Continental Circuits Corp. Reports First Quarter Results for Fiscal 1998.PHOENIX--(BUSINESS WIRE)--Nov. 24, 1997--Continental Circuits Corp. (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 :CCIR See ITU. ) today reported financial results for its fiscal 1998 first quarter ended Nov. 1, 1997. For the quarter, the company achieved net income of $2.3 million, or $0.31 per share, from sales of $34.3 million, compared to its fiscal 1997 first quarter net income of $1.4 million, or $0.19 per share, from sales of $27.1 million. Compared to last year, the company's first quarter net income and sales improved 65% and 27%, respectively. Frederick Frederick, city, United States Frederick, city (1990 pop. 40,148), seat of Frederick co., NW Md.; settled 1745, inc. 1817. The processing center of a fertile farm and dairying area, it makes beer, household items, optical and glass products, leather goods, G. McNamee, Continental Circuits Chairman and Chief Executive Officer, commented on the results, saying, "We are very pleased with our performance and growth for the quarter. The significant improvement year-over-year reflects a number of factors, primarily the sales growth experienced in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. market sectors, coupled with added run-rate capacity for quick-turn and volume production from the recent start up of our new Phoenix inner-layer facility." Gross margin as a percentage of sales in the quarter was 17.3% compared to 16.5% in the first quarter a year ago, and 19.5% for the fourth quarter of fiscal 1997. As anticipated, gross margins were negatively impacted from fourth quarter run rates by labor productivity and production start-up Start-up The earliest stage of a new business venture. costs of the new Phoenix inner-layer facility. The company said that it expects gross margins to improve throughout the fiscal year as the ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of added capacity in Phoenix and quick-turn production in Austin Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas are achieved in the second and third quarters, respectively. At the end of the quarter, 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. exceeded $20 million, while the company's book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can remained strong at approximately 1.1, and the average days for sales outstanding on accounts receivables accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying was 54 days. At the quarter's end, inventories increased to $11.5 million, compared to $8.8 million at the end of the fourth quarter of 1997. The company said that the current higher levels of inventory and somewhat lower inventory turns are consistent with the need for added materials and components to minimize production delays and maximize efficiencies as the new inner-layer facility ramps up to its full manufacturing run rate. At Nov. 1, 1997, inventory distribution was approximately 75% raw materials and work in process. After the close of the quarter, the company acquired Flexible Circuits Technology dba Dynaflex The DynaFlex can refer to
San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.-based, privately-held flexible printed circuit manufacturer, for approximately $7.0 million in cash through an asset purchase transaction. The company believes that Dynaflex will not only contribute to both sales growth and profit in fiscal 1988, but also represents strong product diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. in an important market segment going forward. The company plans to significantly expand the manufacturing capacity of Dynaflex during the fiscal year. McNamee concluded saying, "The prospects for the second quarter and fiscal year are very positive. Looking ahead, we anticipate sequential growth in the remaining quarters of the year through capacity increases at the new Phoenix inner-layer facility and the Austin quick-turn facility. Additionally, we continue with our efforts in executing our four pronged prong n. 1. A thin, pointed, projecting part: a pitchfork with four prongs. 2. A branch; a fork: the two prongs of a river. tr.v. growth strategy." Continental Circuits Corp. manufactures complex, multilayered mul·ti·lay·ered adj. Consisting of or involving several individual layers or levels. circuit boards and flexible circuits used in sophisticated electronic equipment produced by leaders in the computer, communications, instrumentation and industrial controls industries. "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 Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements in this news release regarding the company's anticipated future growth, performance, demand for the company's products, improvement of future gross margins, revenue contributions and expansion of the company's Dynaflex subsidiary and Austin quick-turn facility, the run-rate and ramp up of the Phoenix inner-layer facility, and future expansion plans, 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. within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, such factors as changes in demand for, and acceptance of the company's products, its ability to hire trained personnel, to receive required capital equipment on anticipated delivery dates, to develop the manufacturing processes required to expand its flex, quick-turn and inner-layer manufacturing capabilities, manage growth, and to effectively integrate recent acquisitions into its existing operations. Other risks include possible ramp-up delays for the Phoenix inner-layer facility and the company's ability to find suitable expansion opportunities. Any of these assumptions could prove inaccurate, and therefore, there can be no assurance that the forward-looking information will prove accurate. -0-
CONTINENTAL CIRCUITS CORP.
STATEMENTS OF INCOME (unaudited)
(in thousands, except per share amounts)
Three Months Ended
November 1, November 2,
1997 1996
Net sales $34,306 $27,123
Cost of products sold 28,384 22,660
Gross profit 5,922 4,463
Selling, general and
administrative expense 2,064 2,030
Income from operations 3,858 2,433
Interest 122 64
Other 12 4
Income before income taxes 3,724 2,365
Income taxes 1,410 932
Net income $2,314 $1,433
Net income per share $0.31 $0.19
Weighted average number of shares 7,550 7,424
BALANCE SHEETS
(in thousands)
November 1, July 31,
1997 1997
Assets (unaudited)
Current assets:
Cash $1,231 $85
Accounts receivable - net 21,648 21,431
Inventories 11,583 8,805
Prepaid expenses & other 869 946
Prepaid income taxes 0 420
Deferred income taxes 125 125
Total current assets 35,456 31,812
Property, plant and equipment 108,378 97,386
Less-accumulated depreciation 48,511 46,422
Property, plant and equipment, net 59,867 50,964
Other assets 207 83
Total assets $95,530 $82,859
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $16,008 $14,665
Accrued expenses 2,928 3,131
Income taxes 1,222 0
Total current liabilities 20,158 17,796
Long-term debt 18,190 10,312
Deferred income taxes 2,507 2,507
Shareholders' equity 54,675 52,244
Total liabilities
and shareholders' equity $95,530 $82,859
CONTACT: Continental Circuits Corp. Frederick G. McNamee/Joseph G. Andersen, 602/268-3461 or Silverman Heller Associates Eugene Heller/Glenn Schoenfeld, 310/208-2550 |
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