DPAC Technologies Reports Financial Results for Quarter and Fiscal Year Ended February 29, 2004.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)--April 21, 2004 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 year 2004 ends with non-cash write-offs as DPAC transitions to new product lines for industrial wireless connectivity solutions -- DPAC's Airborne airborne /air·borne/ (ar´born) suspended in, transported by, or spread by air. airborne, adj carried through the air. In health care settings, viruses or bacteria may become airborne, e.g. wireless solutions products seen as providing strong opportunity for future growth. DPAC Technologies Corp. (Nasdaq:DPAC), a provider of wireless connectivity solutions and space-saving specialty high density electronic components, today reported results for its year ended February February: see month. 29, 2004 and its fourth quarter of fiscal year 2004. Fiscal Year Operating Results For the fiscal year ended February 29, 2004, revenue was $19.6 million, a 43.3 percent decrease from prior fiscal year revenue of $34.5 million. The loss, before income taxes, for the fiscal year was $9.2 million, compared with pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income of $0.7 million for fiscal year 2003. The fiscal year 2004 results include $3.9 million ($1.2 million of which is included in cost of sales), in asset write-downs, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and other restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. incurred due to the decreased demand of the legacy product line and also the positioning of the company to focus on the growth of the wireless connectivity products. In addition, during the third quarter of fiscal year 2004 the Company had fully reserved its previously recognized deferred tax asset, resulting in a charge to year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. earnings of $4.8 million. This results in a net loss for the fiscal year ended February 28, 2004 of $13.9 million or $0.66 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 $2.5 million or $0.12 per diluted share for the previous fiscal year. At the end of fiscal year 2004, the Company had $19.5 million in available tax loss carry-forwards for utilization against future taxable earnings. Research and Development costs were $2.8 million in fiscal year 2004 compared to $2.1 million in the previous year. Fourth Quarter Fiscal 2004 Operating Results Fourth quarter revenue was $5.6 million, a 9.7 percent decrease from revenue of $6.2 million for the fourth quarter of fiscal year 2003. Net loss for the fourth quarter was $4.5 million or $0.21 per diluted share, as compared to net loss of $0.4 million or $0.02 per diluted share for the same period last year. The fourth quarter results for fiscal year 2004 include $3.1 million in severance, asset write-downs and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs. Fourth quarter SG&A (sales, marketing and general administrative) expenses were $1.48 million in the current year compared with $1.51 million in the fourth quarter of 2003. The slight decrease in SG&A was primarily related to a decrease in payroll and other costs associated with the stacking product line. Included in the fourth quarter were restructuring and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc $1.16 million in severance related costs, $960,000 in the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the DuraStack equipment and $320,000 relating to a cancelled lease. Research and development expenses were $560,000 or 9.9 percent of revenue, compared to $690,000 or 11.1 percent of revenue for the fourth quarter of fiscal 2003, reflecting the completion of the initial Airborne wireless products and the shift to a production environment. Balance Sheet Summary At February 29, 2004, DPAC had total assets of $13.1 million, including cash and cash equivalents of $4.5 million. Shareholders equity at February 29, 2004 was $10.1 million. Comment and Outlook Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness Early, DPAC's interim chief executive officer, commented on the fiscal year 2004 performance and discussed the new wireless market and product opportunities for the Company: "Since my appointment to this position, I have strived to define the challenges the company faced in dealing with declining stacking revenues, a stalled stall 1 n. 1. A compartment for one domestic animal in a barn or shed. 2. a. A booth, cubicle, or stand used by a vendor, as at a market. b. development effort for the DuraStack product, and the introduction of the Airborne product line. Though our results reflect the painful cost of confronting these issues, I believe we have made significant progress in defining our opportunities, making the necessary decisions and putting the company in position to grow and prosper 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. . Though our work to re-position the company is not complete, I believe we are now on track to take advantage of the opportunity to become a leader in industrial wireless connectivity solutions. "We begin the new fiscal year with a clear vision of the opportunities as well as the challenges we face. We are excited about our prospects for long-term growth and a return to profitability. I believe we have a highly motivated mo·ti·vate tr.v. mo·ti·vat·ed, mo·ti·vat·ing, mo·ti·vates To provide with an incentive; move to action; impel. mo team with the right product at the right time to build an energetic, profitable and growth business in the industrial wireless and connectivity market. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the coming year should reflect these improved opportunities for DPAC employees and shareholders." Conference Call Management of DPAC will host a conference call today at 10:30 a.m. Pacific/1:30 p.m. Eastern to discuss the fiscal year 2004 operating performance and its new wireless technology. The conference call will feature Interim Chief Executive Officer Kim Early and Chief Financial Officer William Stowell. To participate on the live call, please dial 888-413-5357. A phone replay will be available for 48 hours (beginning two hours after the completion of the conference call) by dialing 888-266-2081 and entering the passcode 445933. 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 wireless high-density unique and 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'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 wireless systems, 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 wireless 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 Airborne products, future business opportunities with products, the wireless and 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 general market and economic conditions. More information about the risks and challenges faced by DPAC Technologies Corp. is contained each or any of the Securities and Exchange Commission filings made by the Company on Forms 10-K, 10-Q or 8-K. 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
(Unaudited)
(In 000's)
February 29, February 28,
2004 2003
-------- --------
Cash $4,477 $8,197
-------- --------
Current assets $6,615 $12,557
Fixed assets, net 1,538 3,863
Goodwill 4,529 4,529
Deferred
income taxes-LT -- 4,554
Other assets 406 250
-------- --------
Total assets $13,088 $25,753
======== ========
Current liabilities $2,338 $2,257
Long-term debt 689 99
Shareholders' equity 10,061 23,397
-------- --------
Total liabilities and
shareholders' equity $13,088 $25,753
======== ========
DPAC TECHNOLOGIES CORP.
Condensed Statement of Income
(Unaudited)
For Periods Ended February 28, 2003 and
February 29, 2004
(in 000's, except per share data)
Fourth Quarter Fiscal Year
------------- -------------
2004 2003 2004 2003
---- ---- ---- ----
Sales $5,641 $6,249 $19,567 $34,490
Cost of sales 5,640 4,654 18,144 25,693
------ ------ ------ ------
Gross profit 1 1,595 1,423 8,797
------ ------ ------ ------
Sales, general & administrative costs 1,483 1,507 5,121 6,110
Research and development 560 692 2,829 2,061
Restructuring and impairment charges 2,442 -- 2,654 --
------ ------ ------ ------
Total operating costs 4,485 2,199 10,604 8,171
------ ------ ------ ------
Income (loss) from operations (4,484) (604) (9,181) 626
Other income (expense), net 1 7 21 41
------ ------ ------ ------
Income (loss) before income taxes (4,483) (597) (9,160) 667
Provision (benefit) for income taxes -- (204) 4,764 (1,791)
------ ------ ------ ------
Net income (loss) $(4,483) $(392)$(13,924) $2,458
====== ====== ====== ======
EPS - Basic $(0.21)$(0.02) $(0.66) $0.12
EPS - Diluted $(0.21)$(0.02) $(0.66) $0.12
Basic Shares 21,221 20,988 21,102 21,011
Diluted Shares 21,221 20,988 21,102 21,233
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