EX-99.1 3 c67357ex99-1.txt PRESS RELEASE EXHIBIT 99.1 M-WAVE ANNOUNCES ANNUAL AND FOURTH QUARTER RESULTS FOR 2001 BENSENVILLE, Ill., Feb. 5 /PRNewswire-FirstCall/ -- M-Wave, Inc. (Nasdaq: MWAV - news), a value added service provider of high performance circuit boards used in a variety of digital and high frequency applications, announced net sales of $54,824,000 for year ended December 31, 2001 and a net profit of $3,797,000 or $0.84 per share compared to net sales of $57,560,000 and a net income of $3,940,000 or $0.86 per share for the year ended December 31, 2000. For the fourth quarter ended December 31, 2001, the Company announced net sales of $8,238,000 with a net income of $469,000 or $0.11 per share, compared to a net income of $1,820,000 or $0.40 per share a year ago. Results for the fourth quarter were $0.02 higher than analyst's expectations. Cash levels increased from $1,231,000 at December 31, 2000 to $2,707,000 at December 31, 2001. Accounts receivable and inventories were down $10,845,000 from December 31, 2000, which was partially offset by a decrease in accounts payable of $3,404,000. The Company also paid down $4,774,000 of debt in 2001. "2001 was a tough year for M-Wave and the printed circuit industry as a whole, said Joseph A. Turek, Chairman and Chief Executive Officer. "However, it was a major accomplishment and validation of our Virtual Manufacturing concept that we were able to maintain relatively flat sales this last year." Turek went on to say, "We accomplished most of our objectives in 2001, bringing our new state-of-the-art prototype facility in West Chicago on line in December, increasing the sales force five-fold and expanding procurement, customer service and quality personnel." "We continue to increase our customer base with Virtual Manufacturing as many new customers find supply chain management of printed circuits a way of reducing their costs," said Turek, "and we recently announced the signing of supply chain contracts with three new customers including Westell, International Control Services and BECS Technology. We believe our business will remain constant in the first quarter and begin increasing in the second quarter of 2002." Join M-Wave on its quarterly Conference call on Wednesday, February 6, 2002 at 10:00 am CST at 703-871-3627 or 888-806-9467 at least five minutes before start time or on www.vcall.com . About M-Wave: Established in 1988 and headquartered in the Chicago suburb of Bensenville, Ill., M-Wave is a value-added service provider of high performance circuit boards. The Company's products are used in a variety of telecommunications and industrial electronics applications. M-Wave services customers like Lucent Technologies and Motorola, Inc. with its patented bonding technology, Flexlink II(TM) and its supply chain management program called Virtual Manufacturing. The Company trades on the Nasdaq National 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 judgment 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. M-WAVE, Inc. CONSOLIDATED STATEMENTS OF INCOME Three months ended December 31, ------------------------------- 2000 2001 ------------- -------------- Net sales $ 22,091,523 $ 8,238,239 Cost of goods sold 18,485,412 6,825,776 ------------ ------------ Gross profit 3,606,111 1,412,463 Operating expenses: General and administrative 709,249 486,202 Selling and marketing 485,701 343,037 ------------ ------------ Total operating expenses 1,194,950 829,239 ------------ ------------ Operating income 2,411,161 583,224 other income (expense): Interest income 34,827 59,534 Interest expense (119,366) (14,670) Insurance settlement 61,965 0 Gain (loss) on disposal of assets 0 99,337 Rental income 51,000 57,800 ------------ ------------ Total other income (expense) 28,426 202,001 ------------ ------------ Income before income taxes 2,439,587 785,225 Provision for income taxes 619,446 315,899 ------------ ------------ Net income $ 1,820,141 $ 469,326 Weighted average shares outstanding 4,572,184 4,456,932 Basic earnings per share $ 0.40 $ 0.11 See notes to consolidated financial statements. M-WAVE, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS Twelve months ended December 31, ----------------------------------- 2000 2001 ----------- ----------- Net sales $57,559,962 $54,824,432 Cost of goods sold 47,671,167 44,452,838 ----------- ----------- Gross profit 9,888,795 10,371,594 Operating expenses: General and administrative 2,457,677 2,530,607 Selling and marketing 1,526,676 1,536,411 ----------- ----------- Total operating expenses 3,984,353 4,067,018 ----------- ----------- Operating income 5,904,442 6,304,576 Other income (expense): Interest income 114,173 112,392 Interest expense (339,312) (424,661) Rental income 204,000 176,800 Insurance settlement 61,965 0 Gain (loss) on disposal of assets 0 99,337 ----------- ----------- Total other income (expense) 40,826 (36,132) ----------- ----------- Income before income taxes 5,945,268 6,268,444 Provision for income taxes 2,005,306 2,471,655 ----------- ----------- Net income $ 3,939,962 $ 3,796,789 Net income per share basic and diluted $0.86 $0.84 Weighted average shares 4,561,957 4,536,204 See notes to consolidated financial statements. M-WAVE, Inc. CONSOLIDATED BALANCE SHEETS December 31 December 31 2000 2001 ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,230,999 $ 2,707,273 Accounts receivable, net of allowance for doubtful accounts, 2000- $100,000: 2001- $100,000 12,378,766 8,829,686 Inventories 8,859,795 1,564,008 Deferred income taxes 1,118,242 649,814 Prepaid expenses and other 47,688 105,613 ----------- ----------- Total current assets 23,635,490 13,856,394 PROPERTY, PLANT AND EQUIPMENT: Land, buildings and improvements 6,488,057 7,219,799 Machinery and equipment 8,731,449 13,062,860 ----------- ----------- Total property, plant and equipment 15,219,506 20,282,659 Less accumulated depreciation (6,914,345) (7,836,882) ----------- ----------- Property, plant and equipment-net 8,305,161 12,445,777 NOTE RECEIVABLE 195,391 0 OTHER ASSETS 54,915 331,731 ----------- ----------- TOTAL $32,190,957 $26,633,902 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 6,516,541 $ 3,112,370 Accrued expenses 1,603,474 1,491,547 Accrued income taxes 146,287 152,931 Current credit line debt 5,500,000 0 Current portion of long-term debt 3,229,580 1,378,767 ----------- ----------- Total current liabilities 16,995,882 6,135,615 DEFERRED INCOME TAXES 522,593 0 LONG-TERM DEBT 166,506 2,743,527 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 6,179,112 shares issued and 4,572,184 shares outstanding at December 31, 2000, 6,179,112 shares issued and 4,456,294 shares outstanding at December 31, 2001 30,895 30,895 Additional paid-in capital 8,439,072 8,439,072 Retained earnings 7,715,283 11,512,072 Treasury stock, at cost, 1,606,928 shares, at December 31, 2000 and 1,722,815 shares at December 31, 2001 (1,679,274) (2,227,279) ----------- ----------- Total stockholders' equity 14,505,976 17,754,760 ----------- ----------- TOTAL $32,190,957 $26,633,902 =========== =========== See notes to consolidated financial statements. M-WAVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Twelve months ended December 31, -------------------------------- 2000 2001 -------------- -------------- OPERATING ACTIVITIES: Net income $ 3,939,962 $ 3,796,789 ------------ ------------ Adjustments to reconcile net loss to net cash flows from operating activities: (Gain) loss on disposal of property, plant and equipment $ 0 $ (291,122) Depreciation and amortization $ 1,058,657 $ 1,367,276 Deferred income taxes $ (190,982) $(54,165) Reserve for notes receivable $ 450,000 $195,391 Changes in assets and liabilities: Accounts receivable-trade $ (9,858,696) $ 3,549,080 Inventories $ (6,829,378) $ 7,295,787 Income taxes $ 146,287 $6,644 Prepaid expenses and other assets $ (25,946) $ (334,741) Accounts payable $ 4,542,474 $ (3,404,171) Accrued expenses $ 1,095,018 $ (111,927) ------------ ------------ Net cash flows provided by operating activities $ (5,672,604) $ 12,014,841 INVESTING ACTIVITIES: Purchase of property, plant and equipment $ (2,421,443) $ (7,558,146) Purchase treasury stock $ 0 $(548,005) Proceeds from sale of property, plant and equipment $ 0 $ 2,341,376 ------------ ------------ Net cash flows used in investing activities $ (2,421,443) $ (5,764,775) FINANCING ACTIVITIES: Common stock issued upon exercise of stock options $ 90,437 $ 0 Credit line debt $ 5,500,000 $ (5,500,000) Long term debt $ 1,509,286 $ 3,955,859 Payments on short and long term debt $ (361,562) $ (3,229,651) ------------ ------------ Net cash flows used in financing activities $ 6,738,161 $ (4,773,792) ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS $ (1,355,886) $ 1,476,274 CASH AND CASH EQUIVALENTS - Beginning of period $ 2,586,885 $ 1,230,999 CASH AND CASH EQUIVALENTS - End of period $ 1,230,999 $ 2,707,273 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $ 339,312 $ 424,661 Income tax refunds/ (payments) $ (2,050,000) $ (2,520,133) See notes to consolidated financial statements.