MANKATO, Minn., March 20 /PRNewswire-FirstCall/ -- FlashResults
Winland Electronics, Inc. (AMEX:WEX)
(Numbers in Thousands, Except Per Share Data) 4th quarter ended 4th quarter ended
12/31/2007 YTD 12/31/2006 YTD Sales $7,492 $34,746 $9,186 $37,945
Net Income $7 $(263) $51 $1,038
Average Shares 3,635 3,615 3,640 3,654
EPS $0.00 $(0.07) $0.01 $0.28
Winland Electronics, Inc. (AMEX:WEX), a leading designer and manufacturer of custom electronic control products and systems, today announced financial results for the fourth quarter and year ended December 31, 2007.
Net sales for the fourth quarter were $7.5 million, a decrease of 18.8 percent compared to $9.2 million reported for the fourth quarter of 2006. The decrease was primarily due to lower sales from Winland's major customer, Select Comfort, offset in part by increased sales to existing and new customers.
Gross profit for the fourth quarter was $1.2 million, or 16.0 percent of sales, down from the $1.5 million or 16.1 percent of sales for the fourth quarter of 2006. Decreased gross profit was primarily due to the reduction in sales for the quarter.
Operating expenses were $1.4 million in the fourth quarter compared to $1.3 million for the fourth quarter of 2006. The Company accrued $197,000 in the fourth quarter of 2007 for the severance package payable to its former Chief Executive Officer on January 2, 2008.
Winland incurred a loss from operations of $189,000 for the fourth quarter 2007 compared to income from operations of $132,000 for the same period of 2006. Fourth quarter net income was $7,000, or $0.00 per basic and fully diluted share (based on 3.6 million basic and fully diluted shares), compared to net income of $51,000, or $0.01 per basic and fully diluted share (based on 3.6 million basic and fully diluted shares) for the same period last year.
For the year ended December 31, 2007, net sales decreased 8.4 percent to $34.7 million from $37.9 million for the full year of fiscal 2006. Gross profit was $4.8 million, or 13.8 percent, compared to gross profit of $6.5 million, or 17.1 percent for the full year of fiscal 2006. Total operating expenses were $5.4 million, up 13.6 percent compared to $4.8 million for 2006 due, in large part, to an increase in research and development expense related to investments in Winland's proprietary line of products. The Company incurred an operating loss of $620,000 compared to income from operations of $1.7 million in the same period last year. The net loss was $263,000, or $(0.07) per basic and fully diluted share (based on 3.6 million basic and fully diluted shares) compared to net income of $1.0 million, or $0.29 per basic and $0.28 per fully diluted share (based on 3.6 million and 3.7 million basic and fully diluted shares, respectively) for the full year of fiscal 2006.
Stockholders' equity was $10.4 million as of December 31, 2007 consistent with 2006. The Company completed the fourth quarter 2007 with $7.0 million in working capital, a current ratio of 3.1 to 1 and cash of $1,152,000. At December 31, 2007, Winland had no balance outstanding on its bank revolving line-of-credit agreement compared to $1.9 million outstanding at December 31, 2006.
Thomas de Petra, Winland's Interim Chief Executive Officer, commented, "2007 was a disappointing year. The biggest setbacks were in our EMS business, which has accounted for approximately 88-90 percent of our sales in recent years. Subsequent to year end, we took a hard look at root cause issues related to manufacturing, operations, information systems, materials and inventories. As a result, during the first quarter of 2008, we launched a major internal restructuring that aligns the strongest members of our team to improved processes and initiatives and a growth culture for the company's future. This restructuring resulted in five team-driven initiatives and new leadership positions for four skilled and experienced individuals." Mr. de Petra continued, "We started in the area of supply chain management with the hiring of a senior level executive in that area. He brings high level experience from both the EMS and OEM perspectives of our business, and has been charged with bringing world-class supply chain management practices to Winland. Next, we reorganized manufacturing and operations with new leadership from within the company. These talented individuals are leading teams on specific initiatives designed to improve production processes and quality, reduce waste, and better integrate new customers and new products into manufacturing. Other initiatives are being taken to improve access to data and analytics in support of more robust program management and quotation capabilities." Because of the high cost of new product development, Winland has adjusted the growth rate of its proprietary Critical Environmental Monitoring products from aggressive to a more moderate growth rate that is consistent with the Company's size and other objectives. As a result, the balance of investment will shift toward domestic and European marketing and sales, with less emphasis on research and development. The Company anticipates that expenditures for new product development will yield a new Critical Environmental Monitoring product which is expected to be introduced during the first half of this year. Through the balance of 2008, the Company will be managing the growth of proprietary Critical Environmental Monitoring products in a way that is minimally distracting from the aggressive growth objectives set for the EMS business.
Mr. de Petra concluded, "Our objective is for Winland to reliably support an aggressive growth strategy combining organic growth and selective acquisitions, and to expand and enhance our product and service offerings geographically. Industry data indicates significant revenue and profit opportunities in high-service, customer-intimate industry segments where low-cost, offshore providers don't align well to customer needs. With the actions being taken now, I am very encouraged about a future where we can control more of the elements of our success. This will take time, but the opportunity is now, the team is right and successful execution can deliver the rewards we all want." Conference Call Management will conduct a conference call to discuss its financial results for the fourth quarter and year end December 31, 2007 today at 4:30 p.m. ET. Interested parties may access the call by calling 1-800-762-8795 from within the United States, or 1-480-629-9572 if calling internationally, approximately five minutes prior to the start of the call. A replay will be available through March 27, 2008 and can be accessed by dialing 1-800-406-7325 (U.S.), 1-303-590-3030 (Int'l), passcode 3856538.
This call is being web cast by ViaVid Broadcasting and can be accessed at Winland Electronics' website at http://www.winland.com/. The web cast may also be accessed at ViaVid's website at http://www.viavid.net/. The web cast can be accessed until April 20, 2008 on either site. To access the web cast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.
About Winland Electronics
Winland Electronics is an electronic manufacturing services (EMS) company, providing product development and manufacturing expertise and innovation for more than 20 years. Winland also markets proprietary products for the security/industrial marketplace. Winland's product development offering includes program management, analog circuit design, digital circuit design, printed circuit board design and embedded software design. Winland differentiates itself from the contract manufacturer competition with its integrated product development and manufacturing services to offer end-to-end product launch capability, including design for manufacturability, design for testability, transition to manufacturing and order fulfillment. Winland's core competency is delivering time-to-market through superior program management, experience, integrated development processes, and cross-functional teams. Winland Electronics is based in Mankato, Minnesota.
Cautionary Statements Certain statements contained in this press release and other written and oral statements made from time to time by the Company do not relate strictly to historical or current facts. As such, they are considered forward-looking statements, which provide current expectations or forecasts of future events. The statements included in this release with respect to the following matters are forward looking statements; (i) our expectation to release a new Critical Environmental Monitoring product in the first half of 2008; and (ii) our expectation to support a growth strategy and enhance our product and service offering geographically. These statements involve a variety of risks and uncertainties, known and unknown, including, among others, the risks that (i) we may encounter unexpected delays in the development of a new Critical Environmental Monitoring product that causes a delay in its release; (ii) our we may encounter obstacles in our attempt to support a growth strategy and to enhance our product and service offering geographically. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially.
CONTACT: Thomas P. de Petra Cameron Donahue
Interim Chief Executive Officer Hayden Communications
(507) 625-7231 (651) 653-1854
http://www.winland.com/ Winland Electronics, Inc. Balance Sheets
December 31, 2007 and 2006
(In Thousands, Except Share Data) December 31,
Assets 2007 2006 Current Assets
Cash $1,152 $50
Accounts receivable, less allowance
for doubtful accounts of $25,000
in 2007 and $20,000 in 2006 3,436 5,165
Refundable income taxes 389 237
Inventories 4,708 6,994
Prepaid expenses and other assets 253 364
Deferred income taxes 400 278
Total current assets 10,338 13,088 Property and Equipment, at cost
Land and land improvements 383 383
Building 3,052 3,048
Machinery and equipment 6,798 6,863
Data processing equipment 1,128 1,003
Office furniture and equipment 466 457
Total property and equipment 11,827 11,754 Less accumulated depreciation 6,410 5,975
Net property and equipment 5,417 5,779
Total assets $15,755 $18,867 Winland Electronics, Inc. Balance Sheets
December 31, 2007 and 2006
(In Thousands, Except Share Data) December 31,
Liabilities and Stockholders' Equity 2007 2006 Current Liabilities
Revolving credit agreement $- $1,924
Current maturities of long-term debt 512 627
Accounts payable 1,729 2,830
Accrued expenses:
Compensation 733 673
Other 379 323
Total current liabilities 3,353 6,377 Long-Term Liabilities
Long-term debt, less current maturities 1,471 1,706
Deferred income taxes 282 255
Deferred revenue 138 146
Other long term tax liabilities 129 -
Total long-term liabilities 2,020 2,107 Total liabilities 5,373 8,484 Stockholders' Equity
Common stock, par value $0.01 per
share; authorized 20,000,000
shares; issued and outstanding
3,640,741 shares in 2007 and
3,599,856 shares in 2006 36 36
Additional paid-in capital 4,691 4,429
Retained earnings 5,655 5,918
Total stockholders' equity 10,382 10,383
Total liabilities and stockholders'
equity $15,755 $18,867 Winland Electronics, Inc. Statements of Operations
(In Thousands, Except Share Data) For the three months For the years ended
ended December 31, December 31, 2007 2006 2007 2006 Net sales $7,492 $9,186 $34,746 $37,945
Cost of sales 6,294 7,704 29,960 31,440
Gross profit 1,198 1,481 4,786 6,505 Operating expenses:
General and administrative 724 677 2,648 2,480
Sales and marketing 472 440 1,709 1,637
Research and development 191 232 1,049 642
1,387 1,349 5,406 4,759 Operating income (loss) (189) 132 (620) 1,746 Other income (expenses):
Interest expense (35) (78) (261) (187)
Other, net 49 1 89 9
14 (77) (172) (178) Income (loss) before income
taxes (175) 55 (792) 1,568 Income tax benefit (expense) 182 (4) 529 (530)
Net income (loss) $7 $51 $(263) $1,038 Earnings (loss) per common share data:
Basic $0.00 $0.01 $(0.07) $0.29
Diluted $0.00 $0.01 $(0.07) $0.28 Weighted-average number of
common shares outstanding:
Basic 3,635,446 3,584,296 3,615,108 3,553,062
Diluted 3,635,446 3,640,255 3,615,108 3,653,891
DATASOURCE: Winland Electronics, Inc.
CONTACT: Thomas P. de Petra, Interim Chief Executive Officer of Winland Electronics, Inc., +1-507-625-7231; or Cameron Donahue of Hayden Communications, +1-651-653-1854, for Winland Electronics, Inc.
Web site: http://www.winland.com/
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