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Published:
Digital Angel Announces Third Quarter 2009 Financial Results
SO. ST. PAUL, Minn. - (BUSINESS WIRE) - Digital Angel (NASDAQ: DIGA), an advanced technology company in the
field of animal identification and emergency identification solutions,
today announced financial results for its third quarter ended September
30, 2009.
Joseph J. Grillo, Digital Angel's Chief Executive Officer and President,
commented, "As we continue our efforts to improve the operational and
financial performance of the Company we believe we are in a stronger
position with respect to our ability to thrive in a still challenging
environment. I look forward to discussing in detail our new emphasis on
the Animal Identification segment of our business on our conference call
this afternoon."
The financial results are shown below in the data tables.
Results Conference Call
The Company will host a conference call to discuss the results at 2:00
p.m. ET today. Interested participants should call (866) 393-5807 within
the United States and Canada, or (706) 679-2276 internationally. Please
use access code 39480205. Alternatively, a simultaneous webcast of the
live conference call can be accessed through Digital Angel's website at www.digitalangel.com.
For persons unable to participate in either the conference call or the
webcast, a digitized replay will be available from today at
approximately 4:00 p.m. ET to December 9 at 11.59 p.m. ET. For the
telephonic replay, dial (800) 642-1687 (USA/Canada) or (706) 645-9291
(international), using access code 39480205. The webcast replay can also
be accessed through Digital Angel's website at www.digitalangel.com.
Non-GAAP Financial Measure
To supplement the Company's preliminary consolidated financial
statements presented in accordance with generally accepted accounting
principles ("GAAP" ), the Company provides EBITDA, which is a non-GAAP
financial measure. EBITDA is defined as operating income (loss) plus
depreciation and amortization as presented in the Company's Preliminary
Consolidated Statement of Operations. EBITDA should not be considered as
an alternative to operating income or net income (as determined in
accordance with GAAP) as a measure of the Company's operating
performance or to net cash provided by operating, investing and
financing activities (as determined in accordance with GAAP) as a
measure of the Company's ability to meet cash needs. The Company
believes that EBITDA is a measure commonly reported and widely used by
investors and other interested parties as a measure of a company's
operating performance and debt servicing ability because it assists in
comparing performance on a consistent basis without regard to capital
structure, depreciation and amortization or non-operating factors (such
as historical cost). This information has been disclosed here to permit
a more complete comparative analysis of the Company's operating
performance relative to other companies. EBITDA may not, however, be
comparable in all instances to other similar types of measures. For
supplemental information to facilitate evaluation of the impact of
depreciation and amortization, and comparisons with historical results,
see the attached tables showing the detailed reconciliation of results
reported under GAAP to non-GAAP results for the three-month periods and
nine-months periods ended September 30, 2009 and 2008.
About Digital Angel
Digital Angel (www.digitalangel.com)
is an advanced technology company in the field of animal identification
and emergency identification solutions. Digital Angel's products are
utilized around the world in such applications as pet identification
using its patented, FDA-approved implantable microchip; livestock
identification and tracking using visual and radio frequency
identification (RFID) ear tags; and global positioning systems (GPS)
search and rescue beacons for use on aircraft, ships and boats, and by
adventure enthusiasts.
This press release contains certain "forward-looking" statements (as
such term is defined in the Private Securities Litigation Reform Act of
1995). Forward-looking statements included in this press release
include, without limitation, future expectations in our financial
performance; our ability to streamline our operations and drive our
business towards profitability; and our expectations for the success of
and cost savings resulting from our restructuring plan. These
forward-looking statements are based on the Company's current
expectations and beliefs and are subject to a number of risks,
uncertainties and assumptions. Among the important factors that could
cause actual results to differ materially from those expressed in, or
implied by, the forward-looking statements are our ability to
successfully implement our business strategy and restructuring plan;
uncertainty as to our working capital requirements over the next 12 to
24 months; our ability to successfully obtain the necessary working
capital to meet the operating needs of our businesses; our ability to
successfully integrate the businesses of acquired companies; our ability
to maintain compliance with the covenants of our credit facilities; the
degree of success we have in leveraging our brand reputation; our
ability to become a major player in the food source traceability and
safety arena; our ability to successfully develop survival and emergency
radios for military and commercial uses; our reliance on third-party
dealers and distributors to successfully market and sell our products;
our ability to defend against costly product liability claims and claims
that our products infringe the intellectual property rights of others;
our ability to comply with current and future regulations relating to
our businesses; our inability to meet all applicable Nasdaq Capital
Market requirements; and our ability to maintain proper and effective
internal accounting and financial controls. Additional
information about these and other factors that could affect the
Company's businesses is set forth in the Company's Form 10-K under the
caption "Risk Factors" filed with the Securities and Exchange Commission
("SEC") on March 31, 2009, and subsequent filings with the SEC.
The Company undertakes no obligation to update or release any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this statement or to reflect the
occurrence of unanticipated events, except as required by law.
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DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets Data
(in thousands, except par values)
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September 30, 2009
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December 31, 2008
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Assets
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(unaudited)
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Current assets
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Cash and cash equivalents
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$
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2,027
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$
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1,807
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Restricted cash
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196
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î º
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Accounts receivable, net
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10,590
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10,945
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Note receivable
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450
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450
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Inventories
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12,846
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8,922
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Deferred taxes
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143
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130
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Other current assets
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1,293
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1,530
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Current assets of discontinued operations
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5
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5
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Total current assets
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27,550
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23,789
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Property and equipment, net
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8,352
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8,834
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Goodwill and intangibles, net
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28,714
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30,214
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Note receivable
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701
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1,015
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Other assets, net
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624
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322
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Other assets of discontinued operations
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5
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32
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Total Assets
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$
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65,946
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$
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64,206
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Liabilities and Stockholders' Equity
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Current liabilities
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Notes payable and current maturities of long-term debt
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$
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10,581
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$
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8,581
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Accounts payable.
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14,079
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9,704
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Advances from factors
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2,632
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1,474
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Accrued expenses.
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10,186
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9,133
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Deferred revenue
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687
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840
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Current liabilities of discontinued operations
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5
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10
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Total current liabilities
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38,170
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29,742
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Long-term debt and notes payable
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2,644
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6,943
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Deferred taxes.
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2,556
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2,593
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Other liabilities
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891
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2,223
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Total Liabilities
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44,261
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41,501
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Total Stockholders' Equity (noncontrolling interest of $94 and
$45 respectively
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21,685
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22,705
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Total Liabilities and Stockholders' Equity
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$
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65,946
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$
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64,206
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DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations Data (Unaudited)
(in thousands, except per share data)
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For the three months ended September 30,
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2009
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2008
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Revenue
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$
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15,663
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$
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18,856
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Cost of sales
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9,159
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11,781
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Gross profit
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6,504
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7,075
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Selling, general and administrative expenses
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6,967
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8,169
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Research and development expenses
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468
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730
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Restructuring, severance and separation expenses
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142
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410
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Goodwill and asset impairments
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î º
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24,989
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Operating loss
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(1,073
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)
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(27,223
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)
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Interest and other income (expense), net
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51
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(1,159
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)
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Interest expense
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(670
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)
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(3,178
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)
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Loss from continuing operations before taxes
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(1,692
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)
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(31,560
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)
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Benefit for income taxes
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68
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150
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Loss from continuing operations
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(1,624
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)
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(31,410
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)
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(Loss) income from discontinued operations (attributable to Digital
Angel Corporation)
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(51
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)
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992
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Net loss
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(1,675
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)
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(30,418
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)
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Loss (income) attributable to noncontrolling interest, continuing
operations
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2
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(17
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)
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Net loss attributable to Digital Angel Corporation
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$
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(1,673
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$
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(30,435
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)
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Loss per common share - basic and diluted
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Loss from continuing operations
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$
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(0.09
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$
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(2.04
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(Loss) income from discontinued operations
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(0.00
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0.07
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Net loss
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$
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(0.09
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$
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(1.97
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DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations Data (Unaudited)
(in thousands, except per share data)
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For the nine months ended September 30,
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2009
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2008
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Revenue
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$
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50,692
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$
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61,985
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Cost of sales
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29,863
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39,987
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Gross profit
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20,829
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21,998
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Selling, general and administrative expenses
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21,593
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26,325
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Research and development expenses
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1,380
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2,256
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Restructuring, severance and separation expenses
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455
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2,334
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Goodwill and asset impairments
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î º
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29,358
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Operating loss
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(2,599
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(38,275
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)
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Interest and other income (expense), net
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671
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1,415
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Interest expense
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(1,738
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(7,388
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Loss from continuing operations before taxes
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(3,666
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)
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(44,248
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)
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Benefit for income taxes
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27
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438
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Loss from continuing operations
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(3,639
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)
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(43,810
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)
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Loss from discontinued operations (attributable to Digital Angel
Corporation)
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(135
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)
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(757
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Net loss
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(3,774
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)
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(44,567
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)
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Income attributable to the noncontrolling interest, continuing
operations
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(27
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(121
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)
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Net loss attributable to Digital Angel Corporation
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$
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(3,801
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$
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(44,688
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Loss per common share - basic and diluted
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Loss from continuing operations
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$
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(0.20
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)
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$
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(2.96
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Loss from discontinued operations
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(0.01
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)
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(0.05
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)
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Net loss
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$
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(0.21
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$
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(3.01
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DIGITAL ANGEL CORPORATION AND SUBSIDIARIES
Reconciliation
to Non-GAAP Financial Information
(in thousands)
(unaudited)
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For the three-months ended September 30,
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2009
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2008
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Operating loss
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$
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(1,073
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)
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$
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(27,223
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)
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Depreciation and amortization
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1,128
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1,283
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EBITDA
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55
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(25,940
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Restructuring, severance, separation expenses and
goodwill and asset impairments
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142
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25,585
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2
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Adjusted EBITDA
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$
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197
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$
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(355
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)
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1 Adjusted EBITDA is regular EBITDA with the
restructuring, severance, separation expenses and goodwill and
asset impairments backed out.
2 Includes
$0.2 million of restructuring related charges included in cost of
goods sold in the three-months ended September 30, 2008.
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For the nine-months ended September 30,
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2009
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2008
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Operating loss
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$
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(2,599
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$
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(38,275
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)
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Depreciation and amortization
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3,334
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3,739
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EBITDA
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735
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(34,536
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)
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Restructuring, severance, separation expenses and
goodwill and asset impairments
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455
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33,090
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2
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Adjusted EBITDA1
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$
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1,190
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$
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(1,446
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1 Adjusted EBITDA is regular EBITDA with the
restructuring, severance, separation expenses and goodwill and
asset impairments backed out.
2 Includes
$1.4 million of restructuring related charges included in cost of
goods sold in the nine-months ended September 30, 2008.
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Digital Angel
Jay McKeage, 651-554-1564
Copyright © 2009, Business Wire, Inc., All rights reserved. Copyright © 2009, NewsBlaze, Daily NewsTags: Business wire, High Tech, minnesota, PDAs, Printers, Computer, Hardware, VOIP, Phones and Telecommunications, Agriculture, Aerospace and defense
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