-----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, DRj7GTnJnSR6O08487L/LhvatIVLcbm76bvf+ShHyLWA1DlJbATWEu9GMAeFlRC/ gToVqBTINcjwP3CqT/D1MQ== 0000950137-02-004101.txt : 20020731 0000950137-02-004101.hdr.sgml : 20020731 20020731130804 ACCESSION NUMBER: 0000950137-02-004101 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020730 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: M WAVE INC CENTRAL INDEX KEY: 0000883842 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 363809819 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19944 FILM NUMBER: 02715702 BUSINESS ADDRESS: STREET 1: 216 EVERGREEN ST CITY: BENSENVILLE ILLINOIS STATE: IL ZIP: 60106 BUSINESS PHONE: 6308609542 MAIL ADDRESS: STREET 1: 216 EVERGREEN STREET CITY: BENSENVILLE STATE: IL ZIP: 60106 8-K 1 c70878e8vk.txt CURRENT REPORT 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 July 30, 2002 ------------------------------------------------------------- Date of Report (Date of earliest event reported) M-Wave, Inc. ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 33-45499 36-3809819 - ----------------------------- ------------ ----------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 216 Evergreen Street, Bensenville, Illinois 60106 ----------------------------------------------------------- (Address of principal executive offices) (Zip Code) (630) 860-9542 ------------------------------------ (Registrant's telephone number) ITEM 5. OTHER EVENTS. On July 30, 2002 M-Wave, Inc. announced its second quarter results for 2002. The full text of M-Wave, Inc.'s July 30, 2002 press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Exhibits 99.1 Press Release issued by M-Wave, Inc. dated July 30, 2002. -2- SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 30, 2002 M-WAVE, INC. By: /s/ PAUL S. SCHMITT ----------------------------------- Name: Paul S. Schmitt Title: Controller; Chief Accounting Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION ------- ----------- 99.1 Press Release issued by M-Wave, Inc. dated July 30, 2002 -4- EX-99.1 3 c70878exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [FRB | WEBER SHANDWICK LETTERHEAD] AT THE COMPANY: AT FRB|WEBER SHANDWICK Paul Schmitt Jeff Wilhoit Lisa Fortuna Chief Financial Officer General Info Analysts/Investors (630) 860-3560 (312) 640-6757 (312) 640-6779 FOR IMMEDIATE RELEASE TUESDAY, JULY 30, 2002 M~WAVE ANNOUNCES BREAKEVEN SECOND QUARTER RESULTS ------------------------------------------------- ------------- SIGNS TWO NEW THREE YEAR SUPPLY CHAIN AGREEMENTS ------------------------------------------------- BENSENVILLE, ILL., JULY 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 $7,296,000 for the second quarter ended June 30, 2002 and a net profit of $9,000 or $0.00 per share compared to net sales of $15,449,000 and a net profit of $773,000 or $0.17 per share for the second quarter ended June 30, 2001. Net sales were $15,610,000 and net profit was $352,000 or $0.08 per share for the six months ended June 30, 2002, compared to net sales of $37,975,000 and net profit of $2,849,000 or $0.62 per share for the six months ended June 30, 2001. Cash levels increased from $2,103,000 at December 31, 2001 to $2,111,000 at June 30, 2002. Accounts receivables were down $2,203,000, inventories were up $1,260,000 and accounts payables were up $749,000 from December 31, 2001. The Company purchased $2,013,000 of property plant and equipment mainly related to the new facility in West Chicago during the first six months of 2002. The Company plans to spend approximately $1,000,000 on property plant and equipment in the second half of 2002. "Our second quarter results of 2002 were in line with our expectations," said Joseph A. Turek, Chairman and Chief Executive Officer. "However, our second quarter results included two non-recurring events that boosted sales by $3,600,000 and profits by $2,500,000. These events were a result of the end of life of several products we produced for Lucent and the shipment of inventory we were holding for Westell. Had these events not occurred, the Company would have had a pre-tax loss of approximately $2,500,000." M~Wave also announced today the signing of two new Supply Chain Management Agreements under its program of Virtual Manufacturing. Both contracts were signed for a three-year period. The customers prefer to remain anonymous so as not to alert their competition. M~Wave expects to ship approximately $1,000,000 per year in total to these two customers. The products supplied to these two customers represent single sided to 6-layer printed circuit board technology in industrial electronics and consumer type applications. "M~Wave has signed nine new agreements to date which the Company expects to represent approximately $10,000,000 in revenues for 2002," indicated Mr. Turek. "Virtual Manufacturing contractually supplies the printed circuit needs of our customer by managing the complete procurement MORE 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. M~WAVE, INC. ADD 1 process. We utilize a global base of suppliers that allows our customers to benefit from lower worldwide manufacturing prices. We deliver products when the customer needs them through either consignment inventory control or just-in-time programs. And, we reinforce our quality policy with a money-back guarantee for boards and components. To our knowledge, no other company offers the price, delivery, and quality benefits of our Virtual Manufacturing program. OUTLOOK "Although we shifted the direction of the Company from RF & Microwave products to Digital products, the downturn in the telecom industry could adversely affect our revenue base through the end of this year," continued Turek. "We expect our third quarter 2002 revenue to be between $4 and $7 million. We are addressing the shortfall in revenues by right-sizing the company. The Bensenville facilities will be consolidated into our new West Chicago campus on an accelerated schedule to be completed by the end of 2002. Material and labor costs will be reduced during this period to match the level of expected revenue. Our annual results for this year will be dependent on generating new virtual manufacturing customers and the economic recovery." Join M~Wave on its quarterly conference call on Wednesday, July 31, 2002 at 10:00 am CST at 888-530-7880 or 706-634-2347 at least five minutes before start time or on www.vcall.com. To listen to a replay of the conference call through August 7, 2002, please dial 800-642-1687 or 706-645-9291. The pass code is 5013560. 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- MORE M~WAVE, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) December 31 June 30 2001 2002 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,102,784 $ 2,110,741 Accounts receivable, net of allowance for doubtful accounts, 2001 - $100,000: 2002 - $100,000 8,829,686 6,626,762 Inventories 1,564,008 2,824,078 Refundable income taxes 0 853,707 Deferred income taxes 1,313,644 1,313,644 Prepaid expenses and other 105,613 60,192 Restricted cash 604,489 1,336,469 Total current assets 14,520,224 15,125,593 PROPERTY, PLANT AND EQUIPMENT: Land, buildings and improvements 7,219,799 7,662,591 Machinery and equipment 13,062,860 14,632,716 Total property, plant and equipment 20,282,659 22,295,307 Less accumulated depreciation (7,836,882) (8,592,880) Property, plant and equipment - net 12,445,777 13,702,427 OTHER ASSETS 331,731 286,209 TOTAL $27,297,732 $29,114,229 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,112,370 $ 3,861,359 Accrued expenses 1,491,547 995,085 Accrued income taxes 152,931 0 Current portion of long-term debt 1,378,767 1,378,767 Total current liabilities 6,135,615 6,235,211 DEFERRED INCOME TAXES 663,830 663,830 LONG-TERM DEBT 2,743,527 4,166,273 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 shares 6,179,112 shares issued and 4,456,294 shares outstanding at December 31, 2001, 6,179,112 shares issued and 4,443,294 shares outstanding at June 30, 2002 30,895 30,895 Additional paid-in capital 8,439,072 8,439,072 Retained earnings 11,512,072 11,864,118 Treasury stock, at cost, 1,722,815 shares, at December 31, 2001 and 1,735,815 shares at June 30, 2002 (2,227,279) (2,285,170) Total stockholders' equity 17,754,760 18,048,915 TOTAL $27,297,732 $29,114,229 See notes to consolidated financial statements. M~WAVE, Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended June 30, 2001 2002 Net sales $15,448,962 $7,296,369 Cost of goods sold 13,103,481 6,376,368 Gross profit 2,345,481 920,001 Operating expenses: General and administrative 580,087 539,545 Selling and marketing 457,304 351,245 Total operating expenses 1,037,391 890,790 Operating income 1,308,090 29,211 Other income (expense): Interest income 8,000 43,880 Interest expense (89,354) (58,759) Rental income 51,000 0 Total other (expense) (30,354) (14,879) Income before income taxes 1,277,736 14,332 Provision for income taxes 505,113 5,563 Net income $ 772,623 $ 8,769 Weighted average shares outstanding 4,572,184 4,448,746 Basic earnings per share $ 0.17 $ 0.00 Diluted shares outstanding 4,600,895 4,467,731 Diluted earnings per share $ 0.17 $ 0.00 See notes to consolidated financial statements. M~WAVE, Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Six months ended June 30, 2001 2002 Net sales $37,975,082 $15,610,123 Cost of goods sold 30,692,535 13,074,341 Gross profit 7,282,547 2,535,782 Operating expenses: General and administrative 1,465,334 1,132,821 Selling and marketing 928,333 833,303 Total operating expenses 2,393,667 1,966,124 Operating income 4,888,880 569,658 Other income (expense): Interest income 27,335 106,774 Interest expense (307,312) (101,024) Rental income 102,000 0 Total other income (expense) (177,977) 5,750 Income before income taxes 4,710,903 575,408 Provision for income taxes 1,862,305 223,362 Net income $ 2,848,598 $ 352,046 Weighted average shares outstanding 4,572,184 4,452,499 Basic earnings per share $ 0.62 $ 0.08 Diluted shares outstanding 4,622,937 4,477,879 Diluted earnings per share $ 0.62 $ 0.08 See notes to consolidated financial statements. M~WAVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, 2001 2002 OPERATING ACTIVITIES: Net income $ 2,848,598 $ 352,046 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 796,980 756,000 Deferred income taxes 315,061 0 Changes in assets and liabilities: Accounts receivable-trade (3,728,218) 2,202,924 Inventories 6,356,501 (1,260,070) Income taxes (759,732) (1,006,638) Prepaid expenses and other assets (19,328) 90,941 Restricted cash 0 (731,980) Accounts payable (1,430,656) 748,989 Accrued expenses 77,810 (496,462) Net cash flows provided by operating activities 4,457,016 655,750 INVESTING ACTIVITIES: Purchase of property, plant and equipment (3,562,609) (2,012,648) Net cash flows used in investing activities (3,562,609) (2,012,648) FINANCING ACTIVITIES: Long term debt 132,224 1,465,262 Payments on short and long term debt (1,408,024) (42,516) Purchase treasury stock 0 (57,891) Net cash flows used in financing activities (1,275,800) 1,364,855 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (381,393) 7,957 CASH AND CASH EQUIVALENTS - Beginning of period $ 1,230,999 $ 2,102,784 CASH AND CASH EQUIVALENTS - End of period $ 849,606 $ 2,110,741 See notes to consolidated financial statements. -----END PRIVACY-ENHANCED MESSAGE-----