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API Nanotronics Corp. (OTCBB: APIO) ("API") (the "Company"), a leading supplier of electronic components, nano-optics and nanotechnology research and development to the defense and communications sectors, today announced operating results for the three-month and twelve-month periods ended May 31, 2008.
Financial Highlights for Fiscal 2008
-- Record revenue of $31 million, compared to $20.5 million in 2007, an
increase of over 50%. Revenue in 2008 included a full-year contribution
from the National Hybrid Group, acquired by API on January 24, 2007;
-- GAAP Net loss for the year was $6.6 million or $0.02 per share,
compared with a net loss of $1.0 million or $0.00 per share in the previous
year. The loss includes non-cash charges related to a provision for
inventory, stock-based compensation and depreciation totaling $4.9 million.
Excluding these non-cash charges and nanotechnology R&D expenses of $3.5
million, non-GAAP net income was $1.8 million versus $1.8 million in the
-- GAAP Gross margins were 17.7% compared to 24.4%. Excluding the one-
time inventory write-down of $2.8 million, non-GAAP gross margins increased
2.4% to 26.8%. The inventory reserve is a more conservative business
approach in analyzing inventory;
-- The Company ended the year with a strong balance sheet with cash and
marketable securities totaling more than $3.1 million, a current ratio over
3.73, and no long term debt; and
-- Backlog remains robust at over $16 million.
Financial Highlights for the Fourth Quarter 2008
-- Revenue for the fourth quarter of fiscal 2008 was a record $8.8
million, a 13% increase over the $7.9 million recorded in the same period
of fiscal 2007;
-- GAAP net loss of $3.6 million or $0.01 per share, compared to a loss
of $0.2 million or $0.00 per share for the same period of fiscal 2007. The
loss includes non-cash charges related to a provision for inventory, stock-
based compensation and depreciation totaling $3.5 million. Excluding these
non-cash charges and nanotechnology R&D expenses of $1.1 million, non-GAAP
net income increased to $1.0 million versus $.6 million in the previous
Reconciliations of non-GAAP measures to GAAP net cash used by operations, gross margins, and net profit (loss) are included at the end of this release.
-- In April 2008, API Nanotronics named Stephen B. Pudles as Chief
Executive Officer. Mr. Pudles brings extensive industry experience in
operations, product development and sales to API. He succeeds Philip
DeZwirek, who remains Chairman of the Board;
-- In February 2008, in partnership with Israel's Sital Technologies,
National Hybrid introduced its new Aries line of 1553 communication
products which are pick-and-place compatible with competitors' devices,
demonstrating API's design and engineering capabilities and expanding its
-- In November 2007, API Nanotronics delivered its first nanotechnology
order of its proprietary Subwave™ IR Cut Filters to a leading digital
imaging component supplier helping enable digital cinematography;
-- In October 2007, through its NanoOpto subsidiary, API Nanotronics
introduced its first nanotechnology product, a proprietary line of UV
-- In August 2007, API Nanotronics commenced operations at its newly
acquired nanotechnology facility; and
-- In July 2007, the Company acquired the assets of NanoOpto Corp. This
acquisition provided API with state-of-the-art intellectual property and
facilities and positioned it as a top tier nanotechnology research and
manufacturing partner to government and industry. The Company currently
operates the largest Atomic Layer Deposition (ALD) facility in North
-- In order to enhance efficiencies, the Company recently commenced the
consolidation of certain operations, including the winding down and
relocation of several locations. Management expects to conclude the
consolidation process by the end of the current fiscal year at which time
the Company will operate in three primary manufacturing facilities, down
from eight. This consolidation of operations is expected to result in
reduced overhead expenses and greater overall efficiencies and
Stephen B. Pudles, Chief Executive Officer of API Nanotronics Corp., said, "My mandate at API has been to help the Company capitalize on its unique position and opportunities. In the short time I have been here, we have made significant efforts to improve profitability while investing in the Company's future. While there is still much to do, I am pleased with the results thus far and look forward to the coming year."
About API Nanotronics Corp.
API Nanotronics Corp., through its wholly owned subsidiaries API Electronics Inc., National Hybrid Inc., Filtran Group, TM Systems, Keytronics and API Nanofabrication Corporation, is engaged in the manufacture of electronic components and systems for the defense and communications industries. API is also developing a leadership position in the R&D and manufacture of nanotechnology and MEMS products. With a growing list of blue chip customers, including Honeywell/Allied Signal, General Dynamics, Lockheed Martin, and numerous other top technology-based firms around the world, API regularly ships products to clients in more than 34 countries. API owns state-of-the-art manufacturing and technology centers in New York, New Jersey and Ontario, Canada and has manufacturing capabilities in China and a distribution center in Britain. API Nanotronics trades on the OTC Bulletin Board under the symbol APIO.
In this press release, API has provided a non-GAAP financial measure for (i) net cash provided by operations to reflect its financial results without inventory reserves, depreciation, and stock-based compensation expense, (ii) gross margins to reflect its financial results without inventory reserve, and (iii), net profit (loss) to reflect its financial results without stock-based compensation expense. Management believes the non-GAAP presentations make it easier for investors to compare current and historical period operating results. These are not recognized measures under US GAAP, do not have a standardized meaning, and are unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that these non-GAAP measures should not be construed as an alternative to net earnings or loss determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows.
The following table reconciles annual GAAP net income Year Year (loss) to non-GAAP net income (loss). ended ended (In millions) May 31 May 31 2008 2007 GAAP net income $ (6.6) $ (1.0) Inventory reserves $ 2.8 $ -- Research and development expenses $ 3.5 $ 0.3 Depreciation $ 1.2 $ 1.0 Stock-based compensation expense $ 0.9 $ 1.5 Non-GAAP net income $ 1.8 $ 1.8 The following table reconciles GAAP Gross Margins to Year Year non-GAAP Gross Margins. ended ended (In millions except percentages) May 31 May 31 2008 2007 GAAP Gross margin $ 5.5 $ 5.0 GAAP Gross margin % 17.7% 24.4% Inventory Reserve $ 2.8 $ -- Non-GAAP Gross margin $ 8.3 $ 5.0 Non-GAAP Gross margin % 26.8% 24.4% The following table reconciles fourth quarter GAAP net income (loss) to non-GAAP net income (loss). Net Income (Loss) (In millions) Q408 Q407 GAAP Net income (loss) $ (3.6) $ (0.2) Inventory Reserve $ 2.8 -- Research & Development $ 1.1 $ 0.2 Depreciation $ 0.4 $ 0.3 Stock-based compensation expense $ 0.3 $ 0.3 Non-GAAP Net income (loss) $ 1.0 $ 0.6
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Director of Corporate Communications
API Nanotronics Corp.
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