Published:
Merix Corporation Announces First Quarter Results
Merix Corporation (NASDAQ: MERX) today
announced consolidated financial results for the first quarter of fiscal
2009 that ended August 30, 2008.
The Company reported a net loss of $2.1 million or $0.10 per diluted share
on revenue of $90.6 million for the first quarter of fiscal 2009, which
compares to a net loss of $3.6 million or $0.17 per diluted share on
revenue of $99.4 million for the first quarter of fiscal 2008.
Commenting on the recent first quarter performance, Michael D. Burger,
President and Chief Executive Officer, said, "I am pleased with the
progress we have made as evidenced by our continuing first quarter
financial improvement. Our financial results were within our guidance
range for the quarter and as importantly we substantially completed two
major capital projects as the quarter ended and still generated positive
cash flow."
Mr. Burger continued, "Over the last fifteen months we've been aggressively
working to transition and restructure our business to deliver our global
customer value proposition. The last two major milestones associated with
this effort were substantially completed in the first quarter. I am
pleased to report that our Huiyang, China factory expansion and technology
upgrade is complete and we now have the ability to produce technologically
advanced higher layer boards similar to what we produce in our high
technology North American factories. In addition, during August we
finished the two year implementation of a global ERP system and we now have
one system, across all geographies, to manage our business. This means the
major capital investments we outlined over a year ago are substantially
behind us."
First quarter fiscal 2009 revenue declined 9% when compared to the first
quarter of fiscal 2008. The decline was expected and primarily a result of
the March 2008 closure of our Wood Village factory in North America
somewhat offset by modestly higher revenues in Asia. On a sequential
quarterly basis, first quarter 2009 revenue increased 4% when compared to
the fourth quarter of fiscal 2008, caused by increases in production levels
in our Asian factories. During the fourth quarter of the last fiscal year
we temporarily idled the Asia factories in recognition of Chinese New Year.
Merix' overall gross margin averaged 11.3% of revenue for the first quarter
of fiscal 2009 compared to 11.1% and 10.7% in the first quarter and fourth
quarter of fiscal 2008, respectively. Gross margins improved sequentially
due to modestly higher average prices in both North America and Asia
coupled with production efficiency improvements. North American gross
margin improved sequentially by nearly 1 percentage point to 11.5% when
compared to the fourth quarter of fiscal 2008. Asia gross margins
continued to steadily improve in the first quarter to 11.2% of sales.
Excluding a $0.6 million gain on sale of assets, operating expenses totaled
$10.8 million in the first quarter of fiscal 2009 compared to $12.9 million
and $9.7 million in the first and fourth quarters of fiscal 2008,
respectively. Operating expenses rose modestly when compared to the fourth
quarter primarily reflecting the timing of costs related to the annual
financial audit as well as higher management variable compensation;
however, operating expenses were down 16% from the first quarter of last
year due primarily to our restructuring efforts.
Conference Call and Webcast Information
Merix will conduct a conference call and live webcast Wednesday, October 8,
2008 at 6:30 a.m. PDT. Management will discuss first quarter fiscal 2009
financial results, provide a qualitative discussion regarding our business
outlook and comment further on the strategic direction of the Company. To
access the webcast, log on to www.merix.com.
An online replay of the webcast will be available at 9:30 a.m. PDT on
October 8, 2008 and a telephone replay will be available from 8:30 a.m. PDT
on October 8, 2008 until 11:59 p.m. PDT on Saturday, October 18, 2008 by
calling (320) 365-3844, access code 962769.
About Merix
Merix is a leading manufacturer of technologically advanced, multilayer,
rigid printed circuit boards for use in sophisticated electronic equipment.
Merix provides high-performance materials, quick-turn prototype,
pre-production and volume board production to its customers. Principal
markets served by Merix include communications and networking, computing
and peripherals, industrial and medical, defense and aerospace, and
automotive end markets in the electronics industry. Additional corporate
information is available on the internet at www.merix.com
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning of
the Securities Litigation Reform Act of 1995 relating to the Company's
business operations and prospects, including statements related to
estimates of financial results for the first quarter of fiscal 2009 that
are made pursuant to the safe harbor provisions of the federal securities
laws. These forward-looking statements, which may be identified by the
inclusion of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "goals" and other similar expressions,
are based on current expectations, estimates, assumptions and projections
that are subject to change. Actual results may differ materially from the
forward-looking statements. Many factors, including the following, could
cause actual results to differ materially from the forward-looking
statements: our ability to control or pass through increases in the cost of
raw materials and supplies; changes in customer order levels, product mix
and inventory build-up; lower than expected or delayed sales; ability to
successfully restructure Merix Asia and complete the related capital and
technology expansion; the ability to successfully and timely integrate the
operations of Merix Asia; the ability to successfully restructure Merix
Oregon; fluctuations in demand for products and services of the Company,
including quick-turn and premium services; foreign currency risk; the
introduction of new products or technologies by competitors; the ability to
avoid unanticipated costs, including costs relating to product quality
issues and customer warranty claims; pricing and other competitive
pressures in the industry from domestic and global competitors; all other
risks inherent in foreign operations such as increased regulatory
complexity and compliance cost and greater political and economic
instability; our ability to fully utilize our assets and control costs;
our ability to retain or attract employees with sufficient know-how to
conduct our manufacturing processes and maintain or increase our production
output and quality; and other risks listed from time to time in the
Company's filings with the Securities and Exchange Commission or otherwise
disclosed by the Company, including those set forth in the Company's Annual
Report on Form 10-K for the year ended May 31, 2008. Merix Corporation
does not undertake to update any such factors or to publicly announce
developments or events relating to the matters described herein.
MERIX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings per share data)
(Unaudited)
Fiscal quarter ended
--------------------------------------
August 30, May 31, September 1,
2008 2008 2007
----------- ----------- ------------
Net sales:
North America $ 44,917 $ 45,495 $ 56,176
Asia 45,710 42,059 43,254
----------- ----------- ------------
Total net sales 90,627 87,554 99,430
Cost of sales 80,353 78,185 88,387
----------- ----------- ------------
Gross profit 10,274 9,369 11,043
Gross margin 11.3% 10.7% 11.1%
Operating expenses:
Engineering 563 523 464
Selling, general and
administrative 9,702 8,802 11,603
Amortization of intangible
assets 520 520 613
Impairment and severance charges (527) (175) 241
----------- ----------- ------------
Total operating expenses 10,258 9,670 12,921
----------- ----------- ------------
Operating income (loss) 16 (301) (1,878)
Other expense, net (1,189) (1,723) (1,125)
----------- ----------- ------------
Loss before income taxes and
minority interests (1,173) (2,024) (3,003)
Provision for income taxes 728 1,057 410
----------- ----------- ------------
Loss before minority interests (1,901) (3,081) (3,413)
Minority interests 246 458 236
----------- ----------- ------------
Net loss $ (2,147) $ (3,539) $ (3,649)
=========== =========== ============
Diluted net loss per share $ (0.10) $ (0.17) $ (0.17)
=========== =========== ============
Diluted shares used in per share
calculations 20,794 21,072 20,909
=========== =========== ============
MERIX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
August 30,
2008 May 31, 2008
------------- -------------
Assets:
Cash and short-term investments $ 5,938 $ 5,728
Accounts receivable, net 70,336 73,153
Inventories, net 23,626 23,631
Assets held for sale 1,251 1,477
Deferred income taxes 75 75
Prepaid and other current assets 10,020 12,961
------------- -------------
Total current assets 111,246 117,025
Property, plant and equipment, net 106,506 103,012
Goodwill 31,794 31,794
Intangible assets, net 8,346 8,866
Deferred income taxes 885 885
Other assets 5,366 5,859
------------- -------------
Total assets $ 264,143 $ 267,441
============= =============
Liabilities and Shareholders' Equity:
Accounts payable $ 56,577 $ 59,789
Accrued liabilities 16,809 15,783
------------- -------------
Total current liabilities 73,386 75,572
Long-term debt 70,000 70,000
Other long-term liabilities 3,800 3,522
------------- -------------
Total liabilities 147,186 149,094
------------- -------------
Minority interests 4,522 4,573
Shareholders' equity 112,435 113,774
------------- -------------
Total liabilities and shareholders' equity $ 264,143 $ 267,441
============= =============
MERIX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)
Fiscal quarter ended
---------------------------
August 30, September 1,
2008 2007
------------ -------------
Cash flows from operating activities:
Net loss $ (2,147) $ (3,649)
Net adjustments to reconcile loss to net
cash provided by operating activitities:
Depreciation and amortization 5,457 5,621
Other non-cash items 244 1,361
Changes in working capital 5,645 4,004
------------ -------------
Net cash provided by operating
activities 9,199 7,337
Cash flows from investing activities:
Purchases of property, plant and equipment (9,421) (5,573)
Proceeds from disposal of property, plant
and equipment 555 23
Net changes in investments - 9,025
------------ -------------
Net cash used in investing
activities (8,866) 3,475
Cash flows from financing activities:
Principal payments on long-term borrowings
and capital lease obligations - (238)
Other financing activities, net (123) (1,145)
------------ -------------
Net cash used in financing
activities (123) (1,383)
------------ -------------
Net change in cash and cash equivalents 210 9,429
Cash and cash equivalents
Beginning of period 5,728 17,175
------------ -------------
End of period $ 5,938 $ 26,604
============ =============
SUPPLEMENTAL INFORMATION
(in thousands)
(Unaudited)
Three months ended
-------------------------------------------
August 30, September 1,
2008 May 31, 2008 2007
------------- ------------- -------------
Sales by End Markets:
Communications & Networking $ 38,776 43% $ 36,626 42% $ 42,648 43%
Automotive 19,413 21% 21,255 24% 20,208 20%
Computing & Peripherals 6,585 7% 6,046 7% 8,009 8%
Test, Industrial and
Medical 10,419 12% 8,844 10% 11,486 12%
Defense & Aerospace 7,223 8% 7,641 9% 5,765 6%
Other 8,211 9% 7,142 8% 11,314 11%
-------- ---- -------- ---- -------- ----
$ 90,627 100% $ 87,554 100% $ 99,430 100%
======== ==== ======== ==== ======== ====
Share-based Compensation: $ 566 $ 86 $ 760
======== ======== ========
MERIX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal 2008 (as revised*)
(in thousands, except earnings per share data)
(Unaudited)
Fiscal
year
Fiscal quarter ended ended
---------------------------------------------- ----------
September December March 1, May 31, May 31,
1, 2007 1, 2007 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Net sales:
Oregon $ 47,340 $ 44,566 $ 41,151 $ 36,658 $ 169,715
San Jose 8,836 8,329 7,485 8,837 33,487
---------- ---------- ---------- ---------- ----------
North
America 56,176 52,895 48,636 45,495 203,202
Asia 43,254 44,483 45,639 42,059 175,435
---------- ---------- ---------- ---------- ----------
Total net
sales 99,430 97,378 94,275 87,554 378,637
========== ========== ========== ========== ==========
Gross profit:
Oregon $ 6,324 $ 4,010 $ 2,200 $ 3,187 $ 15,721
San Jose 1,267 1,583 1,206 1,712 5,768
---------- ---------- ---------- ---------- ----------
North
America 7,591 5,593 3,406 4,899 21,489
Asia 3,452 3,930 4,518 4,470 16,370
---------- ---------- ---------- ---------- ----------
Total
gross
profit 11,043 9,523 7,924 9,369 37,859
---------- ---------- ---------- ---------- ----------
Gross margin:
Oregon 13.4% 9.0% 5.3% 8.7% 9.3%
San Jose 14.3% 19.0% 16.1% 19.4% 17.2%
---------- ---------- ---------- ---------- ----------
North
America 13.5% 10.6% 7.0% 10.8% 10.6%
Asia 8.0% 8.8% 9.9% 10.6% 9.3%
---------- ---------- ---------- ---------- ----------
Total
gross
margin 11.1% 9.8% 8.4% 10.7% 10.0%
---------- ---------- ---------- ---------- ----------
Operating
expenses:
Engineering 464 486 337 523 1,810
Selling,
general and
administra-
tive 11,603 10,628 9,930 8,802 40,963
Amortization
of
intangible
assets 613 645 527 520 2,305
Impairment
and
severance
charges 241 980 14,640 (175) 15,686
---------- ---------- ---------- ---------- ----------
Total
operating
expenses 12,921 12,739 25,434 9,670 60,764
---------- ---------- ---------- ---------- ----------
Operating
income
(loss) (1,878) (3,216) (17,510) (301) (22,905)
Other income
(expense), net (1,125) (1,045) 3,914 (1,723) 21
---------- ---------- ---------- ---------- ----------
Loss before
income taxes
and minority
interests (3,003) (4,261) (13,596) (2,024) (22,884)
Provision for
income taxes 410 546 (511) 1,057 1,502
---------- ---------- ---------- ---------- ----------
Loss before
minority
interests (3,413) (4,807) (13,085) (3,081) (24,386)
Minority
interests 236 202 269 458 1,165
---------- ---------- ---------- ---------- ----------
Net loss $ (3,649) $ (5,009) $ (13,354) $ (3,539) $ (25,551)
========== ========== ========== ========== ==========
Diluted net
loss per share $ (0.17) $ (0.24) $ (0.63) $ (0.17) $ (1.22)
========== ========== ========== ========== ==========
Diluted shares
used in per
share
calculations 20,909 21,024 21,079 21,072 21,019
========== ========== ========== ========== ==========
* Fiscal 2008 quarterly results of operations are presented as revised for
a reclassification to cost of sales of charges formerly presented as
engineering expense and an allocation of certain costs of sales
attributable to global segment operations that were previously charged to
the Oregon segment.
Copyright © 2008, MarketWire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,Electronics and Semiconductors:ElectronicComponents, ElectronicsandSemiconductors:ElectronicDesignArchitecture, ElectronicsandSemiconductors:Micro-electronicsandNanotechnology, ,NASDAQ01,NASDAQ01,OR,BEAVERTON, OR
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