Exhibit 99.1
For Further Information:
Steve F. Scott | | Gayle Arnold |
President and CEO | | Chief Financial Officer |
(310) 537-5444 | | (310) 537-5444 |
sscott@advmatl.com | | garnold@advmatl.com |
FOR IMMEDIATE RELEASE:
ADVANCED MATERIALS GROUP REPORTS
SECOND QUARTER RESULTS
ADMG Posts Loss of $0.01 Per Share, Same as Previous Year,
On 27% Lower Sales
RANCHO DOMINGUEZ, California, (July 16, 2003) – Advanced Materials Group, Inc. (NASDAQ OTC Bulletin Board: ADMG.OB) today reported decreased sales of 27% with a net loss for the second fiscal quarter ended May 31, 2003 of $78,000 or $0.01 per share compared to a net loss of $111,000 or $0.01 per share for the comparable period of fiscal 2002.
Net sales for the second quarter of fiscal 2003 were $6.7 million versus $9.3 million for the comparable period of fiscal 2002. Sales for the United States declined 28%, sales in Singapore declined 46% and sales in Ireland decreased 3%.
The net loss for the second quarter of fiscal 2003 was $78,000 compared to a net loss of $111,000 for the second quarter of fiscal 2002. The net loss in the U.S. improved by $120,000, the net income in Singapore declined by $83,000 and the net loss in Ireland increased by $4,000.
Basic and diluted loss per share for the second quarter was $0.01 per share on an average of 8.7 million shares, which was the same as the comparable period of fiscal 2002.
Net sales for the six months of fiscal 2003 were $14.2 million versus $17.9 million for the comparable period of fiscal 2002. The net loss for the six months of fiscal 2003 was $93,000, compared to $394,000 for the six months of fiscal 2002.
Basic and diluted loss per share for the six months was $0.01 per share on an average of 8.7 million shares, compared to basic and diluted loss per share of $0.05 per share on an average of 8.7 million shares, in the year ago period.
Chief Executive Officer Comments on Results
Commenting on the results, Advanced Materials Group CEO and President, Steve Scott said, “Measures to reduce costs over the past couple of years have allowed us to improve the bottom line even though sales were significantly lower in the second quarter of fiscal 2003 compared to the same period in 2002.
As previously announced, we have recently signed a non-binding letter of intent to sell our subsidiary in Ireland and have amended the structure of our manufacturing agreement in Singapore. These transactions will significantly improve our balance sheet and, along with the improved cost structure, should give us the needed cash to sustain and potentially improve our domestic operations.”
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Some statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. In addition to the factors discussed, the following are among other factors that could cause actual results to differ materially: general business conditions, competitive factors, concentration of sales in markets and customers, concentration of raw materials suppliers, delays or cancellations in orders, fluctuations in margins, timing of significant orders, and other risks and uncertainties outlined by management in the Company’s most recent Form 10-K.
Advanced Materials Group, Inc. is a leading manufacturer and fabricator of specialty foams, foils, films and pressure-sensitive adhesive components for a broad base of customers in the computer, medical, automotive and aerospace industries both in the U.S. and abroad.
(Financial tables follow)
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ADVANCED MATERIALS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | Three Months Ended | | Six Months Ended | |
| | May 31, 2003 | | May 31, 2002 | | May 31, 2003 | | May 31, 2002 | |
| | | | | | | | | |
Net sales | | $ | 6,744,000 | | $ | 9,258,000 | | $ | 14,226,000 | | $ | 17,918,000 | |
Cost of sales | | 5,902,000 | | 8,378,000 | | 12,400,000 | | 16,239,000 | |
Gross profit | | 842,000 | | 880,000 | | 1,826,000 | | 1,679,000 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Selling, general and administrative | | 781,000 | | 783,000 | | 1,584,000 | | 1,667,000 | |
Depreciation and amortization | | 66,000 | | 93,000 | | 133,000 | | 177,000 | |
Total operating expenses | | 847,000 | | 876,000 | | 1,717,000 | | 1,844,000 | |
Income (loss) from operations | | (5,000 | ) | 4,000 | | 109,000 | | (165,000 | ) |
| | | | | | | | | |
Other income (expense): | | | | | | | | | |
Interest expense | | (76,000 | ) | (96,000 | ) | (172,000 | ) | (189,000 | ) |
Foreign exchange gain | | 21,000 | | 18,000 | | 27,000 | | 21,000 | |
Other, net | | (9,000 | ) | (26,000 | ) | (36,000 | ) | (41,000 | ) |
Total other expenses, net | | (64,000 | ) | (104,000 | ) | (181,000 | ) | (209,000 | ) |
| | | | | | | | | |
Loss before income taxes | | (69,000 | ) | (100,000 | ) | (72,000 | ) | (374,000 | ) |
Income tax expense | | (9,000 | ) | (11,000 | ) | (21,000 | ) | (20,000 | ) |
Net loss | | $ | (78,000 | ) | $ | (111,000 | ) | (93,000 | ) | $ | (394,000 | ) |
| | | | | | | | | |
Basic and diluted loss per common share | | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.05 | ) |
| | | | | | | | | |
Basic and diluted weighted average common shares outstanding | | 8,671,272 | | 8,671,272 | | 8,671,272 | | 8,671,272 | |
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ADVANCED MATERIALS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | May 31,
2003 | | November 30,
2002 | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 654,000 | | $ | 764,000 | |
Accounts receivable, net of allowance of $159,000 and $155,000 at May 31, 2003 and November 30, 2002, respectively | | 3,371,000 | | 5,464,000 | |
Inventories, net | | 3,788,000 | | 3,456,000 | |
Prepaid expenses and other | | 553,000 | | 143,000 | |
Total current assets | | 8,366,000 | | 9,827,000 | |
Property and equipment, net | | 2,203,000 | | 2,485,000 | |
Other assets | | 71,000 | | 199,000 | |
Total assets | | $ | 10,640,000 | | $ | 12,511,000 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 5,075,000 | | $ | 4,387,000 | |
Accrued liabilities | | 901,000 | | 772,000 | |
Restructuring reserve, current | | 378,000 | | 378,000 | |
Deferred income | | 137,000 | | 97,000 | |
Line of credit | | 1,420,000 | | 3,701,000 | |
Convertible debentures | | 405,000 | | — | |
Current portion of long-term obligations | | 533,000 | | 599,000 | |
Total current liabilities | | 8,849,000 | | 9,934,000 | |
Convertible debentures | | — | | 405,000 | |
Deferred compensation, net of current protion | | 1,094,000 | | 1,094,000 | |
Restructuring reserve, net of current portion | | 289,000 | | 504,000 | |
Capital leases, net of current portion | | 70,000 | | 143,000 | |
Total liabilities | | 10,302,000 | | 12,080,000 | |
| | | | | |
Stockholders’ equity: | | | | | |
Preferred stock-$.001 par value; 5,000,000 shares authorized no shares issued and outstanding | | — | | — | |
Common stock-$.001 par value; 25,000,000 shares authorized; 8,671,272 shares issued and outstanding at May 31, 2003 and November 30, 2002 | | 9,000 | | 9,000 | |
Additional paid-in capital | | 7,083,000 | | 7,083,000 | |
Accumulated deficit | | (6,754,000 | ) | (6,661,000 | ) |
Total stockholders’ equity | | 338,000 | | 431,000 | |
Total liabilities and stockholders’ equity | | $ | 10,640,000 | | $ | 12,511,000 | |
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