EXHIBIT 99.1 |
Reptron Electronics, Inc. Announces Third Quarter and Nine-Month Results
Wednesday November 12, 8:02 am ET
Reptron recorded third quarter 2003 net sales from continuing operations of $39.0 million, a 15% decrease from the same period a year ago. The Company incurred a third quarter 2003 loss from continuing operations totaling $845,000, or $0.13 per fully diluted share, compared to a $2.1 million net loss from continuing operations, $0.33 per fully diluted share, in the same period a year ago. Reptron generated $6.3 million in cash from operations in the third quarter, 2003 which was used primarily to further reduce debt.
For the nine months ended September 30, 2003, net sales from continuing operations totaled $113.2 million, a 9% decrease from the same period a year ago. The Company recorded a $3.7 million net loss from continuing operations during the first nine months of 2003, or $0.58 per fully diluted share, compared to a net loss from continuing operations of $10.1 million, or $1.58 per fully diluted share, in the same period last year. Reptron also incurred a net loss from discontinued operations totaling $22.0 million, or $3.42 per fully diluted share, during the first nine months of 2003 compared to a net loss from discontinued operations of $6.4 million, or $1.00 per fully diluted share in the same period in 2002.
The 2003 loss from discontinued operations includes charges associated with impairment of long lived assets and increases in reserves for assets held for sale. Non-cash charges included in the 2003 loss from discontinued operations totaled $16.1 million. Reptron has generated $17.6 million in cash from operations during the first nine months of 2003.
As of September 30, 2003, Reptron owed $76.3 million under its 6 3/4% Convertible Subordinated Notes due in August, 2004 ("Notes"). Reptron previously announced it has reached an agreement to restructure these Notes and on October 28, 2003, the Company filed a voluntary, pre-negotiated Chapter 11 petition to facilitate the completion of this debt restructure. The negotiated terms include no further payment of interest expense on the current Notes. Interest expense associated with this debt totaling approximately $1.3 million has been accrued and is included in the third quarter, 2003 net loss from continuing operations, and approximately $3.9 million of interest expense from this debt is included in the nine month, 2003 net loss from continuing operations. Current accounting pronouncements required the accrual of this interest during the first nine months of 2003 despite the fact that the negotiated terms of the debt restructure include no further interest payments on the current Notes.
Paul Plante, Reptron's President and Chief Operating Officer commented, "We continue to make significant progress in deploying our plan designed to improve our operating performance and strengthen our balance sheet. The sale of our distribution and memory module divisions this year were important as these divisions accounted for over 85% of the Company's 2002 operating losses. The sale proceeds have been used to pay down over 75% of our working capital line of credit."
Plante continued, "Restructuring our Convertible Notes is the last significant piece of our plan to be completed. We recently filed a voluntary, pre-negotiated Chapter 11 petition to facilitate this restructure. We chose the Chapter 11 process as we believe it provides the quickest and most certain method to implement the restructured terms already supported by the holders of majority of the principal balance outstanding on the Notes. Once the restructure is completed, Reptron expects it will have eliminated over $70 million of debt since the beginning of 2003 and be positioned to take advantage of growth opportunities. We believe confirmation of the Company's plan of reorganization can be completed within 90 to 120 days."
REPTRON ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) Three months ended September 30, 2003 2002 Net sales $38,963 $45,883 Cost of sales 33,713 40,294 Gross profit 5,250 5,589 Selling, general and administrative expenses(A) 4,544 5,940 Operating income (loss) 706 (351) Interest expense, net(B) 1,551 1,769 Loss from continuing operations before income taxes (845) (2,120) Income tax provision (benefit) - - Loss from continuing operations (845) (2,120) Discontinued operations Loss from operations of discontinued divisions (3,229) (2,301) Income tax benefit - - Loss on discontinued operations (3,229) (2,301) Net loss $(4,074) $(4,421) Net loss from continuing operations per common share - diluted $(0.13) $(0.33) Net loss from discontinued operations per common share - diluted $(0.50) $(0.36) Net loss per common share - diluted $(0.63) $(0.69) Weighted average common shares outstanding - diluted 6,417,196 6,417,196 (A) Includes all common or shared expenses which cannot be properly charged directly to any specific operating division. No allocation has been made to the discontinued operations. Management believes these common expenses will decrease upon completion of the sales of the discontinued operations. (B) Includes $1.3 million of interest accrued but unpaid on the Company's Convertible Notes. The Company filed a voluntary, pre-negotiated Chapter 11 petition on October 28, 2003 to facilitate a restructure of these notes. REPTRON ELECTRONICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) Nine months ended September 30, 2003 2002 Net sales $113,168 $124,663 Cost of sales 98,165 112,092 Gross profit 15,003 12,571 Selling, general and administrative expenses(A) 14,012 17,918 Operating income (loss) 991 (5,347) Interest expense, net(B) 4,733 4,792 Loss from continuing operations before income taxes (3,742) (10,139) Income tax provision (benefit) - - Loss from continuing operations (3,742) (10,139) Discontinued operations Loss from operations of discontinued divisions(C) (21,962) (6,425) Income tax benefit - - Loss on discontinued operations (21,962) (6,425) Net loss $(25,704) $(16,564) Net loss from continuing operations per common share - diluted $(0.58) $(1.58) Net loss from discontinued operations per common share - diluted $(3.42) $(1.00) Net loss per common share - diluted $(4.00) $(2.58) Weighted average common shares outstanding - diluted 6,417,196 6,417,196 (A) Includes all common or shared expenses which cannot be properly charged directly to any specific operating division. No allocation has been made to the discontinued operations. Management believes these common expenses will decrease upon completion of the sales of the discontinued operations. (B) Includes $3.9 million of interest accrued but unpaid on the Company's Convertible Notes. The Company filed a voluntary, pre-negotiated Chapter 11 petition on October 28, 2003 to facilitate a restructure of these notes. (C) Non-cash charges included in the loss in discontinued operations totaled $16.1 million. REPTRON ELECTRONICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) ASSETS September 30, Dec 31, 2003 2002 CURRENT ASSETS Cash and cash equivalents $815 $370 Accounts receivable - trade, net 17,452 32,288 Inventories, net 22,040 26,147 Assets held for sale 8,971 39,142 Prepaid expenses and other 1,976 1,738 Total current assets 51,254 99,685 PROPERTY, PLANT & EQUIPMENT - AT COST, NET 20,902 23,292 GOODWILL, NET 26,779 30,073 DEFERRED INCOME TAX 2,480 2,449 OTHER ASSETS 1,710 1,475 TOTAL ASSETS $103,125 $156,974 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable - trade $15,987 $19,045 Note payable to bank 13,928 33,606 6 3/4% Convertible Subordinated Notes 76,315 - Current portion of long-term obligations 617 1,080 Liabilities held for sale 1,495 8,670 Accrued expenses 10,686 8,138 Total current liabilities 119,028 70,539 LONG-TERM OBLIGATIONS, less current portion 3,778 80,407 SHAREHOLDERS' EQUITY (DEFICIT) Preferred Stock - authorized 15,000,000 shares of $.10 par value; no shares issued - - Common Stock - authorized 50,000,000 shares of $.01 par value; issued and outstanding, 6,417,196 and 6,417,196 shares, respectively 64 64 Additional paid-in capital 23,146 23,146 Retained earnings (deficit) (42,891) (17,182) TOTAL SHAREHOLDERS EQUITY (DEFICIT) (19,681) 6,028 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT) $103,125 $156,974
About Reptron
Reptron Electronics, Inc. is an electronics manufacturing services company providing engineering services, electronics manufacturing services and display integration services. Reptron Manufacturing Services offers full electronics manufacturing services including complex circuit board assembly, complete supply chain services and manufacturing engineering services to OEMs in a wide variety of industries. Reptron Display and System Integration provides value- added display design engineering and system integration services to OEMs. For more information, please access www.reptron.com .
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Factors that could cause actual results to differ materially include the following: developments in the Chapter 11 proceedings, including but not limited to a failure to obtain confirmation of the Company's plan of reorganization or the time necessary to complete the reorganization, business conditions and growth in the Company's industry and in the general economy; competitive factors; risks due to shifts in market demand; risks inherent with predicting revenue and earnings outcomes; uncertainties involved in implementing improvements in the manufacturing process; the ability of the Company to complete and integrate acquisitions; and the risk factors listed from time to time in the Company's reports filed with the Securities and Exchange Commission as well as assumptions regarding the foregoing. The words "believe," "estimate," "expect," "intend," "anticipate," "plan," "appears," and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.
Source: Reptron Electronics, Inc.