EX-99.1 2 a09-7178_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Optelecom-NKF Reports Fourth Quarter and Full Year 2008 Results

 

GERMANTOWN, MD/March 5, 2009/PRNewswire-FirstCall — Optelecom-NKF, Inc. (Nasdaq:OPTC), a leading global provider of Siqura® advanced IP-video network solutions, today announced fourth quarter and full year 2008 results. Strong IP product sales in 2008 pushed company revenue to record levels for the year.

 

Revenues for the fourth quarter totaled $11.8 million compared to $13.0 million for the same quarter of 2007. For the full year 2008, revenue totaled a record $45.2 million compared to $42.5 million in 2007, an increase of 6%.  IP-related revenue in the fourth quarter totaled $4.1 million, a 4% increase compared to IP-related revenue of $4.0 million in the fourth quarter of last year. For the full year 2008, IP-related revenue increased 41% to $14.5 million compared to $10.3 million in 2007.

 

“We reported solid revenue and reduced operating expense in the fourth quarter of 2008. Income from operations totaled $1.2 million for the quarter and $2.5 million for the full year,” said Ed Ludwig, Optelecom-NKF’s Chairman of the Board and CEO. “As with other companies, however, we are not immune to global economic forces. Given the circumstances, we decided to record a full write-down of the Company’s U.S. deferred tax assets. This non-cash charge eliminates uncertainty in our future financial statements. Going forward, we believe we are positioned to compete and to succeed in this environment.”

 

The Company reported a net loss of $3.0 million, or $(0.81) per share, in the quarter ending December 31, 2008, including non-cash charges of $3.5 million primarily for the write-down of deferred tax assets. This compares to net income of $873 thousand, or $0.24 per share, one year earlier. For the full year 2008 the net loss totaled $1.8 million, or $(0.48) per share, compared to net income of $1.3 million, or $0.37 per share, in 2007.

 

Adjusted EBITDA for the quarter (as defined in the addendum to this release) was $1.6 million in the fourth quarter 2008 compared to $2.0 million for the same quarter in 2007. For the full year adjusted EBITDA totaled $4.2 million compared to $4.7 million one year earlier.

 

At year-end, Optelecom-NKF, Inc. completed a reduction in force in select business units. The reduction in force will reduce costs in mature areas of the Company’s technology offerings while focusing critical investments in growing Video over IP products. The Company recorded pre-tax charges of approximately $525 thousand in connection with the reduction in force during the fourth quarter of 2008.

 

“We are sized appropriately for the opportunities at hand,” Mr. Ludwig added. “Our team is dedicated to staying on top of operations and we are prepared to respond quickly to changing market conditions.  Efforts in our technology development area will lead to a continuing flow of new products that meet our customers’ needs and drive our success. This has positioned us to capture business as stimulus plans take shape at home and abroad.”

 

“We continue to address our sales effectiveness and we plan to gain market share as some competitors, lacking our strength, have to reign in their efforts. Our management team was strengthened by bringing David Patterson on board as our new president and as my successor designee,” Mr. Ludwig concluded.

 

Fourth Quarter Conference Call

 

Optelecom-NKF CEO Edmund Ludwig will lead a conference call to discuss fourth quarter results at 10:00 a.m. Eastern Time, Friday, March 6, 2009.

 


 

Interested parties are welcome to call 866-543-6408 (International Dial In: 617-213-8899) and request the “Optelecom-NKF conference call” shortly before the designated start time or provide the participant passcode 40321348. 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 1:00 p.m. following the teleconference until March 13, 2009. Those wishing to listen to the replay should call 888-286-8010 (International Dial In: 617-801-6888) and enter passcode number 12381497 when prompted.

 

The call is being web cast by Thomson Reuters and can be accessed at www.earnings.com or at Optelecom-NKF’s website www.optelecom-nkf.com.

 

About Optelecom-NKF

 

Optelecom-NKF, Inc., developer of Siqura® advanced IP video network solutions, 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® 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.

 

About Siqura®

 

All Optelecom-NKF IP surveillance solutions are marketed under the Siqura® brand. Siqura® is a total IP surveillance solution and includes IP cameras, video servers/codecs, network video recorders, video management, and video analytics software. Siqura® can be used in hybrid installations and is compatible with all Optelecom-NKF fiber transmission equipment.

 

Investor inquiries should be directed to Mr. Rick Alpert at 301-948-7872.

 


 

OPTELECOM-NKF, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

FOR THE THREE MONTHS ENDED DECEMBER 31,

 

(Dollars in Thousands, Except Share Amounts)

 

 

 

2008

 

2007

 

Revenue

 

$

11,751

 

$

13,013

 

Cost of goods sold

 

4,862

 

5,446

 

Gross profit

 

6,889

 

7,567

 

Operating expenses:

 

 

 

 

 

Sales and marketing

 

2,596

 

2,560

 

Engineering

 

1,516

 

1,380

 

General and administrative

 

1,445

 

1,974

 

Amortization of intangibles

 

159

 

202

 

Total operating expenses

 

5,716

 

6,116

 

Income from operations

 

1,173

 

1,451

 

Other expense, net

 

511

 

318

 

Income before income taxes

 

662

 

1,133

 

Provision for income taxes

 

3,620

 

260

 

Net (Loss) Income

 

$

(2,958

)

$

873

 

Basic (Loss) Income per share

 

$

(0.81

)

$

0.24

 

Diluted (Loss) Income per share

 

$

(0.81

)

$

0.24

 

Weighted average common shares outstanding - basic

 

3,644,754

 

3,622,094

 

Weighted average common shares outstanding - diluted

 

3,644,754

 

3,625,235

 

 

 

 

 

 

 

Net (Loss) Income

 

$

(2,958

)

$

873

 

Foreign currency translation

 

(1,144

)

1,496

 

Comprehensive (Loss) income

 

$

(4,102

)

$

2,369

 

 


 

OPTELECOM-NKF, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

FOR THE TWELVE MONTHS ENDED DECEMBER 31,

 

(Dollars in Thousands, Except Share Amounts)

 

 

 

2008

 

2007

 

Revenue

 

$

45,165

 

$

42,503

 

Cost of goods sold

 

17,938

 

17,452

 

Gross profit

 

27,227

 

25,051

 

Operating expenses:

 

 

 

 

 

Sales and marketing

 

11,099

 

9,794

 

Engineering

 

6,013

 

5,150

 

General and administrative

 

6,923

 

6,437

 

Amortization of intangibles

 

739

 

765

 

Total operating expenses

 

24,774

 

22,146

 

Income from operations

 

2,453

 

2,905

 

Other expense, net

 

996

 

1,236

 

Income before income taxes

 

1,457

 

1,669

 

Provision for income taxes

 

3,213

 

388

 

Net (Loss) Income

 

$

(1,756

)

$

1,281

 

Basic (Loss) Income per share

 

$

(0.48

)

$

0.37

 

Diluted (Loss) Income per share

 

$

(0.48

)

$

0.37

 

Weighted average common shares outstanding - basic

 

3,638,783

 

3,497,430

 

Weighted average common shares outstanding - diluted

 

3,638,783

 

3,502,765

 

 

 

 

 

 

 

Net (Loss) Income

 

$

(1,756

)

$

1,281

 

Foreign currency translation

 

(872

)

2,836

 

Comprehensive (Loss) income

 

$

(2,628

)

$

4,117

 

 


 

OPTELECOM-NKF, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2008 AND DECEMBER 31, 2007

(Dollars in Thousands, Except Share Amounts)

 

 

 

December 31,

 

December 31,

 

 

 

2008

 

2007

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash & cash equivalents

 

$

5,671

 

$

5,043

 

Accounts receivable and contracts receivable, net of allowance for doubtful accounts of $245 and $249

 

10,290

 

9,575

 

Inventories, net

 

5,782

 

5,214

 

Deferred tax asset - current

 

205

 

732

 

Prepaid expenses and other current assets

 

1,152

 

816

 

Total Current Assets

 

23,100

 

21,380

 

Property & equipment, less accumulated depreciation of $7,820 and $7,634

 

2,063

 

2,594

 

Deferred tax asset - non-current

 

—

 

2,284

 

Intangible assets, net of accumulated amortization of $2,870 and $2,259

 

7,180

 

8,241

 

Goodwill

 

14,603

 

15,259

 

Other assets

 

202

 

205

 

TOTAL ASSETS

 

47,148

 

49,963

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable

 

3,634

 

2,623

 

Accrued payroll

 

1,841

 

2,165

 

Commissions payable

 

198

 

198

 

Bank line of credit

 

—

 

1,000

 

Current portion of notes payable

 

3,468

 

1,525

 

Accrued warranty reserve

 

410

 

418

 

Taxes payable

 

931

 

49

 

Other current liabilities

 

1,688

 

1,135

 

Total Current Liabilities

 

12,170

 

9,113

 

Notes payable

 

10,367

 

14,245

 

Deferred tax liabilities

 

1,427

 

2,037

 

Interest payable

 

1,744

 

1,210

 

Other liabilities

 

249

 

257

 

Total Liabilities

 

25,957

 

26,862

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common Stock, $.03 par value-shares authorized, 15,000,000; issued and outstanding, 3,645,084 and 3,632,083 shares as of December 31, 2008, and December 31, 2007, respectively

 

109

 

109

 

Additional paid-in capital

 

16,252

 

15,534

 

Accumulated other comprehensive gain

 

2,534

 

3,406

 

Treasury stock, 162,672 shares at cost

 

(1,265

)

(1,265

)

Retained earnings

 

3,561

 

5,317

 

Total stockholders’ equity

 

21,191

 

23,101

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

47,148

 

$

49,963

 

 


 

Non-GAAP Earnings Addendum

 

We define Adjusted EBITDA as net income or net loss plus interest expense, income taxes, foreign exchange losses, depreciation and amortization. Adjusted EBITDA is not a measure of cash flow or liquidity as determined by generally accepted accounting principles (GAAP). We have included Adjusted EBITDA as a supplemental disclosure because we believe that it is widely used by investors, industry analysts and others as a useful supplemental measure. Optelecom-NKF calculates and uses Adjusted EBITDA as an indicator of its ability to generate cash from reported operating results.

 

Adjusted EBITDA does not represent funds available for our discretionary use and is not intended to represent or to be used as a substitute for net income or cash flows from operations data as measured under U.S. generally accepted accounting principles (“GAAP”). The items excluded from Adjusted EBITDA but included in the calculation of Optelecom-NKF’s reported net income are significant components of the accompanying unaudited consolidated statements of operations, and must be considered in performing a comprehensive assessment of overall financial performance. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.

 

The table below presents a reconciliation of net income to Adjusted EBITDA:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

(Unaudited)

 

December 31,

 

December 31,

 

(Dollars in Thousands)

 

2008

 

2007

 

2008

 

2007

 

Net (Loss) Income

 

$

(2,958

)

$

873

 

$

(1,756

)

$

1,281

 

Add:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

165

 

268

 

734

 

1,128

 

Provision for income taxes

 

3,620

 

260

 

3,213

 

388

 

Foreign exchange loss, net

 

346

 

50

 

262

 

108

 

Depreciation

 

250

 

357

 

1,051

 

1,065

 

Amortization

 

159

 

202

 

739

 

765

 

Adjusted EBITDA

 

$

1,582

 

$

2,010

 

$

4,243

 

$

4,735