Aura Announces Results for Year Ending February 28, 2002 - Reports 24% Revenue Growth.Business Editors EL SEGUNDO El Segundo (ĕl sēgŭn`dō), industrial city (1990 pop. 15,223), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1917. Its products include navigation and computer systems, aircraft parts, office machines, telephone apparatus, and , Calif.--(BUSINESS WIRE)--May 29, 2002 AURA SYSTEMS, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: AURA) announced today results for the fiscal year ending February 28, 2002. Net revenues in fiscal 2002 totaled $3.1 million, an increase of 24% over net revenues in fiscal 2001 of $2.5 million. In fiscal 2001 and 2002, virtually all of the revenue recorded came from the AuraGen(R) product line. The AuraGen(R) is based on patented state-of-the-art technology developed by Aura Systems, Inc. and provides a complete electric power solution. The net loss for fiscal 2002 was $24.9 million ($.08 per share) as compared to a net loss of $20.9 million ($.08 per share) in the previous year. The Company's net loss in the fourth quarter of fiscal 2002 was $15.7 million as compared to a net loss of $6.9 million in fiscal 2001. The increase in the loss was primarily due to previously announced restructuring activities. "The Company made difficult decisions, closing and discontinuing all of our joint ventures and subsidiary companies, eliminating investment in our non-core lines of business in order to focus on growing the top-line revenue and becoming a profitable company in the future," said Joshua Hauser, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , "Much of the deficit in Fiscal 2002 can be attributed to adjustments to inventory, write downs of non-productive assets, and reserves for future liabilities. Additional steps have been taken since February 28, 2002, when the new management team was put into place to position the business." Carl Albert, Chairman of the Board, said, "We transitioned the management of the Company three months ago and since then made progress toward our goal of creating a strategically focused enterprise with a strong balance sheet and a viable future growth plan". Mr. Albert added, "We have come a long way in a short period of time, and I am very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the corporate leadership team can continue to streamline our operations and seize the substantial revenue opportunities that are provided by the increase in worldwide acceptance of the AuraGen(R) family of products." The higher revenue in fiscal 2002 resulted from a wider acceptance of the AuraGen(R). Revenues increased in virtually all industries served by Aura. Revenues in the fourth quarter are a negative $928,000 due to the return of the product from one customer following a collection proceeding by Aura. The Company has fully accounted for this return in the fourth quarter. The fiscal year net loss of $24.9 million resulted from total net expenses incurred of $28.5 million, partially offset by a gross profit of $1.6 million and a gain on debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of $1.9 million. The total expenses included amounts from recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. operations that included significant costs such as depreciation of $5.5 million, $2.8 million in legal costs, and $2.3 million of net interest. The fiscal 2002 year-end results include a number of one-time charges for impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair and recognition of liabilities that were recorded in the fourth quarter. The fourth quarter loss of $15.7 million included the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of the Company tooling in the amount of $4.6 million, which was the remaining net book value to have been amortized over the next fiscal year. Non-core investments owned by the Company were written-down to their net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. resulting in a loss of $1.4 million. The Company recorded a charge of $3.1 million relative to prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. media advertising.
The inventory reserve was increased by $1.5 million as a result of the
Company's annual review of the net realizable value expected to be
recovered. The Company recorded a liability relative to the future
severance payments to the former management amounting to $1.1 million.
Aura had previously announced on March 5, 2002 that it had restructured and retired approximately $15.3 million of debt and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. . The extraordinary pre-tax gain for the early extinguishment of debt was estimated to be $5.5 million. In the first quarter of fiscal 2003, the Company raised $4.2 million through a capital transaction. Several of these same investors participated in the funding to retire the $15.3 million in debt. As a result of price protection clauses in the restructuring, these investors are entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to receive additional shares of common stock. Therefore, in the fourth quarter the Company recognized other income of $1.3 million for a transaction fee paid to Aura and an extraordinary gain of $1.0 million, which reflects the net liability for the additional shares issued. The Company currently expects AuraGen(R) sales in fiscal 2003 to exceed revenues recorded for fiscal 2002. In addition, the net loss is expected to be significantly less than the current year net loss with improved operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . These expectations are based upon the Company's focused efforts on growing revenue and minimizing the costs incurred. Future costs are expected to be lower due to a reduction in labor and labor related costs, the elimination of depreciation and amortization expense relative to non-productive assets, reduced legal and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. expenses, the elimination of interest expense on a majority of the debt, and other future actions based upon the strategic and operational focus of Aura Systems, Inc. Increased sales and marketing expenses are expected to offset a portion of these cost savings. ABOUT AURA SYSTEMS, INC. Aura Systems Inc., a technology leader in mobile power, develops and sells AuraGen(R) Mobile Induction Power systems to the industrial, commercial and defense mobile power generation markets. The Company's unique and patented energy solution is the only proven, commercially available pure sine wave A continuous, uniform wave with a constant frequency and amplitude. See wavelength.  A Sine Wave _title> Sine wave power system that can continuously provide thousands of watts of power at low engine speed, and is fully integrated under the vehicle hood. The AuraGen(R) is capable of generating full power up to 8,500 watts at all engine speeds, including enhanced engine idle speed Idle speed is the minimum operating speed (generally measured in revolutions per minute, or rpm, of the crankshaft) of a combustion engine. At idle speed, the engine generates enough power to run reasonably smoothly and operate its ancillaries (water pump, alternator, and, if for gasoline engines gasoline engine: see internal-combustion engine. gasoline engine Most widely used form of internal-combustion engine, found in most automobiles and many other vehicles. and at idle speed for bigger diesel engines. The AuraGen(R) combines sophisticated mechanical and electronics design, advanced engineering and break-through electromagnetic electromagnetic /elec·tro·mag·net·ic/ (-mag-net´ik) involving both electricity and magnetism. electromagnetic pertaining to or emanating from electromagnetism. technology to produce a highly reliable and flexible mobile power generating system that creates alternating current (AC) and direct current (DC) electricity, both with and without the engine on. For more information about the Company's AuraGen(R) product visit the company's website at http://www.aurasystems.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release which are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in the Company's Securities and Exchange Commission filings.
BALANCE SHEET
February 28, February 28,
2002 2001
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Current assets $ 6,614,861 $13,943,149
Total assets $28,761,990 $45,278,043
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Current liabilities $ 9,127,414 $19,048,494
Total liabilities $16,109,257 $43,233,008
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Stockholders' equity $12,652,733 $ 2,045,035
Total liabilities and stockholders' equity $28,761,990 $45,278,043
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STATEMENT OF OPERATIONS
FISCAL 2002 FISCAL 2001
Total net revenues $ 3,116,295 $ 2,512,508
Total cost of goods $ 1,480,736 $ 1,216,637
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Gross profit $ 1,635,559 $ 1,295,871
Total expenses, net $ (28,461,994) $(22,225,842)
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Loss before extraordinary item $ (26,826,435) $(20,929,971)
Net loss after extraordinary item $ (24,936,895) $(20,929,971)
Net loss per share $ (0.08) $ (0.08)
Weighted average number of
common shares outstanding $ 327,587,590 $ 261,568,346
FOURTH QUARTER
2002 2001
Total net revenues $ (927,673) $ 1,242,000
Total cost of goods $ (441,935) $ 563,000
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Gross profit $ (485,738) $ 679,000
Total expenses, net $(15,573,423) $ 7,620,000
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Loss before extraordinary item $(16,059,161) $ (6,941,000)
Net loss after extraordinary item $(15,701,809) $ (6,941,000)
Net loss per share $ (0.05) $ (0.02)
Weighted average number of
common shares outstanding $347,953,050 $ 285,239,172
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