ORLANDO, Fla., Jan. 29, 2015 /PRNewswire/ --
-- Q4 revenue of $57.8 million
-- Q4 GAAP Operating Income of $2.2 million; Non-GAAP Operating Income of
$3.5 million
-- Q4 cash from operations of $3.3 million
-- FY14 GAAP Operating Income of $4.6 million; Non-GAAP Operating Income of
$10.3 million
API Technologies Corp. (NASDAQ:ATNY) ("API" or the "Company"), a leading provider of high performance RF, microwave, millimeterwave, power, and security solutions, today announced results for the fiscal fourth quarter ended November 30, 2014.
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"During fiscal year 2014 we continued to execute on our operational and business strategies, resulting in operating income of $4.6 million - a $6.1 million increase over prior year, along with double-digit EBITDA margin and positive cash flow. Moreover, the execution of our product roadmap and successful launch of technologically advanced products continue to attract new customers and industry recognition," said Bel Lazar, President and Chief Executive Officer, API Technologies.
Results for the Quarter Ended November 30, 2014
API Technologies reported fiscal fourth quarter revenue of $57.8 million.
For the fiscal fourth quarter of 2014, GAAP gross margin as a percentage of sales was 23.4%; non-GAAP gross margin was 24.9%.
The Company posted a net loss of $1.2 million for the fiscal fourth quarter. Adjusted EBITDA for the fiscal fourth quarter was $7.2 million or 12.5% of revenue.
Results for the Twelve Months Ended November 30, 2014
API Technologies reported revenue of $226.9 million for the twelve months ended November 30, 2014. GAAP gross margin was 23.0% for the twelve -month period ended November 30, 2014. Non-GAAP gross margin was 24.6% for the same period.
The Company posted a net loss of $18.9 million for the twelve months ended November 30, 2014, which included $10.9 million of amortization of note discounts and deferred financing charges incurred in the fiscal 2014 second quarter. Adjusted EBITDA for the twelve months ended November 30, 2014 was $25.7 million or 11.3% of revenue.
Conference Call
API Technologies will host a conference call to review the Company's fiscal fourth quarter results today, January 29, at 4:45 p.m. Eastern Time. Bel Lazar, President and Chief Executive Officer, and Claudio Mannarino, Senior Vice President and Chief Financial Officer, will host the call.
The call will be available by dialing 1-877-317-6789 or 1-412-317-6789 and accessible by webcast at http://www.apitech.com/investor-relations. Recorded replays of the webcast will be available on the Company's Investor Relations App, for 30 days on the Company's website, and by telephone at 1-877-344-7529 or 1-412-317-0088, replay passcode #10058806, beginning 6 p.m. Eastern Standard Time on January 29, 2015.
The API Technologies Investor Relations App is available for iPhone® and iPad® via the Apple iTunes store and for Android(TM) devices via Google Play. For more information, visit http://www.apitech.com/investor-relations.
About API Technologies Corp.
API Technologies (NASDAQ: ATNY) is an innovative designer and manufacturer of high performance systems, subsystems, modules, and components for technically demanding RF, microwave, millimeterwave, electromagnetic, power, and security applications. A high-reliability technology pioneer with over 70 years of heritage, API Technologies products are used by global defense, industrial, and commercial customers in the areas of commercial aerospace, wireless communications, medical, oil and gas, electronic warfare, unmanned systems, C4ISR, missile defense, harsh environments, satellites, and space. Learn more about API Technologies and our products at www.apitech.com.
Non-GAAP Financial Information
In this press release, API has provided the non-GAAP financial measures for Adjusted EBITDA from continuing operations at the Company level and segment level, non-GAAP gross margin, and non-GAAP operating income. Non-GAAP gross margin excludes restructuring charges and certain other adjustments described in the reconciliation table and non-GAAP Adjusted EBITDA from continuing operations (earnings from continuing operations before interest, taxes, depreciation and amortization) excludes restructuring charges, acquisition and divestiture-related charges, inventory provisions, stock-based compensation expenses, amortization of note discounts and deferred financing costs, and certain other adjustments described in the reconciliation table. API has also provided the non-GAAP financial measure for Adjusted EBITDA before corporate overhead, which is the Adjusted EBITDA number less general corporate overhead. Non-GAAP operating income excludes restructuring charges and certain other adjustments described in the reconciliation table. Management believes the supplemental non-GAAP presentations provide investors an additional analytical tool for understanding the Company's financial performance by excluding from operating results the impact of items that management believes do not reflect the Company's core operating performance. These are not recognized measures under US GAAP, do not have a standardized meaning, and are unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that these non-GAAP measures should not be construed as an alternative to net earnings or loss or gross margin determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. We expect our financial statements to continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.
Safe Harbor for Forward-Looking Statements
Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to, general economic and business conditions, including without limitation, reductions in government defense spending; government regulations; our ability to integrate and consolidate our operations; our ability to expand our operations in both new and existing markets; and the ability of our review of strategic alternatives to maximize stockholder value. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K under Part I, Item 1A "Risk Factors" as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements in this press release, whether as a result of new information, future events, or otherwise.
Contact:
Claudio Mannarino
Senior Vice President and Chief Financial Officer
+1 855-294-3800
investors@apitech.com
Tara Flynn Condon
Vice President, Corporate Development & Marketing
+1 908-546-3903
media@apitech.com
API Technologies Corp.
Financial Results
For the Three and Twelve Months Ended November 30, 2014 and 2013
Consolidated Statements of Operations (unaudited)
in thousands USD
For the Three For the Three For the Twelve For the Twelve
Months Ended Months Ended Months Ended Months Ended
November 30, November 30, November 30, November 30,
2014 2013 2014 2013
---- ---- ---- ----
Revenue, net $57,846 $59,137 $226,857 $244,300
Cost of revenues
Cost of revenues 44,194 48,942 173,697 192,279
Restructuring charges 120 1,223 1,064 1,405
--- ----- ----- -----
Total cost of revenues 44,314 50,165 174,761 193,684
------ ------ ------- -------
Gross profit 13,532 8,972 52,096 50,616
------ ----- ------ ------
Operating expenses
General and administrative 5,500 6,169 23,069 25,873
Selling expenses 3,505 3,752 14,541 15,015
Research and development 2,055 2,305 8,270 9,190
Business acquisition and related charges 104 (129) 479 849
Restructuring charges 154 529 1,153 1,212
--- --- ----- -----
11,318 12,626 47,512 52,139
------ ------ ------ ------
Operating income (loss) 2,214 (3,654) 4,584 (1,523)
Other expense (income), net
Interest expense, net 3,179 2,301 11,765 14,208
Amortization of note discounts and deferred financing costs 23 1,224 10,940 13,020
Other expense (income), net (388) 172 (477) (14 )
---- --- ---- ----
2,814 3,697 22,228 27,214
----- ----- ------ ------
Loss from continuing operations before income taxes (600 ) (7,351) (17,644 ) (28,737 )
Expense (benefit) for income taxes 572 (2,019) 1,270 (5,335 )
--- ------ ----- -------
Loss from continuing operations, net of income taxes (1,172) (5,332) (18,914 ) (23,402 )
Income (loss) from discontinued operations, net of income taxes - (1,911) - 16,174
--- ------ --- ------
Net loss $(1,172) $(7,243) $(18,914) $(7,228)
Accretion on preferred stock - (387) (393) (1,057)
--- ---- ---- ------
Net loss attributable to common shareholders $(1,172) $(7,630) $(19,307) $(8,285 )
======= ======= ======== ========
$(0.02) $(0.11) $(0.35 ) $(0.44 )
Loss per share from continuing operations-Basic and diluted
Income (loss) per share from discontinued operations-Basic and diluted $0.00 $(0.03) $0.00 $0.29
----- ------ ----- -----
Net loss per share-Basic and diluted $(0.02) $(0.14) $(0.35 ) $(0.15 )
====== ====== ======= =======
Weighted average shares outstanding
Basic 55,461,217 55,426,635 55,448,862 55,405,764
Diluted 55,461,217 55,426,635 55,448,862 55,405,764
Consolidated Balance Sheets (audited)
in thousands USD
November 30, November 30,
2014 2013
---- ----
Assets
Current
Cash and cash equivalents $8,258 $6,351
Restricted cash - 1,500
Accounts receivable, net 38,657 39,751
Inventories, net 54,718 58,218
Deferred income taxes 561 2,426
Prepaid expenses and other current assets 1,592 2,445
103,786 110,691
Fixed assets, net 30,424 35,231
Fixed assets held for sale 150 150
Goodwill 116,770 116,770
Intangible assets, net 29,848 38,780
Other non-current assets 1,862 2,956
Total assets $282,840 $304,578
======== ========
Liabilities, Redeemable Preferred Stock and Shareholders' Equity
Current
Accounts payable and accrued expenses $27,907 $32,217
Deferred revenue 2,279 3,519
Current portion of long-term debt 10,097 8,155
40,283 43,891
Deferred income taxes 4,575 5,517
Other long-term liabilities 1,216 1,135
Long-term debt, net of current portion and discount 118,214 96,606
Deferred gain 7,788 -
----- ---
172,076 147,149
------- -------
Commitments and contingencies
Redeemable Preferred Stock - 26,326
Shareholders' equity
Common stock 55 55
Special voting stock - -
Additional paid-in capital 327,846 327,901
Common stock subscribed but not issued 2,373 2,373
Accumulated deficit (220,105) (200,798)
Accumulated other comprehensive income 595 1,572
110,764 131,103
------- -------
Total Liabilities, Redeemable Preferred Stock and Shareholders' Equity $282,840 $304,578
======== ========
Consolidated Adjusted EBITDA
in thousands USD
The following table reconciles three and twelve months GAAP loss from continuing operations to non-GAAP Adjusted EBITDA and Adjusted EBITDA less corporate overhead.
Three (3) months ended Twelve (12) Months ended
November 30, 2014 November 30, 2014
$(1,172) $(18,914)
Loss from continuing operations
Adjustments
Interest expense, net 3,179 11,765
Amortization of note discounts and deferred financing costs 23 10,940
Depreciation and amortization 3,695 15,965
Income taxes 572 1,270
Restructuring charges 274 2,217
Acquisition related charges 104 479
Other adjustments (A) 531 2,019
--- -----
$7,206 $25,741
Total Adjusted EBITDA
12.5% 11.3%
Total Adjusted EBITDA percentage
Corporate overhead $1,497 $6,373
Adjusted EBITDA before corporate overhead $8,703 $32,114
------ -------
Adjusted EBITDA less corporate overhead percentage 15.0% 14.2%
(A) Other adjustments primarily include inventory provisions, stock based compensation, franchise taxes, financing and other adjustments, lease payments for the State College, Pennsylvania facility, foreign exchange losses,
and change in benefits liability.
Additional Adjusted EBITDA Reconciliations by Segment from Continuing Operations
in thousands USD
Three Months Ending SSC SSIA EMS Corporate Total
November 30, 2014
Q4 Q4 Q4 Q4 Q4
Revenue $41,645 $5,307 $10,894 $ - $57,846
Income (loss) from continuing operations (1,172)
Adjustments
Interest expense, Net 3,179
23
Amortization of note discounts and deferred financing costs
Depreciation and amortization 3,695
Income taxes 572
Restructuring charges 274
Acquisition related charges 104
Other adjustments (A) 531
Add-Back Total 8,378
-----
Adjusted EBITDA from continuing operations $6,290 $990 $(74) $ - $7,206
------ ---- ---- ---------------- ------
Adjusted EBITDA Margin from continuing operations 15.1% 18.7% (0.7%) 0.0% 12.5%
---- ---- ----- --- ----
(A) Other adjustments primarily include inventory provisions, stock based compensation, franchise taxes, financing & other adjustments, and lease payments for the State College, Pennsylvania facility.
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
$ amounts in thousands USD
Three Months Ended Twelve Months Ended
November 30, 2014 November 30, 2014
----------------- -----------------
Revenue $57,846 $226,857
Gross Profit 13,532 52,096
GAAP Gross Margin % 23.4% 23.0%
Restructuring and other adjustments (A) 864 3,672
Adjusted Gross profit 14,396 55,768
Adjusted Gross margin % 24.9% 24.6%
(A) Other adjustments primarily include inventory provisions.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income
$ amounts in thousands USD
Three Months Ended Twelve Months Ended
November 30, 2014 November 30, 2014
----------------- -----------------
Operating Income $2,214 $4,584
Restructuring and other adjustments (A) 1,266 5,721
Adjusted Operating Income 3,480 10,305
(A) Other adjustments primarily include inventory provisions, acquisition related charges and stock based compensation expense.
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SOURCE API Technologies Corp.
