HONG KONG, Oct. 31 /PRNewswire-FirstCall/ -- Peak International
Limited (NASDAQ:PEAK) today announced financial results for the
second quarter of fiscal year 2008 ended September 30, 2007. Net
sales for the quarter ended September 30, 2007 were $12.2 million
compared to $12.0 million in the previous quarter and $15.8 million
in the comparable quarter of the previous year. Net sales for the
six months ended September 30, 2007 were $24.2 million compared to
$34.5 million for the same period of fiscal 2007. Peak recorded a
net loss of $3.4 million, or $0.27 per basic and diluted share, for
the quarter ended September 30, 2007, compared to a net loss of
$1.1 million, or $0.09 per share on a basic and diluted basis for
the same quarter of the previous year. The net loss for the six
months ended September 30, 2007 was $6.1 million, or $0.49 per
share on a basic and diluted basis, compared to a net loss of $0.2
million, or $0.02 per share on a basic and diluted basis, for the
same period of fiscal 2007. Dean Personne, president and chief
executive officer of Peak International, said, "Given the
challenging revenue trend in recent quarters, we are pleased that
the second quarter revenue performance exceeded that of the first
fiscal quarter. We have devoted an enormous amount of time and
energy to enhance our sales capabilities to realize the full
benefits from the improved manufacturing efficiencies that we have
achieved in the past 12 to 15 months. We hope that this modest
revenue increase represents the first step in driving our legacy
semiconductor related business in the direction of consistently
improving financial performance." Mr. Personne continued, "During
the past 12 months, Peak initiated a number of projects to
diversify sales. We believe that those programs are being welcomed
by existing and new customers. We have prepared quotes, tooling,
and first articles for companies in the medical disposables and
automotive industries. We are seeing a renewal of orders in the
disk drive industry segment. In addition, we have performed site
qualifications for several multinationals which we expect will soon
become new customers for Peak. In October, Peak delivered 300mm
wafer shipper units for qualification by a prospective customer. We
expect to receive production orders in the coming quarters. Peak
received certification approval for ISO/TS16949 used in the
automotive industry in October. We believe all these activities
portend improved sales over coming quarters. Gross profit margin
for the quarter ended September 30, 2007 was 2.6% compared to 5.4%
in the previous quarter and 16.6% in the comparable quarter of the
previous year. Lower net sales in the most recent quarter versus
the comparable quarter last year resulted in a greater proportion
of fixed manufacturing overhead being absorbed in cost of goods
sold. Like last quarter, the lower production level was simply
insufficient to cover all of the factory overhead costs. The gross
margin for the second quarter of fiscal 2008 also included
approximately $0.5 million of unfavorable material cost and usage
variances and $0.6 million of finished goods that were scrapped due
to obsolescence. Effective April 1, 2006, Peak adopted Statement of
Financial Accounting Standards SFAS No. 123R using the modified
prospective method, which requires the expensing of all stock-based
compensation. For the quarters ended September 30, 2007 and 2006,
the Company reported non-cash, stock-based compensation of $117,000
and $217,000, or $0.01 and $0.02 per share, respectively. For the
six months ended September 30, 2007 and 2006, the Company reported
non-cash, stock-based compensation of $232,000 and $382,000, or
$0.02 and $0.03 per share, respectively. At the conclusion of the
second quarter of fiscal 2008, the Company had approximately $19
million in cash and cash equivalents and no long-term debt. Mr.
Personne concluded, "We will continue to work at rebuilding our
legacy business while we carry on with our diversification efforts.
We believe the signs clearly indicate that the new initiatives are
attracting interest in the marketplace." Earnings Call Peak will
host a conference call to discuss the Company's fiscal 2008 second
quarter results on Thursday, November 1, 2007 at 10:00 AM ET. To
access the teleconference, please call (888) 413-9033 (domestic) or
(706) 679-5076 (international). To listen to the teleconference via
the Internet, go to http://investors.peakinternational.com/ and
click on the second quarter 2008 teleconference link. A replay of
the call will be available at (800) 642-1687 (domestic) or (706)
645-9291 (international), access number 19672948 for 3 days
following the call, and the web cast will be archived on the
Company's website, http://investors.peakinternational.com/, for 30
days. About Peak International Limited Peak International Limited
(http://www.peakinternational.com/) is a leading supplier of
precision-engineered packaging products for storage, transportation
and automated handling of disk drive components, semiconductor
devices as well as precision medical products. There are
approximately 1,400 people who work for Peak worldwide and its
headquarters are in Hong Kong with major manufacturing operations
in Shenzhen, the PRC, which is operated pursuant to a processing
agreement with an unaffiliated party. Peak operates warehouses
throughout the world and offers JIT services to some of the world's
largest disk drive and other companies. Cautionary Note Regarding
Forward-Looking Statements This press release contains
forward-looking statements within the meaning of the "safe harbor"
provision of the Private Securities Litigation Reform Act of 1995,
including, without limitation, statements related to our ability
to: (i) determine whether the Company's net sales decline has
ended, (ii) achieve and manage manufacturing efficiencies while
increasing sales, (iii) achieve increased sales as a result of our
sales initiatives (including without limitation the launch of new
products and meetings with current and prospective customers) in
order to increase sales, diversify our markets and mitigate
cyclical risks, (iv) convert indications of interest from current
and prospective customers to actual sales, (v) continue to generate
cash from operating activities and to maintain the Company's
current cash position, (vi) increase the Company's market value,
(vii) achieve profitability on a quarterly or yearly basis and
(viii) increase shareholder value while managing our assets. These
and other forward-looking statements are not guarantees of future
results and are subject to known and unknown risks, uncertainties
and other factors that may cause actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include but are not
limited to: price of raw materials, factors relating to conditions
in semiconductor, disk drive and electronic industries, the amounts
the Company may have to pay for workers at the PRC factory operated
by a third party, difficulties related to working in the PRC,
including regional government and processing partner relations, the
market acceptance of its products, the introduction of new products
by the Company's competitors, any future economic downturn, and
other matters that could cause actual results to differ materially
from the projections made herein. Additional risks are detailed in
the Company's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K for the year
ended March 31, 2007, filed on June 29, 2007 and the Company's
Quarter Report on Form 10-Q for the quarter ended June 30, 2007.
Statements included in this press release are based on information
known to the Company as of the date of this release, and the
Company assumes no obligation to update or revise any
forward-looking statements or to update the reasons why actual
results could differ from those projected in any forward-looking
statement in this release. Contacts: John Supan Lytham Partners,
LLC Chief Financial Officer Joe Diaz Peak International Limited,
Joe Dorame Hong Kong Robert Blum +852-3193-6000 (602) 889-9700
Consolidated Statements of Operations (in thousands of United
States Dollars, except share and per share data) Three Months Ended
September 30, 2007 2006 (Unaudited) (Unaudited) Net Sales $ 12,186
$ 15,817 Cost of Goods Sold 11,868 13,193 Gross Profit 318 2,624
Selling and Marketing 2,029 2,181 General and Administrative 1,489
1,715 Research and Development 214 28 Loss from operations (3,414)
(1,300) Other expenses - net (135) (111) Interest income 153 165
Loss Before Income Taxes (3,396) (1,246) Income Tax Benefit 26 103
NET LOSS $ (3,370) $ (1,143) LOSS PER SHARE - Basic $ (0.27) $
(0.09) - Diluted $ (0.27) $ (0.09) Weighted Average Number of
Shares Outstanding - Basic 12,423,000 12,420,000 - Diluted
12,423,000 12,420,000 Consolidated Statements of Operations (in
thousands of United States Dollars, except share and per share
data) Six Months Ended September 30, 2007 2006 (Unaudited)
(Unaudited) Net Sales $ 24,187 $ 34,470 Cost of Goods Sold 23,226
27,011 Gross Profit 961 7,459 Selling and Marketing 3,946 4,442
General and Administrative 2,845 3,295 Research and Development 405
64 Loss from operations (6,235) (342) Other expenses - net (231)
(166) Interest income 340 282 Loss Before Income Taxes (6,126)
(226) Income Tax Benefit 25 21 NET LOSS $ (6,101) $ (205) LOSS PER
SHARE - Basic $ (0.49) $ (0.02) - Diluted $ (0.49) $ (0.02)
Weighted Average Number of Shares Outstanding - Basic 12,423,000
12,420,000 - Diluted 12,423,000 12,420,000 Consolidated Balance
Sheets (in thousands of United States Dollars) September 30, March
31, 2007 2007 (Unaudited) (Audited) ASSETS Current Assets: Cash and
cash equivalents $ 19,132 $ 20,366 Restricted Cash 983 1,128
Accounts receivable -- net of allowance for doubtful accounts of
$357 at September 30, 2007 and $427 at March 31, 2007 9,703 9,279
Inventories 9,573 10,959 Other receivables, deposits and
prepayments 869 852 Total Current Assets 40,260 42,584 Property,
plant and equipment - net 17,456 19,278 Land use rights 693 703
Deposits for acquisition of property, plant and equipment 22 60
Deferred income taxes 60 - Other deposit 301 301 TOTAL ASSETS $
58,792 $ 62,926 LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities: Accounts payable: - Trade $ 5,214 $ 3,689 - Property,
plant and equipment 345 78 Accrued payroll and employee benefits
1,381 1,165 Accrued other expenses 1,696 1,990 Income taxes payable
19 95 Total Current Liabilities 8,655 7,017 Stockholders' Equity:
Share capital 124 124 Additional paid-in capital 27,939 27,707
Retained earnings 23,230 29,331 Accumulated other comprehensive
loss (1,156) (1,253) Total stockholders' equity 50,137 55,909 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,792 $ 62,926 Consolidated
Statements of Cash Flows (in thousands of United States Dollars)
Six Months Ended September 30, 2007 2006 (Unaudited) (Unaudited)
Operating activities: Net loss $ (6,101) $ (205) Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: Depreciation and amortization 3,219 3,365 Deferred
income taxes (60) (25) Loss on disposal/write-off of property,
plant and equipment 125 74 Allowance for doubtful accounts (70) 108
Non-cash share-based compensation 232 382 Changes in operating
assets and liabilities: Accounts receivable (354) 162 Inventories
1,386 (813) Other receivables, deposits and prepayments (17) (240)
Accounts payable-trade 1,525 1,002 Accrued payroll, employee
benefits and other expenses (78) (14) Income taxes payable (76) 3
Cash held in escrow for terms of sale agreement for disposal of a
subsidiary 641 641 Cash held in escrow for funding of certain
contingent obligations under existing contracts with senior
management (496) 413 Net cash (used in) provided by operating
activities (124) 4,853 Investing activities: Acquisition of
property, plant and equipment (1,245) (2,700) Decrease (Increase)
in deposits for acquisition of property, plant and equipment 38
(146) Net cash used in investing activities (1,207) (2,846) Net
(decrease) increase in cash and cash equivalents (1,331) 2,007 Cash
and cash equivalents at beginning of period 20,366 17,441 Effects
of exchange rate changes on cash and cash equivalents 97 100 Cash
and cash equivalents at end of period $ 19,132 $ 19,548
Supplemental cash flow information: Cash paid during the period
Income taxes 111 1 DATASOURCE: Peak International Limited CONTACT:
John Supan, Chief Financial Officer of Peak International Limited,
Hong Kong, +852-3193-6000; or Joe Diaz, or Joe Dorame, or Robert
Blum, all of Lytham Partners, LLC, +1-602-889-9700, for Peak
International Limited Web site: http://www.peakinternational.com/
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