MATEC Corporation Reports Fourth Quarter and Year End 2001 Results.Business/Technology Editors HOPKINTON Hopkinton is the name of several towns in the United States:
MATEC MATEC Maricopa Advanced Technology Education Center MATEC Midwest AIDS Training and Education Center (University of Illinois at Chicago) MATEC Maschinen & Technik, Inc. Corporation (AMEX AMEX See: American Stock Exchange :MXC MXC Most Extreme Elimination Challenge (TV show) MXC Malcolm X College MXC Microwave Cross Connect MXC Media Center Extender ) today reported its financial results for the fourth quarter and year ended December December: see month. 31, 2001. MATEC's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , ValpeyFisher Corporation, specializes in providing frequency control devices, including quartz crystals A slice of quartz ground to a prescribed thickness that vibrates at a steady frequency when stimulated by electricity. The tiny crystal, about 1/20th by 1/5th of an inch, creates the computer's heartbeat. Without the quartz crystal, there would be no computers as we know them today! and oscillators. Ted Valpey, Jr., Chairman, 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. , said, "MATEC's operating performance for 2001 reflects the significant 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 telecom industry as ValpeyFisher saw its sales drop 36% to $16,897,000 resulting in an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1,458,000. This operating loss includes a $1,700,000 provision for excess inventory. As previously reported in our 3rd quarter report, we did realize a $3,460,000 after-tax gain on the sale of our investment in MetroWest Bank in the 4th quarter of 2001." Net earnings for 2001 were $2,751,000 ($.64 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) compared to $2,979,000 ($.68 per diluted share) in 2000. The net earnings amount in 2001 includes gains of $3,551,000 ($.83 per diluted share) resulting primarily from the sale of our investment in MetroWest Bank. The net earnings amount in 2000 include gains of $907,000 ($.21 per diluted share) from the sale of assets and a $90,000 ($.02 per diluted share) loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Mr. Valpey, Jr., Chairman, said, " While our operating performance was very disappointing, we did benefit from having a common stock investment that compensated for the inherent swings in the electronics industry. This strategy has resulted in a strong balance sheet that will enable our Company to invest in new product and product expansion as our industry recovers." Mr. Valpey, Jr. stated, "The main cause of the drop in sales and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. came from the precipitous drop in demand from the telecom equipment market. Our 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. at the end of 2001 was $1.4 million compared to $16.4 million at the end of 2000. In retrospect, much of the 2000 year-end backlog disappeared as a result of heavy cancellations from customers in 2001. These cancellations, coupled with a poor 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 of .4 to 1 during 2001 led to our $1.7 million charge for excess inventory. As I have previously stated, the industry's inventory picture continues to be murky due in part to the current supply chain way of doing business. Today it is quite common for the OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and , the ultimate customer, to transfer its purchase commitment to an EMS (electronic manufacturing services) who, in turn, may order parts through a Distributor. Our component industry has to find a more effective way to respond to this lopsided lop·sid·ed adj. 1. Heavier, larger, or higher on one side than on the other. 2. Sagging or leaning to one side. 3. impact the current supply chain management system places on it." Mr. Valpey, Jr. further said, "While we are looking at a market that has not yet shown any significant signs of a recovery, we expect that improvement will be realized as the year progresses. Our plant expansion in Hopkinton and new product efforts in Omsk, Russia will bring benefits as the market recovers." Mr. Valpey, Jr. concluded, "We have reduced employment commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the drop in sales and backlog, however, we have retained our core staff and we are confident we can increase our capacity as the markets improve. As indicated in our 2000 annual report, we expected 2001 to be a year of challenges and opportunities. For sure, 2001 has been a year of challenges and 2002 certainly will be as well. However, we believe opportunities exist and with our strong balance sheet, we will endeavor to realize shareholder value and continue to review all options as we go forward." 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. Certain statements made herein contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Words such as "expects", "believes", "estimates", "plans", or similar expressions are intended to identify such forward-looking statements. The forward-looking statements are based on the Company's current views and assumptions and involve risks and uncertainties that include, but are not limited to: the ability to develop, market and manufacture new innovative products competitively, the fluctuations in product demand of the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry, the ability of the Company and its suppliers to produce and deliver materials and products competitively, and the ability to limit the amount of negative effect on operating results caused by pricing pressure.
MATEC Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Quarter Ended Year Ended
12/31/2001 12/31/2000 12/31/2001 12/31/2000
Net sales $ 1,976 $ 7,476 $ 16,897 $ 26,408
Cost of sales 3,338 5,263 14,610 18,547
Gross profit (loss) (1,362) 2,213 2,287 7,861
Selling and
advertising expenses 331 780 2,365 2,991
General and
administrative expenses 240 441 1,380 1,647
571 1,221 3,745 4,638
Operating profit (loss) (1,933) 992 (1,458) 3,223
Other income (expense), net 5,517 372 5,752 1,796
Earnings from
continuing operations
before income taxes 3,584 1,364 4,294 5,019
Income tax (expense) (1,259) (488) (1,543) (1,950)
Earnings from
continuing operations 2,325 876 2,751 3,069
(Loss) from
discontinued operations 0 0 0 (90)
Net earnings $ 2,325 $ 876 $ 2,751 $ 2,979
Basic earning (loss)
per share:
Continuing operations $ 0.56 $ 0.21 $ 0.66 $ 0.75
Discontinued operations 0.00 0.00 0.00 (0.02)
$ 0.56 $ 0.21 $ 0.66 $ 0.73
Diluted earnings (loss)
per share:
Continuing operations $ 0.55 $ 0.20 $ 0.64 $ 0.70
Discontinued operations 0.00 0.00 0.00 (0.02)
$ 0.55 $ 0.20 $ 0.64 $ 0.68
Basic weighted
average shares 4,153 4,131 4,138 4,107
Diluted weighted
average shares 4,225 4,426 4,277 4,358
(A) For the three months ended 12/31/01, net earnings from
continuing operations includes a gain on the sale of an asset
amounting to $3,460,000 or $.83 per basic share and $.82 per
diluted share.
For the year ended 12/31/01, net earnings from continuing
operations includes gains on the sale of assets amounting to
$3,551,000 or $.86 per basic share and $.83 per diluted share.
(B) For the three months ended 12/31/00, net earnings from
continuing operations includes gains on the sale of assets
amounting to $171,000 or $.04 per basic and diluted share.
For the year ended 12/31/00, net earnings from continuing
operations includes gains on the sale of assets amounting to
$907,000 or $.22 per basic share and $.21 per diluted share.
Average shares and related per share calculations have been restated
to give retroactive treatment for the three-for-two stock split
distributed on November 27, 2000.
Condensed Consolidated Balance Sheets
(in thousands)
12/31/2001 12/31/2000
ASSETS
Current assets:
Cash and cash equivalents $ 5,960 $ 1,627
Receivables, net 2,307 4,458
Inventories 4,469 6,413
Deferred income taxes and
other current assets 1,469 860
Total current assets 14,205 13,358
Property, plant and
equipment, at cost 9,910 7,923
Less accumulated depreciation 5,383 4,871
4,527 3,052
Marketable equity securities
and other assets 109 3,244
$18,841 $19,654
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 1,836 $ 4,445
Long-term debt 1,277 --
Deferred income taxes 754 1,350
Stockholders' equity 14,974 13,859
$18,841 $19,654
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