Cherokee International Files for Extension of Form 10-K Filing; Preliminary Results for the Fourth Quarter of 2005; Net Sales of $32.7 million and Operating Income of $321,000.TUSTIN, Calif. -- Cherokee International Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CHRK), a leading provider of power supplies, today announced that it will file a 15-day automatic extension notification with the Securities and Exchange Commission relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended January 1, 2006. The Company needs additional time 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 ... its financial statements for the year ended January 1, 2006 and will not meet the prescribed filing date of April 3, 2006. In late March, 2006 the Company was made aware that employees of its Indian subsidiary manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. had made certain unauthorized payments. The Company's Audit Committee has commenced an immediate investigation and has engaged the services of independent counsel to oversee it. The reason for the delay is to provide additional time for the Company's Audit Committee to obtain sufficient information to enable the Company to finalize its financial statements. The Company notes that the investigation is in its early stages, and no determination has been made as to whether it will result in any impact on the Company's financial statements. The amounts of the known payments are not material. The facility in India is for the sole purpose of manufacturing product for other Company locations and as such does not generate or bill revenue to external customers. The India production facility manufactures approximately 6% of total Company products. 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 for the fourth quarter of 2005 were $32.7 million, down 11% compared to $36.7 million for the fourth quarter in 2004, and up 24% compared to $26.4 million for the third quarter of 2005. The Company's fourth quarter revenue exceeded the latest guidance of mid-to-high teen growth over the third quarter of 2005. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the fourth quarter of 2005 was $321,000, down from $3.6 million for the fourth quarter in 2004, and up from the $1.6 million operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in the third quarter of 2005. Net income for the fourth quarter of 2005 was $78,000, or $0.00 per diluted share, compared to a net income of $2.2 million, or $0.11 per diluted share, for the fourth quarter of 2004, and a net loss of $2.2 million, or $0.11 per diluted share for the third quarter of 2005. Net sales decreased 18% or $26.4 million to $122.1 million for the fiscal year 2005 from $148.5 million for fiscal year 2004. The Company recorded a net loss of $3.2 million for fiscal year 2005, or $(0.17) per diluted share, compared to net income of $10.4 million during fiscal year 2004, or $0.62 per diluted share. The foregoing financial information for the fourth quarter and fiscal year 2005 is unaudited. About Cherokee International Corporation Cherokee International Corporation designs and manufactures high reliability custom and standard power supplies for original equipment manufacturers. Our advanced power supply products are typically custom designed into higher-end applications in the computing and storage, wireless infrastructure, enterprise networking The networking infrastructure in a large enterprise with multiple computer systems and networks of different types is extraordinarily complex. Due to the myriad of interfaces that are required, much of what goes on has little to do with the real data processing of the payroll and orders. , medical and industrial markets. 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 Certain statements contained in this press 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. . These forward-looking statements are based upon our current expectations about future events. When used in this press release, the words "believe," "anticipate," "intend," "estimate," "expect" and similar expressions, or the negative of such words and expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to our plans, objectives and expectations for future operations. However, these statements are subject to a number of risks and uncertainties affecting our business. You should read this press release completely and with the understanding that actual future results may be materially different from what we expect as a result of these risks and uncertainties and other factors, which include, but are not limited to: (1) changes in general economic and business conditions, domestically and internationally, (2) reductions in sales to, or the loss of, any of the Company's significant customers or in customer capacity generally, (3) changes in the Company's sales mix sales mix See product mix. to lower margin products, (4) increased competition in the Company's industry, (5) disruptions of the Company's established supply channels, (6) the Company's level of debt and restrictions imposed by its debt agreements, and (7) the additional risk factors identified in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, even though the Company's situation may change in the future. |
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