Exhibit 99.1
PHAZAR CORP Reports First Quarter Fiscal Year 2013 Financial Results
MINERAL WELLS, Texas--(BUSINESS WIRE)--November 13, 2012--PHAZAR CORP (NASDAQ: ANTP) designs, manufactures and markets antennas, towers, support structures, masts and communication accessories worldwide. Today, PHAZAR CORP announces the results of operations for the three month period ended September 30, 2012 and 2011, respectively.
First Quarter Fiscal Year 2013
Revenues of $1,159,836 for the first quarter decreased 18% compared to $1,415,218 for the same three month period last year. Sales from our shipboard and safety climb product lines are down $123,755 and $108,045, respectively quarter over quarter.
Cost of sales and contracts from operations were $1,319,406 for the quarter ended September 30, 2012 compared to $779,319 for the quarter ended September 30, 2011, up $540,087, or 69%. The $540,087 increase consists of approximately $600,000 reserve for slow moving inventory offset by a $59,913 (or 8%) decline in cost of goods sold on back of 18% decrease in sales quarter over quarter. The Company reviewed its policy in estimating slow moving inventory to more accurately value inventory that may have become impaired or obsolete due to advancing technology or changes in demand of product by some customers. As such, the Company incurred a charge of approximately $600,000 which represents a reserve of $197,794 and $402,206 against the raw material and finished goods inventories, respectively. Gross profit margins for the quarter, at 38% before the slow moving inventory charge, were down seven basis points from the 45% gross profit margin reported in the comparable period last year, related to a higher level of overhead rates and a change in the product mix.
Sales and administration expense of $537,996 is down $207,374 or 27.8% for the three month period ended September 30, 2012 compared to the prior year expense of $745,370 related to an increase in plant utilization overhead. Research and development costs of $174,096 were up $74,634, for the three months ended September 30, 2012 compared to $99,462 in the prior year. The increase represents continued product development for the commercial wireless product line.
The Company recorded a net loss of $785,372, or $0.34 per share for the three month period ended September 30, 2012 compared to net loss of $120,255, or $0.05 per share for the comparable period in the prior year.
Backlog of Orders
The Company's backlog of orders on September 30, 2012, totaled approximately $1,951,400 compared to $1,487,491 at June 30, 2012, an increase of 31.1%. Incoming orders for the three month period ended September 30, 2012 totaled $1,627,363 versus $1,724,724 for the three month period ended September 30, 2011, a decrease of 5.6%.
More information and analysis of PHAZAR CORP’s financial results will be provided in the management discussion and analysis of financial condition and results of operations in the Form 10-Q for the three month period ended September 30, 2012, filed with the Securities and Exchange Commission on November 9, 2012.
The Form 10-Q will be available at the SEC’s website at www.sec.gov and PHAZAR CORP’S website at www.phazarcorp.com.
Product information is available at www.antennaproducts.com and www.phazar.com.
The common stock of PHAZAR CORP is listed on the NASDAQ Capital Market under the trading symbol “ANTP”. This press release contains forward-looking information within the meaning of Section 29A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performances and underlying assumption and other statements, which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties, which could cause actual results, or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties, but there can be no assurance that management’s expectations, beliefs or projections will result, or be achieved, or accomplished.
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| PHAZAR CORP AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| SEPTEMBER 30, 2012 AND JUNE 30, 2012 |
| | | | | |
| | | September 30, 2012 (Unaudited) | | | June 30, 2012 |
| CURRENT ASSETS | | | | | |
| Cash and cash equivalents | | $ | 797,814 | | | | $ | 528,876 | |
| Accounts receivable: | | | | | |
| Trade, net of allowance for doubtful accounts of $0 | | | | | |
| as of September 30, 2012 and June 30, 2012 | | | 414,766 | | | | | 880,342 | |
| Inventories | | | 1,904,988 | | | | | 2,376,427 | |
| Note receivable | | | 1,523,465 | | | | | 1,477,161 | |
| Prepaid expenses and other assets | | | 92,128 | | | | | 95,231 | |
| Income taxes receivable | | | 29,321 | | | | | 29,321 | |
| Deferred income taxes | | | 206,536 | | | | | 211,674 | |
| Total current assets | | | 4,969,018 | | | | | 5,599,032 | |
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| Property and equipment, net | | | 964,622 | | | | | 997,426 | |
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| Long - term deferred income tax | | | 306,893 | | | | | 301,547 | |
| TOTAL ASSETS | | $ | 6,240,533 | | | | $ | 6,898,005 | |
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| CURRENT LIABILITIES | | | | | |
| Accounts payable | | $ | 170,653 | | | | $ | 274,628 | |
| Accrued liabilities | | | 366,728 | | | | | 300,637 | |
| Deferred revenues | | | 164,500 | | | | | 19,619 | |
| Liabilities held for discontinued operations | | | 114,571 | | | | | 114,571 | |
| Total current liabilities | | $ | 816,452 | | | | $ | 709,455 | |
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| TOTAL LIABILITIES | | $ | 816,452 | | | | $ | 709,455 | |
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| COMMITMENTS AND CONTINGENCIES | | | | | |
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| SHAREHOLDERS’ EQUITY | | | | | |
| Preferred Stock, $1 par, 2,000,000 shares authorized, none issued | | | | | |
| or outstanding, attributes to be determined when issued | | | - | | | | | - | |
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| Common stock, $0.01 par, 6,000,000 shares authorized | | | | | |
and 2,394,228, and 2,391,628 issued on September 30, 2012 and June 30, 2012, respectively | | | 23,943 | | | | | 23,917 | |
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| Additional paid in capital | | | 4,756,677 | | | | | 4,735,800 | |
Treasury stock, at cost, 74,691 shares on September 30, 2012 and June 30, 2012 | | | (215,918 | ) | | | | (215,918 | ) |
| Retained earnings | | | 859,379 | | | | | 1,644,751 | |
| Total shareholders’ equity | | | 5,424,081 | | | | | 6,188,550 | |
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| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 6,240,533 | | | | $ | 6,898,005 | |
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| PHAZAR CORP AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 |
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| | Three Months Ended |
| | | September 30, 2012 (Unaudited) | | | September 30, 2011 (Unaudited) |
| Sales and contract revenues | | $ | 1,159,836 | | | | $ | 1,415,218 | |
| Cost of sales and contracts | | | 1,319,406 | | | | | 779,319 | |
| Gross profit (loss) | | | (159,570 | ) | | | | 635,899 | |
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| Selling, general and administration expenses | | | 537,996 | | | | | 745,370 | |
| Research and development costs | | | 174,096 | | | | | 99,462 | |
| Total operating expenses | | | 712,092 | | | | | 844,832 | |
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| Operating loss | | | (871,662 | ) | | | | (208,933 | ) |
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| Other income | | | | | |
| Interest income (net) | | | 17,319 | | | | | 38,292 | |
| Other income | | | 68,971 | | | | | 6,480 | |
| Total other income | | | 86,290 | | | | | 44,772 | |
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| Loss from operations before income taxes | | | (785,372 | ) | | | | (164,161 | ) |
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| Income tax expense (benefit) | | | - | | | | | (55,815 | ) |
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| Net loss before discontinued operations | | | (785,372 | ) | | | | (108,346 | ) |
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| Loss from discontinued operations | | | - | | | | | (18,044 | ) |
| Income tax benefit from discontinued operations | | | - | | | | | 6,135 | |
| Net loss from discontinued operations | | $ | - | | | | $ | (11,909 | ) |
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| Net loss | | $ | (785,372 | ) | | | $ | (120,255 | ) |
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| Basic loss per common share | | | | | |
| Continuing operations | | $ | (0.34 | ) | | | $ | (0.05 | ) |
| Discontinued operations | | | (0.00 | ) | | | | (0.00 | ) |
| Net loss | | $ | (0.34 | ) | | | $ | (0.05 | ) |
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| Diluted loss per common share | | | | | |
| Continuing operations | | $ | (0.34 | ) | | | $ | (0.05 | ) |
| Discontinued operations | | | (0.00 | ) | | | | (0.00 | ) |
| Net loss | | $ | (0.34 | ) | | | $ | (0.05 | ) |
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| Basic weighted average of common shares outstanding | | | 2,311,559 | | | | | 2,311,124 | |
| Diluted weighted average of common shares outstanding | | | 2,311,559 | | | | | 2,311,124 | |
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| PHAZAR CORP AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 |
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| | Three Months Ended |
| | September 30, 2012 | | | September 30, 2011 |
| | | (Unaudited) | | | (Unaudited) |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Net loss | | $ | (785,372 | ) | | | $ | (120,255 | ) |
| Adjustments to reconcile net loss to net cash | | | | | |
| provided by operating activities: | | | | | |
| Depreciation | | | 32,804 | | | | | 32,347 | |
| Provision for slow moving inventory | | | 600,000 | | | | | - | |
| Loss from discontinued operations | | | - | | | | | 11,909 | |
| Stock based compensation | | | 20,903 | | | | | 18,066 | |
| Deferred federal income tax | | | (208 | ) | | | | (4,191 | ) |
| Changes in operating assets and liabilities: | | | | | |
| Accounts receivable | | | 465,576 | | | | | 335,698 | |
| Inventories | | | (128,561 | ) | | | | (130,683 | ) |
| Income taxes receivable | | | - | | | | | (56,579 | ) |
| Prepaid expenses and other assets | | | 3,103 | | | | | 44,142 | |
| Accounts payable | | | (103,975 | ) | | | | 90,646 | |
| Accrued liabilities | | | 66,091 | | | | | 150,468 | |
| Deferred revenues | | | 144,881 | | | | | (2,355 | ) |
| Net cash used in discontinued operations | | | - | | | | | (75,398 | ) |
| Net cash provided by operating activities | | | 315,242 | | | | | 293,815 | |
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| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | |
| Funding of note receivable | | | (46,304 | ) | | | | (148,034 | ) |
| Purchase of property and equipment | | | - | | | | | (37,250 | ) |
| Net cash used in investing activities | | | (46,304 | ) | | | | (185,284 | ) |
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| Net increase in cash and cash equivalents | | | 268,938 | | | | | 108,531 | |
| CASH AND CASH EQUIVALENTS, beginning of period | | | 528,876 | | | | | 1,169,318 | |
| CASH AND CASH EQUIVALENTS, end of period | | $ | 797,814 | | | | $ | 1,277,849 | |
CONTACT:
Antenna Products Corporation
Kathy Kindle, 940-325-3301
Fax: 940-325-0716
kindle@phazarcorp.com
