-----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, BOa//z7UPWEDzuxamlL5sa22HcwSgn56aAxWimlAWrd5HHfgHaqZmAZnGJkpl0co lUfA1O/njtQfEKa6dm2bAg== 0001104659-08-068484.txt : 20081106 0001104659-08-068484.hdr.sgml : 20081106 20081106102520 ACCESSION NUMBER: 0001104659-08-068484 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20081106 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20081106 DATE AS OF CHANGE: 20081106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Emrise CORP CENTRAL INDEX KEY: 0000854852 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 770226211 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10346 FILM NUMBER: 081165672 BUSINESS ADDRESS: STREET 1: 9485 HAVEN AVENUE STREET 2: STE 100 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 BUSINESS PHONE: 9099879220 MAIL ADDRESS: STREET 1: 9485 HAVEN AVENUE STREET 2: STE 100 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 FORMER COMPANY: FORMER CONFORMED NAME: MICROTEL INTERNATIONAL INC DATE OF NAME CHANGE: 19951117 FORMER COMPANY: FORMER CONFORMED NAME: CXR CORP DATE OF NAME CHANGE: 19920703 8-K 1 a08-27791_18k.htm 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 (earliest event reported):  November 6, 2008

 

EMRISE CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

1-10346

 

77-0226211

(State or other jurisdiction of

 

(Commission

 

(I.R.S. Employer

incorporation)

 

file number)

 

Identification No.)

 

9485 Haven Avenue, Suite 100

Rancho Cucamonga, California 91730

(Address of principal executive offices) (Zip code)

 

(909) 987-9220

(Registrant’s telephone number, including area code)

 

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:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                                    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

 

On November 6, 2008, EMRISE Corporation issued a press release entitled “EMRISE Corporation Reports 2008 Third Quarter Financial Results”. A copy of the press release is attached hereto and incorporated by reference as Exhibit 99.1.

 

Item 9.01               Financial Statements and Exhibits

 

d.             Exhibits:

 

99.1                           Press Release titled “EMRISE Corporation Reports 2008 Third Quarter Financial Results” dated November 6, 2008.

 

2



 

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 thereunto duly authorized.

 

 

EMRISE CORPORATION

 

 

 

 

Dated: November 6, 2008

By:

/s/ D. JOHN DONOVAN

 

 

D. John Donovan, Vice President Finance and
Administration (principal financial officer)

 

3



 

INDEX TO EXHIBITS ATTACHED TO THIS REPORT

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release titled “EMRISE Corporation Reports 2008 Third Quarter Financial Results” dated November 6, 2008.

 

4


EX-99.1 2 a08-27791_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

EMRISE

NEWS

CORPORATION

 

 

 

9485 Haven Avenue Suite 100

 

Rancho Cucamonga, CA 91730

 

(909) 987-9220 (909) 987-5186

 

www.emrise.com

 

FOR IMMEDIATE RELEASE

 

CONTACT:

Allen & Caron Inc

John Donovan

Dan Matsui (investors)

Vice President Finance and Administration

Len Hall (media)

(909) 987-9220 ext. 3201

949-474-4300

JDonovan@emrise.com

D.Matsui@allencaron.com

 

Len@allencaron.com

 

EMRISE CORPORATION REPORTS 2008 THIRD QUARTER FINANCIAL RESULTS

 

Net Income Up Substantially for the Quarter on Higher Sales and Increased Gross Margin;

Further Top and Bottom Line Improvements Expected in Fourth Quarter

 

RANCHO CUCAMONGA, Calif.—November 6, 2008—EMRISE CORPORATION (NYSE Arca: ERI); a multinational designer, manufacturer and marketer of proprietary electronic devices and communications equipment for aerospace, defense, industrial, and communications applications, today announced financial results for three and nine months ended September 30, 2008.

 

Driven primarily by higher sales of electronic devices, net sales for the third quarter increased 22% to $15.7 million from $12.8 million in the third quarter of 2007. Gross profit for the quarter increased to $6.3 million, or 40.2% of net sales, from $4.0 million, or 31.3% of net sales, in the third quarter of 2007. Operating income for the quarter was $1.6 million, or 10.1% of net sales, compared to an operating loss of $0.5 million in the third quarter of 2007. Net income for the quarter improved to $0.3 million, or $0.01 per share, from a net loss of $0.5 million, or $0.01 loss per share, for the third quarter of 2007.

 

“We are obviously very pleased with these results,” EMRISE Chairman, President and Chief Executive Officer Carmine T. Oliva said. “We are seeing improvements in our core business, and it is important to note that our acquisition of Advanced Control Components, Inc.(“ACC”) is quickly proving valuable in terms of our ability to further penetrate the U.S. defense industry. We believe these successes and our substantially improved third quarter financial results are excellent indicators that we are on track to achieve further top and bottom line growth in the fourth quarter of 2008 and beyond.”

 

Oliva added that during the third quarter, EMRISE continued to see strong demand for its new In Flight Entertainment & Communication (“IFE&C”) products,  TiemPo™ network timing and synchronization products and continued to experience increased sales of digital and rotary

 

1



 

switches, especially orders and shipments for the U.S. government Defense Logistics Agency (DLA).

 

Included in the quarterly results is approximately $1.7 million in net sales and $629,000 of gross profit contributed by ACC, which EMRISE acquired on August 20, 2008. The Company reported that the improvement in quarterly gross margin for the three and nine month periods was primarily the result of improvements in pricing, efficiency and product mix related to the Company’s operations, without consideration of ACC’s contribution.

 

Oliva said each of the business units within the Company’s electronic devices segment had higher net sales during the quarter, excluding RO Associates, which experienced a slight decline on a quarterly basis but is up 11% on a year to date basis. He added that the Company’s electronic devices segment’s quarterly net sales were up 41% over the previous year. Excluding the contribution of ACC during the quarter, net sales for the electronic devices segment increased 22%.

 

Net sales of communications equipment were down slightly, but the decline did not materially impact the third quarter. Oliva indicated that he expected sales of communications equipment to improve substantially during the fourth quarter of 2008, which is traditionally a strong quarter for that segment. Also, EMRISE is entering the fourth quarter with a higher-than-usual backlog for communications equipment, driven largely by increased demand for higher margin TiemPoTM network timing and synchronization products as well as test equipment and new fiber optic modem products.

 

The year-over-year increase in third quarter gross margin was due to a combination of increased sales of electronic devices as well as improved gross margins on those products, especially high margin digital switches for the DLA. During the quarter, gross margin increased substantially for all electronic device business units due to a combination of higher selling prices, improved manufacturing efficiency, and favorable changes in product mix. Oliva said: “Gross margin improvement, more than any other improvement, indicates that we are achieving results according to plan. Higher sales of our high gross margin TiemPo™ and new fiber optic modem products also contributed to quarterly improvement in our high-margin communications equipment segment.”

 

Net sales for the first nine months of 2008 were $42.0 million, up 14% from $36.8 million in the nine months of 2007. Gross profit for the first nine months of 2008 increased to $15.7 million, or 37.4% of net sales, from $11.9 million, or 32.4% of net sales, in the first nine months of 2007. Operating income for the first nine months of 2008 was $1.6 million, or 3.7% of net sales, compared to an operating loss of $1.5 million for the first nine months of 2007. Net loss for the first nine months of 2008 was $0.8 million, or $0.02 loss per share, compared to net loss of $1.9 million, or $0.05 loss per share, for the same period in 2007.

 

Driven by a broad base of new and traditional products, backlog on September 30, 2008, was at a record $40.9 million, up 65% from a year ago. Backlog associated with ACC was 31% of the total backlog at September 30, 2008. Excluding ACC’s backlog, the Company’s backlog rose 13% over the prior year. Approximately 96% of the backlog was attributable to the Company’s electronic devices business, with the remaining 4% related to its communications equipment business. EMRISE estimates that the majority of its backlog can be shipped within the next twelve months.

 

Oliva stated: “We are pleased with the current level of backlog, especially since we continue to ship at record levels, as we have done all year. The increase in backlog reflects, in part, the growth

 

2



 

potential of our Company, and, based on the level and strength of this backlog, we are optimistic that fourth quarter shipments will be the highest of the year.”

 

In addition to increased quarterly sales, the Company also expects gross margin in the fourth quarter to be consistent with the higher gross margins achieved in the third quarter of 2008 and continue to be driven by strong sales of electronic devices and improved sales of communications equipment, especially the Company’s higher margin TiemPo™ products, communications test equipment, and newly re-designed fiber optic modem products.

 

Oliva commented “We are particularly pleased that we were able to generate such significant improvements in net sales, gross margin and profitability during the third quarter. Our third quarter net income was achieved even while we experienced the negative impact of certain one time restructuring costs, which were partially offset by a gain on the sale of certain non-core assets. The net negative impact of these one time events during the quarter was approximately $100,000. Our overall performance is consistent with our guidance provided earlier in the year that we expected significant improvement in the last half of 2008. At this point, we believe that fourth quarter results will be even stronger than third quarter, especially considering the third quarter results reflect only a partial quarter contribution from ACC.”

 

As of September 30, 2008, cash and equivalents were $5.3 million. Working capital was $16.0 million with a current ratio of 2.0:1.0. Total assets were $61.6 million, and long term debt was $24.4 million, which includes $5.8 million outstanding on the Company’s line of credit and $13 million of debt issued in connection with the acquisition of ACC. Stockholders’ equity was $23.1 million.

 

Webcast and Conference Call Information

 

A conference call with management is scheduled for 10:30 a.m. PST (1:30 p.m. EST) today to discuss the Company’s financial results for the third quarter of 2008. To join the call, dial toll-free (877) 407-8031 five minutes prior to the scheduled start time. For callers outside the United States, dial (201) 689-8031.

 

A live web cast of the call may also be accessed at http://www.investorcalendar.com. An archived replay of the webcast will be available shortly after the call. The replay may be accessed through the same web link listed above or for callers in the U.S. via telephone at (877) 660-6853, or at (201) 612-7415 for callers outside the U.S. The conference ID is 301865 and the account number 286. The telephone and webcast replays will be available for 90 days.

 

About EMRISE Corporation

 

EMRISE designs, manufactures and markets electronic devices, sub-systems and equipment for aerospace, defense, industrial and communications markets. EMRISE products perform key functions such as power supply and power conversion; RF and microwave transmission; digital and rotary switching; and network access, including timing and synchronization of communications networks carrying wireline, wireless, and cable data, voice, and video. Primary growth driver applications for EMRISE products include commercial avionic “In-Flight Entertainment and Communications” products and communications “Network Timing and Synchronization” equipment. EMRISE serves customers in North America, Europe and Asia through operations in the United States, England, France and Japan. The Company has built a worldwide base of customers including all of the Fortune 100 in the U.S. that do business in markets served by EMRISE and many similar-size companies in Europe and Asia. For more information go to www.emrise.com

 

3



 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

With the exception of historical information, the matters discussed in this press release, including without limitation, EMRISE’s ability to achieve improvements in its core business, ability for (ACC) to quickly prove valuable in terms of EMRISE’s ability to further penetrate the U.S. defense industry, ability to achieve further top and bottom line growth in the fourth-quarter of 2008 and beyond, ability for sales of communications equipment to improve substantially during the fourth quarter of 2008, ability for gross margin improvement to indicate that EMRISE is achieving results according to plan, ability to ship the majority of its backlog within the next twelve months, ability to continue to ship at record levels, the ability to deliver fourth-quarter shipments that will be the highest of the year, the ability for gross margin in fourth-quarter to be consistent with the higher gross margins achieved in the third quarter of 2008, the ability to deliver strong sales of electronic devices and improved sales of communications equipment, especially the Company’s higher margin TiemPo™ products, communications test equipment, and newly re-designed fiber optic modem products, and the ability to deliver fourth quarter results that will be even stronger than third quarter are all forward-looking statements that involve a number of risks and uncertainties.  The actual future results of EMRISE could differ from those statements.  Factors that could cause or contribute to such differences include, but are not limited to, unforeseen technical issues,  failure to achieve or maintain expected improvements in its core business, failure of ACC to successfully receive orders or deliver products for the U.S. defense industry, failure to achieve expected top line or bottom results at any or all of its operating units, failure to increase sales of communication equipment during the fourth quarter of 2008, failure to achieve or maintain expected gross margin improvements or failure to achieve expected bottom line results despite gross margin improvements, failure to ship according to expected delivery schedules due to changes in customer requirements, vendor delays, manufacturing issues, quality issues or other unexpected delays, failure to continue to ship at current levels for any reason, failure to achieve higher sales in the fourth quarter of 2008 for any reason, failure to maintain the improved third quarter gross margin levels in the fourth quarter of 2008 or beyond, failure to continue the higher sales levels of electronic devices or failure to improve sales of communications equipment, failure to achieve higher sales of the Company’s higher margin TiemPo™ products, communications test equipment, and newly re-designed fiber optic modem products or failure to sell such products at prices that result in a higher gross margin, failure to increase sales during the fourth quarter as compared to any previous quarter during 2008, and those factors contained in the “Risk Factors” Section of EMRISE’s most recently filed Form 10-K, and other EMRISE filings with the Securities and Exchange Commission.

 

Financial tables on next pages

 

4



 

EMRISE CORPORATION

Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)

 

 

 

September 30,

 

December 31,

 

 

 

2008

 

2007

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

5,267

 

$

4,764

 

Accounts receivable, net of allowances for doubtful accounts of $493 at September 30, 2008 and $345 at December 31, 2007

 

11,386

 

9,406

 

Inventories, net

 

13,159

 

11,664

 

Current deferred tax assets

 

649

 

200

 

Prepaid and other current assets

 

1,609

 

1,617

 

Total current assets

 

32,070

 

27,651

 

 

 

 

 

 

 

Property, plant and equipment, net

 

3,560

 

2,227

 

Goodwill

 

16,275

 

13,129

 

Intangible assets other than goodwill, net

 

7,876

 

3,269

 

Deferred tax assets

 

610

 

617

 

Other assets

 

1,193

 

1,287

 

Total assets

 

$

61,584

 

$

48,180

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

4,465

 

$

4,440

 

Accrued expenses

 

5,681

 

5,435

 

Current portion of long-term debt

 

4,498

 

71

 

Notes payable to stockholders, current portion

 

500

 

521

 

Income taxes payable

 

571

 

712

 

Other current liabilities

 

357

 

357

 

Total current liabilities

 

16,072

 

11,536

 

 

 

 

 

 

 

Long-term line of credit

 

5,772

 

3,957

 

Long-term debt, net of discount of $1,108 and $1,264, respectively

 

14,162

 

4,829

 

Notes payable to stockholders, less current portion

 

375

 

750

 

Deferred income taxes

 

1,023

 

904

 

Other liabilities

 

1,125

 

1,158

 

Total liabilities

 

38,529

 

23,134

 

 

 

 

 

 

 

Commitments and contingencies (See Note 7)

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock,$0.01 par value. Authorized 10,000,000 shares, zero shares issued and outstanding

 

 

 

Common stock,$0.0033 par value. Authorized 150,000,000 shares; 38,254,000 and 38,254,000 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively

 

126

 

126

 

Additional paid-in capital

 

44,771

 

44,527

 

Accumulated deficit

 

(21,480

)

(20,661

)

Accumulated other comprehensive income

 

(362

)

1,054

 

Total stockholders’ equity

 

23,055

 

25,046

 

Total liabilities and stockholders’ equity

 

$

61,584

 

$

48,180

 

 

5



 

EMRISE CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)
(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

15,687

 

$

12,809

 

$

41,983

 

$

36,798

 

Cost of Sales

 

9,379

 

8,798

 

26,277

 

24,863

 

Gross profit

 

6,308

 

4,011

 

15,706

 

11,935

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

4,058

 

3,796

 

12,039

 

11,381

 

Engineering and product development

 

659

 

692

 

2,105

 

2,067

 

Total operating expenses

 

4,717

 

4,488

 

14,144

 

13,448

 

Income (loss) from operations

 

1,591

 

(477

)

1,562

 

(1,513

)

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

38

 

40

 

79

 

95

 

Interest expense

 

(816

)

(190

)

(2,004

)

(510

)

Other, net

 

(167

)

314

 

(64

)

479

 

Total other income (expense), net

 

(945

)

164

 

(1,989

)

64

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

646

 

(313

)

(427

)

(1,449

)

Income tax provision

 

313

 

173

 

393

 

452

 

Net Income (Loss)

 

$

333

 

$

(486

)

$

(820

)

$

(1,901

)

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.01

 

$

(0.01

)

$

(0.02

)

$

(0.05

)

Diluted

 

$

0.01

 

$

(0.01

)

$

(0.02

)

$

(0.05

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

38,254

 

38,193

 

38,254

 

38,163

 

Diluted

 

38,451

 

38,193

 

38,254

 

38,163

 

 

6


-----END PRIVACY-ENHANCED MESSAGE-----