COSTA MESA, Calif., July 3 /PRNewswire-FirstCall/ -- TROY Group,
Inc. (OTC:TROY.PK) announced today that financial results for the
second quarter of fiscal 2008, which ended May 31, 2008, have been
posted on the company's web-site at http://www.troygroup.com/. To
access the report, click on About TROY Group then click on
Financials. TROY's financial results are also posted at
http://www.pinksheets.com/. Enter TROY in the symbol field then
click on Financial Report. Revenue for the three months ended May
31, 2008 decreased to $11.3 million compared to revenue for the
three months ended May 31, 2007 of $11.8 million largely due to
decreased supplies sales. Earnings from continuing operations for
the three months ended May 31, 2008 decreased to $0.07 per share
compared to $0.11 per share for the three months ended May 31,
2007. Revenue for the six months ended May 31, 2008 decreased to
$21.8 million compared to revenue for the six months ended May 31,
2007 of $24.9 million largely due to the one time purchase of
printers by one customer included in the first three months of 2007
and a decline in supplies sales. Earnings from continuing
operations for the six months ended May 31, 2008 decreased to $0.14
per share compared to $0.25 per share for the six months ended May
31, 2007. As of July 2, 2008 a substantial portion of the Company's
current assets consisted of $10 million in investments that are
auction rate securities. These auction rate securities consist of
preferred stock of various closed-end mutual funds which have an
AAA credit rating. The auctions for these securities have failed
since February 13, 2008 resulting in the investment being illiquid.
There has been no default on the underlying securities, and
investment income continues to be received in a timely manner while
we wait for a return of the market. However, a market for auction
rate securities may not return before the Company has a need to
sell its investments, which would result in TROY having to borrow
on its line of credit or other lending sources. In addition, a
prolonged decline in marketability could result in a reduced value
of the securities. There can be no assurance when or if the market
for these securities will return. On June 23, 2008, the Orange
County Water District filed a lawsuit against 17 companies
including TROY and 400 unnamed companies in the Superior Court of
the State of California, Orange County. The complaint asserts
claims for these alleged hazardous releases under the Orange County
Water District Act and the California Superfund Act. The complaint
further asserts common law claims for negligence, trespass and
nuisance. The complaint seeks various forms of legal and equitable
relief, including without limitation unspecified compensatory
damages, attorneys' fees and costs, and declaratory relief. The
consolidated balance sheet and consolidated statement of income are
attached to this press release. Please refer to the quarterly
report including financial statements for more detailed
information. TROY GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
Assets May 31, November 30, 2008 2007 (unaudited) Current assets:
Cash and cash equivalents $3,170,000 $782,000 Investment in
available-for-sale securities 11,475,000 11,400,000 Accounts
receivable, net of allowances 2008 $307,000; 2007 $293,000
5,211,000 6,302,000 Inventories 3,502,000 3,050,000 Prepaid
expenses and other 945,000 840,000 Deferred tax assets 421,000
734,000 Current assets of discontinued operations held for sale -
311,000 Total current assets 24,724,000 23,419,000 Equipment and
leasehold improvements, net 1,611,000 1,725,000 Goodwill 281,000
281,000 Other assets, including receivables from stockholders;
$1,899,000 in 2008 and $1,903,000 in 2007 3,595,000 3,535,000 Total
assets $30,211,000 $28,960,000 Liabilities and Stockholders' Equity
Current liabilities: Accounts payable $2,969,000 $2,645,000 Accrued
expenses 2,282,000 2,085,000 Deferred revenue 1,289,000 1,286,000
Current liabilities of discontinued operations held for sale -
1,976,000 Total current liabilities 6,540,000 7,992,000 Non-current
liabilities 1,275,000 881,000 Total liabilities 7,815,000 8,873,000
Commitments and contingencies Stockholders' equity: Preferred
stock, no par value, authorized 100,000 shares; issued none - -
Common stock, par value $0.01 per share; authorized 13,000,000
shares; issued 9,763,235 shares in 2008 and 10,563,701 shares in
2007; outstanding 9,713,235 in 2008 and 9,948,235 in 2007 98,000
106,000 Additional paid-in capital 18,082,000 21,587,000 Retained
earnings 4,416,000 1,441,000 Less cost of treasury stock; 2008
50,000 shares, 2007 615,466 shares (200,000) (3,047,000) Total
stockholders' equity 22,396,000 20,087,000 Total liabilities and
stockholders' equity $30,211,000 $28,960,000 TROY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three
Months Ended Six Months Ended May 31, May 31, May 31, May 31, 2008
2007 2008 2007 Net sales $11,267,000 $11,773,000 $21,820,000
$24,860,000 Cost of goods sold 6,622,000 7,025,000 12,965,000
14,683,000 Gross profit 4,645,000 4,748,000 8,855,000 10,177,000
Operating expenses: Selling, general and administrative 2,871,000
2,347,000 5,580,000 5,069,000 Research and development 756,000
632,000 1,378,000 1,213,000 Total operating expenses 3,627,000
2,979,000 6,958,000 6,282,000 Operating income 1,018,000 1,769,000
1,897,000 3,895,000 Interest income 149,000 142,000 327,000 288,000
Income from continuing operations before income taxes 1,167,000
1,911,000 2,224,000 4,183,000 Provision for income taxes 432,000
740,000 823,000 1,558,000 Income from continuing operations 735,000
1,171,000 1,401,000 2,625,000 Loss from discontinued operations,
net of tax - (307,000) (73,000) (602,000) Gains on disposal of
discontinued operations, net of tax - - 1,647,000 - Discontinued
operations, net of tax - (307,000) 1,574,000 (602,000) Net income
$735,000 $864,000 $2,975,000 $2,023,000 Net income per share: Basic
income from continuing operations $0.07 $0.11 $0.14 $0.25 Basic
income (loss) from discontinued operations - (0.03) 0.16 (0.06)
Basic income $0.07 $0.08 $0.30 $0.19 Diluted income from continuing
operations $0.07 $0.11 $0.14 $0.25 Diluted income (loss) from
discontinued operations - (0.03) 0.16 (0.06) Diluted income $0.07
$0.08 $0.30 $0.19 Weighted average shares outstanding: Basic
9,806,000 10,564,000 9,828,000 10,564,000 Diluted 9,904,000
10,589,000 9,974,000 10,576,000 About TROY Group TROY Group, Inc.
("TROY") is a worldwide leader of secure on-demand printing
solutions. TROY solutions manage, secure and simplify end-to-end
enterprise printing environments. TROY offers application software,
security printing hardware and specialized consumables for securely
printing checks, money orders, transcripts, prescriptions and other
important documents. TROY solutions are used by small and medium
size businesses as well as large enterprises and governmental
organizations to manage fraud, operational risk and comply with
government regulations related to protecting information privacy.
As a Gold Solutions Partner to Hewlett Packard, TROY is the only
company in the world authorized by HP to enhance HP printers and
consumables for use in secure printing workflows. Only TROY MICR
and Security printers and HP compatible MICR Toner cartridges are
certified by Hewlett Packard for quality and reliability. We sell
and service our products to major corporations, banks, key
government accounts and distributors worldwide. Visit TROY at
http://www.troygroup.com/ Forward-looking statements of TROY
(statements that are not historical fact) in this news release are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as believe, expect, may,
will, could and should, and the negative of these terms or other
similar expressions. These statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those discussed in the forward-looking statements. These risks
and uncertainties include, but, are not limited to, the ability to
sell investments when needed, the ability to develop new products,
the ability to hire and retain qualified management, technology and
other personnel, the impact of competition from existing and new
technologies and companies and the other factors set forth in our
periodic reports and other documents that we distribute from time
to time which are available in our financial statements under
certain important factors on our website TROYgroup.com or
pinksheets.com. Statements included in this news release are based
upon information known to TROY as of the date of this release, and
TROY assumes no obligation to update information contained in this
news release. For More Information Contact: TROY Group, Inc. 3535
Hyland Ave., Suite 200 Costa Mesa, CA 92626 (714) 241-4760 (714)
241-4762 Facsimile http://www.troygroup.com/ Contact: Myra
Erickson, Investor Relations DATASOURCE: TROY Group, Inc. CONTACT:
Myra Erickson, Investor Relations, +1-714-241-4760, fax,
+1-714-241-4762, for Troy Group, Inc. Web site:
http://www.troygroup.com/
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