EX-99 3 a4511187ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Valpey-Fisher Corporation Reports Third Quarter 2003 Results HOPKINTON, Mass.--(BUSINESS WIRE)--Nov. 6, 2003--Valpey-Fisher Corporation (VPF: AMEX), reported today its financial results for the third quarter and nine months ended September 28, 2003. Valpey-Fisher Corporation specializes in providing frequency control devices, including quartz crystals and oscillators. Michael J. Ferrantino, President and Chief Executive Officer said, "Valpey-Fisher's operating performance for the third quarter ending September 28, 2003 continues to improve in spite of the continued softness in the telecommunications market. Sales in the third quarter were $2,190,000, up from $1,617,000 in the third quarter of last year. The sales increase was positively impacted by our acquisition of MF Electronics, which was finalized in late May of this year. While less than last quarter, our operating losses continue. We are reporting an operating loss of $595,000 for this quarter resulting in an after-tax loss of $396,000 or $.09 per diluted share. During the 2002 third quarter, we reported an operating loss of $1,741,000, and after-tax loss of $1,092,000 or $.26 per diluted share. The 2002 third quarter operating loss included $1 million in expense provisions for excess inventory and severance costs. In this quarter we completed the move of MF Electronics from New York to Hopkinton and had transitioning costs of approximately $85,000. In the fourth quarter we expect a significant reduction in these transitioning costs." Mr. Ferrantino further said, "New orders for the quarter were $2,254,000 for a book-to-bill of slightly better than 1.0 and the highest of any quarter this year. Our backlog at September 28, 2003 was $1.7 million compared to $1.6 million at June 29, 2003 and $1.1 million at December 31, 2002. For the nine months ending September 28, 2003, sales were $6,081,000 with an operating loss of $1,944,000 and a net loss from continuing operations of $1,282,000 or $.31 per diluted share. For the nine months ending September 29, 2002 sales were $5,692,000 with an operating loss of $2,935,000 and a net loss from continuing operations of $1,713,000 or $.41 per diluted share. During the quarter ended September 28, 2003, cash increased $1,428,000 to $4,570,000 mainly due to the receipt of our Federal income tax refund. Albeit our financial results remain unacceptable, we continue to make operational progress. Inventory management, cycle time reduction and yield improvement programs continue to drive our improvement in efficiency." Mr. Ferrantino concluded, "As we stated in our last quarter report, we have improved our sales channels into Europe. During the third quarter we visited several potential European customers and concluded training of our representatives in Italy and the United Kingdom. We expect to see an increase in quoting activity during the fourth quarter as a result of these visits. Going forward, in the fourth quarter we are continuing two key initiatives. One is to align our current skill sets with those that we believe we require in order to continue to improve our financial results. In addition, we have engaged a consultant with knowledge of the Chinese market, and we will visit several manufacturers with the intent to ultimately develop a partnership, allowing us to both manufacture more products at lower costs and increase our product offering." Ted Valpey, Jr., Chairman said, "We believe the markets we address are slowly starting to stabilize and in fact show modest growth. Valpey-Fisher is better positioned than ever to capitalize on this growth. As we enter the fourth quarter we continue the strategy that has caused us to improve our operational efficiency and we diligently continue to pursue strategic external opportunities that we believe could contribute to our improvement in 2004." Ted Valpey, Jr. Michael J. Ferrantino Chairman of the Board President and Chief Executive Officer November 6, 2003 Forward-Looking Statements Certain statements made herein contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Words such as "expects", "believes", "estimates", "plans" or similar expressions are intended to identify such forward-looking statements. The forward-looking statements are based on the Company's current views and assumptions and involve risks and uncertainties that include, but not limited to: the ability to develop, market and manufacture new innovative products competitively, the fluctuations in product demand of the telecommunications industry, the ability of the Company and its suppliers to produce and deliver materials and products competitively, and the ability to limit the amount of the negative effect on operating results caused by pricing pressure. Valpey-Fisher Corporation Condensed Consolidated Statements of Operations Unaudited (in thousands, except per share Nine data) Quarter Ended Months Ended ---------------- ----------------- 9/28/03 9/29/02 9/28/03 9/29/02 ---------------- ----------------- Net sales $2,190 $1,617 $6,081 $5,692 Cost of sales 1,933 2,688 5,532 6,624 ---------------- ----------------- Gross profit (loss) 257 (1,071) 549 (932) Selling and advertising expenses 287 389 1,033 1,129 General and administrative expenses 565 281 1,460 874 ---------------- ----------------- 852 670 2,493 2,003 ---------------- ----------------- Operating (loss) (595) (1,741) (1,944) (2,935) Other income, net (A) 8 11 28 172 ---------------- ----------------- (Loss) from continuing operations before income taxes (587) (1,730) (1,916) (2,763) Income tax benefit 191 638 634 1,050 ---------------- ----------------- (Loss) from continuing operations (A) (396) (1,092) (1,282) (1,713) (Loss) from discontinued operations 0 0 0 (45) ---------------- ----------------- Net (loss) $(396)$(1,092) $(1,282)$(1,758) ================ ================= Basic and diluted (loss) per share: Continuing operations $(0.09) $(0.26) $(0.31) $(0.41) Discontinued operations 0.00 0.00 0.00 (0.01) ---------------- ----------------- $(0.09) $(0.26) $(0.31) $(0.42) ================ ================= Basic and diluted weighted average shares 4,185 4,140 4,189 4,144 (A) For the nine months ended 9/29/02, the net loss from continuing operations includes a gain on the sale of an investment amounting to $124,000 or $.03 per basic and diluted share. Valpey-Fisher Corporation Condensed Consolidated Balance Sheets (in thousands) (Unaudited)(Audited) 9/28/03 12/31/02 -------------------- ASSETS Current assets: Cash and cash equivalents $4,570 $5,758 Receivables, net 1,948 2,175 Inventories, net 1,523 2,028 Deferred income taxes and other current assets 944 1,110 -------------------- Total current assets 8,985 11,071 -------------------- Property, plant and equipment, at cost 10,734 10,165 Less accumulated depreciation 6,856 6,231 -------------------- 3,878 3,934 -------------------- Other assets 136 146 -------------------- $12,999 $15,151 ==================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $1,614 $2,365 Deferred income taxes 619 704 Stockholders' equity 10,766 12,082 -------------------- $12,999 $15,151 ==================== CONTACT: Valpey-Fisher Corporation Michael J. Kroll, 508-435-6831 ext. 600