| Southwall Announces 2009 Fourth Quarter and Full Year Results |
| PALO ALTO, Calif., Mar 25, 2010 (BUSINESS WIRE) -- Southwall Technologies Inc. (OTCBB:SWTX) announced fourth quarter 2009 revenue of $8.7 million, an increase of 23% as compared to the fourth quarter of 2008, reflecting a stabilizing economy. Full year 2009 revenue was $32.1 million, a 23% decrease over 2008. The full-year revenue decline was broad-based and driven by the poor economic climate, particularly in the first half of the year.
Net income and fully diluted earnings per share for the fourth quarter of 2009 were $1.2 million and $0.03, respectively, as compared with a net loss of $0.2 million, or a loss of $0.01 per fully diluted share, in the fourth quarter of 2008. The increase was primarily due to higher gross profit attributable to higher sales volumes and was partially offset by an increase in losses incurred by our insulating glass joint venture. Year end 2009 net income was $5.7 million, an increase of approximately 9% as compared to 2008. Year end 2009 earnings per fully diluted share was $0.16 as compared to $0.15 for the year ended 2008. The increase was primarily due to improved gross margins attributable to improved production efficiency, controlled operating expenses, and a gain recognized in the first quarter of 2009 relating to the settlement of our Matrix debt.
"In a tough year, we maintained our long-term focus on growth while delivering respectable results - a great tribute to the employees of Southwall," said Dennis Capovilla, Chief Executive Officer. "Despite the challenging economy, we invested in growth, retired debt, increased profitability and generated cash. This positions us well for continued growth of our energy efficiency products in 2010."
About Southwall Technologies Inc.
Southwall Technologies is the leading innovator of energy-saving films and glass products that dramatically improve the energy efficiency of buildings, homes and cars. Southwall is an ISO 9001/2000/14001-certified manufacturer with customers in over 25 countries around the world.
This press release may contain forward-looking statements, including, without limitation, statements regarding the Company's expectations, beliefs, intentions, or strategies regarding the future.All forward-looking statements in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements.These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented.These risks include the possibility that the Company's expected future results will be materially worse than estimated, that the Company may not continue to be profitable in future quarters or may not be able to achieve future long-term growth, that there will be a decline in one or more portions of our business in 2010 or thereafter, that the Company will not be successful in improving operations performance or controlling costs, that the Company will suffer a decline in manufacturing or financial effectiveness, that the Company's new product development will not be successful, that there may be decreasing demand in certain markets and that the Company will not be able to secure additional financing if required, as well as risks associated with its failure to meet potential covenant requirements under future credit facilities.Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2008, filed on March 26, 2009.
|
| SOUTHWALL TECHNOLOGIES INC. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Twelve months ended |
|
|
December 31,
2009 |
|
|
December 31,
2008 |
|
|
December 31,
2009 |
|
|
December 31,
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
$ |
8,673 |
|
|
|
$ |
7,033 |
|
|
|
$ |
32,103 |
|
|
|
$ |
41,920 |
|
| Cost of revenues |
|
|
4,150 |
|
|
|
|
4,315 |
|
|
|
|
17,704 |
|
|
|
|
24,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
|
4,523 |
|
|
|
|
2,718 |
|
|
|
|
14,399 |
|
|
|
|
17,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
| Research & development |
|
|
756 |
|
|
|
|
624 |
|
|
|
|
2,874 |
|
|
|
|
2,996 |
|
| Selling, general and administrative |
|
|
2,227 |
|
|
|
|
2,028 |
|
|
|
|
8,037 |
|
|
|
|
8,199 |
|
| Restructuring recoveries |
|
|
(56 |
) |
|
|
|
- |
|
|
|
|
(56 |
) |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total operating expenses |
|
|
2,927 |
|
|
|
|
2,652 |
|
|
|
|
10,855 |
|
|
|
|
11,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from operations |
|
|
1,596 |
|
|
|
|
66 |
|
|
|
|
3,544 |
|
|
|
|
6,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense, net |
|
|
(78 |
) |
|
|
|
(154 |
) |
|
|
|
(570 |
) |
|
|
|
(586 |
) |
| Other income (expense), net |
|
|
(367 |
) |
|
|
|
61 |
|
|
|
|
2,844 |
|
|
|
|
(62 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before provision for (benefit from) income taxes |
|
|
1,151 |
|
|
|
|
(27 |
) |
|
|
|
5,818 |
|
|
|
|
5,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for (benefit from) income taxes |
|
|
(20 |
) |
|
|
|
185 |
|
|
|
|
154 |
|
|
|
|
511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
|
1,171 |
|
|
|
|
(212 |
) |
|
|
|
5,664 |
|
|
|
|
5,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deemed dividend on preferred stock |
|
|
123 |
|
|
|
|
122 |
|
|
|
|
489 |
|
|
|
|
489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) attributable to common stockholders |
|
$ |
1,048 |
|
|
|
$ |
(334 |
) |
|
|
$ |
5,175 |
|
|
|
$ |
4,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
0.04 |
|
|
|
$ |
(0.01 |
) |
|
|
$ |
0.18 |
|
|
|
$ |
0.17 |
|
| Diluted |
|
$ |
0.03 |
|
|
|
$ |
(0.01 |
) |
|
|
$ |
0.16 |
|
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares used in computing net income (loss) per share : |
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
28,776 |
|
|
|
|
28,705 |
|
|
|
|
28,730 |
|
|
|
|
28,252 |
|
| Diluted |
|
|
35,688 |
|
|
|
|
28,705 |
|
|
|
|
34,486 |
|
|
|
|
34,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| SOUTHWALL TECHNOLOGIES INC. |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
|
|
|
|
|
|
|
|
December 31,
2009 |
|
|
December 31,
2008 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
12,454 |
|
|
|
$ |
10,768 |
|
| Restricted cash |
|
|
- |
|
|
|
|
282 |
|
| Accounts receivable, net |
|
|
5,907 |
|
|
|
|
3,709 |
|
| Inventories, net |
|
|
4,522 |
|
|
|
|
5,965 |
|
| Other current assets |
|
|
1,479 |
|
|
|
|
745 |
|
| Total current assets |
|
|
24,362 |
|
|
|
|
21,469 |
|
| Property, plant and equipment, net |
|
|
14,393 |
|
|
|
|
15,012 |
|
| Other assets |
|
|
156 |
|
|
|
|
804 |
|
| Total assets |
|
$ |
38,911 |
|
|
|
$ |
37,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
| Current portion of long term debt and capital leases |
|
$ |
808 |
|
|
|
$ |
1,767 |
|
| Accounts payable |
|
|
1,258 |
|
|
|
|
596 |
|
| Accrued compensation |
|
|
1,395 |
|
|
|
|
1,372 |
|
| Other accrued liabilities |
|
|
4,881 |
|
|
|
|
5,127 |
|
| Total current liabilities |
|
|
8,342 |
|
|
|
|
8,862 |
|
|
|
|
|
|
|
| Term debt and capital leases |
|
|
3,358 |
|
|
|
|
4,501 |
|
| Other long term liabilities |
|
|
58 |
|
|
|
|
2,514 |
|
| Total liabilities |
|
|
11,758 |
|
|
|
|
15,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Series A, convertible preferred stock |
|
|
4,810 |
|
|
|
|
4,810 |
|
|
|
|
|
|
|
| Stockholders' equity: |
|
|
|
|
|
| Common stock |
|
|
29 |
|
|
|
|
29 |
|
| Capital in excess of par value |
|
|
78,291 |
|
|
|
|
78,323 |
|
| Accumulated other comprehensive income: |
|
|
|
|
|
| Translation gain on subsidiary |
|
|
4,382 |
|
|
|
|
4,269 |
|
| Accumulated deficit |
|
|
(60,359 |
) |
|
|
|
(66,023 |
) |
| Total stockholders' equity |
|
|
22,343 |
|
|
|
|
16,598 |
|
|
|
|
|
|
|
|
Total liabilities, preferred stock and stockholders' equity |
|
$ |
38,911 |
|
|
|
$ |
37,285 |
|
|
|
|
|
|
|
|
|
|
|
| SOUTHWALL TECHNOLOGIES, INC. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
|
|
Years ended |
|
|
December 31,
2009 |
|
|
December 31,
2008 |
| Cash flows from operating activities: |
|
|
|
|
|
| Net income |
|
$ |
5,664 |
|
|
|
$ |
5,188 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
| Gain on settlement of liability |
|
|
(2,359 |
) |
|
|
|
- |
|
| Deferred income tax |
|
|
(38 |
) |
|
|
|
38 |
|
| (Gain) loss on disposal of property, plant and equipment |
|
|
(4 |
) |
|
|
|
97 |
|
| Depreciation and amortization |
|
|
2,596 |
|
|
|
|
2,647 |
|
| Stock-based compensation charge |
|
|
403 |
|
|
|
|
219 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
| Accounts receivable, net |
|
|
(2,300 |
) |
|
|
|
649 |
|
| Inventories, net |
|
|
1,461 |
|
|
|
|
(325 |
) |
| Other current and non-current assets |
|
|
(20 |
) |
|
|
|
601 |
|
| Accounts payable and accrued liabilities |
|
|
(175 |
) |
|
|
|
(2,014 |
) |
| Net cash provided by operating activities |
|
|
5,228 |
|
|
|
|
7,100 |
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
| Restricted cash |
|
|
261 |
|
|
|
|
1,189 |
|
| Proceeds from sale of property, plant and equipment |
|
|
34 |
|
|
|
|
- |
|
| Expenditures for property, plant and equipment |
|
|
(1,725 |
) |
|
|
|
(626 |
) |
| Net cash provided by (used in) investing activities |
|
|
(1,430 |
) |
|
|
|
563 |
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
| Proceeds from exercise of stock options |
|
|
54 |
|
|
|
|
304 |
|
| Investment credit in Germany |
|
|
221 |
|
|
|
|
- |
|
| Repayments of term debt and capital leases |
|
|
(2,242 |
) |
|
|
|
(3,551 |
) |
| Net cash used in financing activities |
|
|
(1,967 |
) |
|
|
|
(3,247 |
) |
|
|
|
|
|
|
| Effect of foreign exchange rate changes on cash |
|
|
(145 |
) |
|
|
|
(140 |
) |
|
|
|
|
|
|
| Net increase in cash and cash equivalents |
|
|
1,686 |
|
|
|
|
4,276 |
|
| Cash and cash equivalents, beginning of year |
|
|
10,768 |
|
|
|
|
6,492 |
|
|
|
|
|
|
|
| Cash and cash equivalents, end of year |
|
$ |
12,454 |
|
|
|
$ |
10,768 |
|
|
|
|
|
|
|
| Supplemental cash flows disclosures: |
|
|
|
|
|
| Interest paid |
|
$ |
508 |
|
|
|
$ |
730 |
|
| Income taxes paid |
|
$ |
717 |
|
|
|
$ |
428 |
|
|
|
|
|
|
|
| Supplemental schedule of non-cash investing and financing activities: |
|
|
|
|
|
| Dividends accrued |
|
$ |
489 |
|
|
|
$ |
489 |
|
| Property, plant and equipment acquired through capital leases |
|
$ |
88 |
|
|
|
$ |
605 |
|
SOURCE: Southwall Technologies Inc.
Southwall Technologies Inc.
Kathy Taylor, 650-798-1200 |
|
