RF Monolithics Posts 3Q Financial Results

Jul 16, 2009 (Close-Up Media via COMTEX) -- RFMI | Quote | Chart | News | PowerRating -- RF Monolithics, Inc. has reported sales for the third quarter ended May 31, of $6.5 million, compared to sales of $12.8 million for the third quarter of the prior year.

In a release on July 14, the company noted that it reported a net loss, calculated in accordance with generally accepted accounting principles ("GAAP"), of $1.98 million or $0.20 per share compared to a GAAP net loss of $1.42 million or $0.15 per share for the third quarter of the prior year.

The Company's sales during the first nine months of fiscal 2009 were $24.5 million compared to $42.3 million for the prior year's first nine months. For the nine months ended May 31, GAAP net loss was $3.5 million or $0.35 per share compared to GAAP net loss of $1.4 million or $0.14 per diluted share for the same period of the prior year.

President and CEO David M. Kirk said, "The global economic situation continued to have a material effect on our performance in the third quarter. However, sales did stabilize and were flat with our second quarter. Sales into the medical market remained strong and represented 21 percent of our total sales. The automotive business recovered somewhat from our previous quarter, but will be a challenge for the next several quarters. The industrial markets continued to remain softer than anticipated. The diversity of the markets our products serve has helped stabilize sales in these challenging times.

"We did incur a large loss this quarter, of almost $2.0 million. However, $1.5 million of it relates to our testing of impairments for intangible assets, which is a non-cash charge and another $0.1 million relates to other nonrecurring costs. We believe our ongoing cost reduction program has put us in position to achieve a breakeven profit level at a $7.0 million to $7.5 million quarterly sales level, which is only slightly more than our current sales. The restructuring we did in December and the continuous controls put in place have had a very positive effect on operating expenses. Recurring operating expenses were significantly lower than last quarter at $2.6 million. We will be at this level or lower until we see signs of an economic recovery.

"During the quarter, we took several steps to address our second-quarter non-compliance with our credit agreement. First, we closed a mortgage on our Dallas facility to refinance our term debt commitments that were due in coming quarters, including using excess cash generated in the transaction to reduce our revolving credit. Next, we signed a forbearance agreement that expires July 31, with our senior lender to address our contractual defaults. Our operating results for the third quarter were in compliance with our forbearance financial covenants and we also expect to remain in compliance during the term of the forbearance period. Lastly, the combination of improved operating results and a reduction in inventory of $1.2 million allowed us to pay down approximately $300,000 in bank debt, $500,000 in accounts payable to our suppliers and $400,000 in accrued liabilities, including severance pay resulting from this year's reduction-in-force. Total liabilities were reduced almost $1.3 million in the quarter. By the end of our forbearance period, we expect to agree to an extension of the forbearance agreement or a typical credit agreement for our next fiscal year.

"While the global economic climate is still distressed and order visibility continues to be very limited, we are more comfortable that the business is stabilizing. Customer inventory levels appear to have been significantly reduced in many parts of the supply chain. We continue to work closely with our customers and partners to capitalize on any and all reasonable opportunities. With our current, lower cost structure we believe we can sustain our business at current revenue levels and be positioned for significant profitability whenever the economy truly recovers."

RF Monolithics, Inc. is a provider of solutions-driven, technology-enabled wireless connectivity for a broad range of wireless applications.

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