PHAZAR CORP Reports Third Quarter Fiscal 2013 Financial Results

  PHAZAR CORP Reports Third Quarter Fiscal 2013 Financial Results

Business Wire

MINERAL WELLS, Texas -- April 22, 2013

PHAZAR CORP, (NASDAQ: ANTP) designs, manufactures and markets antennas,
towers, support structures, masts and communication accessories worldwide.
Today, PHAZAR CORP announces the unaudited results of operations for the three
and nine month periods ended March 31, 2013.

Third Quarter Fiscal Year 2013

PHAZAR CORP’s consolidated sales from operations were $1,643,108 for the
quarter ended March 31, 2013 compared to sales of $1,485,107 for the quarter
ended March 31, 2012. The Company’s increase in revenues of $158,001, or 11%,
is attributed to a 12% increase in the commercial wireless product line for
the comparative quarters. Cost of sales and contracts from operations were
$956,228 for the quarter ended March 31, 2013, compared to $651,211 for the
quarter ended March 31, 2012, up $305,017, or 47% attributable to higher level
of sales and an increase in plant utilization overhead charged to cost of
goods sold. Gross profit margin for the quarter, at 42% is down fourteen basis
points from the 56% gross profit margin reported in the comparable period last
year.

Selling, general and administration expenses were down 41% for the quarter
ended March 31, 2013, to $659,296 from $1,113,677 in the prior year,
reflecting an increase in plant utilization overhead charged to cost of goods
sold, lower level of wages and stock compensation expense partially offset by
higher level of legal and professional costs for the comparative quarters.
Discretionary product development spending for the quarter ended March 31,
2013 was $172,553, or 11% of sales, compared to $171,075, or 12% of sales for
the comparable period last year.

The Company recorded a net loss of $168,196, or $(0.07) per share for the
three month period ended March 31, 2013 compared to a net loss of $286,471 or
$(0.12) per share for the comparable period in the prior year.

Nine Month Period Ending March 31, 2013

Consolidated sales from operations for PHAZAR CORP were $4,298,074 for the
nine months ended March 31, 2013 compared to $4,992,692 for the nine months
ended March 31, 2012. The Company’s sales fell by $694,618, or 14%
attributable to a $1,116,454 non-recurring antenna shipment to EID-Portugal in
fiscal year 2012 partially offset by an upturn in commercial wireless,
shipboard and safety climb product lines during fiscal year 2013.

Costs of sales and contracts from operations were $3,207,190 for the nine
months ended March 31, 2013 compared to $2,703,592 for the nine months ended
March 3, 2012, up $503,598, or 19%. The increase is attributed to the $600,000
slow moving inventory reserve recorded in the first quarter of fiscal year
2013 and an increase in plant utilization overhead offset by a decline in
revenues over the nine month period. The gross profit margin for the nine
month period ended March 31, 2013, at 25% was down twenty one basis points
compared to the gross profit margin of 46% for the same period in the prior
year.

Selling, general and administration expenses of $1,790,844 are down $787,791,
or 31% for the nine months ended March 31, 2013 compared to $2,578,635 for the
nine month period ended March 31, 2012. The $787,791 decline related to an
increase in plant utilization overhead charged to cost of goods sold, along
with a lower level of wages and stock compensation expense partially offset by
an increase in legal and professional fees for the nine month period ended
March 31, 2013 compared to the same nine month period in prior year. The
impairment of note receivable reflects a $1,547,513 impairment charge on the
Tracciare, Inc. note receivable.

Discretionary product development spending for the nine month period ended
March 31, 2013 was $531,525, or 12% of sales, compared to $397,935, or 8% of
sales for the comparable period last year. Year over year there is an increase
of $133,590 in discretionary product development spending. The increase
represents continued product development for the commercial wireless product
line.

The Company recorded a net loss of $3,187,683, or $(1.37) per share for the
nine month period ended March 31, 2013 compared to a net loss of $402,255, or
$(0.17) per share for the comparable period in the prior year.

Backlog of Orders

The Company’s backlog of orders on March 31, 2013, totaled $2,223,663, up 53%
compared to backlog of $1,449,250 at March 31, 2012 and up 49% from June 30,
2012. Incoming orders for the nine month period ended March 31, 2013 totaled
$5,047,991 versus $4,190,148 for the nine month period ended March 31, 2012,
an increase of 20% year over year.

Cash and Cash Equivalents

Cash and cash equivalents of $683,499 at March 31, 2013 are up $154,623, or
29% compared to a balance of $528,876 as of June 30, 2012. The primary
components of the increase in cash at the end of the period consists of
$500,000 of cash provided from the funding of a promissory note from QAR
Industries, Inc. offset by $272,025 of cash used in operating activities,
consisting of a $277,739 increase in inventories (net of slow moving reserve)
associated with work in process jobs scheduled to ship later in the fiscal
year and a $138,489 decrease in accounts payable.

Financing Activities

There was $500,000 of financing activities from the funding of the promissory
note from QAR Industries, Inc. during the nine month periods ended March 31,
2013. At March 31, 2013 and 2012, PHAZAR CORP had no long-term debt
outstanding.

Expected Going Private Transaction and Capital Liquidity

The Company has entered into an agreement by which it will go private no later
than July 31, 2013, provided it receives shareholder approval. The Company
currently anticipates that it has adequate operating capital through the close
of the transaction. Should the Company experience unexpected operational
difficulties or delays in the transaction closing or if the transaction is not
consummated for any reason, the Company will most likely need additional
capital, including capital to repay the $500,000 loan received from QAR
Industries, Inc. which carries a maturity date of July 31, 2013. There is no
guarantee that the Company will be able to procure additional capital and if
it is successful, it is likely that such capital will be highly dilutive to
current shareholders.

More information and analysis of PHAZAR CORP’s financial results will be
provided in the management discussion and analysis of financial condition and
results of operations in the Form 10-Q for the third quarter ended March 31,
2013, estimated to be filed with the Securities and Exchange Commission on or
about April 22, 2013.

The Form 10-Q will also be available at the SEC’s website at www.sec.gov and
PHAZAR CORP’s website at www.phazarcorp.com.

Product information is available at www.antennaproducts.com and
www.phazar.com.

The common stock of PHAZAR CORP is listed on the NASDAQ Capital Market under
the trading symbol “ANTP”. This press release contains forward-looking
information within the meaning of Section 29A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performances and underlying assumption and other statements,
which are other than statements of historical facts. Certain statements
contained herein are forward-looking statements and, accordingly, involve
risks and uncertainties, which could cause actual results, or outcomes to
differ materially from those expressed in the forward-looking statements. The
Company’s expectations, beliefs and projections are expressed in good faith
and are believed by the Company to have a reasonable basis, including without
limitations, management’s examination of historical operating trends, data
contained in the Company’s records and other data available from third
parties, but there can be no assurance that management’s expectations, beliefs
or projections will result, or be achieved, or accomplished.


PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                        
                                          March 31, 2013
                                                       June 30, 2012
                                          (Unaudited)
CURRENT ASSETS
Cash and cash equivalents                 $ 683,499            $ 528,876
Accounts receivable:
Trade, net of allowance for
doubtful accounts of $0
as of March 31, 2013 and June 30,           708,147              880,342
2012
Inventories (net of slow                    2,054,166            2,376,427
moving reserve)
Note receivable (net of impairment          -                    1,477,161
reserve)
Prepaid expenses and other assets           50,282               95,231
Income taxes receivable                     29,321               29,321
Deferred income taxes                   -               211,674    
Total current assets                        3,525,415            5,599,032
                                                               
Property and equipment, net                 899,015              997,426
Long-term deferred income                               301,547    
tax
TOTAL ASSETS                           $ 4,424,430      $ 6,898,005  

CURRENT LIABILITIES
Accounts payable                          $ 136,139            $ 274,628
Accrued liabilities                         320,869              300,637
Note payable – QAR Industries, Inc.         500,000              -
Deferred revenues                           262,341              19,619
Liabilities held for discontinued       114,571         114,571    
operations
Total current liabilities                 $ 1,333,920          $ 709,455
                                                               
TOTAL LIABILITIES                      $ 1,333,920      $ 709,455    
                                                               
COMMITMENTS AND CONTINGENCIES
                                                               
SHAREHOLDERS’ EQUITY
Preferred Stock, $1 par, 2,000,000
shares authorized, none issued
or outstanding, attributes to be            -                    -
determined when issued
                                                               
Common stock, $0.01 par, 6,000,000
shares authorized
2,330,337 issued and outstanding on
March 31, 2013 and 2,391,628                23,304               23,917

issued June 30, 2012
                                                                             
Additional paid in capital                  4,610,138            4,735,800
Treasury stock, at cost, 0 and
74,691 shares on March 31, 2013
and June 30, 2012, respectively             -                    (215,918  ) 
Retained earnings (accumulated          (1,542,932 )     1,644,751  
deficit)
Total shareholders’ equity              3,090,510       6,188,550  

TOTAL LIABILITIES AND SHAREHOLDERS'    $ 4,424,430      $ 6,898,005  
EQUITY
                                                               


PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                      
                       Three Months Ended                    Nine Months Ended
                       March 31,                             March 31,
                         2013             2012               2013              2012
                 (Unaudited)                            (Unaudited)
Sales and
contract             $ 1,643,108           $ 1,485,107         $ 4,298,074          $ 4,992,692
revenues
Cost of sales     956,228            651,211        3,207,190       2,703,592 
and contracts
Gross profit             686,880             833,896             1,090,884            2,289,100
                                                                                    
Selling,
general and          659,296                 1,113,677           1,790,844            2,578,635
administration
expenses
Impairment of
note                     31,175              -                   1,547,513            -
receivable
Research and
development         172,553        171,075        531,525         397,935   
costs
Total
operating                863,024             1,284,752           3,869,882            2,976,570
expenses
                                                                                    
Operating loss           (176,144  )         (450,856  )         (2,778,998 )         (687,470  )
                                                                                    
Other income
Interest
income               (815          )         23,759              50,952               91,636
(expense)
Other income      8,763              8,622          53,793          19,973    
Total other          7,948                   32,381              104,745              111,609
income
                                                                                    
Loss from
operations           (168,196      )         (418,475  )         (2,674,253 )         (575,861  )
before income
taxes
                                                                                    
Income tax
expense           -                  (142,282  )     513,430         (195,793  )
(benefit)
                                                                                    
Net loss
before               (168,196      )         (276,193  )         (3,187,683 )         (380,068  )
discontinued
operations
                                                                                    
Loss from
discontinued         -                       (15,572   )         -                    (33,616   )
operations
Income tax
benefit from      -                  5,294          -               11,429    
discontinued
operations
Net loss from
discontinued             -                   (10,278   )         -                    (22,187   )
operations
                                                                                                
Net loss           $ (168,196  )    $ (286,471  )    $ (3,187,683 )    $ (402,255  )
                                                                                    
Basic loss per
common share
Continuing             $ (0.07     )       $ (0.12     )       $ (1.37      )       $ (0.16     )
operations
Discontinued        -              -              -               (0.01     )
operations
Net loss               $ (0.07     )       $ (0.12     )       $ (1.37      )       $ (0.17     )
                                                                                    
Diluted loss
per common
share
Continuing             $ (0.07     )       $ (0.12     )       $ (1.37      )       $ (0.16     )
operations
Discontinued        -              -              -               (0.01     )
operations
Net loss               $ (0.07     )       $ (0.12     )       $ (1.37      )       $ (0.17     )
                                                                                    
Basic weighted
average of               2,325,795           2,315,080           2,321,983            2,313,264
common shares
outstanding
Diluted
weighted
average of               2,325,795           2,315,080           2,321,983            2,313,264
common shares
outstanding
                                                                                    


PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                       Nine Months Ended
                                           March 31, 2013       March 31, 2012
                                                       
                                           (Unaudited)          (Unaudited)
                                                            
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss                                   $ (3,187,683 )       $  (402,255  )
Adjustments to reconcile net loss
to net cash

provided by (used in) operating
activities:
Depreciation                                 98,411                97,040
Provision for slow moving                    600,000               -
inventory
Impairment of note receivable                1,547,513             -
Loss from discontinued operations            -                     22,187
Stock based compensation                     89,643                206,808
Deferred federal income tax                  513,221               (178,260  )
Changes in operating assets and
liabilities:
Accounts receivable                          172,195               96,928
Inventories                                  (277,739   )          56,466
Prepaid expenses and other assets            44,949                73,544
Income taxes receivable                      -                     207,045
                                                                
Accounts payable                             (138,489   )          (22,168   )
Accrued liabilities                          20,232                98,117
Deferred revenues                            242,722               2,265
Net cash used in discontinued           -                (85,676   )
operations
Net cash provided by (used in)               (275,025   )          172,041
operating activities
                                                                
CASH FLOWS FROM INVESTING
ACTIVITIES:
Funding of note receivable                   (70,352    )          (399,369  )
Purchase of property and equipment      -                (84,560   )
Net cash used in investing                   (70,352    )          (483,929  )
activities
                                                                
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from QAR Industries, Inc.      500,000          -         
note payable
Net cash provided by financing               500,000               -
activities
                                                                
Net increase (decrease) in cash              154,623               (311,888  )
and cash equivalents
                                                                
CASH AND CASH EQUIVALENTS,              528,876          1,169,318 
beginning of period
CASH AND CASH EQUIVALENTS, end of      $ 683,499        $  857,430   
period

Contact:

PHAZAR CORP
Kathy Kindle, 940-325-3301
Fax: 940-325-0716
kindle@phazarcorp.com