Exhibit 99.1
Integrated Performance Systems Announces Second Quarter Results
DALLAS, March 13, 2006/ Integrated Performance Systems, Inc. (PinkSheets:
IPFS.PK) (the "Company"), a printed circuit board and electronics component
manufacturer, announced results for its second quarter ending January 31,
2006.
Second quarter 2006 net sales increased 20% to $9.1 million, compared to
$7.6 million for the second quarter 2005. The second quarter 2006 increase
is a result of sales generated primarily by an increase in sales to our core
customers. The Company is continuing to see growth within the power and
military segments and expects this trend to continue through the next
several quarters.
Gross profit increased to 17% for the second quarter 2006 versus 15% for the
second quarter 2005. The increase is attributable to the improved capacity
utilization related to the increase in sales, which results in fixed costs
being spread over a larger number of units produced. This increase is also
attributable to a higher margin sales mix which includes a higher demand for
premium services, primarily quick-turn orders offset by higher material
costs as a result of price increases from our primary suppliers. The
Company expects price increases to stabilize over the next quarter and will
continue to focus on the higher margin product mix to positively affect
margins.
Selling, general and administrative expense decreased to approximately $1.2
million, or 76% for the second quarter 2006 from $8.6 million in 2005. The
decrease is a result of recording a $7.6 million non-cash compensation
expense in 2005 that did not recur during 2006. Excluding the $7.6 million
non-cash compensation charge in 2005, SG&A increased $228,00 from 2005.
This increase was the result of additional administrative and accounting
personnel to provide the support mechanisms and corporate infrastructure
required to effectively manage and grow our operations, and additional
accounting, legal and other professional fees related to (1) the ongoing
litigation as a result of the November 2004 merger with Best Circuits
Boards, Inc, and (2) filing and reporting as a public entity. The Company
is currently focusing on controlling and reducing the expenses related to
professional and accounting fees and with the exception of legal fees
related to (1) above, believes the results of that effort will become
evident over the next several quarters.
Net income for the second quarter 2006 was $76,287, compared to a net loss
of $(11,861,742) for the second quarter 2005. The increase is attributable
to improved gross margin offset by the increased general and administrative
costs, specifically the $7.6 million non-cash compensation expense as
described above and $4.2 million in non-cash interest expense related to the
beneficial conversion feature of the notes payable to related party as
described in Note 4 of the financial statements to the Company's amended
quarterly report on Form 10-QSB/A for the quarter ended January 31, 2005,
filed on January 31, 2006, that were recorded in 2005 and did not recur in
2006.
The Company's Chief Financial Officer Brad Peters said, "We are pleased to
be able to begin focusing on cutting costs and targeting specific areas that
we believe will organically grow our business. We continue to see strong
growth within our core customer base and from the military customers as
well." Peters further commented, "This focus on increasing shareholder
value with an emphasis on reducing our operating costs, improving our core
business and by pursuing numerous revenue-generating opportunities will be
instrumental in meeting our goals and driving our growth."
Integrated Performance Systems manufactures complex multi-layer printed
circuit boards utilizing the Company's proprietary technologies, global
supply chain management expertise and manufacturing capabilities. The
Company provides its customers with integrated manufacturing solutions that
encompass all stages of an electronic product's life cycle, from prototype
through volume production. The Company's customers include original equip-
ment manufacturers and electronic manufacturing service providers that serve
rapidly growing segments of the electronics industry. Additional corporate
information is available on the Internet at http://www.lonestarcircuits.com
Forward-Looking Statements: Certain statements contained herein are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements include our expectations,
plans and projections, including statements concerning expected income and
expenses and the adequacy of our sources of cash to finance current and
future operations, which may or may not materialize and which are subject to
various risks and uncertainties. Factors which could cause actual results
to materially differ from our expectations include the following: general
economic conditions and growth in the high tech industry; competitive
factors and pricing pressures; changes in product mix; the timely
development and acceptance of new products; the effects of the contingencies
described herein; the availability of capital; loss of key suppliers,
significant customers or key management personnel; payment defaults by our
customers; limitations upon financial and operating flexibility due to the
terms of our indebtedness; changes in our business strategy or development
plans; and the risks described from time to time in our filings with the
Securities and Exchange Commission. The words "may," "will," "plans,"
"believes," "expects," "projects," "targets," "anticipates," "estimates,"
"continue," "intend" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements speak only as
of the date of this release, and we have based our forward-looking
statements on our current assumptions and expectations about future events.
We have expressed our assumptions and expectations in good faith, and we
believe there is a reasonable basis for them. However, we cannot assure you
that our assumptions and expectations will prove to be accurate. We
expressly disclaim any obligation or undertaking to release publicly any
updates or change in our expectations or any change in events, conditions or
circumstances on which any such statement may be based, except as may be
otherwise required by the securities laws.
CONTACT: Brad Peters (214) 291-1452