COMARCO Reports Second Quarter Financial Results; Company Posts Year-Over-Year and Sequential Revenue and Earnings Growth.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. 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)--Aug. 23, 2001 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 ), a leading provider of advanced technology products and services for the wireless 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 , today announced financial results for the second quarter ended July July: see month. 31, 2001. Revenue for the second quarter of fiscal 2002 increased 17 percent to $14 million, compared with $12 million for the same period last year, and sequentially from $12 million in the first quarter. Net income 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 , excluding acquisition-related amortization, increased to $1.7 million, or $0.23 per share, compared with net income from continuing operations, excluding 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, of $1.3 million, or $0.18 per share for the second quarter of fiscal 2001, and sequentially from $0.15 per share in the first quarter. Revenue for the six months ended July 31, 2001 increased 18 percent to $26.1 million, compared with $22 million for the same period last year. Net income from continuing operations, excluding acquisition-related amortization, increased to $2.9 million, or $0.38 per share, compared with net income from continuing operations, excluding a one-time charge for severance costs, of $2.2 million, or $0.30 per share for the six months ended July 31, 2000. Including acquisition-related amortization, net income from continuing operations for the three and six months ended July 31, 2001 was $1.6 million and $2.6 million, respectively, and, on a per share basis, $0.21 per share and $0.35 per share, respectively. "We're we're Contraction of we are. we're we are seeing pent-up pent-up adj. Not given expression; repressed: pent-up emotions. pent-up Adjective not released; repressed: demand for network capacity spurred by low-cost minutes of use, reluctance to spend on 2G technology and late arriving 2.5G technology," said COMARCO 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. Tom Franza. "We're investing aggressively in the development of products and services for GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. , 1XRTT and third-generation technologies. COMARCO's sales and support infrastructure for Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia is
also being strengthened in anticipation of demand for GPRS and 3G. I am
very pleased that we continue to maintain excellent quarterly
performance and a strong balance sheet as we prepare for the next wave
of wireless industry expansion."
The company remains on track to achieve its planned earnings growth. 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, or the financial impact of any legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and are subject to the "Forward-Looking Information" considerations noted below. -- COMARCO anticipates revenue for fiscal 2002 to be within the range of $53 to $55 million, an increase of approximately 10 percent compared with $49.5 million for the prior fiscal year. -- COMARCO also anticipates the gross margin for fiscal 2002 to increase by a point in comparison to 50 percent for the prior fiscal year. -- Earnings per share, on a fully diluted basis and excluding acquisition-related amortization, is expected to increase approximately 25 percent in comparison to the prior fiscal year. Subsequent to the second quarter of fiscal 2002, COMARCO was named as a defendant in two lawsuits filed by Mobility Electronics Inc. ("Mobility"). The initial complaint names COMARCO as a defendant in a lawsuit lawsuit: see procedure; tort. against 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"), the distributor of COMARCO's power adapter 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 products. In addition to claims against Targus, the lawsuit alleges that COMARCO intentionally in·ten·tion·al adj. 1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary. 2. Having to do with intention. interfered with Mobility's rights under an exclusive manufacturing agreement with Targus and misappropriated mis·ap·pro·pri·ate tr.v. mis·ap·pro·pri·at·ed, mis·ap·pro·pri·at·ing, mis·ap·pro·pri·ates 1. a. To appropriate wrongly: misappropriating the theories of social science. Mobility's trade secrets. Subsequent to the initial complaint, Mobility filed an additional lawsuit naming COMARCO and its subsidiary, Comarco Wireless Technologies Inc., as defendants. This subsequent lawsuit alleges that COMARCO and its subsidiary, through the manufacture and sale of its 70-Watt AC ChargeSource universal power adapter, infringe in·fringe v. in·fringed, in·fring·ing, in·fring·es v.tr. 1. To transgress or exceed the limits of; violate: infringe a contract; infringe a patent. 2. a patent purchased by Mobility on Aug. 6, 2001. Although COMARCO has only recently received the two lawsuits filed by Mobility, based upon an initial review of the statements and claims made by Mobility, COMARCO's management believes that Mobility's claims against COMARCO are without merit and intends to vigorously defend the lawsuits. Earnings Conference Call As previously announced, COMARCO will host a conference call to discuss financial results for the second quarter ended July 31, 2001 at 11 a.m. PT Aug. 23. Interested parties may call 800/822-4794 approximately five minutes before the scheduled conference. A replay of the conference call will be available for seven days, running through 10 p.m. PT Aug. 30. To hear the replay, call 888/203-1112 and enter pass code 561282. The conference call will also be audiocast See streaming audio. and can be accessed via the company's Web site at http://www.comarco.com/ or http://www.irconnect.com/primecast/01/q2/cmro_2q2001.mhtml. About COMARCO Based in Irvine, COMARCO Inc. is a leading provider of advanced technology products and services for the wireless Internet. The company's Web sites can be found at www.comarco.com and www.chargesource.com. 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.
COMARCO INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
2001 2000 2001 2000
Revenue $14,010,000 $11,952,000 $26,052,000 $22,049,000
Cost of sales 6,761,000 5,756,000 12,932,000 10,564,000
Gross profit 7,249,000 6,196,000 13,120,000 11,485,000
Selling, general
and administrative
costs 3,502,000 3,015,000 6,860,000 5,896,000
Engineering and
support costs 1,400,000 1,220,000 2,657,000 2,329,000
Operating income
before severance
costs 2,347,000 1,961,000 3,603,000 3,260,000
Severance costs - 1,325,000 - 1,325,000
Operating income 2,347,364 636,000 3,603,000 1,935,000
Other income 251,000 110,000 574,000 174,000
Minority interest (25,000) (1,000) (26,000) (2,000)
Income before
income taxes 2,573,000 745,000 4,151,000 2,107,000
Income tax expense 959,000 272,000 1,530,000 769,000
Net income from
continuing
operations 1,614,000 473,000 2,621,000 1,338,000
Net income from
discontinued
operations - 301,000 - 499,000
Net income $ 1,614,000 $ 774,000 $ 2,621,000 $ 1,837,000
Earnings per share
-- continuing
operations:
Basic $ 0.23 $ 0.07 $ 0.37 $ 0.21
Diluted $ 0.21 $ 0.06 $ 0.35 $ 0.18
Earnings per share
-- discontinued
operations:
Basic $ 0.00 $ 0.04 $ 0.00 $ 0.07
Diluted $ 0.00 $ 0.04 $ 0.00 $ 0.07
Earnings per share:
Basic $ 0.23 $ 0.11 $ 0.37 $ 0.28
Diluted $ 0.21 $ 0.10 $ 0.35 $ 0.25
COMARCO INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
July 31, Jan. 31,
2001 2001
(Unaudited)
Current Assets:
Cash and cash equivalents $ 19,465,000 $ 24,903,000
Short-term investments 3,622,000 3,819,000
Accounts receivable, net 10,739,000 8,418,000
Inventory 5,961,000 5,277,000
Deferred tax asset 1,840,000 2,133,000
Other current assets 939,000 1,746,000
Total current assets 42,566,000 46,296,000
Property and equipment, net 4,083,000 3,695,000
Software development costs, net 8,913,000 7,249,000
Intangible assets, net 7,942,000 8,381,000
Other assets 1,130,000 430,000
$ 64,634,000 $ 66,051,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 465,000 $ 1,050,000
Deferred revenue 4,790,000 6,786,000
Accrued liabilities 7,009,000 9,364,000
Total current liabilities 12,264,000 17,200,000
Deferred compensation 3,622,000 3,918,000
Deferred income taxes 1,809,000 1,406,000
Minority interest 469,000 32,000
Stockholders' equity 46,470,000 43,495,000
$ 64,634,000 $ 66,051,000
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