COMARCO Reports Record Quarterly Revenue and Strong Third Quarter Earnings; All Share and Per Share Amounts Reflect 3-For-2 Stock Split Distributed October 27, 2000.Business Editors/High-Tech Writers IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--Nov. 21, 2000 COMARCO, Inc. (Nasdaq:CMRO CMRO Current Medical Research and Opinion (journal) CMRO Concerned Motorcycle Riders of Ohio CMRO Canadian Mud Racing Organization CMRO Certified Medical Review Officer CMRO Complex Maintenance, Repair & Overhaul ) today announced record quarterly revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the and strong financial results for the third quarter ended October October: see month. 31, 2000. On Nov. 17, COMARCO completed the plan to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. its non-wireless businesses. Accordingly, the Company's continuing operations consist solely of its wireless technologies subsidiary, Comarco Wireless Technologies, Inc. CONTINUING OPERATIONS COMARCO reported third quarter revenue from continuing operations of $13.2 million, a quarterly record, up 10 percent from $12.0 million for both the corresponding quarter of the prior fiscal year and the second quarter ended July July: see month. 31, 2000. Net income from continuing operations for the third quarter was $1.6 million, up 7 percent from $1.5 million for the corresponding quarter of the prior fiscal year and up 23 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . For the third quarter, earnings per share from continuing operations was $0.22, an increase of 5 percent from $0.21 for the corresponding quarter of the prior fiscal year, and an increase of 22 percent sequentially. Second quarter net income from continuing operations of $1.3 million and earnings per share from continuing operations of $0.18 exclude a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs recorded in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of the Company's non-wireless businesses. Including the one-time charge, net income from continuing operations was $473,000 and, on a per share basis was $0.06 per share. "We are very pleased with our third quarter results, which include record revenue for the Company," said Tom Franza, COMARCO president and chief executive officer. "We have been successful anticipating the needs of the wireless industry and have introduced test and measurement products and engineering services that are widely accepted." In comparison to the corresponding quarter of the prior fiscal year, the net increase in third quarter revenue was primarily due to a $4.8 million increase in sales of test and measurement products and engineering services which was offset by a $2.8 million decrease of fixed communication systems sales. With respect to the decrease in fixed communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. sales, the Company completed certain contracts to install and upgrade several call box systems during the prior fiscal year. These contracts were not expected to recur in the current fiscal year. Net income for the third quarter ended October 31, 2000 was $1.5 million, and on a per share basis was $0.20. As previously announced, COMARCO received an order from Targus Business Targus (corporation) is a manufacturer of computer equipment (mostly related to mobile computing) and accessories such as notebook computer storage cases. Fiction Targus is a name of people and places in several fictional worlds. Group International ("Targus") for $10 million of ChargeSource 70-watt universal power adapters An external power supply for laptop computers and just about every portable or semi-portable electronic device on the market. Also called an "AC adapter," it contains a rectifier to convert AC current to DC and a transformer to convert voltage from 120 down to 9, 12, 15 or whatever is . During the third quarter, the Company went into production and began delivering on this order. The ChargeSource 70-watt power adapter is COMARCO's second-generation sec·ond-gen·er·a·tion adj. 1. Of or relating to a person or persons whose parents are immigrants. 2. Of or relating to a person or persons whose parents are citizens by birth and whose grandparents are immigrants. 3. power system that powers and charges most notebook computers A laptop computer that weighs in a range from five to seven pounds. The term originated when laptops were routinely more than 10 pounds, and those that became lighter were placed in a special "notebook" category. In practice, notebook computer and laptop computer are synonymous. , cellular telephones, handheld handheld: see personal digital assistant. devices and portable printers. The Company anticipates delivering the balance of this order to Targus during the fiscal year ended January January: see month. 31, 2002. DISCONTINUED OPERATIONS Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. Previously, COMARCO announced it was embarking on a plan to divest its non-wireless businesses and to focus on its wireless business. Prior to the third quarter ended October 31, 2000, the Company completed five of six planned business disposition transactions. On November November: see month. 17, 2000, COMARCO completed the final disposition transaction with the sale of the Company's airport services business. Net loss from discontinued operations for the third quarter ended October 31, 2000 was $121,000, and on a per share basis was $0.02. BUSINESS OUTLOOK "The wireless industry continues to have a strong appetite ap·pe·tite n. An instinctive physical desire, as for food or sex. Appetite The natural instinctive desire for food. for products and engineering services. We are focused on the future needs of our customer base as the wireless industry transitions to broadband technologies broadband technology Telecommunications devices, lines, or technologies that allow communication over a wide band of frequencies, and especially over a range of frequencies divided into multiple independent channels for the simultaneous transmission of different signals. ," said Tom Franza, COMARCO president and chief executive officer. "We believe the demand for test and measurement equipment, engineering services and related software will remain strong in the near term. COMARCO intends to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this demand with new products and an expanded offering of engineering services." The following estimates are based on current expectations. These estimates are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results may differ materially. These estimates do not include the potential impact of any future mergers, acquisitions or other business combinations. Fourth quarter comparisons to both the prior quarter and the corresponding quarter of the prior fiscal year are provided for informational purposes only. The Company's business, on a quarterly basis, is subject to fluctuations that may be material. Accordingly, prior quarterly results may not be indicative indicative: see mood. of future results. -- COMARCO anticipates fourth quarter revenue to be up slightly from $13.2 million for the third quarter. In comparison to the corresponding quarter of the prior fiscal year, fourth quarter revenue is anticipated to be up more than 26 percent from $10.5 million. For the current fiscal year, revenue is anticipated to be up more than 24 percent from $39.2 million for the prior fiscal year. -- COMARCO also anticipates gross margin percentage for the fourth quarter to be consistent with the third quarter gross margin of 51 percent, plus or minus a point, as compared to 47 percent for the fourth quarter of the prior fiscal year. For the current fiscal year, gross margin is expected to be 3 to 4 points higher than 47 percent achieved for the prior fiscal year. The anticipated favorable increase is attributable to increased sales of the Company's higher margin test and measurement products and engineering services. COMARCO's engineering services business commenced full operations during the first quarter of the current fiscal year. -- Selling, general and administrative costs and engineering and support costs are anticipated to be consistent with the third quarter. -- The tax rate for both the fourth quarter and the current fiscal year is anticipated to be approximately 36.5 percent. EARNINGS CONFERENCE CALL COMARCO will host a conference call to discuss further the results for the third quarter at 11 a.m. PST PST Paroxysmal supraventricular tachycardia, see there on Nov. 21. Interested parties may call 800/811-8830, and enter pass code 760740, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. five minutes before the scheduled conference. A replay of the conference call will be available for seven days, running through 10 p.m. PST Nov. 28. To hear the replay, call 888/203-1112, and enter pass code 760740. The conference call will be webcast live by Vcall.com via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , and can be accessed at http://www.vcall.com/NASApp/Vcall/EventPage?ID=52824. ABOUT COMARCO Based in Irvine, Calif., COMARCO, Inc. provides test and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. products and services for wireless telephone carriers, systems for the wireless transmission of voice and data, and advanced technology products for portable wireless appliances such as notebook computers, cellular telephones and personal organizers : Top - 0–9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A
FORWARD-LOOKING INFORMATION Except for historical information contained herein, the matters set forth in this news release 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 involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as the level of sales of our products, timely and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. product development, market acceptance of new products, foreign marketing, the level of competition for the Company's products and services, our ability to meet contractual commitments with our customers, and the ability to meet the technical requirements of our customers. Investors are also directed to consider a more detailed description of risks and uncertainties facing the Company discussed in documents filed by the Company with the Securities and Exchange Commission. The foregoing information concerning the Company's forecast for the fourth quarter represent the Company's current outlook only as of the date of this release and the Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.
COMARCO, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------ ------------------------
2000 1999 2000 1999
------------------------ ------------------------
Revenues $13,153,000 $11,959,000 $35,202,000 $28,774,000
Cost of sales 6,414,000 6,258,000 16,978,000 15,233,000
------------ ----------- ----------- -----------
Gross profit 6,739,000 5,701,000 18,224,000 13,541,000
Selling, general
and
administrative
costs 3,236,000 2,538,000 9,132,000 6,721,000
Engineering and
support costs 1,239,000 848,000 3,568,000 2,811,000
------------ ----------- ----------- -----------
Operating income
before
severance costs 2,264,000 2,315,000 5,524,000 4,009,000
Severance costs -- -- 1,325,000 --
------------ ----------- ----------- -----------
Operating income 2,264,000 2,315,000 4,199,000 4,009,000
Other income 327,000 47,000 501,000 224,000
Minority
interest (2,000) (29,000) (4,000) (38,000)
------------ ----------- ----------- -----------
Income before
income taxes 2,589,000 2,333,000 4,696,000 4,195,000
Income tax
expense 946,000 851,000 1,715,000 1,531,000
------------ ----------- ----------- -----------
Net income from
continuing
operations 1,643,000 1,482,000 2,981,000 2,664,000
Net income
(loss) from
discontinued
operations (121,000) (1,894,000) 378,000 (1,105,000)
------------ ----------- ----------- -----------
Net income
(loss) $1,522,000 $(412,000) $3,359,000 $1,559,000
============ =========== =========== ===========
Earnings per
share --
continuing
operations:
Basic $0.24 $0.23 $0.45 $0.40
============ =========== =========== ===========
Diluted $0.22 $0.21 $0.40 $0.36
============ =========== =========== ===========
Earnings (loss)
per share --
discontinued
operations:
Basic $(0.02) $(0.29) $0.05 $(0.17)
============ =========== =========== ===========
Diluted $(0.02) $(0.28) $0.05 $(0.16)
============ =========== =========== ===========
Earnings (loss)
per share:
Basic $0.22 $(0.06) $0.50 $0.24
============ =========== =========== ===========
Diluted $0.20 $(0.07) $0.45 $0.20
============ =========== =========== ===========
Common shares
outstanding 6,831,000 6,540,000 6,677,000 6,606,000
============ =========== =========== ===========
Common shares
outstanding
assuming
dilution 7,485,000 7,180,000 7,501,000 7,325,000
============ =========== =========== ===========
Note: All shares and per share information reflect a 3-for-2 stock
split distributed Oct. 27 to shareholders of record on Oct. 6.
COMARCO, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
October 31, January 31,
2000 2000
------------ -----------
(Unaudited)
Current Assets:
Cash and cash equivalents $18,386,000 $ 5,064,000
Short-term investments 4,375,000 3,721,000
Accounts receivable, net 10,888,000 6,695,000
Inventory 5,508,000 4,852,000
Deferred tax asset 2,787,000 2,908,000
Net assets available for sale 666,000 9,361,000
Other current assets 4,020,000 2,651,000
------------ -----------
Total current assets 46,630,000 35,252,000
Property and equipment, net 3,612,000 2,763,000
Software development costs, net 6,955,000 5,839,000
Intangible assets, net 1,987,000 2,222,000
Other assets 429,000 72,000
------------ -----------
$59,613,000 $46,148,000
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,131,000 $ 666,000
Deferred revenue 4,510,000 3,077,000
Accrued liabilities 12,588,000 8,052,000
------------ -----------
Total current liabilities 18,229,000 11,795,000
Deferred income taxes 3,135,000 2,599,000
Minority interest 117,000 --
Stockholders' equity 38,132,000 31,754,000
------------ -----------
$59,613,000 $46,148,000
============ ===========
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