-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GyrD7VyEv8UNvOWgcqHS/b8GpKISWqrt2FHlr1uu/YzcFawUsjQ1CFJftj4GyVf5 svUuq83NOytvS2D6LVKehg== 0001157523-06-006905.txt : 20060717 0001157523-06-006905.hdr.sgml : 20060717 20060717165352 ACCESSION NUMBER: 0001157523-06-006905 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060717 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060717 DATE AS OF CHANGE: 20060717 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOVEX INC CENTRAL INDEX KEY: 0000050601 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 411223933 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13143 FILM NUMBER: 06965369 BUSINESS ADDRESS: STREET 1: 5540 PIONEER CREEK DRIVE CITY: MAPLE PLAIN STATE: MN ZIP: 55359-9003 BUSINESS PHONE: 7634795300 8-K 1 a5189515.txt INNOVEX, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): July 17, 2006 Innovex, Inc. ----------------------------------- (Exact name of Registrant as Specified in its Charter) Minnesota ----------------------------------- (State Or Other Jurisdiction Of Incorporation) 000-13143 41-1223933 - ---------------------------------------- ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 5540 Pioneer Creek Drive Maple Plain, MN 55359 - ---------------------------------------- ------------------------------------ (Address Of Principal Executive Offices) (Zip Code) (763) 479-5300 ----------------------------------- Registrant's Telephone Number, Including Area Code Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Items under Sections 1, 3 through 8 are not applicable and therefore omitted. ITEM 2.02 Results Of Operations And Financial Condition. The Company hereby furnishes a press release issued on July 17, 2006 and attached hereto as Exhibit 99.1 disclosing material non-public information regarding the Company's results of operations for the quarter ended June 30, 2006. ITEM 9.01 Financial Statements And Exhibits. Exhibit No. Description - ----------- ----------------------------------------------------------------- 99.1 Press Release issued July 17, 2006 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INNOVEX, INC. By: /s/ Douglas W. Keller --------------------------- Douglas W. Keller Vice President of Finance Date: July 17, 2006 EX-99.1 2 a5189515ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Innovex Announces Fiscal 2006 Third Quarter Results MAPLE PLAIN, Minn.--(BUSINESS WIRE)--July 17, 2006--Innovex (Nasdaq:INVX) today reported revenue of $38.9 million and revenue excluding pass through material of $20.9 million for the fiscal 2006 third quarter ending June 30, 2006. In the fiscal 2005 third quarter the Company reported revenue of $60.0 million and revenue excluding pass through material of $29.0 million. Revenue for the first nine months of fiscal 2006 was $140.9 million compared to $152.8 for the same period last year. Revenue excluding pass through material for the first nine months of fiscal 2006 was $75.3 million as compared to $77.9 million for the first nine months of fiscal 2005. The Company's net loss was $934,000 or $0.05 per share in the third quarter of fiscal 2006 as compared to a net loss of $2.6 million or $0.13 per share in the prior year third quarter. The fiscal 2006 third quarter includes restructuring charges of $597,000 or $0.03 per share and gain on the sale of assets of $2.7 million or $0.14 per share. The Company's fiscal 2006 third quarter net loss excluding the restructuring charge and gain of sale of assets was $3 million or $0.16 per share. The Company's fiscal 2005 third quarter net loss was $665,000 or $0.03 per share excluding restructuring charges of $1.2 million and a $750,000 loss on the sale of a building. The fiscal 2006 third quarter gross margin was 8%, compared to 9% for the fiscal 2005 third quarter. The change in gross margin as compared to the prior year is a result of lower fixed cost absorption caused by lower revenue from Flex Suspension Assembly (FSA) and Flat Panel Display (FPD) products. The gross margin for the first nine months of fiscal 2006 was 12%, compared to 7% for the first nine months of fiscal 2005. The improved gross margin related to improved operating efficiencies and restructuring related cost reductions. Operating expenses excluding restructuring charges for the fiscal 2006 third quarter were $5.2 million as compared to $6.1 million reported in the fiscal 2005 third quarter. Operating expenses for the fiscal 2006 third quarter also include approximately $168,000 of non-cash compensation expense for stock options related to the adoption of FASB Statement 123R Share Based Payments as of October 1, 2005. The $2.7 million gain on sale of assets included in the fiscal 2006 third quarter related to the June 27, 2006 sale of the business, facility and assets of Innovex's etched metal component business. This sale and the simultaneous completion of the transfer of Innovex's prototyping operation from its Litchfield, Minnesota location to its Lamphun, Thailand location is anticipated to result in annual cost savings of at least $2,000,000. The prototyping transfer will also result in a significant reduction in the time required to produce prototype products by eliminating the transit time between Minnesota and Thailand and establishing a cost effective Thailand operation functioning 24 hours a day. The Company expects to begin experiencing the benefits of this lower cost structure in the September 2006 quarter. Cash flow from operations for the fiscal 2006 third quarter of $5 million primarily reflects decreases in receivables and inventory partially offset by a reduction in accounts payable. In addition, the $5 million proceeds from the sale of the metal business was adequate to cover capital expenditures for the quarter of $2.7 million, normally scheduled debt payments and an additional $1.5 million debt reduction. Unused credit facilities of over $30 million remain available to meet capital expenditure and other cash requirements for the remainder of fiscal 2006. FSA products constituted 60% of the Company's net sales for the quarter, Actuator Flex (AFC) revenue was 27%, FPD product revenue was 5%, integrated circuit packaging application revenue was 5%, network system application revenue was 2% and other revenue was 1%. AFC revenue increased as expected as the disk drive industry began its transition to the 160 gigabyte platform. The Company believes both FSA and FPD revenue was lower than expected because of industry seasonality, new product transitions and merger related product line and inventory rationalizations. "Although we are disappointed by the quarter's soft revenue, we are pleased with the progress made executing our cost leadership strategy," stated William P. Murnane, Innovex's President and CEO. "The sale of our metal business and corresponding transfer of prototyping to Thailand are significant milestones in the execution of this strategy. We remain very confident that our low cost structure and ability to turn prototypes quickly has positioned us well to grow and diversify our business over the next 12 to 24 months. We remain committed to achieving a 20% gross margin and 10% operating margin business model," stated Murnane. The Company anticipates improved revenue as it moves into the seasonably stronger last half of the calendar year and as disk drive and FPD customers complete their merger related activity. In its fiscal 2006 fourth quarter, the Company expects revenue between $34 and $38 million and revenue excluding pass-through material content between $21 and $24 million. Conference Call & Live Webcast Innovex will conduct a conference call and webcast for investors beginning at 5:00 p.m. Eastern Time (ET) on Monday, July 17, 2006. During the conference call, Mr. Murnane and senior managers will discuss the Company's future product, revenue, mix and margin expectations along with historical results. To listen to the live conference call, dial 785-832-1508 and ask for conference ID "Innovex." The live webcast will be available at www.innovexinc.com/investor.shtml. A replay of the call will be available 6:00 p.m. ET on Monday, July 17 through 11:59 p.m. ET on Wednesday, July 19, 2006. To access the replay, dial (402) 220-0874 and ask for conference ID "Innovex." The webcast version of the conference call will be archived at www.innovexinc.com/investor.shtml. About Innovex, Inc. Innovex, Inc. is a leading manufacturer of high-density flexible circuit-based electronic interconnect solutions. Innovex's products enable the miniaturization and increasing functionality of high technology electronic devices. Applications for Innovex's products include data storage devices such as hard disk drives and tape drives, liquid crystal displays for mobile telecommunication devices, flat panel displays and printers. Innovex is known worldwide for its advanced technology and world class manufacturing. Safe Harbor for Forward Looking Statements Except for historical information contained herein, the matters discussed in this Current Report on form 8-K are forward looking statements that involve risks and uncertainties, including the timely availability and acceptance of new products, impact of restructuring charges, changes in product mix, the impact of competitive products and pricing, effect of world-wide economic conditions on flexible circuit demand, changes in manufacturing efficiencies, fluctuations in financial results and other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. INNOVEX, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) Three Months Ended June 30, ---------------------------- 2006 2005 -------------- ------------- Net sales $38,891 $60,020 Costs and expenses: Cost of sales 35,927 54,592 Selling, general and administrative 3,573 3,696 Royalty expense 331 574 Engineering 1,275 1,858 Restructuring charges 597 1,161 (Gain) loss on sale of assets (2,673) 750 Net interest expense 533 459 Net other (income) expense 262 (494) -------------- ------------- Income (loss) before income taxes (934) (2,576) Provision for income taxes 0 0 -------------- ------------- Net income (loss) ($934) ($2,576) ============== ============= Net income (loss) per share: Basic ($0.05) ($0.13) ============== ============= Diluted ($0.05) ($0.13) ============== ============= Weighted average shares outstanding: Basic shares 19,367 19,177 ============== ============= Diluted shares 19,367 19,177 ============== ============= Nine Months Ended June 30, ---------------------------- 2006 2005 -------------- ------------- Net sales $140,938 $152,785 Costs and expenses: Cost of sales 124,294 141,951 Selling, general and administrative 11,561 10,846 Royalty expense 1,187 1,467 Engineering 4,035 5,442 Restructuring charges 11,904 1,970 (Gain) loss on sale of assets (2,869) 745 Net interest expense 1,565 1,016 Net other (income) expense 499 (1,375) -------------- ------------- Income (loss) before income taxes (11,238) (9,277) Provision for income taxes 0 8,357 -------------- ------------- Net income (loss) ($11,238) ($17,634) ============== ============= Net income (loss) per share: Basic ($0.58) ($0.92) ============== ============= Diluted ($0.58) ($0.92) ============== ============= Weighted average shares outstanding: Basic shares 19,277 19,151 ============== ============= Diluted shares 19,277 19,151 ============== ============= INNOVEX, INC. CONSOLIDATED BALANCE SHEETS (In thousands) June 30, September 30, Assets 2006 2005 ------------- ------------- Cash and short-term investments $12,445 $12,914 Accounts receivable, net 18,680 32,585 Inventory 12,638 17,744 Other current assets 2,286 1,314 - ---------------------------------------------------------------------- Total current assets 46,049 64,557 Property, plant and equipment, net 55,064 66,507 Intangible & other assets, net 4,223 6,762 - ---------------------------------------------------------------------- Total assets $105,336 $137,826 ============= ============= Liabilities and Stockholders' Equity Current liabilities $32,212 $48,632 Long-term debt 22,082 27,818 Stockholders' equity 51,042 61,376 - ---------------------------------------------------------------------- Total liabilities and stockholders' equity $105,336 $137,826 ============= ============= INNOVEX, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Nine months ended June 30, ------------------- 2006 2005 --------- --------- Cash Flows From Operating Activities: Net income (loss) ($11,238) ($17,634) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 7,968 9,128 Asset impairment charges 9,132 1,970 Deferred income taxes - 8,394 Other non-cash items (2,799) (810) Changes in operating assets and liabilities: Accounts receivable 13,905 (12,816) Inventories 4,651 (8,407) Other current assets 1,564 662 Accounts payable (5,101) 12,610 Other current liabilities (600) 787 --------- --------- Net cash provided by (used in) operating activities 17,482 (6,116) Cash Flows From Investing Activities: Capital expenditures (7,248) (23,570) Proceeds from sale of assets 5,344 20 --------- --------- Net cash used in investing activities (1,904) (23,550) Cash Flows From Financing Activities: Net long-term debt activity (3,726) 15,631 Net line of credit activity (12,728) 8,939 Proceeds from exercise of stock options and employee stock purchase plan 406 209 --------- --------- Net cash provided by (used in) financing activities (16,048) 24,779 --------- --------- Increase (decrease) in cash and equivalents (470) (4,887) Cash and equivalents at beginning of period 12,914 14,422 --------- --------- Cash and equivalents at end of period $12,444 $9,535 ========= ========= CONTACT: Innovex, Inc., Maple Plain Doug Keller, 763-479-5300 Facsimile: 763-479-5395 Internet: http://www.innovexinc.com -----END PRIVACY-ENHANCED MESSAGE-----