Exhibit 99.1
FROM: | DDi Corp. | |
1220 Simon Circle | ||
Anaheim, CA 92806 | ||
CONTACT: | MWW Group | |
Kimberly Storin | ||
212-704-9727 | ||
kstorin@mww.com | ||
DDI CORP. REPORTS A ONE-TIME UPWARD ADJUSTMENT AND CLARIFICATION
TO FOURTH QUARTER AND YEAR-END 2003 RESULTS
ANAHEIM, CA – March 26, 2004 – DDi Corp. (Nasdaq: DDIC), a leading provider of technologically advanced engineering and manufacturing services, today announced an adjustment to the Company’s fourth quarter and year-end earnings release dated February 26, 2004 (the “February 26th Release”).
Subsequent to the February 26th Release, management concluded that, as a result of further analysis done in the course of finalizing the Company’s financial statements in connection with the Company’s Form 10-K for the period ended December 31, 2003, it was appropriate to make certain adjustments to the Company’s financial statements. These adjustments do not indicate a change in the Company’s previously reported operating performance or first quarter 2004 outlook.
The Company recorded an additional gain due to fresh start accounting adjustments of $118.4 million relating to the Company’s emergence from bankruptcy. As a result, the Company’s net income was $164.4 million for the eleven months ended November 30, 2003 and $216.6 million for the two months ended November 30, 2003, as opposed to net income of $46.0 million for the eleven months ended November 30, 2003 and $98.2 million for the two months ended November 30, 2003, reported in the February 26th Release. The Company’s net income for the fourth quarter of fiscal 2003 was $202.6 million, as opposed to previously reported net income of $84.2 million. This additional gain had no effect on the Company’s condensed consolidated balance sheet at December 31, 2003, as reported in the February 26th Release.
In addition, in order to clarify the classification of an amount of the Company’s cash that is held in an account under the previously-disclosed Dynamic Details senior credit facility, the Company reclassified $7.5 million on its balance sheet as “Cash, cash equivalents and marketable securities – restricted” as of December 31, 2003. Previously, the Company recorded such amount as “cash and cash equivalents” in the February 26th Release.
About DDi Corp.
DDi is a leading provider of time-critical, technologically advanced, electronics manufacturing services. Headquartered in Anaheim, California, DDi and its subsidiaries offer fabrication and assembly services to customers on a global basis, from its facilities located across North America and in England.
- Financial Tables Follow-
Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding our assumptions, projections, expectations,
targets, intentions or beliefs about future events. Words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue,” “may,” “could” or similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and we believe such statements are based on reasonable assumptions, including without limitation, management’s examination of historical operating trends, data contained in records, other data available from third parties, our ability to maintain normal business operations and our emergence from bankruptcy, we cannot assure you that our projections will be achieved. In addition to other factors and matters discussed elsewhere in our quarterly, annual and current reports that we file with the U.S. Securities and Exchange Commission, or the SEC, some important factors that could cause actual results or outcomes for DDi or our subsidiaries to differ materially from those discussed in forward-looking statements include: changes in general economic conditions in the markets in which we may compete and fluctuations in demand in the electronics industry; our ability to sustain historical margins; increased competition; increased costs; loss or retirement of key members of management; increases in our cost of borrowings or unavailability of additional debt or equity capital on terms considered reasonable by management; and adverse state, federal or foreign legislation or regulation or adverse determinations by regulators. Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors.
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DDi Corp.
Condensed Consolidated Statements of Operations
(in thousands, except for per share amounts)
(unaudited)
Reorganized DDi 1 month ended 12/31/03 | Predecessor DDi 11 months ended | Predecessor DDi 12 months ended | ||||||||||
Net sales | $ | 21,393 | $ | 221,729 | $ | 248,826 | ||||||
Cost of goods sold: | ||||||||||||
Other cost of goods sold | 17,916 | 199,568 | 229,653 | |||||||||
Non-cash compensation and amortization of intangibles | 8,048 | — | — | |||||||||
Restructuring related inventory impairment | — | 1,736 | 3,465 | |||||||||
Total cost of goods sold | 25,964 | 201,304 | 233,118 | |||||||||
Gross profit (loss) | (4,571 | ) | 20,425 | 15,708 | ||||||||
Operating expenses: | ||||||||||||
Sales and marketing | ||||||||||||
Non-cash compensation | 2,013 | — | — | |||||||||
Other sales and marketing expenses | 1,461 | 16,335 | 22,988 | |||||||||
Total sales and marketing | 3,474 | 16,335 | 22,988 | |||||||||
General and administration | �� | |||||||||||
Non-cash compensation | 1,656 | — | — | |||||||||
Other general and administrative expenses | 1,174 | 15,574 | 16,521 | |||||||||
Total general and administration | 2,830 | 15,574 | 16,521 | |||||||||
Amortization on intangibles | 383 | — | — | |||||||||
Goodwill impairment | — | 11,645 | 199,000 | |||||||||
Restructuring and other related charges | 439 | 3,823 | 28,841 | |||||||||
Reorganization charges | 572 | 8,946 | — | |||||||||
Operating loss | (12,269 | ) | (35,898 | ) | (251,642 | ) | ||||||
Loss on interest rate swap termination | — | 5,621 | — | |||||||||
Interest expense (net) and other expense (net) | 1,324 | 18,178 | 22,148 | |||||||||
Gain on extinguishment of debt | — | (120,444 | ) | — | ||||||||
Fresh start accounting adjustments | — | (118,368 | ) | |||||||||
Income (loss) before reorganization proceeding expenses and income taxes | (13,593 | ) | 179,115 | (273,790 | ) | |||||||
Reorganization proceeding expenses | 1,138 | 14,034 | — | |||||||||
Income (loss) before income taxes | (14,731 | ) | 165,081 | (273,790 | ) | |||||||
Income tax benefit (expense) | 723 | (659 | ) | (14,303 | ) | |||||||
Net income (loss) | $ | (14,008 | ) | $ | 164,422 | $ | (288,093 | ) | ||||
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DDi Corp
Condensed Consolidated Balance Sheets
(in thousands)
Reorganized DDi December 31, 2003 | Predecessor DDi December 31, 2002 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 11,202 | $ | 28,934 | ||||
Cash, cash equivalents and marketable securities - restricted | — | 6,250 | ||||||
Marketable securities - available for sale | — | 115 | ||||||
Accounts receivable, net | 39,140 | 41,986 | ||||||
Inventories | 26,292 | 28,240 | ||||||
Prepaid expenses and other | 2,707 | 3,963 | ||||||
Total current assets | 79,341 | 109,488 | ||||||
Property, plant and equipment, net | 74,918 | 83,139 | ||||||
Debt issuance costs, net | — | 10,141 | ||||||
Goodwill and intangibles, net | 128,828 | 13,982 | ||||||
Cash, cash equivalents and marketable securities - restricted | 7,500 | 3,142 | ||||||
Other | 816 | 1,300 | ||||||
Total Assets | $ | 291,403 | $ | 221,192 | ||||
Liabilities and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term debt and capital lease obligations | $ | 1,439 | $ | 275,137 | ||||
Revolving credit facilities | 11,809 | 4,246 | ||||||
Accounts payable | 28,687 | 27,457 | ||||||
Accrued expenses and other | 26,338 | 28,093 | ||||||
Income tax payable | 998 | 68 | ||||||
Note payable | 500 | — | ||||||
Total current liabilities | 69,771 | 335,001 | ||||||
Long-term debt and capital lease obligations | 114,799 | 38,509 | ||||||
Deferred tax liability | 533 | 2,464 | ||||||
Notes payable and other | 12,798 | 9,078 | ||||||
Manditorily redeemable preferred stock | 2,066 | — | ||||||
Total liabilities | 199,967 | 385,052 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock, additional paid-in-capital and other | 137,898 | 538,433 | ||||||
Deferred compensation | (32,454 | ) | — | |||||
Accumulated deficit | (14,008 | ) | (702,293 | ) | ||||
Total stockholders’ equity(deficit) | 91,436 | (163,860 | ) | |||||
Total Liabilities and Stockholders’ Equity (deficit) | $ | 291,403 | $ | 221,192 | ||||
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