Exhibit 99.1
FOR IMMEDIATE RELEASE
Optelecom-NKF Reports First Quarter 2009 Results
GERMANTOWN, MD/May 12, 2009/PRNewswire-FirstCall — Optelecom-NKF, Inc. (NASDAQ: OPTC), a leading global provider of Siqura® advanced IP-video network solutions, today announced first quarter 2009 results.
Revenues for the first quarter totaled $8.6 million, compared to $10.5 million for the same quarter of 2008. Video over IP-related revenue climbed 10% in the first quarter to $2.9 million, compared to last year’s $2.6 million.
The Company reported a net loss of $765 thousand, or $(0.21) per share, in the quarter ending March 31, 2009. This compares to net income of $148 thousand, or $0.04 per share, one year earlier.
Adjusted EBITDA for the quarter (as defined in the addendum to this release) was a loss of $551 thousand compared to profit of $976 thousand for the same quarter last year.
“The sharp contraction in the global economy was the dominant force affecting our first quarter performance along with a reduction in reported revenue from foreign exchange translation rates,” said Ed Ludwig, Optelecom-NKF’s Chairman and CEO. “Orders slowed this winter as customers delayed projects in the face of budgetary concerns. As we look for signs of a bottom in the economic contraction and we actively contain costs, I view our long-term business prospects with measured optimism based on feedback from current customers and visits we’ve had with prospective customers.”
First Quarter Conference Call
Optelecom-NKF CEO Edmund Ludwig will lead a conference call to discuss first quarter results at 10:00 a.m. Eastern Time, Wednesday, May 13, 2009. Interested parties are welcome to call 866-730-5771 (International Dial In: 857-350-1595) and request the “Optelecom-NKF conference call” shortly before the designated start time or provide the participant pass code 54941156. The telephone conference call will feature a question and answer segment with management.
For those parties unable to participate in the live conference call, a replay will be available from 1:00 p.m. following the teleconference until May 20, 2009. Those wishing to listen to the replay should call 888-286-8010 (International Dial In: 617-801-6888) and enter pass code number 87823732 when prompted.
The call is being web cast by Thomson Reuters and can be accessed at www.earnings.com or at Optelecom-NKF’s website www.optelecom-nkf.com.
About Optelecom-NKF
Optelecom-NKF, Inc. (NASDAQ: OPTC - News), manufacturer of Siqura® advanced video surveillance solutions, provides a full range of cameras, video servers/codecs, network video recorders, fiber transmission equipment, video content analysis applications, and video management software based on an open technology platform that simplifies integration and installation.
Our Siqura solutions offer a perfect blend of ease of use and processing power, enabling end-users to optimize the effectiveness of their surveillance systems while reducing the total cost of ownership. All products and solutions are developed and tested for professional and mission critical applications.
We deliver complete solutions for the Traffic Monitoring, Public Transport, Industrial and Commercial Security, and Government markets. Our systems are deployed by professionals at highway departments, airports, seaports, casinos, public transport authorities, hospitals, city centers, shopping centers, and corporate, military, and government campuses.
Founded in 1972, Optelecom-NKF is committed to providing its customers with expert technical advice and support. Corporate headquarters are in Germantown, Maryland, USA. The Company’s European corporate offices are located in Gouda, The Netherlands. Optelecom-NKF has sales offices or support covering Latin America, France, Spain, the UK, Germany, Italy, Dubai, and Singapore.
Investor inquiries should be directed to Mr. Rick Alpert at +1 301-948-7872.
Press inquiries for North, Latin, and South America, and Japan should be directed to Betsy Lanning, blanning@optelecom-nkf.com, tel. +1 301-444-2276.
Press inquiries for Europe, Middle East, Africa, and Asia should be directed to Jolanda Medendorp, jmedendorp@optelecom-nkf.com, tel. +31 182 592 470.
For more information please visit our website: www.optelecom-nkf.com.
OPTELECOM-NKF, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE (LOSS) INCOME
FOR THE THREE MONTHS ENDED MARCH 31,
(Unaudited)
(Dollars in Thousands, Except Share Amounts)
| | 2009 | | 2008 | |
Revenue | | $ | 8,586 | | $ | 10,535 | |
Cost of goods sold | | 3,871 | | 4,076 | |
Gross profit | | 4,715 | | 6,459 | |
Operating expenses: | | | | | |
Sales and marketing | | 2,615 | | 2,661 | |
Engineering | | 1,349 | | 1,416 | |
General and administrative | | 1,543 | | 1,662 | |
Amortization of intangibles | | 157 | | 208 | |
Total operating expenses | | 5,664 | | 5,947 | |
(Loss) income from operations | | (949 | ) | 512 | |
Other expense, net | | (290 | ) | (352 | ) |
(Loss) income before income taxes | | (1,239 | ) | 160 | |
(Benefit) provision for income taxes | | (474 | ) | 12 | |
Net (loss) income | | $ | (765 | ) | $ | 148 | |
Basic (loss) income per share | | $ | (0.21 | ) | $ | 0.04 | |
Diluted (loss) income per share | | $ | (0.21 | ) | $ | 0.04 | |
Weighted average common shares outstanding -basic | | 3,641,692 | | 3,632,564 | |
Weighted average common shares outstanding -diluted | | 3,641,692 | | 3,632,635 | |
| | | | | |
Net (loss) income | | $ | (765 | ) | $ | 148 | |
Foreign currency translation | | (1,056 | ) | 1,920 | |
Comprehensive (loss) income | | $ | (1,821 | ) | $ | 2,068 | |
OPTELECOM-NKF, INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND DECEMBER 31, 2008
(March 31, 2009 Unaudited)
(Dollars in Thousands, Except Share and Per Share Amounts)
| | March 31, | | December 31, | |
| | 2009 | | 2008 | |
| | (unaudited) | | | |
ASSETS | | | | | |
CURRENT ASSETS | | | | | |
Cash & cash equivalents | | $ | 3,374 | | $ | 5,671 | |
Accounts receivable, net of allowance for doubtful accounts of $317 and $245 | | 9,181 | | 10,290 | |
Inventories, net of allowance for obsolescence of $832 and $679 | | 5,834 | | 5,782 | |
Deferred tax asset | | 308 | | 205 | |
Prepaid expenses and other current assets | | 1,202 | | 1,152 | |
Total current assets | | 19,899 | | 23,100 | |
Property & equipment, less accumulated depreciation of $7,388 and $7,820 | | 2,115 | | 2,063 | |
Intangible assets, net of accumulated amortization of $2,848 and $2,870 | | 6,568 | | 7,180 | |
Goodwill | | 13,683 | | 14,603 | |
Other assets | | 189 | | 202 | |
TOTAL ASSETS | | 42,454 | | 47,148 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | |
CURRENT LIABILITIES | | | | | |
Accounts payable | | 3,388 | | 3,634 | |
Accrued payroll | | 1,630 | | 1,841 | |
Commissions payable | | 193 | | 198 | |
Bank line of credit | | 150 | | — | |
Current portion of notes and interest payable | | 14,329 | | 3,432 | |
Accrued warranty reserve | | 422 | | 410 | |
Taxes payable | | 18 | | 931 | |
Other current liabilities | | 1,282 | | 1,724 | |
Total current liabilities | | 21,412 | | 12,170 | |
Notes payable and interest payable | | — | | 12,093 | |
Deferred tax liabilities | | 1,163 | | 1,427 | |
Other liabilities | | 254 | | 267 | |
Total liabilities | | 22,829 | | 25,957 | |
STOCKHOLDERS' EQUITY | | | | | |
Common stock, $.03 par value-shares authorized, 15,000,000; issued and outstanding, 3,641,804 and 3,645,084 shares as of March 31, 2009, and December 31, 2008, respectively | | 109 | | 109 | |
Additional paid-in capital | | 16,507 | | 16,252 | |
Accumulated other comprehensive income | | 1,478 | | 2,534 | |
Treasury stock, 162,672 shares at cost | | (1,265 | ) | (1,265 | ) |
Retained earnings | | 2,796 | | 3,561 | |
Total stockholders' equity | | 19,625 | | 21,191 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 42,454 | | $ | 47,148 | |
Non-GAAP Earnings Addendum
We define Adjusted EBITDA as net income or net loss plus interest expense, income taxes, foreign exchange losses, depreciation and amortization. Adjusted EBITDA is not a measure of cash flow or liquidity as determined by generally accepted accounting principles (GAAP). We have included Adjusted EBITDA as a supplemental disclosure because we believe that it is widely used by investors, industry analysts and others as a useful supplemental measure. Optelecom-NKF calculates and uses Adjusted EBITDA as an indicator of its ability to generate cash from reported operating results.
Adjusted EBITDA does not represent funds available for our discretionary use and is not intended to represent or to be used as a substitute for net income or cash flows from operations data as measured under U.S. generally accepted accounting principles (“GAAP”). The items excluded from Adjusted EBITDA but included in the calculation of Optelecom-NKF’s reported net income are significant components of the accompanying unaudited consolidated statements of operations, and must be considered in performing a comprehensive assessment of overall financial performance. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.
The table below presents a reconciliation of net income to Adjusted EBITDA:
| | Three Months Ended | |
(Unaudited) | | March 31, | |
(Dollars in Thousands) | | 2009 | | 2008 | |
Net Income | | $ | (765 | ) | $ | 148 | |
Add: | | | | | |
Interest expense, net | | 159 | | 250 | |
(Benefit) Provision for income taxes | | (474 | ) | 12 | |
Foreign currency loss | | 131 | | 102 | |
Depreciation | | 241 | | 256 | |
Amortization | | 157 | | 208 | |
Adjusted EBITDA | | $ | (551 | ) | $ | 976 | |
