EX-99.1 3 c69201ex99-1.txt PRESS RELEASE NEWS FRB | WEBER SHANDWICK | FINANCIAL COMMUNICATIONS AT THE COMPANY: AT FRB|WEBER SHANDWICK Paul Schmitt Tad Gage Lisa Fortuna Chief Financial Officer General Info Analysts/Investors (630) 860-3560 (312) 640-6745 (312) 640-6779 FOR IMMEDIATE RELEASE TUESDAY, APRIL 30, 2002 M-WAVE ANNOUNCES FIRST QUARTER RESULTS FOR 2002 BENSENVILLE, ILL., APRIL 30, 2002--M~Wave, Inc. (Nasdaq: MWAV), a value added service provider of high performance circuit boards used in a variety of digital and high frequency applications, announced net sales of $8,314,000 for the quarter ended March 31, 2002 and a net profit of $343,000 or $0.08 per share compared to net sales of $22,526,000 and a net income of $2,076,000 or $0.45 per share for the quarter ended March 31, 2001. Results for the first quarter were in line with expectations. The first quarter of 2002 was fairly flat when compared to fourth quarter 2001 net sales of $8,238,000 and net income of $469,000 or $.11 per share. The fourth quarter 2001 included a gain of $.05 per share relating to the sale of the facility in Texas. Cash levels increased from $2,103,000 at December 31, 2001 to $3,045,000 at March 31, 2002. accounts receivables were down $2,196,000, inventories were up $1,365,000 and accounts payables were up $823,000 from December 31, 2001. The Company purchased $1,202,000 of property plant and equipment mainly related to the new facility in West Chicago during the first quarter of 2002. The Company plans to spend approximately $3,000,000 on property plant and equipment in 2002. "Our first quarter results of 2002 were in line with expectations marking this as M-Wave's 10th consecutive quarter of profitability," said Joseph A. Turek, Chairman and Chief Executive Officer, "however, the economy is not recovering as quickly as expected and our Telecom business has slowed a bit. We expect our second quarter 2002 revenue to be between $5 and $10 million. Our strategy is to continue to reduce our dependence on the Telecom industry and focus our growth on the Digital side of our business. Although our annual results for this year are dependent on generating new virtual manufacturing customers and the economic recovery, we expect to be profitable in 2002." Turek went on to say, "the new state-of-the-art prototype facility in West Chicago is up and running. We have increased our sales force with the addition of three Sales Managers, added 12 new sales representative organizations and are calling on 103 new customers. Our core strategy of customer relationship sales is the key to our virtual manufacturing concept. Our goal is to sign one new supply chain contract each month bringing our total contracts to approximately 15 by year end." The Company signed six new supply chain contracts during the first quarter of 2002 representing approximately $19,000,000 in annual revenues. Join M~Wave on its quarterly Conference call on Wednesday, May 1, 2002 at 10:00 am CST at 703-871-3599 or 877-817-7175 at least five minutes before start time or on www.vcall.com. FRB | Weber Shandwick Worldwide serves as financial relations counsel to this company, is acting on the company's behalf in issuing this bulletin and receiving compensation therefor. The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities. 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 IITM 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 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: the Company's relationship and contractual arrangements with key customers; 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. -FINANCIAL TABLES FOLLOW- M~WAVE, Inc. CONSOLIDATED BALANCE SHEETS (unaudited) December 31 March 31 2001 2002 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,102,784 $ 3,044,595 Accounts receivable, net of allowance for doubtful accounts, 2001- $100,000: 2002- $100,000 8,829,686 6,633,669 Inventories 1,564,008 2,928,758 Refundable income taxes 0 139,271 Deferred income taxes 1,313,644 1,150,390 Prepaid expenses and other 105,613 95,507 Restricted cash 604,489 969,638 ------------ ------------ Total current assets 14,520,224 14,961,828 PROPERTY, PLANT AND EQUIPMENT: Land, buildings and improvements 7,219,799 7,594,397 Machinery and equipment 13,062,860 13,890,213 ------------ ------------ Total property, plant and equipment 20,282,659 21,484,610 Less accumulated depreciation and amortization (7,836,882) (8,214,882) ------------ ------------ Property, plant and equipment-net 12,445,777 13,269,728 OTHER ASSETS 331,731 308,979 ------------ ------------ TOTAL $ 27,297,732 $ 28,540,535 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,112,370 $ 3,935,340 Accrued expenses 1,491,547 1,181,889 Accrued income taxes 152,931 0 Current portion of long-term debt 1,378,767 1,378,767 ------------ ------------ Total current liabilities 6,135,615 6,495,996 DEFERRED INCOME TAXES 663,830 500,576 LONG-TERM DEBT 2,743,527 3,445,926 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 4,456,294 shares outstanding at December 31, 2001 and March 31, 2002 30,895 30,895 Additional paid-in capital 8,439,072 8,439,072 Retained earnings 11,512,072 11,855,349 Treasury stock, at cost, 1,606,928 shares, at December 31, 2001 and March 31, 2002 (2,227,279) (2,227,279) Total stockholders' equity 17,754,760 18,067,142 ------------ ------------ TOTAL $ 27,297,732 $ 28,509,640 ============ ============ See notes to consolidated financial statements. M~WAVE, Inc. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended March 31, 2001 2002 Net sales $ 22,526,120 $ 8,313,754 Cost of goods sold 17,589,054 6,697,973 ------------ ------------ Gross profit 4,937,066 1,615,781 Operating expenses: General and administrative 885,247 593,276 Selling and marketing 471,029 482,058 ------------ ------------ Total operating expenses 1,356,276 1,075,334 ------------ ------------ Operating income 3,580,790 540,447 Other income (expense): Interest income 19,335 62,893 Interest expense (217,958) (42,265) Rental income 51,000 0 ------------ ------------ Total other income (expense) (147,623) 20,628 ------------ ------------ Income before income taxes 3,433,167 561,075 Provision for income taxes 1,357,192 217,798 ------------ ------------ Net income $ 2,075,975 $ 343,277 ============ ============ Weighted average shares outstanding 4,572,184 4,456,294 Basic earnings per share $ 0.45 $ 0.08 ============ ============ See notes to consolidated financial statements. M~WAVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three months ended March 31, 2001 2002 OPERATING ACTIVITIES: Net income $ 2,075,975 $ 343,277 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization $ 398,490 $ 378,000 Changes in assets and liabilities: Accounts receivable-trade $ 1,948,279 $ 2,196,017 Inventories $ 2,030,895 $(1,364,750) Income taxes $ 1,297,192 $ (292,202) Prepaid expenses and other assets $ (60,686) $ 32,858 Restricted cash $ 0 $ (365,149) Accounts payable $ (976,107) $ 822,970 Accrued expenses $ 81,410 $ (309,658) ----------- ----------- Net cash flows provided by operating activities $ 6,795,448 $ 1,441,363 INVESTING ACTIVITIES: Purchase of property, plant and equipment $(1,557,974) $(1,201,951) Net cash flows used in investing activities $(1,557,974) $(1,201,951) FINANCING ACTIVITIES: Long term debt $ 0 $ 717,090 Payments on short and long term debt $(2,884,710) $ (14,691) ----------- ----------- Net cash flows used in (provided by) financing activities $(2,884,710) $ 702,399 NET INCREASE IN CASH AND CASH EQUIVALENTS $ 2,352,764 $ 941,811 CASH AND CASH EQUIVALENTS - Beginning of period $ 1,230,999 $ 2,102,784 ----------- ----------- CASH AND CASH EQUIVALENTS - End of period $ 3,583,763 $ 3,044,595 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $ 217,958 $ 42,226 Income tax refunds/ (payments) $ 0 $ 510,000 See notes to consolidated financial statements.