Exhibit 99.1
DPAC Technologies Reports Financial Results for Quarter and
Fiscal Year Ended February 29, 2004
GARDEN GROVE, Calif.--(BUSINESS WIRE)--April 21, 2004--DPAC
Technologies Corp. (Nasdaq:DPAC):
-- Fiscal year 2004 ends with non-cash write-offs as DPAC
transitions to new product lines for industrial wireless
connectivity solutions
-- DPAC's Airborne wireless solutions products seen as providing
strong opportunity for future growth.
DPAC Technologies Corp. (Nasdaq:DPAC), a provider of wireless
connectivity solutions and space-saving specialty high density
electronic components, today reported results for its year ended
February 29, 2004 and its fourth quarter of fiscal year 2004.
Fiscal Year Operating Results
For the fiscal year ended February 29, 2004, revenue was $19.6
million, a 43.3 percent decrease from prior fiscal year revenue of
$34.5 million. The loss, before income taxes, for the fiscal year was
$9.2 million, compared with pre-tax income of $0.7 million for fiscal
year 2003. The fiscal year 2004 results include $3.9 million ($1.2
million of which is included in cost of sales), in asset write-downs,
severance and other restructuring charges incurred due to the
decreased demand of the legacy product line and also the positioning
of the company to focus on the growth of the wireless connectivity
products. In addition, during the third quarter of fiscal year 2004
the Company had fully reserved its previously recognized deferred tax
asset, resulting in a charge to yearend earnings of $4.8 million. This
results in a net loss for the fiscal year ended February 28, 2004 of
$13.9 million or $0.66 per diluted share as compared to net income of
$2.5 million or $0.12 per diluted share for the previous fiscal year.
At the end of fiscal year 2004, the Company had $19.5 million in
available tax loss carry-forwards for utilization against future
taxable earnings. Research and Development costs were $2.8 million in
fiscal year 2004 compared to $2.1 million in the previous year.
Fourth Quarter Fiscal 2004 Operating Results
Fourth quarter revenue was $5.6 million, a 9.7 percent decrease
from revenue of $6.2 million for the fourth quarter of fiscal year
2003. Net loss for the fourth quarter was $4.5 million or $0.21 per
diluted share, as compared to net loss of $0.4 million or $0.02 per
diluted share for the same period last year. The fourth quarter
results for fiscal year 2004 include $3.1 million in severance, asset
write-downs and restructuring costs.
Fourth quarter SG&A (sales, marketing and general administrative)
expenses were $1.48 million in the current year compared with $1.51
million in the fourth quarter of 2003. The slight decrease in SG&A was
primarily related to a decrease in payroll and other costs associated
with the stacking product line. Included in the fourth quarter were
restructuring and impairment charges relating to $1.16 million in
severance related costs, $960,000 in the write-off of the DuraStack
equipment and $320,000 relating to a cancelled lease. Research and
development expenses were $560,000 or 9.9 percent of revenue, compared
to $690,000 or 11.1 percent of revenue for the fourth quarter of
fiscal 2003, reflecting the completion of the initial Airborne
wireless products and the shift to a production environment.
Balance Sheet Summary
At February 29, 2004, DPAC had total assets of $13.1 million,
including cash and cash equivalents of $4.5 million. Shareholders
equity at February 29, 2004 was $10.1 million.
Comment and Outlook
Kim Early, DPAC's interim chief executive officer, commented on
the fiscal year 2004 performance and discussed the new wireless market
and product opportunities for the Company:
"Since my appointment to this position, I have strived to define
the challenges the company faced in dealing with declining stacking
revenues, a stalled development effort for the DuraStack product, and
the introduction of the Airborne product line. Though our results
reflect the painful cost of confronting these issues, I believe we
have made significant progress in defining our opportunities, making
the necessary decisions and putting the company in position to grow
and prosper long-term. Though our work to re-position the company is
not complete, I believe we are now on track to take advantage of the
opportunity to become a leader in industrial wireless connectivity
solutions.
"We begin the new fiscal year with a clear vision of the
opportunities as well as the challenges we face. We are excited about
our prospects for long-term growth and a return to profitability. I
believe we have a highly motivated team with the right product at the
right time to build an energetic, profitable and growth business in
the industrial wireless and connectivity market. We are optimistic
that the coming year should reflect these improved opportunities for
DPAC employees and shareholders."
Conference Call
Management of DPAC will host a conference call today at 10:30 a.m.
Pacific/1:30 p.m. Eastern to discuss the fiscal year 2004 operating
performance and its new wireless technology. The conference call will
feature Interim Chief Executive Officer Kim Early and Chief Financial
Officer William Stowell. To participate on the live call, please dial
888-413-5357. A phone replay will be available for 48 hours (beginning
two hours after the completion of the conference call) by dialing
888-266-2081 and entering the passcode 445933.
About DPAC Technologies
Based in Garden Grove, California, DPAC Technologies provides
wireless high-density unique and patented component packaging
technology to create high-density, space-saving surface mount
electronic components. DPAC's products are used in electronic circuits
found in network servers, computer storage devices, guidance systems,
medical instrumentation, and communication devices. The Company's web
site address is www.DPACTech.com.
Forward-Looking Statements
This press release includes forward-looking statements, including
statements regarding management's current beliefs concerning the
Company's market, technology development, expansion and business
plans, the use of its technology in wireless systems, relationships in
price parity of existing technology with future technology, and the
need for wireless products, which are subject to change. Every
statement herein that is not historic in nature is a forward-looking
statement for purposes of the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements involve
risks and uncertainties, which may differ materially from those set
forth in these statements. Factors that affect DPAC's business
include, but are not limited to, the success of Airborne products,
future business opportunities with products, the wireless and
semiconductor market, protection of technology or proprietary rights,
risks of litigation, and general market and economic conditions. More
information about the risks and challenges faced by DPAC Technologies
Corp. is contained each or any of the Securities and Exchange
Commission filings made by the Company on Forms 10-K, 10-Q or 8-K.
DPAC Technologies Corp. specifically disclaims any obligation to
update or revise any forward-looking statements whether as a result of
new information, future developments or otherwise.
DPAC TECHNOLOGIES CORP.
Condensed Balance Sheet Information
(Unaudited)
(In 000's)
February 29, February 28,
2004 2003
-------- --------
Cash $4,477 $8,197
-------- --------
Current assets $6,615 $12,557
Fixed assets, net 1,538 3,863
Goodwill 4,529 4,529
Deferred
income taxes-LT -- 4,554
Other assets 406 250
-------- --------
Total assets $13,088 $25,753
======== ========
Current liabilities $2,338 $2,257
Long-term debt 689 99
Shareholders' equity 10,061 23,397
-------- --------
Total liabilities and
shareholders' equity $13,088 $25,753
======== ========
DPAC TECHNOLOGIES CORP.
Condensed Statement of Income
(Unaudited)
For Periods Ended February 28, 2003 and
February 29, 2004
(in 000's, except per share data)
Fourth Quarter Fiscal Year
------------- -------------
2004 2003 2004 2003
---- ---- ---- ----
Sales $5,641 $6,249 $19,567 $34,490
Cost of sales 5,640 4,654 18,144 25,693
------ ------ ------ ------
Gross profit 1 1,595 1,423 8,797
------ ------ ------ ------
Sales, general & administrative costs 1,483 1,507 5,121 6,110
Research and development 560 692 2,829 2,061
Restructuring and impairment charges 2,442 -- 2,654 --
------ ------ ------ ------
Total operating costs 4,485 2,199 10,604 8,171
------ ------ ------ ------
Income (loss) from operations (4,484) (604) (9,181) 626
Other income (expense), net 1 7 21 41
------ ------ ------ ------
Income (loss) before income taxes (4,483) (597) (9,160) 667
Provision (benefit) for income taxes -- (204) 4,764 (1,791)
------ ------ ------ ------
Net income (loss) $(4,483) $(392)$(13,924) $2,458
====== ====== ====== ======
EPS - Basic $(0.21)$(0.02) $(0.66) $0.12
EPS - Diluted $(0.21)$(0.02) $(0.66) $0.12
Basic Shares 21,221 20,988 21,102 21,011
Diluted Shares 21,221 20,988 21,102 21,233
CONTACT: DPAC Technologies
William M. Stowell, Chief Financial Officer
Kim Early, Interim Chief Executive Officer
714-898-0007
William.Stowell@dpactech.com / Kim.Early@dpactech.com
www.dpactech.com