GERMANTOWN, Md., Nov. 15, 2010 /PRNewswire-FirstCall/ --
Optelecom-NKF, Inc. (Nasdaq: OPTC), a leading global provider of
Siqura® advanced IP-video network solutions, today announced third
quarter 2010 results.
Revenues for the third quarter totaled $7.6 million compared to $8.3 million for the same quarter one year
earlier. Revenues declined sequentially from $7.7 million reported in the second quarter this
year. Backlog at the end of the third quarter climbed to
$3.4 million, a multi-year high.
During the quarter the Company consolidated manufacturing
operations into its existing Dutch manufacturing facility and
outsourced U.S. production to a Maryland-based contract manufacturer. This
transition impacted the shipment of some orders. The delayed
recognition of revenue from work in progress (WIP) totaled
approximately $700 thousand.
This delay was a component of the significant climb in
backlog.
The Company reported a net loss of $929
thousand or $(0.25) per share,
for the quarter ending September
2010, compared to net loss of $1.3
million, or $(0.35) per share,
one year earlier. The Company's operating loss declined to
$53 thousand compared to a loss of
$958 thousand one year earlier.
Adjusted EBITDA for the quarter was $244
thousand compared to a loss of $553
thousand for the same quarter last year.
On November 11, 2010, the Company
and TKH Group N.V. (NYSE Euronext Amsterdam, AMS: TWEKA, "TKH")
announced a definitive merger agreement for a subsidiary of TKH to
acquire all of the outstanding shares of the Company in an all cash
merger transaction for $2.45 per
share. The transaction, which is expected to close in the first
quarter of 2011, is subject to the approval of the Company's
stockholders and other customary closing conditions. There
is no financing condition to consummate the transaction.
Additional Information
In connection with the proposed transaction, the Company will
file a proxy statement with the Securities and Exchange Commission
("SEC"). When completed, a definitive proxy statement and a
form of proxy will be mailed to the stockholders of the Company.
INVESTORS AND SHAREHOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE MERGER AGREEMENT, THE PROPOSED MERGER AND THE
PARTIES THERETO.
Investors and shareholders will be able to obtain copies of the
proxy statement and other documents filed with the SEC by the
Company without charge and when available, at the SEC's Website at
www.sec.gov. The proxy statement and such other documents may
also be obtained without charge and when available, from the
Company by directing such request to Cathy
Mizell, Chief Financial Officer, Optelecom-NKF, Inc., 12920
Cloverleaf Center Drive, Germantown,
MD 20874; telephone: (301) 444-2200.
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
Company's stockholders in connection with the proposed transaction.
Information about the Company's directors and executive officers
and their ownership of the Company's common stock is set
forth in the Company's proxy statement relating to the 2010 annual
shareholder meeting, which was filed with the SEC on March 30, 2010, and its Current Report on Form
8-K filed with the SEC on August 27,
2010. Stockholders may obtain additional information
regarding the interests of the Company's directors and executive
officers in the merger, which may be different than those of the
Company's stockholders generally, by reading the proxy statement
and other relevant documents regarding the transaction, when filed
with the SEC.
Conference Call
In light of the proposed transaction, Optelecom-NKF has
cancelled the previously announced conference call that was
scheduled for Tuesday, November 16,
2010 at 10:00 am Eastern Standard
Time.
Safe Harbor Statement
This communication contains forward-looking statements that
involve numerous risks and uncertainties. The statements contained
in this communication that are not purely historical are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange
Act of 1934, as amended. All forward-looking statements
included in this communication are based on information available
to the Company on the date hereof. In some cases, you can identify
forward-looking statements by terminology such as "may," "can,"
"will," "should," "could," "expects," "plans," "anticipates,"
"intends," "believes," "estimates," "predicts," "potential,"
"targets," "goals," "projects," "outlook," "continue," or
variations of such words, similar expressions, or the negative of
these terms or, other comparable terminology. No assurance
can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what impact they will have on the Company's results of
operations or financial condition. Accordingly, actual results may
differ materially and adversely from those expressed in any
forward-looking statements. None of the Company nor any other
person can assume responsibility for the accuracy and completeness
of forward-looking statements and there are various important
factors that could cause actual results to differ materially from
those in any such forward-looking statements, many of which are
beyond the Company's control. These factors include: failure to
obtain stockholder approval of the proposed merger; failure to
obtain, delays in obtaining or adverse conditions contained in any
required approvals; failure to consummate or a delay in
consummating the transaction for other reasons, changes in laws or
regulations; and changes in general economic conditions. The
Company undertakes no obligation (and expressly disclaim any such
obligation) to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. For additional information please refer to the
Company's most recent Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K filed with the
SEC.
About Optelecom-NKF
Optelecom-NKF, Inc. (Nasdaq: OPTC), manufacturer of
Siqura® advanced video surveillance solutions, provides
a full range of network products based on an open technology
platform that simplifies integration and installation. Our
Siqura® solutions offer a perfect blend of ease of use
and processing power, enabling end users to optimize the
effectiveness of their surveillance systems while reducing the
total cost of ownership. All products and solutions are developed
and tested for professional and mission-critical applications, such
as at highway departments, airports, seaports, casinos, public
transport authorities, hospitals, city centers, shopping centers,
military bases, and corporate and government campuses. Founded in
1972, Optelecom-NKF is committed to providing its customers with
expert technical advice and support.
Investor inquiries should be directed to Mr. Rick Alpert at 301-948-7872.
Press inquiries should be directed to Kate Huber, khuber@optelecom-nkf.com tel.
301-444-2294 (for North and Latin
America) or tel. +31 182 592 215 (for Europe, Middle
East, Africa, and
Asia). For more information please
visit our website: www.optelecom-nkf.com
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
AS OF
SEPTEMBER 30, 2010 AND DECEMBER 31, 2009
|
|
(Dollars in
Thousands, Except Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash & cash
equivalents
|
|
$
1,172
|
|
$
2,344
|
|
|
|
Restricted cash
|
|
255
|
|
1,900
|
|
|
|
Accounts receivable, net of
allowance for doubtful accounts of $505 and $386
|
|
7,271
|
|
8,209
|
|
|
|
Inventories, net
|
|
4,301
|
|
4,343
|
|
|
|
Deferred tax assets
|
|
120
|
|
240
|
|
|
|
Prepaid expenses and other
current assets
|
|
803
|
|
893
|
|
|
Total current assets
|
|
13,922
|
|
17,929
|
|
|
|
Property & equipment, less
accumulated depreciation of $5,368 and $5,681
|
|
907
|
|
1,593
|
|
|
|
Intangible assets, net of
accumulated amortization of $3,919 and $3,609
|
|
5,785
|
|
6,609
|
|
|
|
Goodwill
|
|
14,102
|
|
14,848
|
|
|
|
Other assets
|
|
207
|
|
209
|
|
TOTAL ASSETS
|
|
34,923
|
|
41,188
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Current portion of notes and
interest payable
|
|
12,329
|
|
1,907
|
|
|
|
Accounts payable
|
|
2,535
|
|
2,012
|
|
|
|
Accrued payroll
|
|
907
|
|
1,280
|
|
|
|
Accrued warranty
reserve
|
|
445
|
|
422
|
|
|
|
Other current
liabilities
|
|
1,194
|
|
1,233
|
|
|
Total current
liabilities
|
|
17,410
|
|
6,854
|
|
|
|
Long term notes and interest
payable
|
|
-
|
|
12,818
|
|
|
|
Deferred tax
liabilities
|
|
1,260
|
|
1,513
|
|
|
|
Other liabilities
|
|
159
|
|
188
|
|
|
Total liabilities
|
|
18,829
|
|
21,373
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Common stock, $.03 par
value-shares authorized, 15,000,000; issued
and outstanding, 3,702,409 and
3,653,644 shares as of September 30,
2010, and December 31, 2009,
respectively
|
|
111
|
|
110
|
|
|
|
Additional paid-in
capital
|
|
17,294
|
|
17,036
|
|
|
|
Accumulated other comprehensive
income
|
|
2,064
|
|
2,769
|
|
|
|
Treasury stock, 162,672 shares
at cost
|
|
(1,265)
|
|
(1,265)
|
|
|
|
(Accumulated deficit) retained
earnings
|
|
(2,110)
|
|
1,165
|
|
|
Total stockholders'
equity
|
|
16,094
|
|
19,815
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
34,923
|
|
$
41,188
|
|
|
|
|
|
|
|
|
|
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
AND
COMPREHENSIVE INCOME (LOSS)
|
|
FOR THE
THREE MONTHS ENDED SEPTEMBER 30,
|
|
(Unaudited)
|
|
(Dollars in
Thousands, Except Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Revenue
|
|
|
$
7,585
|
|
$
8,307
|
|
Cost of goods sold
|
|
3,492
|
|
3,714
|
|
|
Gross profit
|
|
4,093
|
|
4,593
|
|
Operating expenses:
|
|
|
|
|
|
|
Sales and marketing
|
|
1,871
|
|
2,723
|
|
|
Engineering
|
|
895
|
|
1,195
|
|
|
General and
administrative
|
|
1,225
|
|
1,461
|
|
|
Amortization of
intangibles
|
|
155
|
|
172
|
|
|
|
Total operating
expenses
|
|
4,146
|
|
5,551
|
|
Loss from operations
|
|
(53)
|
|
(958)
|
|
Other expense, net
|
|
394
|
|
158
|
|
Loss before income
taxes
|
|
(447)
|
|
(1,116)
|
|
Provision for income
taxes
|
|
482
|
|
153
|
|
Net loss
|
|
|
$
(929)
|
|
$
(1,269)
|
|
Basic loss per share
|
|
$
(0.25)
|
|
$
(0.35)
|
|
Diluted loss per
share
|
|
$
(0.25)
|
|
$
(0.35)
|
|
Weighted average common shares
outstanding -basic
|
|
3,702,155
|
|
3,648,490
|
|
Weighted average common shares
outstanding -diluted
|
|
3,702,155
|
|
3,648,490
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
(929)
|
|
$
(1,269)
|
|
Foreign currency
translation
|
|
1,562
|
|
570
|
|
Comprehensive income
(loss)
|
|
$
633
|
|
$
(699)
|
|
|
|
|
|
|
|
|
OPTELECOM-NKF,
INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
AND
COMPREHENSIVE LOSS
|
|
FOR THE NINE
MONTHS ENDED SEPTEMBER 30,
|
|
(Unaudited)
|
|
(Dollars in
Thousands, Except Share and Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
Revenue
|
|
|
$ 22,441
|
|
$ 26,904
|
|
Cost of goods sold
|
|
10,695
|
|
11,547
|
|
|
Gross profit
|
|
11,746
|
|
15,357
|
|
Operating expenses:
|
|
|
|
|
|
|
Sales and marketing
|
|
7,488
|
|
8,215
|
|
|
Engineering
|
|
3,151
|
|
3,632
|
|
|
General and
administrative
|
|
4,060
|
|
4,665
|
|
|
Amortization of
intangibles
|
|
476
|
|
494
|
|
|
Gain on sale of Electro
Optics
|
|
(1,150)
|
|
-
|
|
|
|
Total operating
expenses
|
|
14,025
|
|
17,006
|
|
Loss from operations
|
|
(2,279)
|
|
(1,649)
|
|
Other expense, net
|
|
1,013
|
|
591
|
|
Loss before income
taxes
|
|
(3,292)
|
|
(2,240)
|
|
Benefit for income
taxes
|
|
17
|
|
78
|
|
Net loss
|
|
|
$
(3,275)
|
|
$
(2,162)
|
|
Basic loss per share
|
|
$
(0.89)
|
|
$
(0.59)
|
|
Diluted loss per
share
|
|
$
(0.89)
|
|
$
(0.59)
|
|
Weighted average common shares
outstanding -basic
|
|
3,687,511
|
|
3,645,360
|
|
Weighted average common shares
outstanding -diluted
|
|
3,687,511
|
|
3,645,360
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
(3,275)
|
|
$
(2,162)
|
|
Foreign currency
translation
|
|
705
|
|
522
|
|
Comprehensive loss
|
|
$
(2,570)
|
|
$
(1,640)
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Addendum
We define Adjusted EBITDA as net income or net loss plus
interest expense, income taxes, foreign exchange gains and losses,
depreciation, and amortization. Adjusted EBITDA is not a measure of
cash flow or liquidity as determined under U.S. Generally Accepted
Accounting Principles (GAAP). We have included this Adjusted EBITDA
as a supplemental disclosure because we believe that it is widely
used by investors, industry analysts, and others as a useful
supplemental measure. Optelecom-NKF calculates and uses Adjusted
EBITDA as an indicator of its ability to generate cash from
reported operating results.
Adjusted EBITDA does not represent funds available for our
discretionary use and is not intended to represent or to be used as
a substitute for net income or cash flows from operations data as
measured under GAAP. The items excluded from Adjusted EBITDA but
included in the calculation of Optelecom-NKF's reported net income
are significant components of the accompanying unaudited
consolidated statements of operations and must be considered in
performing a comprehensive assessment of overall financial
performance. Other companies may calculate Adjusted EBITDA
differently than we do, which may limit its usefulness as a
comparative measure.
The table below presents a reconciliation of net income to
Adjusted EBITDA:
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
(Unaudited)
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Net Loss
|
|
$ (929)
|
|
$ (1,269)
|
|
$ (3,275)
|
|
$ (2,162)
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
263
|
|
169
|
|
921
|
|
489
|
|
|
|
(Benefit) Provision for income
taxes
|
|
482
|
|
153
|
|
(17)
|
|
(78)
|
|
|
|
Other expenses, net
|
|
131
|
|
(11)
|
|
92
|
|
102
|
|
|
|
Depreciation
|
|
142
|
|
233
|
|
534
|
|
714
|
|
|
|
Amortization
|
|
155
|
|
172
|
|
476
|
|
494
|
|
Adjusted EBITDA
|
|
$ 244
|
|
$ (553)
|
|
$ (1,269)
|
|
$ (441)
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Optelecom-NKF, Inc.