SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 15, 2002 (NOVEMBER 6, 2002)
WHITE ELECTRONIC DESIGNS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
INDIANA 1-4817 35-0905052
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3601 E. UNIVERSITY DRIVE, PHOENIX, ARIZONA 85034
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(602)437-1520
(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 5. OTHER EVENTS.
WHITE ELECTRONIC DESIGNS ANNOUNCES FOURTH QUARTER AND FISCAL YEAR
END 2002 OPERATING RESULTS
Phoenix, AZ. November 6, 2002--White Electronic Designs Corporation (NASDAQ:
WEDC) today reported net sales and earnings for the fourth quarter ended
September 28, 2002 and the fiscal year ended September 28, 2002.
- - Q4 EARNINGS PER SHARE (EXCLUDING INCOME TAX BENEFIT): $0.11 BEFORE
GOODWILL
- - Q4 BASIC EARNINGS PER SHARE: $0.25 GAAP
- - Q4 REVENUES: $23,734,000
- - CASH-ON-HAND AS OF SEPTEMBER 28, 2002: $12 MILLION
Net sales for the quarter were $23,734,000, as compared to $23,204,000 in the
preceding quarter, and $21,379,000 in the prior year's fourth quarter. Earnings
before goodwill and before income tax benefit totaled $2,193,000, or $0.11 per
share for the quarter compared to earnings before goodwill of $1,727,000, or
$0.09 per share, in the immediately preceding quarter, and as compared to
earnings before goodwill of $1,950,000, or $0.10 per share for the same period
of fiscal 2001.
During the quarter, the Company also recognized the release of a tax valuation
allowance relating to deferred tax assets and other tax reserves, as well as a
foreign sales credit resulting in an income tax benefit of $3,082,000, or $0.15
per share. Including the income tax benefit, net income for the fourth quarter
fiscal 2002 on GAAP basis, was $4,949,000, or $0.25 basic earnings per share.
Net income after goodwill and prior to income tax benefit, totaled $1,867,000,
or $0.09 per share for the fourth quarter as compared to net income after
goodwill of $1,401,000, or $0.07 basic earnings per share, in the immediately
preceding quarter, and as compared to net income after goodwill of $1,630,000,
or $0.08 basic earnings per share, for the same period of fiscal 2001.
Net sales for the fiscal year ended September 28, 2002 were $90,458,000 as
compared to net sales of $96,761,000 in the prior fiscal year. Net income for
the fiscal year 2002, excluding goodwill amortization and tax allowance, was
$6,955,000 or $0.35 per share as compared to earnings before goodwill
amortization of $4,126,000, or $0.21 per share, in the prior year of fiscal
2001. Including the income tax benefit, net income for the fiscal year 2002 on a
GAAP basis, totaled $8,740,000, or $0.44 basic earnings per share.
Beginning with the new fiscal year 2003, White Electronic Designs will adopt the
Statement of Financial Accounting Standard No. 142 (SFAS 142) issued by the
Financial Accounting Standards Board. SFAS 142 prohibits the amortization of
goodwill but requires that goodwill and other indefinite lived intangible assets
be assessed for impairments at least on an annual basis. As a result, the
Company will cease amortization of goodwill, which will reduce the annual
amortization expense by approximately $1,297,000. In the future, any impairment
review may result in charges to earnings for any write down of the value of
goodwill. As of September 28, 2002, the Company was not aware of any impairment.
"Despite a challenging economic climate for high technology data and
telecommunications industries, our focus on diversification allowed us to
maintain quarterly revenue and profitability growth throughout fiscal year
2002," stated Hamid Shokrgozar, President and CEO of White Electronic Designs
Corporation. "While we are maintaining our focus on profitability, we are also
continuing our efforts in process technology and new product innovation, as we
believe these continued efforts are important for us to be competitive in the
markets we serve. Our balance sheet remains strong and continues to strengthen
during the quarter. With our existing cash balances, minimal long-term debt and
no outstanding balance on our line of credit, we remain optimistic about the
future," Shokrgozar concluded.
Conference Call and Web Cast
White Electronic Designs will host a teleconference today at 4:15 p.m. (Eastern
time) to discuss fourth quarter and fiscal year 2002 year-end results. A live
web cast of the call will be available at www.vcall.com by entering the ticker
symbol of WEDC. The online replay will be available shortly after the end of the
call and will be archived for 90 days.
White Electronic Designs Corporation designs, develops and manufactures
innovative solutions for three high technology sectors in military, industrial
and commercial markets; advanced semiconductor packaging, high-density memory
products and state-of-the-art microelectronic multichip modules for data
communications and telecommunications providers, defense and aerospace system
suppliers; ruggedized high-legibility flat panel display for commercial/military
aircraft and ordnance delivery systems; interface storage and retrieval devices,
and electro-mechanical assemblies for OEM's on commercial and military markets.
White is headquartered in Phoenix, Arizona, and has design and manufacturing
centers in Arizona, Massachusetts, Indiana and Oregon. To learn more about White
Electronic Designs Corporation's business, as well as employment opportunities,
visit our website, www.whiteedc.com. To learn more about White Electronic
Designs' subsidiary Panelview Incorporated, visit its website at
www.Panelview.com
This press release contains forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking
statements. The words, "believe," "expect," "anticipate," "estimate," and other
similar statements of expectation identify forward-looking statements.
Forward looking statements in this press release include statements relating to
the strength of our business, the anticipated fiscal year 2003 business outlook,
the effect of accounting changes on the amortization of goodwill, the
possibility of goodwill impairment, the appropriateness and amounts of expected
future expenditures for process technology and new product development, and the
ability to maintain cash balances and minimal debt positions. Such
forward-looking statements speak only as of the date the statement was made.
These forward looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, some of which cannot be
predicted or quantified, and are beyond the Company's control. Certain risks
that could cause results to differ materially from the Company's expectations
are described in Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 29, 2002, and under the heading "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended September 29, 2001.
Additional factors that could cause actual results to differ materially from
those expressed in such forward looking statements include, but are not limited
to, the loss of a significant customer, the inability to procure required
components, any further downturn in the high technology data and
telecommunications industries, reductions in military spending or changes in the
acquisition requirements for military products, the inability to develop,
introduce and sell new products or the inability to develop and implement new
manufacturing technologies, the ability to locate appropriate acquisition
candidates, negotiate an appropriate purchase price, and integrate into the
Company the people, operations, and products from acquired businesses, and
changes or restrictions in the practices, rules and regulations relating to
sales in international markets. In light of these risks and uncertainties, there
can be no assurance that the forward-looking statements in this press release
will prove to be accurate. We urge you to carefully consider the risks and
uncertainties that could cause actual results to differ materially from the
Company's expectations.
White Electronic Designs provides pro forma net income and pro forma earnings
before goodwill results as additional information for understanding its
operating results. These measures are not in accordance with, or an alternative
for, generally accepted accounting principles and may be different from pro
forma measures used by other companies. Pro forma net income and pro forma
earnings before goodwill are calculated as follows:
WHITE ELECTRONIC DESIGNS CORPORATION
PROFORMA FINANCIAL INFORMATION
(UNAUDITED)
(in thousands of dollars, except share and per share data)
Three months ended
September 28, 2002 September 29, 2001
Net income $ 4,949 $1,630
Recognized tax benefit $(3,082) $ 0
Amortization of Goodwill $ 326 $ 320
------- ------
Earnings Before Tax Benefit
and Amortization of Goodwill $ 2,193 $1,950
======= ======
Average shares outstanding 20,024,823 19,560,147
Earnings Before Tax Benefit
and Amortization of Goodwill
on a per share basis $ 0.11 $ 0.10
======= ======
Twelve months ended
September 28, 2002 September 29, 2001
Net income $ 8,740 $3,272
Recognized tax benefit $(3,082) $ 0
Amortization of Goodwill $ 1,297 $ 854
------- ------
Earnings Before Tax Benefit
and Amortization of Goodwill $ 6,955 $4,126
======= ======
Average shares outstanding 19,815,162 19,230,781
Earnings Before Tax Benefit
and Amortization of Goodwill
on a per share basis $ 0.35 $ 0.21
======= ======
Three months ended
September 28, 2002 June 29, 2002
Net income $ 4,949 $1,401
Recognized tax benefit $(3,082) $ 0
Amortization of Goodwill $ 326 $ 326
------- ------
Earnings Before Tax Benefit
and Amortization of Goodwill $ 2,193 $1,727
======= ======
Average shares outstanding 20,024,823 19,893,154
Earnings Before Tax Benefit
and Amortization of Goodwill
on a per share basis $ 0.11 $ 0.09
======= =======
WHITE ELECTRONIC DESIGNS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands of dollars, except share and per share data)
Three months ended
September 28, September 29,
2002 2001
------------ ------------
Revenues $ 23,734 $ 21,379
Cost of revenues 15,867 14,638
------------ ------------
Gross profit $ 7,867 $ 6,741
------------ ------------
Operating expenses:
Research and development 1,115 1,116
Selling, general and administrative 3,323 3,942
Amortization of intangible assets 398 392
Interest expense/(income) 20 16
------------ ------------
Total expenses $ 4,856 $ 5,466
------------ ------------
Income before income taxes 3,011 1,275
Provision for income taxes (1,938) (355)
------------ ------------
Net income $ 4,949 $ 1,630
------------ ------------
Basic net income per share $ 0.25 $ 0.08
Basic weighted average common shares and equivalents 20,024,823 19,560,147
------------ ------------
Diluted net income per share $ 0.24 $ 0.08
Diluted weighted average-common shares
and equivalents 20,986,760 19,924,352
============ ============
Twelve months ended
September 28, September 29,
2002 2001
------------ ------------
Revenues $ 90,458 $ 96,761
Cost of revenues 61,558 70,360
------------ ------------
Gross profit $ 28,900 $ 26,401
------------ ------------
Operating expenses:
Research and development 4,264 5,302
Selling, general and administrative 13,939 15,222
Amortization of intangible assets 1,587 1,144
Interest expense/(income) (18) 480
------------ ------------
Total expenses $ 19,772 $ 22,148
------------ ------------
Income before income taxes 9,128 4,253
Provision for income taxes 388 981
------------ ------------
Net income $ 8,740 $ 3,272
------------ ------------
Basic net income per share $ 0.44 $ 0.17
Basic weighted average common shares and equivalents 19,815,162 19,230,781
------------ ------------
Diluted net income per share $ 0.42 $ 0.16
Diluted weighted average-common shares
and equivalents 20,922,434 20,528,337
============ ============
WHITE ELECTRONIC DESIGNS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands of dollars)
September 28, September 29,
2002 2001
------------ ------------
ASSETS
Current Assets
Cash $ 12,097 $ 5,032
Accounts receivable, less allowance for
doubtful accounts of $626 and $638 14,916 14,020
Inventories, net 16,109 16,707
Prepaid expenses 575 594
Deferred income taxes 3,995 2,741
------------ ------------
Total Current Assets 47,692 39,094
Property, plant and equipment, net 10,481 7,914
Deferred income taxes 3,122 1,934
Goodwill and intangibles 6,886 8,086
Other assets, net 185 200
------------ ------------
Total Assets $ 68,366 $ 57,228
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ -- $ 628
Accounts payable 6,037 5,798
Accrued salaries and benefits 2,344 1,874
Accrued expenses 3,842 2,910
------------ ------------
Total Current Liabilities 12,223 11,210
Accrued long-term pension liability 671
Long term debt -- 890
Other long term liabilities 702 1,348
------------ ------------
Total Liabilities $ 13,596 $ 13,448
------------ ------------
Shareholders' Equity
Preferred stock, authorized 500,000, no shares issued -- --
Common stock, $0.10 stated value, authorized 60,000,000
shares issued 20,091,542 and 19,594,124 2,009 1,959
Treasury stock, 44,442 and 44,442 shares, at cost (4) (4)
Additional paid-in capital 53,313 50,858
Accumulated deficit (293) (9,033)
------------ ------------
55,025 43,780
Less accumulated other comprehensive loss 255 --
------------ ------------
Total Shareholders' Equity 54,770 43,780
------------ ------------
Total Liabilities and Shareholders' Equity $ 68,366 $ 57,228
============ ============
SIGNATURES
Pursuant to the Requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WHITE ELECTRONIC DESIGNS CORPORATION
Date: November 15, 2002 By: /s/ Hamid R. Shokrgozar
-----------------------------------------
Hamid R. Shokrgozar
Chairman, President and Chief Executive Officer