Mackie Designs Reports Second Quarter Results.Business Editors WOODINVILLE, Wash.--(BUSINESS WIRE)--July 26, 2001 Citing lower-than-expected sales of certain of the company's audio products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Europe, Mackie Designs Inc. (Nasdaq: MKIE) today announced a net loss for the second quarter ended June 30, 2001, of $1,797,000, or $0.15 per share, on revenue of $56.5 million. For the second quarter of 2000, net income was $2,246,000, or $0.17 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, on revenue of $56.9 million. For the six months ended June 30, 2001, the net loss was $835,000, or $0.07 per share. This compares to net income of $4,665,000, or $0.37 per diluted share, for last year's first half. Revenue was $115.1 million versus $102.0 million for the same period a year ago. Chief Executive Officer Jamie Engen said, "While total sales were about in line with last year's second quarter, gross margin was significantly lower due to several factors including sales mix sales mix See product mix. , higher manufacturing costs, and higher costs of distribution. Sales mix was particularly significant, as sales of certain of our traditionally higher-margin products were below our expectations. We continue to grow our market share in the musical instrument loudspeaker loudspeaker or speaker, device used to convert electrical energy into sound. It consists essentially of a thin flexible sheet called a diaphragm that is made to vibrate by an electric signal from an amplifier. segment. Those products do, however, contribute lower gross margins than our other audio products. "In addition, we were negatively affected by the strength of the dollar and by costs associated with the implementation of our new global information system, including certain restructuring costs that increased our loss by approximately $0.01 per share." The 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. continued, "Sales in China through our new distribution partnership with Amoisonic Electronics are meeting our expectations. Our products also continue to win industry accolades. In April, Mackie was awarded the prestigious Film & Video Magazine User's Choice Award in the area of Best Overall Product Quality, and our Fussion Active Loudspeaker System recently was named 'Product of the Year' by the British Entertainment & Discotheque Association. And the biggest names in music continue to choose Mackie products for live shows and recording. To cite just one example, Eric Clapton is using our Hard Disk Recorder See DVR. (HDR (1) (High Data Rate) A wireless data technology from QUALCOMM that provides up to a 2.4 Mbps data rate in a standard 1.25MHz CDMA voice channel. HDR can be used to enhance data capabilities in existing cdmaOne networks or in stand-alone data networks. ) as well as loudspeakers provided by our Eastern Acoustic Works Eastern Acoustic Works (EAW) is an American manufacturer of mainly professional audio reinforcement tools, like loudspeaker systems and processors. Eastern Acoustic Works, most commonly known by its initials: EAW, was co-founded by Kenneth Berger and Kenton Forsythe (EAW EAW Empire at War (Star Wars video game) EAW European Arrest Warrant (also seen as EUAW) EAW Eastern Acoustic Works, Inc. ) subsidiary on his current North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. tour. Mackie's increasingly strong position in the music industry gives us confidence in our direction and our opportunity for profitable long-term growth. "However, the outlook for the second half of the year remains cloudy cloudy (clou´de) 1. murky; turbid; not transparent. 2. marked by indistinct streaks. because of continuing uncertainty in the U.S. and Europe. We are working hard to improve profitability. We have developed and are implementing a series of steps involving logistics, offshore manufacturing, and improvements to our manufacturing plants that we expect will contribute to higher gross margins in the future." About Mackie Designs Mackie Designs is a leading designer, manufacturer and marketer of professional audio equipment. The company sells audio mixers, mixer mixer, either of two electronic devices in which two or more signals are combined. In the type of mixer used in radio receivers, radar receivers, and similar systems, a signal is translated upward or downward in frequency. systems, power amplifiers Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. and professional loudspeakers. 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 news release contains statements that are forward-looking statements within the meaning 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. These statements are based on current expectations, estimates and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, difficulties encountered in the integration of acquired businesses and other risks discussed from time to time in the company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. Note: "Mackie" is a registered trademark of Mackie Designs Inc. in the United States and other countries.
MACKIE DESIGNS INC.
Statements of Operations
(In thousands, except for per share data)
Three months ended Six months ended
June 30, June 30,
2001 2000 2001 2000
Net sales $ 56,503 $ 56,857 $ 115,128 $ 102,048
Cost of goods sold 40,372 35,579 79,226 64,579
Gross profit 16,131 21,278 35,902 37,469
Operating expenses:
Selling, general
and administrative 13,309 13,628 27,113 23,466
Research and development 3,300 2,774 6,249 4,713
Total operating expenses 16,609 16,402 33,362 28,179
Operating (loss) income (478) 4,876 2,540 9,290
Interest expense, net 1,293 959 2,648 1,409
Other expense, net 790 56 893 37
(Loss) income
before taxes (2,561) 3,861 (1,001) 7,844
(Benefit) provision
for income taxes (764) 1,615 (166) 3,179
Net (loss) income (1,797) 2,246 (835) 4,665
Basic (loss) income per share $ (0.15) $ 0.19 $ (0.07) $ 0.38
Diluted (loss) income
per share $ (0.15) $ 0.17 $ (0.07) $ 0.37
Weighted average basic shares 12,373 12,131 12,373 12,120
Weighted average diluted shares 12,373 12,901 12,373 12,619
Note: Certain amounts reported in previous years have been
reclassified to conform to the current year presentation
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