Winland Electronics, Inc. (OTCQB: WELX) today reported that sales
of its environmental monitoring products for the second quarter
ended June 30, 2013 were $869,000, up $50,000, or 6.1 percent from
the same period in 2012. Sales for the six months ended June 30,
2013 were $1,742,000, up $116,000, or 7.1 percent from the same
period last year.
The Company reported an operating loss of $755,000 for the
quarter ended June 30, 2013 compared to an operating loss of
$121,000 for the same period in 2012; and an operating loss of
$1,245,000 for the six months ended June 30, 2013 compared to an
operating loss of $303,000 for the same period in 2012.
"We continued our progress during the quarter in executing our
strategic shift to a SaaS (software-as-a-service) model and
repositioning the organization as a provider of real-time,
cloud-based critical environment monitoring services," said David
Gagne, Winland's Chief Executive Officer. "Beta-testing is
confirming that our new strategy is on target for meeting the
growing demand for perishable asset protection and simplified data
logging for critical condition environment compliance, specifically
in the food and medical-related industries."
Gross margins increased from 29.2 percent to 32.5 percent for
the second quarter ended June 30, 2013 compared to the same period
in 2012, and from 28.8 percent to 31.6 percent for the six months
ended June 30, 2013 compared to the same period in 2012. These
increases were the result of increased unit volumes, an annual
price increase and cost reductions in direct support costs.
Research and development expenses for the quarter ended June 30,
2013 were $323,000 compared to $74,000 for the same time period a
year ago; and $557,000 for the six months ended June 30, 2013
compared to $134,000 for the same time period a year ago. These
expenses were primarily for continued product development of the
Company's new cloud-based critical environment software application
that is scheduled for release during the second half of this
year.
General and Administrative expenses were $430,000 for the three
months ended June 30, 2013, an increase of $293,000 compared to the
same time period a year ago. These increases are attributed to
increased salaries and benefits, professional fees related to the
Company's new strategic plan, stock-based compensation expense
related to stock options issued to Company executives and board of
directors, and increased travel and rent expenses.
For the six months ended June 30, 2013, General and
Administrative expenses were $729,000, an increase of $445,000
compared to the same time period a year ago.
Second-quarter sales and marketing expenses increased $135,000
to $284,000 from the same period a year ago, and $157,000 to
$510,000 for the six months ended June 30, 2013 compared to the
same period a year ago. Both increases were due primarily to
development of brand and marketing strategies.
"We have spent approximately half of the $1.2 million investment
we planned for our new SaaS strategy, including the software
development, sales, marketing, and channel management required to
drive awareness and demand," Gagne said. "Our preparation in the
marketing and channel sales areas continues, and our plan to launch
our new cloud-based offering in the second half of the year remains
solid."
About Winland Electronics Winland
Electronics, Inc. (www.winland.com), is an industry leader in
critical condition monitoring devices. The company develops
products like EnviroAlert, WaterBug, TempAlert, Vehicle Alert and
more to monitor critical conditions for health/medical,
grocery/food service, commercial/industrial, agriculture and
residential markets. Manufactured in the United States, Winland
products are compatible with any hard-wired or wireless alarm
system and are available through distribution worldwide.
Headquartered in Mankato, Minn., Winland trades on the OTC under
the symbol WELX.
Cautionary Statements Certain statements
contained in this press release and other written and oral
statements made from time to time by the Company do not relate
strictly to historical or current facts. As such, they are
considered forward-looking statements, which provide current
expectations or forecasts of future events. The statements included
in this release with respect to the following matters are
forward-looking statements:(i) that the Company continued its
progress in executing its strategic shift to a SaaS model and
repositioning the organization as a provider of real-time,
cloud-based critical environment monitoring services during the
quarter, (ii) that Beta-testing is confirming that the Company's
new strategy is on target, (iii) that the Company's new cloud-based
critical environment software application is scheduled for release
during the second half of this year, and (iv) that the Company's
preparation in the marketing and channel sales areas continues, and
the Company's plan to launch its new cloud-based offering in the
second half of this year remains solid. These statements involve
risks and uncertainties, known and unknown, including among other
risks that:(i) that the Company is not progressing in executing its
strategic shift to a SaaS model and not properly repositioning the
organization as a provider of real-time, cloud-based critical
environment monitoring services, (ii) that Beta-testing is not
correct in confirming that the Company's new strategy is on target,
(iii) that the Company's new cloud-based critical environment
software application is not on schedule for release during the
second half of this year, and (iv) that the Company's preparation
in the marketing and channel sales areas is not properly
continuing, and the Company's plan to launch its new cloud-based
offering in the second half of this year is not on track.
Consequently, no forward-looking statement can be guaranteed and
actual results may vary materially.
WINLAND ELECTRONICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In Thousands, Except Share and Per Share Data)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2013 2012 2013 2012
------------ ------------ ----------- -----------
Net sales $ 869 $ 819 $ 1,742 $ 1,626
Cost of sales 587 580 1,191 1,158
------------ ------------ ----------- -----------
Gross profit 282 239 551 468
------------ ------------ ----------- -----------
Operating expenses:
General and
administrative 430 137 729 284
Sales and marketing 284 149 510 353
Research and
development 323 74 557 134
------------ ------------ ----------- -----------
Total operating
expenses 1,037 360 1,796 771
------------ ------------ ----------- -----------
Operating loss (755) (121) (1,245) (303)
Other income - 3 5 5
Loss from continuing
operations (755) (118) (1,240) (298)
Income from
discontinued
operations, net of
tax - 66 - 131
------------ ------------ ----------- -----------
Net loss $ (755) $ (52) $ (1,240) $ (167)
============ ============ =========== ===========
Loss per common share
data:
Basic and diluted $ (0.20) $ (0.02) $ (0.33) $ (0.05)
Loss from continuing
operations per common
share data:
Basic and diluted $ (0.20) $ (0.02) $ (0.33) $ (0.05)
Income from
discontinued
operations per common
share data:
Basic and diluted $ - $ - $ - $ -
Weighted-average
number of common
shares outstanding:
Basic and diluted 3,732,208 3,701,630 3,717,004 3,701,630
WINLAND ELECTRONICS, INC.
CONDENSED BALANCE SHEETS
(In Thousands, Except Share Data)
December 31,
June 30, 2013 2012
------------- -------------
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 1,946 $ 390
Funds held in escrow from sale of
manuafacturing facility, including land - 2,641
Accounts receivable, less allowance for
doubtful accounts of $7 as of June 30,
2013 and December 31, 2012 459 516
Inventories 691 884
Prepaid expenses and other assets 160 56
------------- -------------
Total current assets 3,256 4,487
Property and Equipment, at cost
Property and equipment 343 321
Less accumulated depreciation and
amortization 261 278
------------- -------------
Net property and equipment 82 43
------------- -------------
Total assets $ 3,338 $ 4,530
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 400 $ 503
Accrued liabilities:
Compensation 139 60
Other 33 30
------------- -------------
Total current liabilities 572 593
------------- -------------
Stockholders' Equity
Common stock, par value $0.01 per share;
authorized 20,000,000 shares; issued and
outstanding 3,753,160 as of June 30, 2013
and 3,701,630 as of December 31, 2012 37 37
Additional paid-in capital 5,124 5,055
Accumulated deficit (2,395) (1,155)
------------- -------------
Total stockholders' equity 2,766 3,937
------------- -------------
Total liabilities and stockholders'
equity $ 3,338 $ 4,530
============= =============
WINLAND ELECTRONICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
For the Six Months Ended June 30,
2013 2012
---------------- ----------------
Cash Flows From Operating Activities
Net loss $ (1,240) $ (167)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 11 19
Non-cash stock based compensation 69 -
Changes in assets and liabilities:
Accounts receivable 57 47
Inventories 193 (166)
Deferred rent receivable - 21
Prepaid expenses (104) (44)
Accounts payable (103) (68)
Accrued liabilities 82 (62)
---------------- ----------------
Net cash used in operating
activities (1,035) (420)
---------------- ----------------
Cash Flows From Investing Activities
Purchases of property and equipment (50) (5)
Receipt of funds held in escrow 2,641 -
---------------- ----------------
Net cash provided by (used in)
investing activities 2,591 (5)
Net increase (decrease) in cash and cash
equivalents 1,556 (425)
Cash and cash equivalents
Beginning 390 1,031
---------------- ----------------
Ending $ 1,946 $ 606
================ ================
CONTACT: Brian Lawrence CFO & Senior Vice President (507)
625-7231
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