquisition, increased competition from low-cost foreign manufacturers, and other Risk Factors set forth in the companys Form 10-K for 2002.
- Tables Follow -
TTM TECHNOLOGIES, INC.
Selected Unaudited Financial Information
(In thousands, except per share data)
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Second Quarter |
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First Quarter |
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First Two Fiscal Quarters |
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2003 |
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2002 |
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2003 |
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2003 |
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2002 |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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Net sales |
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$ |
41,047 |
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$ |
23,287 |
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$ |
39,634 |
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$ |
80,681 |
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$ |
47,021 |
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Cost of goods sold |
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34,601 |
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21,095 |
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35,108 |
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69,709 |
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42,234 |
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Gross profit |
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6,446 |
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2,192 |
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4,526 |
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10,972 |
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4,787 |
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Operating expenses: |
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Sales and marketing |
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2,644 |
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1,591 |
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2,545 |
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5,189 |
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3,246 |
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General and administrative |
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2,766 |
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1,272 |
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2,814 |
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5,580 |
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2,097 |
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Amortization of intangibles |
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301 |
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301 |
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300 |
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601 |
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601 |
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Restructuring charges |
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907 |
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203 |
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203 |
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907 |
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Total operating expenses |
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5,711 |
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4,071 |
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5,862 |
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11,573 |
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6,851 |
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Operating income (loss) |
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735 |
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(1,879 |
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(1,336 |
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(601 |
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(2,064 |
) |
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Interest expense |
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(152 |
) |
(275 |
) |
(155 |
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(307 |
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(542 |
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Amortization of debt issuance costs |
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(23 |
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(11 |
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(16 |
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(39 |
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(21 |
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Interest income and other, net |
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88 |
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255 |
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77 |
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165 |
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308 |
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Income (loss) before income taxes and extraordinary item |
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648 |
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(1,910 |
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(1,430 |
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(782 |
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(2,319 |
) |
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Income tax benefit (provision) |
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(216 |
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626 |
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456 |
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240 |
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757 |
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Net income (loss) before extraordinary item |
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432 |
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(1,284 |
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(974 |
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(542 |
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(1,562 |
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Extraordinary item |
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824 |
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824 |
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Net income (loss) |
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$ |
432 |
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$ |
(1,284 |
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$ |
(150 |
) |
$ |
282 |
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$ |
(1,562 |
) |
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Earnings per common share (EPS) before extraordinary item: |
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Basic |
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$ |
0.01 |
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$ |
(0.03 |
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$ |
(0.02 |
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$ |
(0.01 |
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$ |
(0.04 |
) |
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Diluted |
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0.01 |
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(0.03 |
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(0.02 |
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(0.01 |
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(0.04 |
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Earnings per common share (EPS): |
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Basic |
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0.01 |
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(0.03 |
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(0.00 |
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0.01 |
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(0.04 |
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Diluted |
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0.01 |
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(0.03 |
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(0.00 |
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0.01 |
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(0.04 |
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Weighted average common shares: |
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Basic |
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39,854 |
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39,831 |
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39,762 |
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39,808 |
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39,217 |
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Diluted |
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40,549 |
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39,831 |
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39,762 |
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39,808 |
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39,217 |
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SELECTED BALANCE SHEET DATA
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June 30, 2003 |
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December 31, 2002 |
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Cash |
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$ |
32,000 |
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$ |
18,879 |
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Accounts receivable, net |
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16,546 |
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17,913 |
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Inventories, net |
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8,073 |
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10,485 |
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Total current assets |
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62,141 |
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60,254 |
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Net PP&E |
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42,774 |
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45,569 |
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Other assets |
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92,486 |
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91,683 |
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Total assets |
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197,401 |
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197,506 |
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Current maturities of long-term debt |
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$ |
4,444 |
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$ |
2,222 |
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Other current liabilities |
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17,054 |
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17,627 |
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Long-term liabilities |
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7,789 |
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10,231 |
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Shareholders equity |
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168,114 |
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167,426 |
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Total liabilities and shareholders equity |
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197,401 |
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197,506 |
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SUPPLEMENTAL DATA
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Second Quarter |
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First Quarter |
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First Two Fiscal Quarters |
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2003 |
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2002 |
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2003 |
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2003 |
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2002 |
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EBITDA |
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$ |
2,996 |
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$ |
776 |
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$ |
897 |
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$ |
3,893 |
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$ |
3,167 |
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EBITA |
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$ |
1,036 |
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$ |
(1,578 |
) |
$ |
(1,036 |
) |
$ |
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$ |
(1,463 |
) |
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Gross margin |
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15.7 |
% |
9.4 |
% |
11.4 |
% |
13.6 |
% |
10.2 |
% |
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EBITDA margin |
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7.3 |
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3.3 |
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2.3 |
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4.8 |
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6.7 |
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Operating margin |
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1.8 |
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(8.1 |
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(3.4 |
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(0.7 |
) |
(4.4 |
) |
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End Market Breakdown:
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Second Quarter |
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2003 |
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2002 |
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Networking/communications |
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38.5 |
% |
31.0 |
% |
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High-end computing |
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38.2 |
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12.5 |
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Industrial/Medical |
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10.3 |
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28.4 |
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Computer peripherals |
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7.6 |
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20.0 |
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Handheld |
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2.1 |
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2.8 |
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Other |
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3.3 |
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5.3 |
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RECONCILIATIONS*
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Second Quarter |
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First Quarter |
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First Two Fiscal Quarters |
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2003 |
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2002 |
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2003 |
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2003 |
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2002 |
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EBITA/EBITDA Reconciliation: |
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Net income (loss) |
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$ |
432 |
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$ |
(1,284 |
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$ |
(150 |
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$ |
282 |
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$ |
(1,562 |
) |
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Add back items: |
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Extraordinary item |
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(824 |
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(824 |
) |
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Income taxes |
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216 |
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(626 |
) |
(456 |
) |
(240 |
) |
(757 |
) |
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Interest expense |
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152 |
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275 |
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155 |
|
307 |
|
542 |
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Amortization of debt issuance costs |
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23 |
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11 |
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16 |
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39 |
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21 |
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Interest income and other |
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(88 |
) |
(255 |
) |
(77 |
) |
(165 |
) |
(308 |
) |
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Amortization of intangibles |
|
301 |
|
301 |
|
300 |
|
601 |
|
601 |
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EBITA |
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1,036 |
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(1,578 |
) |
(1,036 |
) |
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(1,463 |
) |
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Depreciation expense |
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1,960 |
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2,354 |
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1,933 |
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3,893 |
|
4,630 |
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EBITDA |
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$ |
2,996 |
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$ |
776 |
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$ |
897 |
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$ |
3,893 |
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$ |
3,167 |
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* This information provides a reconciliation of EBITA/EBITDA to the financial information in our consolidated statements of operations.