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Revenue totaled $11.3 million, a 23% increase compared to $9.2 million in the second quarter of 2007. Gross profit increased $1.1 million to $6.7 million, or 59% of revenues, for the three months ended June 30, 2008. Optelecom-NKF's IP-related sales jumped 133% in the quarter compared to the second quarter of 2007, while IP sales for the first half of 2008 increased 59% over last year.
The Company reported net income of $24 thousand, or $0.01 per diluted share, for the second quarter of 2008. This compares to a net loss of $(217) thousand, or ($0.06) per diluted share, for the second quarter of 2007. The second quarter of 2008 includes one-time costs before tax of approximately $350 thousand related to a previously announced refinancing and legal restructuring. The Company also received a nonrecurring $116 thousand benefit in income taxes related to this transaction.
Edmund Ludwig, President and CEO of Optelecom-NKF, said, "We enjoyed double-digit revenue growth for the fourth consecutive quarter. Our IP product sales increased significantly as we saw strong demand for our Siqura(R) product suite. International sales grew as we benefited from increased demand as illustrated by our previously announced contract with Electricite de France, a Global Fortune 100 firm."
"We made progress across several fronts during the quarter," added Steve Tamburo, Optelecom-NKF's CFO. "Sales of our expanding Siqura IP product line grew and now represent more than a third of our total revenue.
"In the closing days of the quarter we finalized the reorganization of our international legal structure, enabling us to fully pay down our outstanding line of credit on July 1 and extend the term of our bank loan. This new flexible corporate structure will help streamline future growth. While we recognized a nonrecurring tax gain in the amount of $116 thousand, as expected we incurred significant restructuring and refinancing costs in the quarter."
Second Quarter Conference Call
Optelecom-NKF President and CEO Edmund Ludwig will lead a conference call to discuss second quarter results at 10:00 a.m. Eastern Time, Thursday, August 7, 2008.
Interested parties are welcome to call 888-873-4896 (International Dial In: 617-213-8850) and request the "Optelecom-NKF conference call" shortly before the designated start time or provide the participant passcode 20629994. The telephone conference call will feature a question and answer segment with management. For those parties unable to participate in the live conference call, a replay will be available from noon following the teleconference until August 14, 2008. Those wishing to listen to the replay should call 888-286-8010. (International Dial In: 617-801-6888) and enter passcode number 86427622 when prompted.
The call is being web cast by Thomson Reuters and can be accessed at http://www.earnings.com or at Optelecom-NKF's website http://www.optelecom-nkf.com.
About Optelecom-NKF
Optelecom-NKF, Inc. (Nasdaq: OPTC), is a global supplier of advanced video surveillance solutions, including IP cameras, video servers/codecs, network video recorders, fiber transmission equipment, video management and video analytics software. We deliver complete solutions for traffic monitoring and security of airports, seaports, casinos, prisons, utilities, public transit, city centers, hospitals, and corporate campuses.
Founded in 1972, Optelecom-NKF is committed to providing its customers with expert technical advice and support in addition to products that are developed and tested for professional and mission critical applications. All Optelecom-NKF IP surveillance solutions are marketed under the Siqura(R) name.
The Optelecom-NKF corporate headquarters is in Germantown, Maryland, USA, with European corporate offices in Gouda, the Netherlands, and sales offices or support covering Latin America, France, Spain, the UK, Germany, Italy, Dubai, and Singapore.
Forward-Looking Statements
The statements contained in this release, which are not historical facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include, among others: the ability of Optelecom-NKF to successfully operate its global business; the ability of the Company to develop and market network video products and solutions for the traffic monitoring, transportation security, commercial and industrial and government markets; lack of reliable vendors, service providers, and outside products; unforeseen changes in competing technologies and products; worldwide economic variances; poor or delayed research and development results; and disparities between forecast and realized sales results. Other important factors that could cause actual results to differ materially are included but are not limited to those listed in Optelecom-NKF's periodic reports and registration statements filed with the Securities and Exchange Commission. Optelecom-NKF does not assume any obligation to update information concerning its expectations.
Investor inquiries should be directed to Mr. Rick Alpert at 301-948-7872. OPTELECOM-NKF, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, (Unaudited) (Dollars in Thousands, Except Share Amounts) 2008 2007 Revenue $11,338 $9,191 Cost of goods sold 4,668 3,643 Gross profit 6,670 5,548 Operating expenses: Sales and marketing 3,021 2,654 Engineering 1,491 1,164 General and administrative 2,079 1,568 Amortization of intangibles 190 188 Total operating expenses 6,781 5,574 (Loss) from operations (111) (26) Interest expense, net 146 279 (Loss) before income taxes (257) (305) Benefit for income taxes 281 88 Net Income (Loss) $24 $(217) Basic Income (loss) per share $.01 $(0.06) Diluted Income (loss) per share $.01 $(0.06) Weighted average common shares outstanding - basic 3,636 3,521 Weighted average common shares outstanding - diluted 3,636 3,521 Net Income (loss) $24 $(217) Foreign currency translation 1 256 Comprehensive income $25 $39 OPTELECOM-NKF, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE SIX MONTHS ENDED JUNE 30, (Unaudited) (Dollars in Thousands, Except Share Amounts) 2008 2007 Revenue $21,873 $18,026 Cost of goods sold 8,744 7,565 Gross profit 13,129 10,461 Operating expenses: Sales and marketing 5,681 4,711 Engineering 2,907 2,540 General and administrative 3,741 2,916 Amortization of intangibles 399 371 Total operating expenses 12,728 10,538 Income (loss) from operations 401 (77) Interest expense, net 498 603 (Loss) before income taxes (97) (680) Benefit for income taxes 269 206 Net Income (loss) $172 $(474) Basic Income (loss) per share $.05 $(0.14) Diluted Income (loss) per share $.05 $(0.14) Weighted average common shares outstanding - basic 3,636 3,495 Weighted average common shares outstanding - diluted 3,636 3,495 Net Income (loss) $172 $(474) Foreign currency translation 1,921 428 Comprehensive income (loss) $2,093 $(46) OPTELECOM-NKF, INC. CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2008 AND DECEMBER 31, 2007 (June 30, 2008 Unaudited) (Dollars in Thousands, Except Share Amounts) June 30, Dec. 31, 2008 2007 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $8,604 $5,043 Accounts and contracts receivable, net of allowance for doubtful accounts of $316 and $249 10,072 9,575 Inventories, net 5,616 5,214 Deferred tax asset-current 508 732 Prepaid expenses and other current assets 632 816 Total current assets 25,432 21,380 Property and equipment, less accumulated depreciation of $8,378 and $7,634 2,603 2,594 Deferred tax asset-non-current 3,416 2,284 Intangible assets, net of accumulated amortization of $2,836 and $2,259 8,428 8,241 Goodwill 16,367 15,259 Other assets 220 205 TOTAL ASSETS $56,466 $49,963 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable 4,157 $2,623 Accrued payroll 2,285 2,363 Bank line of credit 2,870 1,000 Current portion of notes payable 1,525 1,525 Accrued warranty reserve 399 418 Other current liabilities 1,592 1,184 Total current liabilities 12,828 9,113 Notes payable 14,268 14,245 Deferred tax liability 2,149 2,037 Interest payable 1,328 1,210 Other liabilities 253 257 Total liabilities 30,826 26,862 STOCKHOLDERS' EQUITY Common stock, $.03 par value-shares authorized, 15,000,000; issued and outstanding, 3,636,263 and 3,632,083 shares as of June 30, 2008 and December 31, 2007, respectively 109 109 Additional paid-in capital 15,980 15,534 Accumulated other comprehensive gain 5,327 3,406 Treasury stock, 162,672 shares, at cost (1,265) (1,265) Retained earnings 5,489 5,317 Total stockholders' equity 25,640 23,101 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $56,466 $49,963
SOURCE Optelecom-NKF, Inc.
http://www.optelecom-nkf.com
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