Centennial Technologies Announces Second Consecutive Profitable Quarter With Its Second Quarter Fiscal 1999 Results.WILMINGTON Wilmington. 1 City (1990 pop. 71,529), seat of New Castle co., NE Del., on the Delaware River and tributary streams, the Christina and the Brandywine; settled 1638, inc. as a city 1832. , Mass.--(BUSINESS WIRE)--Oct. 26, 1998-- Centennial Technologies, Inc. (Ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. :CENL CENL Conference of European National Librarians CENL Conference of European National Libraries ) announced today its financial results for its second quarter ended September 26, 1998, reporting its second profitable quarter in a row. Revenues for the second quarter were $6.2 million, compared to similar revenues for the first quarter of $6.2 million and revenues for the comparable quarter last year of $6.9 million. A portion of the decrease in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight compared to last year resulted from a decline in the cost of certain memory devices used in the production of the Company's PC card products. Decreasing component costs were passed along to customers, reducing the Company's average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. . This trend was offset partially by an increase in the volume of PC cards sold to both new and existing customers. Gross profit for the second quarter was $1.9 million, or 31% of sales, compared to gross profit of $1.6 million, or 26% of sales for the first quarter, and $0.9 million, or 13% of sales for the comparable quarter last year. During the second quarter, the Company was successful in selling $480,000 of customized inventory, the costs of which had been previously fully reserved due to a dispute with the customer for whom the customized cards were originally produced and who had attempted to cancel the order. Gross margin for the second quarter, excluding this sale of fully reserved inventory, was 25% of sales. During the second quarter, the Company recorded non-operating income of $1.6 million representing the proceeds of a settlement that the Company reached with the customer referred to above that had attempted to cancel an order for customized PC cards which had already been produced. In addition, the Company recorded a non-operating loss on investment activities of $733,000 representing a reduction in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Company's investment in its former affiliate, Century Electronics Manufacturing This article presents a typical manufacturing process of an electronic assembly. Component manufacturing Components such as resistors, capacitors and integrated circuits are generally made by specialized contractors. , Inc. This reduction in the investment carrying value was based upon management's continuing assessment of the value of contract manufacturing businesses in general. The Company has been negotiating with Century regarding a possible redemption of the Company's remaining interest in Century, and the Company expects to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... the terms of such a redemption consistent with the remaining carrying value of the investment before the end of calendar 1998. The Company generated quarterly net income of $1.2 million during the second quarter of fiscal 1999, or $.06 per share on a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, compared to net income of $0.1 million last quarter, or $.01 per share on a basic and diluted basis, and a net loss of $9.8 million for the same quarter last year, or $.52 per share on a basic and diluted basis. "We are pleased to be building on the success we achieved last quarter with another positive earnings report," said L. Michael Hone hone, v to sharpen. , Centennial's President and Chief Executive Officer. "The Company continues to make headway Verb 1. make headway - obtain advantages, such as points, etc.; "The home team was gaining ground"; "After defeating the Knicks, the Blazers pulled ahead of the Lakers in the battle for the number-one playoff berth in the Western Conference" on developing sales opportunities for new, existing and customized products. Our gross margins remain consistent despite competitive pressures, and our bottom line profitability and positive cash flows create greater resources for the Company to put to work towards its strategies for future growth." This press release contains 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. . The matters expressed in such statements are subject to numerous risks and uncertainties, including, without limitation, the ability of the Company to compete effectively with regard to new and existing accounts, the ability of the Company successfully to develop and incorporate the technology required for its new products, market acceptance of the Company's new products, the ability of the Company to reach mutually agreeable terms regarding Century's redemption of the Company's remaining investment in Century, and other risks identified in filings made by Centennial Technologies, Inc. with the Securities and Exchange Commission (the "Commission") including Centennial's Form 10-Q Form 10-Q See 10-Q. filed with the Commission on August 11, 1998 under the heading "Risk Factors." Centennial Technologies, Inc. provides custom and industry standard PC Cards for original equipment manufacturers. As a global leader, Centennial integrates patented and proprietary technology into application specific cards for commercial, industrial and military markets. The Company's headquarters and ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certified See certification. engineering and manufacturing facility is located in the Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New area, with sales and services offices in 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). , New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). and Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . The Company's international sales and service operations are headquartered in the United Kingdom. More information about Centennial can be obtained on 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 at http://www.cent-tech.com. -0-
CENTENNIAL TECHNOLOGIES, INC.
Financial Summary
Three Months and Six Months Ended September 26, 1998
and September 27, 1997
(in thousands, except per share information)
September 26, September 27,
1997 1998
Net sales $ 6,151 $ 6,901
Cost of goods sold 4,241 5,993
Gross profit 1,910 908
Operating expenses:
167 215
Engineering, research and
development costs
Selling, general and
administrative
expenses 1,490 2,803
Operating income/(loss) 253 (2,110)
Provision for loss on
inventory subject to
customer dispute -- 1,841
Proceeds from resolution of
customer dispute (1,600) --
Loss on investment
activities 733 5,424
Lease cancellation
charge -- 258
Net interest
(income)/expense (81) 69
Income/(loss) before equity
in earnings of affiliate 1,201 (9,702)
Equity in earnings
(loss) of affiliate -- (77)
Net income/(loss) $ 1,201 $ (9,779)
Net income/(loss)
per share - basic and
diluted $ .06 $ (.52)
Weighted average shares
outstanding - basic 20,031 18,648
Weighted average shares
outstanding - diluted 20,034 18,648
Six Months Ended
September 26, September 27,
1997 1998
Net $ 12,386 $ 13,474
sales
Cost of goods sold 8,831 12,504
Gross profit 3,555 970
Operating expenses:
Engineering, research and 369 434
development costs
Selling, general and 2,898 4,460
administrative expenses
Operating income/(loss) 288 (3,924)
Provision for loss on inventory -- 1,841
subject to customer dispute
Proceeds from resolution of (1,600) --
customer dispute
Loss on investment activities 733 8,909
Special investigation costs -- 597
Lease cancellation charge -- 258
Net interest (income)/expense (145) 147
Income/(loss) before equity 1,300 (15,676)
in earnings of affiliate
Equity in earnings (loss) of -- 423
affiliate
Net income/(loss) $ 1,300 $(15,253)
Net income/(loss) per share - $ .07 $ (.83)
basic and diluted
Weighted average shares 19,278 18,412
outstanding - basic
Weighted average shares 19,445 18,412
outstanding -diluted
CENTENNIAL TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
As of September 26, 1998 and March 31, 1998
(in thousands)
September 26, March 31,
1998 1998
ASSETS
Current assets:
Cash and cash equivalents $ 7,990 $ 5,358
Accounts receivable, net 2,590 2,809
Inventories 1,459 2,309
Other current assets 510 1,021
Total current assets 12,549 11,497
Equipment and leasehold improvements, net 2,441 2,731
Other assets 2,087 2,850
Total assets $17,077 $17,078
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Obligations under capital leases $ 71 $ 70
Accounts payable and accrued expenses 6,804 8,070
Total current liabilities 6,875 8,140
Long-term obligations under capital leases -- 36
Stockholders' equity 10,202 8,902
Total liabilities and stockholders' equity $17,077 $17,078
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