Compass Plastics & Technologies Reports Second-Quarter Results.GARDENA Gardena (gärdē`nə), city (1990 pop. 49,847), Los Angeles co., SW Calif., an industrial suburb of Los Angeles; inc. 1930. Often called "Freeway City" because of its proximity to several major roads, Gardena manufactures aircraft , Calif.--(BUSINESS WIRE)--June 11, 1998--Compass Plastics & Technologies (Nasdaq/NM:CPTI CPTI Conscience and Peace Tax International CPTI Counselling and Psychotherapy Training Institute (Edinburgh, Scotland, UK) CPTI Center for Patent and Trademark Information CPTI Concrete Polishing Technical Institute ) announced results for the second quarter of its 1998 fiscal year. For the 13 weeks ended April 26, 1998, Compass reported record comparable quarter revenues of $13,119,280 and a net loss of $480,548, or 10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. on a fully 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. This compares with revenues of $9,853,369 and net income of $481,723, or 13 cents per share on a fully diluted basis, for the comparable 13 weeks ended April 27, 1997. The increase in revues was due primarily to the inclusion of MOS (1) (Metal Oxide Semiconductor) See MOSFET. (2) (Mean Opinion Score) The quality of a digitized voice line. It is a subjective measurement that is derived entirely by people listening to the calls and scoring the results from Plastics Inc. beginning Feb. 27, 1998, the date of acquisition. Sales and productivity continue to improve at the company's new Tijuana Tijuana (tēhwä`nä), city (1990 pop. 698,752), Baja California state, NW Mexico, just south of the U.S. border. It is a gaudy border resort, noted for its racetracks and bullfights. An irrigated agricultural area surrounds the city. operations with sales for the quarter exceeding $4.4 million, a 56 percent increase over sales for the first quarter. Also, the company's Gardena warehouse addition was completed in May and offsite warehousing costs have been eliminated. For the 26 weeks ended April 26, 1998, Compass reported revenues of $23,907,004 and a net loss of $264,053, or 5 cents per share on a fully diluted basis. This compares with revenues of $20,244,365 and net income of $1,179,904, or 33 cents per share on a fully diluted basis, for the comparable 26 weeks ended April 27, 1998. Diluted shares outstanding on April 26, 1998, were 4.89 million compared with 3.6 million on April 27, 1997, the result of the company's initial public offering in September 1997. As a result of the its first-half losses, as of April 26, 1998, Compass was in violation of certain financial covenants under its senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . The lenders have waived the violations and amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. the loan agreement retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a to April 26, 1998, to levels where Compass will be in compliance. Commenting on the first-half financial results, Michael A. Gibbs, chief executive officer of Compass stated: "There have been several industrywide in·dus·try·wide adv. & adj. Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. events that have adversely impacted our profit plan for the year. We point out, however that we view their impact as temporary and overshadowing the new customer accounts and technology gains we have made this year. "Essentially all of our customers, including our largest, are not achieving their expected sales, which directly affects us. Secondly, the Asian crisis is having a direct effect on Compass. Many Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" have been affected by the economic crisis, weak domestic demand, tight credit with high interest rates, and unprecedented unemployment. "Some companies have taken a nationalistic view, including one of our customers so far, and are relocating some production back home to offset unemployment and enjoy favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. export prices due to currency de-valuation. "Offsetting these events is the sales activity at newly acquired MOS. Several new programs from existing customers are expected to be on stream by year-end, including a major R&D effort for a current medical-device customer, and a program for a new data-storage customer commencing in July. "In addition, we have been qualifying MOS to cell-phone manufacturers and are pursuing tooling and production programs in this market. These programs expand our former, more narrowly defined customer and technological expertise. "The purchase by Compass of Silicon Valley-based MOS Plastics Inc., completed on Feb. 27, 1998, culminates efforts which began over a year ago. We believe that MOS is the last independently owned company in our market with engineering capability and reputation of its kind. "The affiliation has immediately let us bid on business we could not have otherwise. The acquisition of MOS solidifies Compass' position as a total outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. partner from design to production. "The domestic computer market remains robust, continuing to grow at double-digit rates, and digital television's introduction in the fall of 1998 should aid television sales. "The NAFTA NAFTA in full North American Free Trade Agreement Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's requirements for international electronic manufacturers to have significant production facilities in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. by 2001 has resulted in ten, mostly Taiwanese, who do not seem to be impacted by the Asian economic crisis, personal computer monitor manufacturers opening plants in Baja California Baja California, state, Mexico Baja California (Span.: bä`hä kälēfōr`nyä), state (1990 pop. 1,660,855), 27,628 sq mi (71,576 sq km), NW Mexico, on the Baja California peninsula. Mexicali is the capital. , Mexico, this year. "Three of these manufacturers have inspected Compass' new plant in Tijuana, and one has completed its quality audit and committed production to start in July. This is the new market opportunity we have discussed at length. We are confident we will be supplying several of these new facilities." About Compass Plastics Compass Plastics & Technologies is a leading contract producer of custom injection-molded enclosures and sub-assemblies for OEMs in the computer monitor, PC, printer, consumer electronics, and medical- device industries. The company has manufacturing and assembly facilities in Silicon Valley, Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , and Baja California. Customers include Sony, Hewlett-Packard, Matsushita, Casio, Samsung, Hitachi, Sanyo, Apple Computer, Silicon Graphics and Lifescan. The statements in this news release may contain 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 risks and uncertainties that could cause actual results to differ from predicted results. These risks are further discussed in the 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. and annual report filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. -0-
COMPASS PLASTICS & TECHNOLOGIES INC.
Condensed Consolidated Statement of Operations
(Unaudited)
13 Weeks Ended 26 Weeks Ended
April 26, April 27, April 26, April 27,
1998 1997 1998 1997
Revenues:
Sales $13,119,280 $ 9,853,369 $23,907,004 $20,244,365
Cost of
Goods Sold 11,771,708 8,011,663 21,206,162 16,393,249
Gross Profit 1,347,572 1,841,706 2,700,842 3,851,116
Selling, General
and Administrative:
Selling
Expenses 219,970 180,438 390,057 294,133
General
Administrative 1,053,724 653,435 1,645,704 1,127,511
Amortization of
Goodwill 153,858 26,587 179,907 34,555
Total Selling,
General and
Administrative 1,427,552 860,460 2,215,668 1,456,199
Operating Income
(Loss) (79,980) 981,246 485,174 2,394,917
Interest Expense 624,634 182,753 828,132 451,243
Income (loss)
before Income Tax (704,614) 798,493 (342,958) 1,943,674
Provision (benefit)
for income taxes (282,343) 316,770 (137,182) 763,770
Income (loss)
before
extraordinary
item ($ 422,271) $ 481,723 ($ 205,776)$ 1,179,904
Extraordinary
loss from
extinguishment
of indebtedness (58,277) -- (58,277) --
Net income
(loss) ($ 480,548) $ 481,723 ($ 264,053)$ 1,179,904
Net income (loss)
per common share:
Basic:
Income (loss)
before
extraordinary
loss (9 cents) 24 cents (4 cents) 59 cents
Extraordinary loss (1 cent) -- (1 cent) --
Net income (loss) (10 cents) 24 cents (5 cents) 59 cents
Weighted Average
Shares
Outstanding 4,883,750 2,000,000 4,883,750 2,000,000
Diluted:
Income (loss)
before
extraordinary
loss (9 cents) 13 cents (4 cents) 33 cents
Extraordinary loss (1 cent) -- (1 cent) --
Net income (loss) (10 cents) 13 cents (5 cents) 33 cents
Weighted Average
Shares
Outstanding 4,883,750 3,600,000 4,883,750 3,600,000
CONTACT: Compass Plastics & Technologies Paul Iacono, 213/770-8771 or Coffin Communications Sanjay Sabnani, 818/789-0100 |
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