DPAC Technologies Reports Financial Results for First Quarter of Fiscal 2003.Business Editors GARDEN GROVE Garden Grove, city (1990 pop. 143,050), Orange co., S Calif., a suburb of Long Beach and Los Angeles, on the Santa Ana River; founded 1877, inc. 1956. Many of its residents work in nearby aerospace and defense installations, and there is light manufacturing. , Calif.--(BUSINESS WIRE)--June 11, 2002 DPAC DPAC Denver Performing Arts Complex (CO, USA aka: DCPA) DPAC Deferred Policy Acquisition Costs (insurance) DPAC District Parent Advisory Committee DPAC Dover Partnership Against Crime Technologies Corp. (Nasdaq:DPAC): -- Fiscal first quarter revenue grew 60.2 percent year-over-year and 39.0 percent sequentially to a record $11.94 million -- Earnings per share increased year-over-year to $0.04 from $0.01 DPAC Technologies Corp. (Nasdaq:DPAC), a provider of patented stacking technology for high-density high-den·si·ty adj. Having a high concentration: high-density urban areas. , space-saving specialty electronic components, today reported earnings for its first quarter of fiscal year 2003, ended May 31, 2002. First Quarter Operating Results First quarter revenue was $11.94 million, a 60.2 percent increase from revenue of $7.45 million for the first quarter of 2002. Sequentially, revenue increased 39.0 percent from $8.59 million reported for the fourth quarter of 2002. The year-over-year and sequential increases in revenue were primarily due to a change in product mix toward a greater percentage of memory stacking that contains purchased memory. Sixty-seven percent of total revenue in the first quarter of 2003 came from sales of memory stacking as compared with 43 percent in the first quarter of fiscal 2002. Net income for the first quarter was $803,000 or $0.04 per 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. share, as compared to net income of $111,000 or $0.01 per share for the same period last year and net income of $776,000 or $0.04 per diluted share in the prior sequential quarter. Ted Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. , DPAC's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented on the Company's financial results, "DPAC's management team has continued to prove itself in a tough market environment with another profitable quarter, which was our fifth consecutive profitable quarter and the thirteenth profitable quarter in the last fourteen." Mr. Bruce continued, "Our revenue was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. affected by our customer mix as there was an increase in the amount of sales with memory content as compared to previous quarters. `Memory stacking' involves DPAC purchasing memory chips, stacking them, and then selling the stacked Stacked is an American television sitcom that premiered on Fox on April 13, 2005. On May 18, 2006, Stacked was cancelled, leaving five episodes unaired in the United States. The last episode aired on January 11, 2006. product to the customer. In the second case of `service stacking,' we provide stacking to customers who provide us with consigned memory chips. The number of stacks shipped in the quarter doubled from the previous year's first quarter, but decreased slightly from the prior quarter. We are continuing to explore opportunities that will expand our base of products and service offerings in order to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. and reduce our reliance on the DRAM market." Gross margin for the first quarter of 2003 was 23.7 percent, compared with 29.7 percent for the first quarter of 2002, and 34.8 percent for the fourth quarter of 2002. First quarter gross margin was affected mainly by changes in DPAC's product mix. First quarter SG&A (sales and marketing and general and administrative) expenses were $1.6 million compared with $1.5 million in the first quarter of 2002. During the first fiscal quarter the Company incurred $180,000 in expenses related to an acquisition search. The slight increase in SG&A is primarily related to increased expenses associated with the acquisition costs offset by reduced legal expenses. Research and development expenses were $456,000 or 3.8 percent of revenue, an increase of 9.1 percent from $418,000 for the first quarter of fiscal 2002. Effective March 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142). As a result, DPAC recorded no amortization of goodwill for the three months ended May 31, 2002. First quarter fiscal 2002 operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. included amortization of goodwill totaling $193,000. Other income, consisting of net interest, was $12,000 compared with $37,000 in the first quarter of 2002. The Company continues to utilize its tax loss carry-forward See Loss Carry-Back. and therefore had no provision for income taxes in the first quarter of 2003. Balance Sheet Summary At May 31, 2002, DPAC had total assets of $22.4 million, including cash and cash equivalents of $7.4 million. Current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. were $12.9 million, up 10.8 percent from the end of the fourth quarter of fiscal 2002, primarily due to the cash increase and inventory increases associated with work in progress at the end of the quarter. The Company's current ratio is approximately 4.3-to-1, and its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. debt-to-assets ratio is 1.4 percent. The goodwill balance at May 31, 2002 was $4.8 million. Second Quarter Outlook The Company anticipates continued demand for its products during its second quarter ending August 31, 2002. Anticipated product mix continues to trend toward sales of stacking services with memory content, and the near-term outlook for the Company is good. Conference Call and Webcast Management of DPAC will host a conference call with a simultaneous webcast today at 2:00 p.m. Pacific/5:00 p.m. Eastern to discuss first quarter operating performance. The conference call will feature Chief Executive Officer and President Ted Bruce, Chief Financial Officer Bill Stowell, and Vice President of Sales and Marketing Kevin Perry and will be available live via 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 . To listen, log on to the DPAC web site at www.DPACTech.com. An online replay will be available for 30 days on www.DPACTech.com, or a phone replay will be available through June 18, 2002, by calling 888-266-2086 (703-925-2435 for international callers) and entering the passcode 6017748. About DPAC Technologies Based in Garden Grove, California Garden Grove is a city centrally located in northern Orange County, California, United States. As of 2004, the city population was 170,000 people. California State Route 22, also known as the Garden Grove Freeway, passes through the city from east to west. , DPAC Technologies provides patented component packaging technology to create high-density, space-saving surface mount electronic components. DPAC's products are used in electronic circuits found in network servers, computer storage devices, guidance systems, medical instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. , and communication devices. The Company provides outsourced engineering design services to aid customers in creating cost-saving circuit designs as well as contract manufacturing of prototype designs and medium volume production runs of assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. circuit boards. The Company's web site address is www.DPACTech.com. 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. This press release includes forward-looking statements, including statements regarding management's current beliefs concerning the Company's market, technology development, expansion and business plans, the use of its technology in military programs, relationships in price parity parity or space parity, in physics, quantity that refers to the relationship between an object or process and the image that it can produce in a mirror. of existing technology with future technology, and the need for emulation (architecture) emulation - When one system performs in exactly the same way as another, though perhaps not at the same speed. A typical example would be emulation of one computer by (a program running on) another. products, which are subject to change. Every statement herein that is not historic in nature is a forward-looking statement for purposes of the 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. provisions of 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. Such statements involve risks and uncertainties, which may differ materially from those set forth in these statements. Factors that affect DPAC's business include, but are not limited to, the success of patented products, future business opportunities with products, the semiconductor market, protection of technology or proprietary rights, risks of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , and difficulties of controlling acquisition costs. More information about the risks and challenges faced by DPAC Technologies Corp. is contained in the Securities and Exchange Commission filings made by the Company. DPAC Technologies Corp. specifically disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise.
DPAC TECHNOLOGIES CORP.
Condensed Balance Sheet Information
(in thousands)
May 31, February 28,
2002 2002
----------- -----------
(Unaudited)
Assets
Cash and cash equivalents $ 7,399 $ 6,259
Other current assets 5,468 5,351
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Total current assets 12,867 11,610
Fixed assets, net 4,363 4,581
Goodwill 4,783 4,783
Other assets 358 367
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Total Assets $ 22,371 $ 21,341
=========== ============
Liabilities and Shareholders' Equity
Current liabilities $ 3,003 $ 2,744
Long-term debt 312 421
Shareholders' equity 19,056 18,176
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Total Liabilities and Shareholders' Equity $ 22,371 $ 21,341
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DPAC TECHNOLOGIES CORP.
Condensed Statement of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended May 31,
2002 2001
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Sales $ 11,937 $ 7,453
Cost of sales 9,111 5,239
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Gross profit 2,826 2,214
Sales, general & administrative costs 1,579 1,529
Research & development 456 418
Amortization of goodwill - 193
------------ ----------
Total operating costs $ 2,035 $ 2,140
Income from operations 791 74
Other income 12 37
Provision for income taxes - -
------------ ----------
Net income $ 803 $ 111
============ ==========
Basic income per share $ 0.04 $ 0.01
Diluted income per share $ 0.04 $ 0.01
Basic shares outstanding 21,016 20,943
Diluted shares outstanding 21,374 21,126
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