-----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, GlO9Ns9tMVmWrIciF8xm2OfI013SeEb/fJa3qX7VmGFfsJlET/w8acWpoiYH/9Oq mFg/L+qFj4NddC0XPSjHWA== 0001157523-07-005130.txt : 20070514 0001157523-07-005130.hdr.sgml : 20070514 20070514163140 ACCESSION NUMBER: 0001157523-07-005130 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070514 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070514 DATE AS OF CHANGE: 20070514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DPAC TECHNOLOGIES CORP CENTRAL INDEX KEY: 0000784770 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 330033759 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14843 FILM NUMBER: 07846847 BUSINESS ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148980007 MAIL ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 FORMER COMPANY: FORMER CONFORMED NAME: DENSE PAC MICROSYSTEMS INC DATE OF NAME CHANGE: 19920703 8-K 1 a5402689.txt DPAC TECHNOLOGIES, 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): May 14, 2007 ----------------- DPAC Technologies Corp. (Exact name of registrant as specified in its charter) ----------------- California 0-14843 33-0033759 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 5675 Hudson Industrial Parkway Hudson, Ohio 44236 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (800) 553-1170 Not applicable (Former name or former address, if changed since last report) ----------------- 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)) Item 2.02 Results of Operations and Financial Condition. The following information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition." DPAC Technologies Corp. issued a press release on May 14, 2007 announcing its 2007 first quarter results. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibit. Exhibit 99.1 Press release of DPAC Technologies Corp. dated May 14, 2007. SIGNATURES 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 hereunto duly authorized. DPAC TECHNOLOGIES CORP. By: /s/ Stephen J. Vukadinovich ------------------------------------ Stephen J. Vukadinovich Chief Financial Officer Dated: May 14, 2007 Exhibit Index Exhibit No. Description ----------- ----------- Exhibit 99.1 Press release of DPAC Technologies Corp. dated May 14, 2007. EX-99.1 2 a5402689ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 DPAC Technologies Reports Financial Results for the First Quarter of Fiscal Year 2007 HUDSON, Ohio--(BUSINESS WIRE)--May 14, 2007--DPAC Technologies Corp. (OTCBB:DPAC), a leader in device networking and connectivity solutions, today reported results for its first quarter ended March 31, 2007. These results include the combined operations of DPAC Technologies Corp. and QuaTech, Inc., which combined on February 28, 2006 as previously announced. As a result of the merger, QuaTech has become a wholly-owned subsidiary of DPAC. For accounting purposes, the transaction is considered a "reverse merger" under which QuaTech is considered the acquirer of DPAC. Accordingly, the purchase price was allocated among the fair values of the assets and liabilities of DPAC, while the historical results of QuaTech are reflected in the results of the combined company (the "Company"). The results of operations are those of QuaTech prior to the merger date, and consolidated QuaTech and DPAC after the merger date of February 28, 2006. First Quarter Operating Results Net sales of $2.8 million for the first quarter of 2007 were down 11% from net sales of $3.2 million in the first quarter of 2006 and $3.2 million in the fourth quarter of 2006. The Company reported an operating loss of $162,000 as compared to an operating loss of $52,000 for the first quarter of 2006 and an operating loss of $165,000 for the fourth quarter of 2006. The Company reported a net loss for the current year first quarter of $539,000 as compared to a net loss of $246,000 for the prior year's first quarter, and a net loss of $498,000 for the fourth quarter of 2006. Total operating expenses incurred in the first quarter of 2007 of $1.35 million decreased by $157,000 or 10% from the previous year first quarter period. The decrease was due primarily to decreases in sales and marketing expenses of $180,000 and G&A expenses of $23,000. Amortization expense for intangible assets of $123,000 increased by $82,000 over the prior year period which included only one month of amortization expense as compared to three months for the current year period. The prior year period included $78,000 of restructuring charges, of which none were incurred in the current year period. An income tax benefit of $139,000 was recorded in the first quarter of 2006 and no income tax benefit was recorded in the current year period as a full valuation allowance was recorded against deferred tax assets in the fourth quarter of 2006. Balance Sheet Summary At March 31, 2007, DPAC had total assets of $12.1 million, including cash and cash equivalents of $4,000. This compares to total assets of $12.1 million at December 31, 2006, which included $38,000 in cash and cash equivalents. As a result of the merger on February 28, 2006, the Company recorded goodwill and intangible assets of approximately $5.1 million. Comments Chief Executive Officer and President Steve Runkel commented, "Our first quarter results were impacted by softness in our Device Connectivity product line offset by continued growth in our Device Networking products. Our Device Connectivity revenue was down 18% sequentially and down 29% on a year over year basis. This revenue shortfall was primarily due to decreased shipments to several of our traditional OEM customers that utilize our serial port connectivity products." Mr. Runkel continued: "Our Device Networking products generated revenue growth of 8% sequentially and growth of 91% on a year over year basis, reflecting our continued success in this market. "Additionally, we continued to reduce our spending levels as we complete the integration initiatives from the merger in Q1, 2006. Our spending in Sales and Marketing decreased by 30% on a year over year basis, as a result of integrating the two sales teams." About DPAC Technologies DPAC Technologies provides embedded wireless networking products for machine-to-machine communication applications. DPAC's Airborne(TM) and AirborneDirect(TM) wireless products are used by major OEMs in the transportation, instrumentation and industrial control, homeland security, medical diagnostics and logistics markets to provide remote data collection and control. DPAC Technologies is based in Hudson, OH. The Company's web site address is www.dpactech.com. Information concerning DPAC is filed by DPAC with the SEC and is available on the SEC website, www.sec.gov. About QuaTech QuaTech, Inc., a wholly-owned subsidiary of DPAC, delivers high performance device networking & connectivity solutions to help companies improve their bottom line performance. Quatech enables reliable machine-to-machine (M2M) communications via secure 802.11 wireless or traditional wired networks with industrial grade (hardened) embedded radios, modules, boards and external device servers and bridges. For local and mobile connections, Quatech serial adapters provide secure connectivity and port expansion via any interface option. Satisfied customers rely on our unique combination of performance and support to improve bottom line performance through real-time remote monitoring & control, streamlined systems and lower total cost of ownership (TCO). Quatech markets its products through a global network of distributors, resellers, systems integrators and original equipment manufacturers (OEMs). Founded in 1983, Quatech is headquartered in Hudson, Ohio, and merged with DPAC Technologies, Inc. in February 2006. www.quatech.com. Forward-Looking Statements This press release includes forward-looking statements. You can identify these statements by their forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," predict," and "continue" or similar words or any connection with any discussion of future events or circumstances or of management's current estimates or beliefs. Forward-looking statements are subject to risks and uncertainties, and therefore results may differ materially from those set forth in those statements. More information about the risks and challenges faced by DPAC Technologies Corp. is contained in the Securities and Exchange Commission filings made by the Company on Form S-4, 10-K, 10-Q or 10-QSB and 8-K. DPAC Technologies Corp. specifically disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise. DPAC TECHNOLOGIES CORP. Condensed Consolidated Balance Sheet Information (Unaudited) (In 000's) March 31, December 31, 2007 2006 --------- ------------ CURRENT ASSETS: Cash and cash equivalents $4 $38 Accounts receivable, net 1,554 1,421 Inventories 1,540 1,500 Prepaid expenses and other current assets 115 43 --------- ------------ Total current assets 3,213 3,002 Property, net 391 413 Goodwill and intangible assets 8,419 8,578 Other assets 55 81 --------- ------------ TOTAL $12,078 $12,074 ========= ============ CURRENT LIABILITIES: Revolving credit facility and short term notes $1,724 $1,361 Current portion of long-term debt 2,215 2,097 Accounts payable 1,639 1,488 Accrued restructuring costs - current 364 392 Other accrued liabilities 572 514 --------- ------------ Total current liabilities 6,514 5,852 Accrued restructuring costs 230 330 Long-term debt, net of current portion 2,747 2,770 Net stockholders' equity 2,587 3,122 --------- ------------ TOTAL $12,078 $12,074 ========= ============ DPAC TECHNOLOGIES CORP. Condensed Consolidated Statement of Income (Unaudited) (in 000's) For the quarter ended: March 31, ---------------------- 2007 2006 ----------- ---------- REVENUE $2,844 $3,194 COST OF GOODS SOLD 1,656 1,739 ----------- ---------- GROSS PROFIT 1,188 1,455 OPERATING EXPENSES Sales and marketing 423 603 Research and development 308 265 General and administrative 496 520 Amortization of intangible assets 123 41 Restructuring charges - 78 ----------- ---------- Total operating expenses 1,350 1,507 INCOME FROM OPERATIONS (162) (52) OTHER EXPENSES: Interest expense 376 333 ----------- ---------- INCOME (LOSS) BEFORE INCOME TAXES (538) (385) INCOME TAX PROVISION (BENEFIT) 1 (139) ----------- ---------- NET INCOME (LOSS) $(539) $(246) =========== ========== NET INCOME (LOSS) PER SHARE: Net Income (Loss) - Basic and diluted ($0.01) ($0.00) =========== ========== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic and Diluted 92,821 73,760 =========== ========== CONTACT: DPAC Technologies Corp. Steve Vukadinovich, Chief Financial Officer, 330-655-9000 Steve.Vukadinovich@dpactech.com or Steve Runkel, Chief Executive Officer, 330-655-9000 Steve.Runkel@Quatech.com -----END PRIVACY-ENHANCED MESSAGE-----