SAN JOSE, Calif., Oct. 23, 2001 (PRIMEZONE) -- WJ Communications, Inc. (Nasdaq:WJCI) today announced results for its third quarter ended September 30, 2001.
Sales for the third quarter of 2001 were $15.5 million, compared to $16.7 million in the second quarter of 2001 and $34.9 million in the third quarter of last year. The third quarter loss from continuing operations excluding non-cash and non-recurring items was $1.9 million, or $0.03 per diluted common share. This represents a significant improvement of $600,000 compared to a net loss excluding non-cash and non-recurring items in the previous quarter of $2.5 million, or $0.05 per diluted common share.
"Our revenues during the third quarter continued to be impacted by the prolonged slowdown in the telecommunications equipment sector, as a 17% sequential increase in wireless product sales was offset by a tough market for both semiconductor and fiber optic products," said Malcolm Caraballo, Chief Executive Officer and President of WJ Communications. "However, we are very pleased with our progress in introducing new products and winning new customers, while also significantly improving our financial model. Our break-even point has been dramatically lowered over the past six months and we believe that we can quickly reach EBITDA positive on even a modest rebound in demand."
Recent highlights include:
-- The Company today announced that Bill Slakey will join the
management team as CFO. Bill brings over 17 years of technology
and finance experience from leading technology companies, such as
Apple, IBM, Palm Computing and 3Com.
-- WJ introduced over ten new fiber optic products and has added
over 20 customers in this market in 2001. Notably, WJ increased
sales of its recently introduced fiber-optic product lines and
OC-768 products by over 100% sequentially.
-- During the third quarter, the Company introduced over six new
semiconductor products, and the Company had 15 new socket wins at
major OEMs.
-- In the third quarter, WJ took aggressive steps to lower its cost
structure, including writing off its excess facility in San Jose,
reducing inventory and decreasing expenses.
"In light of the overall economy and the events of September 11th, we think it is wise to take a very conservative outlook and are forecasting flat to modest sequential revenue growth in the fourth quarter," continued Mr. Caraballo. "Over the next six months, we believe we can continue to improve the financial model, expanding gross margins and further driving down costs. Additionally, with $57 million in cash, we are well positioned to weather these tougher periods and believe that, with a broad product line and a diversifying customer base, we can emerge from the current downturn a significantly stronger company."
Reported results for the third quarter of 2001 are a net loss from continuing operations of $9.1 million, or $0.16 per diluted common share. This includes a one-time charge of $9.8 million reported on September 17, 2001, related to WJ's decision to abandon its excess facility. This compares to a net loss available to common stockholders of $10.1 million or $0.20 per diluted common share for the third quarter of 2000, which reflects a $10.0 million preferred stock dividend related to the assumed beneficial conversion of preferred stock, and a $2.1 million extraordinary item related to the write-off of unamortized deferred financing cost, net of taxes.
WJ Communications, Inc., headquartered in San Jose, California, designs, develops and manufactures innovative broadband communications products for the current and next generation fiber optic, broadband cable and wireless communications networks.
This release contains forward-looking statements including financial projections, statements as to the plans and objectives of management for future operations, and statements as to the Company's future economic performance, financial condition or results of operations. These forward-looking statements are not historical facts but rather are based on current expectations and our beliefs. Words such as "may," "will," "expects," "intends," "plans," "believes," "seeks," "could," and "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. The Company's actual results may differ materially from those projected in these forward-looking statements as a result of a number of factors, including, but not limited to, the Company's ability to continue to successfully improve its financial model, expand gross margins and decrease expenses, the Company's ability to utilize its cash effectively, technological innovation in the wireless and fiber optic communications markets, the availability and the price of raw materials and components used in the Company's products, the demand for wireless and fiber optic systems and products generally as well as those of our customers, the adequacy of the Company's obsolete inventory reserve, the success of the Company's new product introductions and the Company's ability to expand its customer base, broaden its product offering and deepen its penetration into existing customers, general economic conditions including the global economic slowdown and such other factors as described from time to time in the Company's filings with the Securities & Exchange Commission. Readers of this release are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this press release.
WJ Communications Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Sales
Fiber Optics $ 2,405.9 $ 15,586.6 $ 7,271.9 $ 34,043.1
Wireless 10,114.3 13,451.7 25,195.3 29,600.1
Semiconductor 2,938.0 5,910.8 15,737.3 15,984.4
---------- ---------- ---------- ----------
Total sales 15,458.2 34,949.1 48,204.5 79,627.6
---------- ---------- ---------- ----------
Cost of goods sold 12,351.3 21,917.3 39,678.1 49,458.3
---------- ---------- ---------- ----------
Gross margin 3,106.9 13,031.8 8,526.4 30,169.3
Research &
development 3,722.0 4,820.0 13,483.4 13,584.7
Selling &
administrative 3,120.5 4,773.2 10,388.2 11,061.0
---------- ---------- ---------- ----------
Income (loss) from
operations before
nonrecurring and
noncash items (3,735.6) 3,438.6 (15,345.2) 5,523.6
Interest income
(expense), net 542.8 (59.9) 2,409.1 (1,017.6)
Other income
(expense) net 345.0 (176.4) 696.5 (867.7)
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before income taxes (2,847.8) 3,202.3 (12,239.6) 3,638.3
Income tax expense
(benefit) (929.5) 950.0 (4,484.6) 989.6
---------- ---------- ---------- ----------
Proforma gain (loss)
from continuing
operations before
noncash and
nonrecurring items $ (1,918.3) $ 2,252.3 $ (7,755.0) $ 2,648.7
========== ========== ========== ==========
Proforma diluted
average shares
outstanding 55,814 61,874 55,566 75,767
========== ========== ========== ==========
Proforma diluted
gain (loss) per
share from continuing
operations before
nonrecurring and
noncash items $ (0.03) $ 0.04 $ (0.14) $ 0.03
========== ========== ========== ==========
Note 1: Certain prior year amounts have been reclassified to
conform with current year presentation.
WJ Communications Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
---------------------- -----------------------
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Sales
Fiber Optics $ 2,405.9 $ 15,586.6 $ 7,271.9 $ 34,043.1
Wireless 10,114.3 13,451.7 25,195.3 29,600.1
Semiconductor 2,938.0 5,910.8 15,737.3 15,984.4
---------- ---------- ---------- ----------
Total sales 15,458.2 34,949.1 48,204.5 79,627.6
---------- ---------- ---------- ----------
Cost of goods
sold 12,721.9 21,917.3 47,008.5 49,458.3(a)
---------- ---------- ---------- ----------
Gross margin 2,736.3 13,031.8 1,196.0 30,169.3
Research &
development 3,722.0 4,820.0 13,483.4 13,584.7
Selling &
administrative 3,513.7 4,773.2 10,869.1 11,061.0
Amortization of
deferred stock
compensation 143.0 329.1 526.6 846.4
Restructuring
charge 9,796.5 -- 9,796.5 --
Recapitalization
merger -- -- -- 35,452.9
---------- ---------- ---------- ----------
Income (loss) from
operations (14,438.9) 3,109.5 (33,479.6) (30,775.7)
Interest income
(expense), net 542.8 (59.9) 2,409.1 (1,017.6)
Other income
(expense) net 345.0 (176.4) 696.5 (867.7)
Gain on disposition
of real properties -- -- 325.5 808.2
---------- ---------- ---------- ----------
Income (loss) from
continuing
operations before
income taxes (13,551.1) 2,873.2 (30,048.5) (31,852.8)
Income tax
provision
(benefit) (4,410.9) 950.0 (11,009.8) (8,423.8)
---------- ---------- ---------- ----------
Income (loss) from
continuing
operations (9,140.2) 1,923.2 (19,038.7) (23,429.0)
Discontinued
operations:
Gain on
dispositions,
net of taxes -- -- -- 30,918.5
---------- ---------- ---------- ----------
Income (loss)
before
extraordinary
item (9,140.2) 1,923.2 (19,038.7) 7,489.5
Extraordinary item
- loss on early
extinguishment
of debt -- (2,050.1) -- (2,050.1)
---------- ---------- ---------- ----------
Net Income (loss) (9,140.2) (126.9) (19,038.7) 5,439.4
Assumed stock
dividend -
beneficial
conversion -- (9,982.0) -- (9,982.0)
---------- ---------- ---------- ----------
Net loss available
for common
shareholders $ (9,140.2) $(10,108.9) $(19,038.7) $ (4,542.6)
========== ========== ========== ==========
Basic per share
amounts:
Loss from
continuing oper-
ations $ (0.16) $ (0.16) $ (0.34) $ (0.51)
Gain on dispo-
sitions of
discontinued
operations -- -- -- 0.47
Extraordinary item
- loss on early
extinguishment
of debt -- (0.04) -- (0.03)
---------- ---------- ---------- ----------
Net loss available
for common
shareholders $ (0.16) $ (0.20) $ (0.34) $ (0.07)
========== ========== ========== ==========
Basic average
shares 55,814 51,176 55,566 66,093
========== ========== ========== ==========
Diluted per share
amounts:
Loss from
continuing
operations $ (0.16) $ (0.16) $ (0.34) $ (0.51)
Gain on
dispositions of
discontinued
operations -- -- -- 0.47
Extraordinary
item - loss on
early extin-
guishment
of debt -- (0.04) -- (0.03)
---------- ---------- ---------- ----------
Net loss available
for common
shareholders $ (0.16) $ (0.20) $ (0.34) $ (0.07)
========== ========== ========== ==========
Diluted average
shares 55,814 51,176 55,566 66,093
========== ========== ========== ==========
Note: Certain prior year amounts have been reclassified to
conform with current year reporting
(a) Includes a $6.6m provision for excess and obsolete inventory
WJ Communications Inc. and Subsidiaries
Unaudited Reconciliation of Pro Forma Adjustments
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
----------------------- -----------------------
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Income (loss)
from continuing
operations
before income
taxes $(13,551.1) $ 2,873.2 $ (30,048.5) $(31,852.8)
Add:
Amortization of
deferred stock
compensation 143.0 329.1 526.6 846.4
Severance
related cost 763.8 -- 1,244.0 --
Inventory
provision -- -- 6,567.3 --
Restructuring
charge 9,796.5 -- 9,796.5 --
Recapital-
ization and
merger cost -- -- -- 35,452.9
Less:
Gain on
disposition of
real property -- -- (325.5) (808.2)
---------- ---------- ---------- ----------
Income (loss)
from continuing
operations
before income
taxes, as
adjusted (2,847.8) 3,202.3 (12,239.6) 3,638.3
Proforma income
tax provision
(benefit) (929.5) 950.0 (4,484.6) 989.6
---------- ---------- ---------- ----------
Net Income
(loss), as
adjusted $ (1,918.3) $ 2,252.3 $ (7,755.0) $ 2,648.7
========== ========== ========== ==========
Diluted average
shares
outstanding 55,814 61,874 55,566 75,767
========== ========== ========== ==========
Earnings (loss)
per share as
adjusted $ (0.03) $ 0.04 $ (0.14) $ 0.03
========== ========== ========== ==========
WJ Communications Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30, Dec. 31,
2001 2000 (1)
-------- --------
ASSETS (unaudited)
Cash and Short-term
Investments $ 57,031 $ 89,785
Accounts Receivable, net 9,009 22,549
Inventory, net 14,473 14,457
Other Current Assets 13,481 9,356
-------- --------
Total Current Assets 93,994 136,147
Property, Plant and
Equipment 32,880 29,260
Other Assets 6,072 2,091
-------- --------
Total Assets $132,946 $167,498
======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities $ 13,319 $ 37,270
Other Long-Term Obligations 17,687 10,840
Stockholders' Equity 101,940 119,388
-------- --------
Total Liabilities
and Stockholders'
equity $132,946 $167,498
======== ========
Note: Certain prior year amounts have been reclassified to
conform with current year reporting.
(1) Derived from the Company's audited consolidated financial
statements included in our annual report on Form 10-K for the
year ended December 31, 2000.