DPAC Technologies Reports Financial Results for Second 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)--Sept. 17, 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 second quarter revenue grew 32.7 percent year-over-year to $10.88 million -- Earnings per share increased year-over-year to $0.11 from $0.02, including income tax benefit of $0.07 per share -- Executing on a comprehensive strategy for all business product lines 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 second quarter of fiscal year 2003, ended August 31, 2002. Second Quarter Operating Results Second quarter revenue was $10.88 million, a 32.7 percent increase from revenue of $8.20 million for the second quarter of 2002. Sequentially, revenue decreased 8.8 percent from $11.9 million reported for the first quarter of 2003. The year-over-year increase in revenue was primarily due to a change in product mix toward a greater percentage of memory stacking that contains purchased memory. Seventy percent of total revenue in the second quarter of fiscal 2003 came from sales of memory stacking as compared with 41 percent in the second quarter of fiscal 2002. The sequential decrease was mainly the result of the extended downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the DRAM industry, which continues to negatively impact our customer base of semiconductor manufacturers and module makers. Net income for the second quarter, prior to the income tax benefit, was $809,000 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 $461,000 or $0.02 per share for the same period last year and net income of $803,000 or $0.04 per diluted share in the prior quarter. For the quarter ended August 31, 2002, total net income, after the income tax benefit, was $2.25 million or $0.11 per share. 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 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. and president, 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 sixth consecutive profitable quarter and the fourteenth profitable quarter in the last fifteen. During the second fiscal quarter of 2003, we continued to evaluate DPAC's strengths within its product lines and, coupled with research into existing and potential markets for our technology and products, we sought to put into place a comprehensive strategy to ensure the future growth of the Company. We have begun to execute against this strategy, which includes the following. "For the Commercial Stacking area, we are looking to expand our product offering by accelerating R&D efforts and introducing new products into new markets. End users are demanding higher density, faster speed, smaller footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. products. We continue to be excited about chip-scale packaging and have multiple approaches to addressing this market. We have over 20 patents and patent applications addressing chip-scale packaging technology. "System Design Services is focused on developing new product opportunities in multiple markets, such as medical instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. and networking. Our talent in this area is getting stronger and we are encouraged by the opportunities that we are uncovering. "Management is committed to providing resources for our Industrial, Defense and Aerospace (IDA Ida (ē`dä), city (1990 pop. 91,859), Nagano prefecture, central Honshu, Japan, on the Tenryu River. It is an agricultural market and railway junction. ) business. The IDA business is the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of DPAC's foundation and today provides from 10 to 15 percent of revenues. Our sales efforts have uncovered Uncovered may refer to:
"To ensure the future growth of DPAC, we are putting necessary resources into appropriate business activities as our strategy is to generate new technology and products for existing and new markets. During the third fiscal quarter of 2003 we will focus on implementing this strategy. The operational and financial achievements we have delivered the past three years indicates that we have the team in place to successfully execute our strategy." Gross margin for the second quarter of 2003 was 26.8 percent, compared with 30.7 percent for the second quarter of 2002, and 23.7 percent for the first quarter of fiscal 2003. Changes in the gross margin are affected by product mix with higher margins from service stacking business. Second quarter SG&A (sales, marketing and general administrative) expenses were $1.7 million compared with $1.4 million in the second quarter of 2002. The slight increase in SG&A is primarily related to increased legal expenses associated with the SimpleTech This article has multiple issues: * It does not cite any references or sources. Please help improve this article by citing reliable sources. * Its notability is in question. 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. , which was dismissed, without prejudice Without any loss or waiver of rights or privileges. When a lawsuit is dismissed, the court may enter a judgment against the plaintiff with or without prejudice. When a lawsuit is dismissed without prejudice , on September 11, 2002. Research and development expenses were $448,000 or 4.1 percent of revenue, a slight decrease of 5.4 percent from $474,000 for the second 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 August 31, 2002. Second 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 $194,000. Other income, consisting of net interest, was $13,000 compared with $1,000 in the second quarter of 2002. The Company recognized an income tax benefit in its second fiscal quarter of 2003 of approximately $1.4 million, or $0.07 per share. This benefit results from the reversal of a previously established valuation allowance on the Company's net deferred tax assets net of an estimated income tax provision for the second fiscal quarter of 2003. Balance Sheet Summary At August 31, 2002, DPAC had total assets of $26.6 million, including cash and cash equivalents of $9.0 million. The Company continues to generate cash flow with $1.6 million for the quarter. 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 $13.3 million, up 14.8 percent from the end of the fourth quarter of fiscal 2002, primarily due to the cash increase and deferred income taxes. The Company's current ratio is approximately 5.4-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 0.8 percent. Outlook Despite the strong performance of the Company during the first half of the fiscal year, DPAC is beginning to see some impact on its business due to the continued turmoil in the semiconductor industry and has temporarily chosen to refrain from issuing quarterly guidance. Mr. Bruce further commented, "This is an important period for DPAC to stay committed to the future and continue to stay focused on the expansion of our business capabilities and approach to the market. We will couple our technology focus with a customer driven attitude that will expand DPAC's future in both services and products." 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 second quarter operating performance. The conference call will feature Chief Executive Officer and President Ted Bruce, Chief Financial Officer William Stowell, and Kevin Perry, Vice President of Sales and Marketing 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 September 24, 2002, by calling 888-266-2086 (703-925-2435 for international callers) and entering the passcode 6197746. 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, 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, and general market and economic conditions. 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 Consolidated Balance Sheet Information
(Unaudited)
(In 000's) August 31, February 28,
2002 2002
(unaudited)
Cash $9,029 $6,259
Current assets 13,324 11,610
Fixed assets, net 4,163 4,581
Goodwill 4,529 4,783
Deferred income taxes-LT 4,268 --
Total assets $26,633 $ 21,341
Current liabilities $2,453 $2,744
Long-term debt 200 421
Shareholders' equity 23,980 18,176
Total liabilities and
shareholders' equity $26,633 $21,341
DPAC TECHNOLOGIES CORP.
Condensed Statement of Income
(Unaudited)
For Periods Ended August 31
(in 000's) Second Quarter Six Months
2002 2001 2002 2001
Sales $10,883 $8,201 $22,820 $15,654
Cost of sales 7,965 5,686 17,076 10,925
Gross profit 2,918 2,515 5,744 4,729
Sales, general & administrative
costs 1,674 1,387 3,253 2,916
Research and development 448 474 904 891
Amortization of goodwill 194 388
Total operating costs 2,122 2,055 4,157 4,195
Income from operations 796 460 1,587 534
Other income 13 1 25 38
Income before income taxes 809 461 1,612 572
Provision (benefit) for income
taxes (1,445) -- (1,445) --
Net income $2,254 $461 $3,057 $572
EPS -- Basic $0.11 $0.02 $0.15 $0.03
EPS -- Fully diluted $0.11 $0.02 $0.14 $0.03
Basic shares 20,044 20,956 21,030 20,950
Diluted shares 21,305 21,338 21,464 21,176
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