EXHIBIT 99.1
FFI REPORTS RECORD FIRST QUARTER
REVENUE AND OPERATING INCOME
INDIANAPOLIS, INDIANA -- January 11, 2007 - Fortune Industries, Inc. (AMEX:FFI)
announced today record quarterly revenue for the first quarter ended November
30, 2006.
HIGHLIGHTS
Revenue for the three months ended November 30, 2006 were $40.7 million as
compared to $36.4 million for the same period of 2005, representing a 12%
increase and record first quarter results. Quarterly operating income was $1.6
million (or $1.4 million net of $0.2 million related to the Company's
consolidation of a variable interest entity), a record for the Company's first
quarter. Net income available to common shareholders for the three months ended
August 31, 2006 was $726,000 or $0.07 and $0.06 per basic and diluted share,
respectively, as compared to $847,000 or $0.08 per basic and diluted share for
the same period of 2005, representing a 14% decrease.
"Four out of five of our segments reported an increase in operating income,"
stated John Fisbeck, CEO. "I am extremely pleased with our operating
performance. We reported record revenue for our first quarter and four out of
our five segments reported an increase in quarterly revenue. Our net income
decreased primarily as a result of an increase of interest expense and preferred
stock dividends of $0.4 million."
"We continue to make cash payments on our convertible debt note, with each
payment equating to a reduction of approximately 41,000 diluted shares
outstanding. As of today Laurus has approximately 1.2 million shares that are
diluted shares outstanding."
In connection with the Company's quarterly earnings results, the Company
consolidated a related-party real-estate holding company as a variable interest
entity in accordance with the Financial Interpretation No. 46R. As such, the
consolidated results of the Company includes operating income of $177,000
related to this entity. Net income of $40,000 related to this entity is
eliminated from the Company's consolidated results.
SEGMENT ANALYSIS
Results are described under the Company's five reportable as follows:
Wireless Infrastructure revenue increases were due mainly to increased demand
for products and services offered by our companies due to the cellular
communication industry's investment in expansion of their networks and increased
marketing of our services. Operating income improved as a result of revenue
growth and operating performance offset by geographic and branch expansion and
hiring and training of new employees.
Business Solutions revenue increases were due to increases in customer base.
Operating income decreased as a result of an increase in unfavorable claims
experience in health and workers compensation insurance programs.
Transportation Infrastructure revenue decreases were due to the completion of
several long-term contracts and unfavorable fall weather conditions. Operating
income increased as a result of improved results in certain geographic divisions
and favorable job closing costs.
Ultraviolet Technologies revenue increases were due to new product offerings.
Operating income marginally increased as a result of revenue growth and a
decrease in sales personnel offset by office expansion.
Electronics Integration revenue increases were due to additional service
offerings in electronics installation of and new commercial customer electronic
sales. Operating income increased as a result of revenue increases, offset by an
increase in administrative and sales personnel.
Holding Company and Other expenses decreased slightly as a result of the
consolidation of a variable interest entity and implementation of a self-insured
health program offset by increased accounting personnel and third party legal
and accounting fees.
BUSINESS OUTLOOK
"I believe we continue to perform above and beyond expectations as a result of a
strong management team," stated Fisbeck. "Our continued focus for fiscal 2007
will be on earnings growth, improvements to our leverage ratio, and integration
of operations under each reportable segment through software conversion and
operating environments."
"Our turn-key service offerings within our Wireless Infrastructure segment
continue to drive revenue growth nationally. We expect additional growth
opportunities within the wireless industry due to the build-out and upgrades of
the wireless networks in the United States."
"Our Business Solutions performance will level off after significant
year-over-year growth as a result of our investment in various acquisitions over
the past few years. We continue to expect to allocate additional capital
resources to this segment over the next twelve to twenty four months to fund
growth efforts."
"Our Transportation Infrastructure segment has benefited from funding of federal
and state highway safety projects, market conditions and commercial steel
erection. With the completion of a number of larger projects in fiscal 2006, we
expect to focus on continuing to drive our earnings results, as our revenue is
largely dependent on the release of state and federal highway funds."
"Our Ultraviolet Technologies segment continues to grow as a result of our
investment in innovative new technologies and products. We have seen a
substantial increase in product closings that will be realized over the next six
months. We will continue to push sales efforts in the Asian markets."
"Our Electronics Integration segment growth is largely due to several new
customer relationships that have been established as a result of an expansion of
vendor product offerings over the past few years. We also have seen sales
increases as a result of our investment in businesses involved in the
installation of commercial and residential electronics. We expect to realize the
investment in our start-up electrical business over the next twelve months."
ABOUT FORTUNE INDUSTRIES, INC.
Fortune Industries, Inc. operates as a technology-based service company in the
United States. It provides technology solutions to businesses in five segments:
Wireless Infrastructure, Business Solutions, Transportation Infrastructure,
Ultraviolet Technologies and Electronics Integration. The Wireless
Infrastructure segment provides turnkey solutions directly to wireless carriers
in 20
states and provides other specialty infrastructure services. The Human Resource
Solutions segment provides professional employment organization (PEO) services
to small and medium sized businesses with up to 1,000 employees in over 44
states including human resource consulting & management, employee assessment,
training, and benefits administration. The Transportation Infrastructure segment
provides the installation of highway safety products and commercial structural
steel. The Ultraviolet Ink segment provides worldwide state--of-the-art UV ink
technology solutions. The Electronics Integration segment provides sales and
installation of commercial electronics.
Fortune Industries is based in Indianapolis, Indiana and is publicly traded on
the American Stock Exchange under the symbol FFI. Additional information about
Fortune Industries, Inc. can be found at www.ffi.net.
This press release and other statements by Fortune Industries, Inc. may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are typically
identified by words or phrases such as "believe", "expect", "estimate",
"potential", or future/conditional verbs such as "will", "should", and "could"
or the negative of those terms or other variations of them or by comparable
terminology. The absence of such terms, however, does not mean that the
statement is not forward-looking. Any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties that could
cause actual results to differ materially. Factors that might cause or
contribute to such differences, include, but are not limited to, the risks and
uncertainties that are discussed under the heading "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" within the Company's Form 10-K for the year ended August 31, 2006.
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 should carefully review the risk factors disclosed
within the Company's Form 10-K and other documents filed by the Company with the
Securities and Exchange Commission.
CONSOLIDATED FINANCIAL INFORMATION
Financial highlights are as follows:
Three Month Period Ended
November 30,
---------------------------
2006 2005
-------- --------
(Dollars in thousands, except per share data)
CONSOLIDATED
Total Revenue $ 40,684 $ 36,443
Operating Income 1,625 1,300
Net Income 850 847
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Net Income Available to Common Shareholders $ 726 $ 847
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Net Income per Share:
Basic $ 0.07 $ 0.08
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Diluted $ 0.06 $ 0.08
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SEGMENT DATA
Segment Revenue
Wireless Infrastructure $ 8,996 $ 6,824
Business Solutions 11,630 9,738
Transportation Infrastructure 12,747 14,102
Ultraviolet Technologies 3,049 2,697
Electronics Integrations 4,257 3,082
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Subtotal Revenue 40,679 36,443
Variable interest entity 5 -
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Total Revenue $ 40,684 $ 36,443
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Segment Operating Income
Wireless Infrastructure $ 547 $ 336
Business Solutions 738 973
Transportation Infrastructure 593 550
Ultraviolet Technologies 83 82
Electronics Integrations 337 86
Holding Company (850) (727)
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Subtotal Operating Income 1,448 1,300
Variable interest entity 177 -
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Total Operating Income $ 1,625 $ 1,300
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Net Income Available to Common Shareholders $ 726 $ 847
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CONTACT
Fortune Industries, Inc.
Amy Gallo, Chief Financial Officer
(317) 532-1374