EX-99.1 2 c59948ex99-1.txt PRESS RELEASE DATED 2/6/01 1 TUESDAY FEBRUARY 6, 5:10 PM EASTERN TIME PRESS RELEASE SOURCE: M~Wave, Inc. M~WAVE ANNOUNCES ANNUAL RESULTS AND FIRST QUARTER EXPECTATIONS BENSENVILLE, Ill., Feb. 6/PRNewswire/ -- M~Wave, Inc. (Nasdaq: MWAV - news), a manufacturer of high performance printed circuit boards used in wireless communications, announced a net income of $1,820,000 or $0.40 per share, for the fourth quarter ended December 31, 2000, compared with a net income of $22,000 or $0.00 per share a year ago. Net sales for the fourth quarter of 2000 were $22,092,000, up 22% from the third quarter of 2000. For the year ended December 31, 2000, the Company reported a net profit of $3,940,000 or $0.86 per share compared with a net loss of ($689,000) or ($0.15) per share for 1999. Cash levels decreased from $2,587,000 at December 31, 1999 to $1,231,000 at December 31, 2000. Accounts receivable and inventories were up $16,688,000 from year-end, which was partially offset by an increase in accounts payable of $4,542,000. The Company borrowed $4,000,000 in the fourth quarter of 2000 to support the increase in working capital. American National Bank and Trust Company of Chicago has increased our line of credit to $10,000,000 to fund the growth of the business. "The working capital is in line with our budget," explained Paul Schmitt, Chief Financial Officer. "2000 was an exciting and record setting year for M~Wave," said Joseph A. Turek, Chairman and Chief Executive Officer, "and we expect 2001 to be equally demanding as we bring our new West Chicago facility on line by Q3 and continue to increase our customer base with Virtual Manufacturing. Although the economy is showing signs of slowing down, we expect first quarter revenues to be between $20,000,000 and $30,000,000." The Company recently announced the addition of two new executives to the management staff, Mark Anderson and Dick Golden, and the appointment of Gary Costagna as a Director of M~Wave. Join M~Wave on its quarterly Conference call on Wednesday, February 7, 2001 at 10:00 am CST at 703-871-3016 or 877-282-2315 at least five minutes before start time or on www.vcall.com. 2 About M~Wave: Established in 1988 and headquartered in the Chicago suburb of Bensenville, Ill., M~Wave is a manufacturer of high performance printed circuits through its wholly owned subsidiary Poly Circuits. The Company's products are used in a variety of telecommunications applications for wireless and Internet communications. M~Wave services customers like Lucent Technologies and Motorola, Inc. with its patented bonding technology, Flexlink IITM. The Company trades on the Nasdaq SmallCap market under the symbol "MWAV". Visit the Company on its web site at www.mwav.com. This news release contains predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties. While this outlook represents our current judgement on the future direction of the business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested above. Factors that could cause actual results to differ include the following: dependence on suppliers and subcontractors for circuit board components; successful award of contracts under bid; a highly competitive environment; design and production delays; cancellation or reductions of contract orders; effective utilization of existing and new manufacturing resources; pricing pressures by key customers; and other factors detailed in the Company's Securities and Exchange Commission filings. For more information on M~Wave via fax, free of charge, Dial 1-800-PRO-INFO and enter the ticker "MWAV". M~WAVE, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended December 31, 1999 2000 Net sales $3,556,959 $22,091,523 Cost of goods sold 3,002,838 18,485,412 Gross profit 554,118 3,606,111 Operating expenses: General and administrative 325,087 709,249 Selling and marketing 171,397 485,701 Total operating expenses 496,484 1,194,950 Operating income 57,634 2,411,161 Other income (expense): Interest income 50,714 34,827 Interest expense (44,313) (119,366) Rental income 51,000 51,000 Insurance settlement 0 61,965 Total other income 57,401 28,426 Income before income taxes 115,035 2,439,587 Provision for income taxes 92,834 619,446 Net income $ 22,201 $ 1,820,141 Net income per share basic and diluted $ 0.00 $ 0.40 weighted average shares outstanding 4,543,330 4,572,184 3 M-WAVE, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS Twelve months ended December 31, 1999 2000 Net sales $11,305,643 $57,559,962 Cost of goods sold 10,282,981 47,671,167 Gross profit 1,022,662 9,888,795 Operating expenses: General and administrative 1,519,006 2,457,677 Selling and marketing 610,075 1,526,676 Total operating expenses 2,129,081 3,984,353 Operating income (loss) (1,106,419) 5,904,442 Other income (expense): Interest income 205,871 114,173 Interest expense (211,759) (339,312) Rental income 161,000 204,000 Insurance settlement 0 61,965 Loss on disposal of assets (135,084) 0 Total other income 20,028 40,826 Income (loss) before income taxes (1,086,391) 5,945,268 Provision (credit) for income taxes (397,486) 2,005,306 Net income (loss) ($688,905) $ 3,939,962 Net income (loss) per share basis and diluted ($0.15) $ 0.86 Weighted average shares outstanding 4,535,342 4,561,957 See notes to consolidated financial statements. 4 M-WAVE, Inc. CONSOLIDATED BALANCE SHEETS December 31, December 31, ASSETS 1999 2000 CURRENT ASSETS: Cash and cash equivalents $ 2,586,885 $ 1,230,999 Accounts receivable, net of allowance for doubtful accounts, 1999- $10,000: 2000 $100,000 2,520,070 12,378,766 Inventories 2,030,417 8,859,795 Deferred income taxes 1,080,940 1,118,242 Prepaid expenses and other 71,957 47,688 Total current assets 8,290,269 23,635,490 PROPERTY, PLANT AND EQUIPMENT: Land, buildings and improvements 4,863,247 6,488,057 Machinery and equipment 7,934,816 8,731,449 Total property, plant and equipment 12,798,063 15,219,506 Less accumulated depreciation (5,855,688) (6,914,345) Property, plant and equipment-net 6,942,375 8,305,161 NOTE RECEIVABLE, NET 645,391 195,391 OTHER ASSETS 4,700 54,915 TOTAL $15,882,735 $32,190,957 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 1,974,067 $ 6,516,541 Accrued expenses, 508,456 1,603,474 Accrued income taxes 0 146,287 Current credit line debt 0 5,500,000 Current portion of long-term debt 361,563 321,794 Total current liabilities 2,844,086 14,088,096 DEFERRED INCOME TAXES 676,273 522,593 LONG-TERM DEBT 1,886,799 3,074,292 STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; authorized, 1,000,000 shares; no shares issued 0 0 Common stock, $.01 par value; authorized, 10,000,000 shares 3,069,806 shares issued and 2,267,842 shares outstanding at December 31, 1999, 6,179,112 shares issued and 4,572,184 shares outstanding at December 31, 2000 30,698 30,895 Additional paid-in capital 8,348,832 8,439,072 Retained earnings 3,775,321 7,715,283 Treasury stock: 1,606,928 shares, at cost (1,679,274) (1,679,274) Total stockholders' equity 10,475,577 14,505,976 TOTAL $15,882,735 $32,190,957 5 M~WAVE. INC CONSOLIDATED STATEMENTS OF CASH FLOWS Twelve months ended December 31, 1999 2000 OPERATING ACTIVITIES Net income (loss) $ (688,905) $ 3,939,962 Adjustments to reconcile net income to net Cash flows from operating activities: Gain on disposal of property, plant and equipment $ 135,084 $ 0 Depreciation and amortization $ 1,008,216 $ 1,058,657 Reserve for notes receivable $ 0 $ 450,000 Deferred income taxes $ (397,486) $ (190,982) Changes in assets and liabilities: Accounts receivable-trade $(1,362,463) $(9,858,696) Inventories $(1,220,475) $(6,829,378) Income taxes $ 0 $ 146,287 Prepaid expenses and other assets $ 10,109 $ (25,946) Accounts payable $ 656,522 $ 4,542,474 Accrued expenses ($58,757) $ 1,095,018 Net cash flows used in operating activities $(1,918,155) $(5,672,604) INVESTING ACTIVITIES: Purchase of property, plant and equipment $ (473,803) $(2,421,443) Proceeds from sale of property, plant and equipment $ 4,619 $ 0 Purchase treasury stock ($3,166) $ 0 Proceeds from notes receivable $ 421,113 $ 0 Proceeds from sale of PC Dynamics property, plant and equipment $ 581,965 $ 0 Proceeds from sale of PC Dynamics net working capital and other $ 311,354 $ 0 Net cash flows provided by (used in) investing activities $ 842,082 $(2,421,443) FINANCING ACTIVITIES: Common stock issued upon exercise of stock options $ 0 $ 90,437 Long term debt $ 293,834 $ 1,509,286 Credit line debt $ 0 $ 5,500,000 Payments on long term debt $ (343,413) $ (361,562) Net cash flows (used in) provided by financing activities $ (49,579) $ 6,738,161 NET DECREASE IN CASH AND CASH EQUIVALENTS $(1,125,652) $(1,355,886) CASH AND CASH EQUIVALENTS - Beginning of period $ 3,712,537 $ 2,586,885 CASH AND CASH EQUIVALENTS - End of period $ 2,586,885 $ 1,230,999 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $ 211,759 $ 339,312 Income tax payments $ 0 $ 2,050,000 SOURCE: M-wave, Inc.