Exhibit 99.1
Integrated Performance Systems, Inc. Announces Three and Nine Months
Financial Results
WYLIE, Texas, June 14 -- Integrated Performance Systems, Inc. (OTC Pink
Sheets: IPFS), a leading Electronic Manufacturer Services (EMS) company
which designs, engineers and manufactures technologically advanced printed
circuit boards, announces its financial results for the three and nine
months ended April 30, 2006.
Integrated Performance Systems, Inc.
(in thousands, except per share amounts and percentages)
Three Months Ended Nine Months Ended
April 30, Change April 30, Change
--------------------------- ---------------------------
2006 2005 2006 2005
(unaudited) (unaudited)
Revenues $ 8,880 $ 8,615 3.1% $ 26,017 $ 22,972 13%
Gross Profit $ 1,830 $ 1,756 4.2% $ 5,131 $ 3,917 31%
Net income (loss) $ 200 $ 94 111% $ 493 $(11,617) 104%
EPS (Basic) $ 0.00 $ 0.00 --- $ 0.01 $ (0.35) 103%
EPS (Diluted) $ 0.00 $ 0.00 --- $ 0.00 $ (0.35) 100%
Weighted avg.
shares outstanding:
Basic 61,152 58,209 61,152 33,399
Diluted 282,981 282,438 282,981 33,399
Revenue: Revenue for the three months ended April 30, 2006 increased 3.1% to
$8,880,509, as compared to $8,615,431 for the same period in 2005. Revenues
for the nine months ended April 30, 2006 increased 13.3% to $26,017,314, as
compared to $22,972,424 for the same period in 2005. The increase in revenue
during the three and twelve months of 2006 was primarily the result of
continuing strong sales to our existing original equipment manufacturer
customers. Sales to our top ten customers increased by 10.1% and 21.3% for
the three and nine months ended April 30, 2006 respectively compared to the
same period in 2005.
Gross Profit. Gross profit for the three months ended April 30, 2006 was
$1,829,649 compared to $1,756,171 for the same period in 2005, an increase
of $73,478 or 4.2%. Gross profit for the nine months ended April 30, 2006
was $5,131,329, versus a gross profit of $3,917,188 for the same period in
2005. Gross margin improved to 21% and 20% for the three and nine months
ended April 30, 2006 from 20% and 17%, respectively, for the same period in
2005. The increase in gross margin is due to an increase in sales resulting
in fixed costs being spread over a larger number of units produced, and
consistent demand for premium services, which typically command a higher
margin.
Net Income: Net income available to stockholders for the three months ended
April 30, 2006 increased 111% to $200,083 or $.00 per share (diluted), as
compared to net income of $94,447 or $.00 per share (diluted) for the
same period in 2005. Net income for the nine months ended April 30, 2006
increased to $492,689 or $.00 per share (diluted), as compared to a loss
of $11.6 million or ($.35) per share (diluted) for the same period in 2005.
This increase in net income is mainly due to the increase in sales to our
top ten customers. The nine month period in 2005 included non-cash charges
of $7.6 million compensation expense and $4.2 million interest expense
related to stock options and a beneficial conversion feature respectively,
both of which are non-recurring.
Brad J Peters, Vice President and Chief Financial Officer of Integrated
Performance Systems, Inc. said, "We showed solid growth with our third
quarter and nine months financial results, particularly our gross profits
and the generation of cash. Our nine month revenue increased 13.3% when
compared to 2005 due to our continual quarterly growth from our primary
revenue sources. We have current assets substantially in excess of current
liabilities. Based on our current level of operations, we believe that cash
provided by operations along with funds available under our new five-year
term loan will be sufficient to fund our working capital needs, finance
capital expenditures and service our debt for the next twelve months and
beyond. We are moving confidently into the balance of 2006 with a strong
balance sheet, a healthy backlog and a platform for growth."
About Integrated Performance Systems, Inc.
Integrated Performance Systems, Inc. is a leading Electronic Manufacturer
Services (EMS) company through its wholly owned subsidiary Lone Star
Circuits, designs, engineers and manufactures technologically advanced
printed circuit boards. Our customers are generally high-end commercial
companies, the military and military suppliers. The commercial markets
are typically characterized by time-sensitive, high technology prototypes
and short product life cycles. The military markets require special
certifications and are characterized by high reliability and advanced
technology and in many cases are formalized by long-term contracts. Our
principal products are complex multi-layer printed circuit boards, including
antenna and metalback radio frequency circuit boards. Printed circuit boards
serve as the basis and foundation for electronic equipment. The circuit
boards we produce are sold through direct sales people and manufacturer's
representatives to a variety of commercial and military markets. The
commercial markets and their applications include power systems,
telecommunications, computer hardware, consumer electronics, instrumentation
and controls. The military applications for our products include satellite
communications, avionics, missiles, smart bombs, defense systems, radar
detection and test equipment.
Certain statements contained herein with respect to factors which may affect
future earnings, including management's beliefs and assumptions based on
information currently available, are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements that are not historical
facts involve risks and uncertainties, and results could vary materially
from the descriptions contained herein. For more details on risk factors,
see the company's annual reports on Form 10-K, quarterly reports on Form
10-Q and other filings with the Securities and Exchange Commission.
For More Information, Contact:
Brad J Peters, Vice President and Chief Financial Officer
1-800-303-9266
Jim Drewitz, Investor Relations
Creative Options Communications
972-355-6070
jdrewitz@comcast.net
Or visit the Company's website at http://www.integratedperformsys.com/
INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
(Unaudited)
April 30,
2006
------------
ASSETS
Current assets:
Cash $ 1,769,808
Trade accounts receivable, net of allowance
for doubtful accounts of $26,009 4,992,711
Prepaid expenses and other 302,919
Inventory 1,850,275
Deferred income tax asset 166,092
------------
Total current assets 9,081,805
Property and equipment, net 1,560,299
Other assets:
Goodwill 8,275,034
Customer base, net 3,568,488
------------
11,843,522
------------
Total assets $ 22,485,626
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,862,731
Accrued expenses (including $28,000 interest
to related party) 767,402
Income tax payable 198,176
Notes payable, current portion 389,878
------------
Total current liabilities 4,218,187
Noncurrent liabilities:
Long-term debt, net of current maturities 1,659,197
Note payable to related party 4,200,000
Deferred income tax liability 1,585,633
------------
Total long-term liabilities 7,444,830
Stockholders' equity:
Preferred stock; par value $0.01; 10,000,000
shares authorized
Series F Convertible; 300,000 shares authorized,
193,829 shares issued and outstanding 1,938
Common stock; par value $0.01; 100,000,000 shares
authorized; 61,152,194 shares issued and outstanding 611,522
Additional paid-in capital 17,839,618
Accumulated deficit (7,630,469)
------------
Total stockholders' equity 10,822,609
------------
Total liabilities and stockholders' equity $ 22,485,626
============
INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three Three Nine Nine
Months Ended Months Ended Months Ended Months Ended
April 30, April 30, April 30, April 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net sales $ 8,880,509 $ 8,615,431 $26,017,314 $22,972,424
Cost of sales 7,050,860 6,859,260 20,885,985 19,055,236
---------- ---------- ---------- ----------
Gross profit 1,829,649 1,756,171 5,131,329 3,917,188
---------- ---------- ---------- ----------
Expenses:
Selling, general and
administrative expenses 1,293,535 1,350,710 3,678,648 10,743,008
Amortization of customer
base 135,513 135,513 406,537 225,854
---------- ---------- ---------- ----------
1,429,048 1,486,223 4,085,185 10,968,862
---------- ---------- ---------- ----------
Income (loss) from
operations 400,601 269,948 1,046,144 (7,051,674)
---------- ---------- ---------- ----------
Other income (expense):
Interest expense (35,666) (62,978) (98,746) (143,012)
Interest expense -
related party (83,067) (80,000) (254,800) (4,333,333)
Interest income 3,469 70 4,995 226
Gain (loss) on
extinguishment of debt - - 2,510 -
Other income (expense) 42,177 6,700 76,643 21,685
---------- ---------- ---------- ----------
(73,087) (136,208) (269,398) (4,454,434)
---------- ---------- ---------- ----------
Income (loss) before
provision for income taxes 327,514 133,740 776,746 (11,506,108)
Provision for income taxes 127,431 39,293 284,057 110,566
---------- ---------- ---------- -----------
Net income (loss) $ 200,083 $ 94,447 $ 492,689 $(11,616,674)
========== ========== ========== ===========
Net income (loss) per share
Basic $ .00 $ .00 $ .01 $ (.35)
========== ========== ========== ==========
Diluted $ .00 $ .00 $ .00 $ (.35)
========== ========== ========== ==========
Weighted average common
shares
Basic 61,152,194 58,209,972 61,152,194 33,399,660
=========== =========== =========== ==========
Diluted 282,981,194 282,438,972 282,981,194 33,399,660
=========== =========== =========== ==========
INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended April 30,
---------------------------
2006 2005
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 492,689 $ (11,616,674)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 818,363 808,663
Stock based compensation - 7,689,000
Non-cash interest expense
from beneficial conversion feature - 4,200,000
Deferred tax expense 2,292 58,613
Disposal of property and equipment 98,250 -
Changes in operating assets and liabilities:
Trade accounts receivable (868,610) (641,351)
Inventory 230,155 (79,173)
Other receivables 20,957 (7,311)
Prepaid expenses and other (227,576) (50,387)
Income tax payable 930,194 -
Accounts payable 346,606 565,455
Accrued expenses (8,277) 362,773
------------ ------------
Net cash provided by operating activities 1,835,043 1,289,608
------------ ------------
Cash flows from investing activities:
Merger costs - (209,805)
Cash acquired through merger. - 78,763
Acquisition of property and equipment (148,379) (199,451)
------------ ------------
Net cash used in investing activities (148,379) (330,493)
------------ ------------
Cash flows from financing activities:
Net borrowings (payments) on line of credit (1,455,560) 945,560
Payments on long-term debt (530,563) (967,191)
Interest paid to related party (453,599) -
Borrowing on new term note 2,250,000 -
Collections on advances to related parties - 37,972
------------ ------------
Net cash provided (used) by financing
activities (189,722) 16,341
------------ ------------
Net increase in cash 1,496,942 975,456
Cash, beginning of period 272,866 218,000
------------ ------------
Cash, end of period $ 1,769,808 $ 1,193,456
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