EXHIBIT 99.1
[COMPANY LOGO]
FOR IMMEDIATE RELEASE
CONTACT: SMTEK INTERNATIONAL, INC.
Kirk A. Waldron, CFO
(805) 532-2800, ext. 111
SMTEK INTERNATIONAL, INC. REPORTS
THIRD QUARTER RESULTS
MOORPARK, Calif. (May 12, 2003) - SMTEK International, Inc.
(Nasdaq: SMTI / Pacific Exchange: SMK), a provider of electronics
manufacturing services (EMS), today announced that revenues for the
quarter ended March 31, 2003 were $17.4 million compared to $13.5
million for the quarter ended March 31, 2002. For the nine months
ended March 31, 2003, revenues were $50.5 million compared to $48.3
million for the nine months ended March 31, 2002.
For the quarter ended March 31, 2003, SMTEK reported a net loss
of $1.1 million after discontinued operations, or $0.46 loss per basic
share, compared to a net loss of $2.9 million for the quarter ended
March 31, 2002, or $1.28 loss per basic share. For the nine months
ended March 31, 2003, the net loss was $6.2 million after discontinued
operations, or $2.68 loss per basic share, compared to a net loss of
$3.7 million, or $1.60 loss per basic share, for the same period in the
prior year.
Included in the net loss for the nine months ended March 31,
2003, was approximately $2.0 million related to the consolidation of
the Company's San Diego facility and the transitioning of its customers
to SMTEK facilities in Moorpark and Santa Clara.
Commenting on the results for the March quarter 2003, Edward J.
Smith, President and Chief Executive Officer stated, "Although we
posted results reflecting an operating loss, we are beginning to
experience the benefits of our cost reduction efforts and efficiency
improvements. In particular, we recently sold our Ireland operations
and transferred operations from our San Diego, California facility.
Based on these measures and our current backlog of business, we
anticipate a positive trend in our fourth quarter results from
operations. Although we are generally optimistic about our future
prospects, we nevertheless remain cautious in light of current economic
conditions."
He further added, "The Company's balance sheet remains a
challenge as we try to recover from the losses and nonrecurring charges
that have been incurred over the past two years. We are very focused on
trying to address our significant debt, and we are exploring
alternatives to possibly resolve the burden that we face with servicing
our current liability structure."
* * * * *
Headquartered in Moorpark, California, SMTEK International, Inc.
is an EMS provider serving original equipment manufacturers (OEMs) in
the industrial instrumentation, medical, telecommunications, security,
financial services automation, aerospace and defense industries. We
provide integrated solutions to OEMs across the entire product life
cycle, from design to manufacturing to end-of-life services, for the
worldwide low to medium volume, high complexity segment of the EMS
industry. We have five operating facilities with locations in
Moorpark, California; Santa Clara, California; Marlborough,
Massachusetts; Fort Lauderdale, Florida; and the Ayuttya Province in
Thailand.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and is
subject to the safe harbor provisions created by those sections. You
can identify these statements by the fact that they use words such as
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," and other words of similar meaning in connection with any
discussion of future operating or financial performance. Any forward-
looking statements are only predictions and may differ materially from
actual future events or results. Readers are cautioned that forward-
looking statements regarding future events and the future performance
of SMTEK International, Inc. involve various risks and uncertainties
that could cause actual results to differ materially from those
described in these statements.
Readers are referred to the documents filed by SMTEK
International, Inc. with the SEC, including our most recent Reports on
Forms 10-K, 10-Q and 8-K, each as it may be amended from time to time,
for a more complete description of important risk factors and other
information with respect to risks and uncertainties relating to the
materials in this press release, as well as to other aspects of our
business and financial condition. We do not undertake, and
specifically disclaim, any obligation to update forward-looking
statements.
SMTEK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands except per share amounts)
Three Months Ended Nine Months
Ended
March 31, March 31,
------------------- ---------------
- ----
2003 2002 2003
2002
------- ------- ------- ---
- ----
Revenues $17,430 $13,463 $50,474
$48,345
Cost of goods sold 15,510 13,364 46,122
44,554
------- ------- ------- ---
- ----
Gross profit 1,920 99 4,352
3,791
------- ------- ------- ---
- ----
Operating expenses:
Administrative and selling 2,216 3,034 8,242
6,470
Goodwill amortization - 9 -
28
------- ------- ------- ---
- ----
Total operating expenses 2,216 3,043 8,242
6,498
------- ------- ------- ---
- ----
Operating loss (296) (2,944) (3,890)
(2,707)
------- ------- ------- ---
- ----
Interest expense, net (267) (236) (776)
(707)
Other income, net 269 195 261
231
------- ------- ------- ---
- ----
Loss from continuing operations
before income taxes (294) (2,985) (4,405)
(3,183)
Income tax provision (benefit) - (182) 6
(155)
------- ------- ------- ---
- ----
Loss from continuing operations (294) (2,803) (4,411)
(3,028)
Loss from discontinued operations,
net of taxes (756) (122) (1,300)
(632)
------- ------- ------- ---
- ----
Loss before change in accounting
principle (1,050) (2,925) (5,711)
(3,660)
Change in accounting principle,
net of taxes - - (420)
- -
------- ------- ------- ---
- ----
Net loss $(1,050) $(2,925) $(6,131)
$(3,660)
======= ======= =======
=======
Loss from continuing operations $ (0.13) $ (1.23) $ (1.93) $
(1.32)
Loss from discontinued operations (0.33) (0.05) (0.57)
(0.28)
Change in accounting principle - - (0.18)
- -
======= ======= =======
=======
Loss per share $ (0.46) $ (1.28) $ (2.68) $
(1.60)
======= ======= =======
=======
Average shares (in OOOs) 2,284 2,284 2,284
2,284
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=======
SMTEK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except share amounts)
March 31, June
30,
2003
2002
------------- ----
- -----
Current assets:
Cash and cash equivalents $ 546 $
816
Accounts receivable, net 11,518
8,390
Inventories, net 9,170
9,666
Prepaid expenses 807
809
Current assets, excluding cash
- discontinued operations 3,360
5,572
-------- ----
- ----
Total current assets 25,401
25,253
-------- ----
- ----
Property, equipment and improvements, net 5,991
7,260
Property, equipment and improvements, net -
discontinued operations 1,486
1,549
Other assets 330
772
-------- ----
- ----
$ 33,208 $
34,834
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========
Current liabilities:
Current portion of bank lines of credit payable $ 6,631 $
- -
Current portion of long-term debt 2,113
2,104
Accounts payable 8,842
6,867
Other accrued liabilities 6,491
4,746
Current liabilities - discontinued operations 5,312
5,621
-------- ----
- ----
Total current liabilities 29,389
19,338
-------- ----
- ----
Long-term bank line of credit payable -
4,005
Long-term debt 3,945
5,194
Long-term debt - discontinued operations 65
872
Other long-term liabilities 594
- -
-------- ----
- ----
Total long-term debt 4,604
10,071
-------- ----
- ----
Stockholders' equity (deficit):
Common stock 23
23
Additional paid-in capital 37,028
37,028
Accumulated deficit (37,745)
(31,616)
Accumulated other comprehensive loss (91)
(10)
-------- ----
- ----
Total stockholders' equity (deficit) (785)
5,425
-------- ----
- ----
$ 33,208 $
34,834
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