California Microwave Reports First-Quarter Results, Loss Resulting From Global Slowdown in Line With Pre-Announced Estimate.SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BUSINESS WIRE)--Oct. 26, 1998--California Microwave, Inc. (Nasdaq/NMS:CMIC CMIC CPU Management Interface Controller CMIC Caucasus Media Investigations Center (Baku, Azerbaijan) CMIC Combined Military Interrogation Center (Vietnam) CMIC Configuration Management Information Center ) today reported results for its fiscal 1999 first quarter ended September September: see month. 30, 1998. 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 purchased in-process research and development related to its Adaptive Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Limited acquisition, the company's net loss was $2.6 million, or $.17 per share. The one-time pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge for the acquisition of Adaptive's wireless, high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data technology was $8.2 million ($7.2 million after tax), resulting in a 1999 first-quarter net loss of $9.9 million, or $.65 per share, compared to net income of $2.3 million, or $.14 per share for the prior year's first quarter. California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Microwave's strategic plan calls for investing in high-growth, commercial businesses. In line with this strategy, on October October: see month. 7, 1998, the company announced its intent 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 Government Division. Accordingly, California Microwave's operating results are stated to account for the operating results of the Government division as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The Government Division contributed $1.1 million, or $.07 per share, in first-quarter 1999 compared to $1.4 million, or $.08 per share, in the prior year's first quarter. Also in its October 7 announcement, the company indicated that it was increasing its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program from three to six million shares, to be funded by proceeds from sale of the Government division. Shares are to be purchased over the next six to 12 months. In February February: see month. 1998, California Microwave announced a three-million share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program, of which approximately two million shares have been repurchased. International Satellite Revenue Down, Terrestrial Dealing with the earth. See terrestrial link. Even As California Microwave indicated in its October 7, 1998, announcement, the first-quarter loss was due to a revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. primarily in its international satellite communications business. 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 totaled $34.8 million compared to $39.3 million in the first quarter of the prior year. Satellite bookings and revenue were down by 21% and 22%, respectively, while Terrestrial revenue and bookings were essentially the same as reported last year. "The restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities we implemented in the fourth quarter provided the benefits we expected in our first quarter. However, the effect of our reduced cost structure was not fully apparent due to the revenue shortfall in the quarter, particularly in our Satellite segment. Satellite bookings accelerated in the latter part of the quarter, which led to a stronger closing backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , and have continued at a good pace in the current quarter. We will, however, continue to be cautious in our outlook until we see more encouraging international economic news. Terrestrial international bookings were also disappointing in the first quarter, but to a lesser degree, and were offset with higher domestic business in that segment," commented Donna S. Birks Birks is a surname, and may refer to
Domestic Satellite, Analog-to-Digital Video Orders Improving During the current quarter, California Microwave has seen an increase in orders for its domestic satellite products, particularly those provided to U.S. television broadcasters for their FCC-mandated analog-to-digital video conversion. EF Data won a $1.4 million order from a major television network to supply high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" digital modems for the upgrade of its satellite distribution network. Deliveries are commencing in support of the November November: see month. 1, 1998, High Definition Television (HDTV (High Definition TV) A set of digital television (DTV) standards that offer the highest resolution and sharpest picture. Although some HDTV sets are available in standard (rather square) screen sizes, the overwhelming majority of sets are wide screen, which eliminates ) network debut. Additionally, EF Data was selected by PBS PBS in full Public Broadcasting Service Private, nonprofit U.S. corporation of public television stations. PBS provides its member stations, which are supported by public funds and private contributions rather than by commercials, with educational, cultural, to provide modems for transmission of HDTV signals to PBS' member stations. These modems are designed for high-speed satellite reception, including transmission of HDTV signals, Digital Satellite News Gathering, Digital Video Broadcast and 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 applications. Orders are also accelerating for California Microwave's Microwave Radio Communications digital video microwave radio equipment. Shareholders Approve All Proposals at Annual Meeting At California Microwave's Annual Meeting of Shareholders held October 22, 1998, shareholders elected all director nominees, approved a 300,000 share increase to the Employee Stock Purchase Plan and authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the board of directors to change the name of the company when appropriate. The company believes that its current name no longer reflects its strategic direction. At this time, no decision has been made as to the timing of a name change or a specific new name. Statements made in this press release that are not historical facts, including any statements about expectations for fiscal year 1999 and beyond, 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. , involving certain risks and uncertainties. Factors that could cause the company's actual results to differ materially from management's projections, estimates and expectations include, but are not limited to, delays in the receipt of orders or in the shipment of products, the company's success in implementing its strategic plan, and other factors referred to in the company's Securities and Exchange Commission filings. California Microwave, Inc. (http://www.calmike.com) is a leading supplier of satellite earth station and microwave radio infrastructure products and information and collection systems. Its focus is on transmission of high-speed data, especially for Internet traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. , via satellite and terrestrial wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. . -0-
CALIFORNIA MICROWAVE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
Three Months Ended
September 30
1998 1997
---- ----
Revenue $ 34,731 $ 39,258
Costs of revenue 23,086 23,860
Gross margin 11,645 15,398
Expenses:
Research & development 5,434 4,194
Marketing & administration 10,725 8,305
Amortization of
intangible assets 395 344
Purchased in-process research &
development 8,210 --
Total expenses 24,764 12,843
Operating income (loss) (13,119) 2,555
Interest expense, net (872) (1,113)
Income (loss) from
continuing operations
before income taxes (13,991) 1,442
Provision (benefit) for
income taxes (3,065) 519
Income (loss) from
continuing operations (10,926) 923
Income from discontinued
operations, net of
income taxes 1,075 1,389
Net income (loss) $ (9,851) $ 2,312
Basic earnings
(loss) per share:
Income (loss) from
continuing operations $ (0.72) $ 0.06
Income from
discontinued operations $ 0.07 $ 0.08
Net income (loss) $ (0.65) $ 0.14
Weighted average shares 15,115 16,495
Diluted earnings
(loss) per share:
Income (loss) from
continuing operations $ (0.72) $ 0.06
Income from
discontinued operations $ 0.07 $ 0.08
Net income (loss) $ (0.65) $ 0.14
Weighted average shares
and dilutive equivalents 15,115 16,814
CALIFORNIA MICROWAVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, June 30,
1998 1998
Assets
Cash and cash equivalents $ 1,825 $ 24,630
Receivables 35,432 35,918
Inventories 26,598 25,710
Deferred income taxes 34,908 32,162
Net assets of
discontinued businesses 21,665 18,294
Property, plant and equipment (net) 19,010 19,065
Intangible assets 29,819 27,887
Other assets 7,726 6,846
$176,983 $190,512
Current liabilities $ 41,337 $ 43,711
Long-term liabilities 66,291 62,248
Shareholders' equity 69,355 84,553
$176,983 $190,512
CALIFORNIA MICROWAVE, INC.
SEGMENT INFORMATION
(Dollars in millions)
Q1 1999 Q1 1998(1)
BOOKINGS
Satellite $ 18.0 $ 22.7
Terrestrial 19.1 19.1
Commercial 37.1 41.8
Government 13.7 13.5
Total $ 50.8 $ 55.3
BOOKINGS MIX
International 32% 34%
Domestic 42% 42%
Commercial 74% 76%
Government 26% 24%
Total 100% 100%
COMMERCIAL BOOKINGS MIX
International 43% 45%
Domestic 57% 55%
Commercial 100% 100%
BOOK-TO-BILL
Satellite 111% 109%
Terrestrial 103% 103%
Commercial 107% 106%
Government 69% 54%
Total 93% 86%
BACKLOG
Satellite $ 15.2 $ 13.5
Terrestrial 13.2 12.3
Commercial 28.4 25.8
Government 63.6 56.1
Total $ 92.0 $ 81.9
REVENUE
Satellite $ 16.2 $ 20.8
Terrestrial 18.5 18.5
Commercial 34.7 39.3
Government 19.8 25.1
Total $ 54.5 $ 64.4
REVENUE MIX
International 29% 31%
Domestic 35% 30%
Commercial 64% 61%
Government 36% 39%
Total 100% 100%
COMMERCIAL REVENUE MIX
International 45% 51%
Domestic 55% 49%
Commercial 100% 100%
GROSS MARGIN Percentage
Commercial 34% 39%
Government 20% 20%
Total 29% 32%
EBIT
Satellite $ -2.6 $ 2.3
Terrestrial (3) 1.2 2.3
Commercial -1.4 4.6
Government 1.7 2.1
Corporate and Other (2) -11.7 -2.0
Total $ -11.4 $ 4.7
EBITDA
Commercial $ 0.2 6.1
Government 2.2 2.4
Corporate and Other (2) -11.0 -1.3
Total $ -8.6 $ 7.2
(1) The Company's Services Division, which was sold for a gain in the
fourth quarter of fiscal year 1998, is included in "Government."
(2) Q1 99 includes a one-time purchased in-process research and
development charge for the ABL acquisition of $8.2 million.
(3) ABL was acquired in Q1 99 and its results are included in the
Terrestrial segment.
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