PT Announces First Quarter 2013 Financial Results

PT Announces First Quarter 2013 Financial Results 
ROCHESTER, NY -- (Marketwired) -- 05/02/13 --  PT (NASDAQ: PTIX), a
leading global provider of advanced network communications solutions,
today announced its unaudited financial results for the first quarter
2013. 
Revenue in the first quarter 2013 amounted to $6.3 million, compared
to $8.4 million in the first quarter 2012.  
On the basis of generally accepted accounting principles (GAAP), the
net loss in the first quarter 2013 amounted to ($.9 million), or
($.08) per basic share, based on 11.1 million shares outstanding,
including restructuring costs of $.02 per share, amortization of
purchased intangible assets of $.02 per share and stock-based
compensation expense of $.01 per share. GAAP net income in the first
quarter 2012 amounted to $.3 million, or $.03 per diluted share,
based on 11.1 million shares outstanding, including stock
compensation expense of $.01 per share and amortization of purchased
intangible assets of $.03 per share.  
The non-GAAP net loss in the first quarter 2013 amounted to ($.3
million), or ($.03) per basic share, compared to non-GAAP net income
of $.6 million, or $.06 per diluted share in the first quarter 2012.
Please refer to the reconciliations between GAAP and non-GAAP
financial measures contained in this release.  
On March 31, 2013, the Company had cash and investments amounting to
$12.5 million, working capital of $16.5 million and no long-term
debt. 
"While we are pleased with our 19% sequential quarterly revenue
growth and improvement in our working capital position, our objective
firmly remains on driving to bottom line profitability," said John
Slusser, president and chief executive officer. "As we execute our
refined business strategy announced in January, we continue to make
meaningful progress in our key 2013 initiative -- advancement of our
SEGway Universal Diameter Router product line. During the quarter, we
added new Diameter Routing capabilities and features, responded to
several major Diameter RFIs/RFPs, quoted over a dozen Diameter
opportunities and recognized our first Diameter revenues. We remain
very enthusiastic about the opportunities in the Diameter Signaling
space, recently further highlighted by the very positive feedback we
received on our Signaling Evol
ution strategy during our participation
at the Mobile World Congress, the CCA Global Expo and the Latin
America LTE Summit. We expect to increase our sales and marketing
investments in our Diameter product line to accelerate its
penetration in this growing market."  
About PT (www.pt.com)  
PT (NASDAQ: PTIX) is a global supplier of advanced, high availability
network communications solutions. Its SEGway(TM) Diameter and SS7
Signaling Systems provide tightly integrated signaling and advanced
routing capabilities and applications that uniquely span the mission
critical demands of both existing and next-generation 4G LTE and IMS
telecommunications networks. The Company's IPnexus(R) Multi-Protocol
Gateways and Servers enable a broad range of IP-interworking in data
acquisition, sensor, radar, and control applications for aviation,
weather and other infrastructure networks. Established in 1981, PT is
headquartered in Rochester, NY and markets and sells its products
worldwide through its direct sales organization as well as through
channel partners that include major telecommunications equipment
vendors, government prime contractors and value-added resellers. 
Forward-Looking Statements 
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This press release
contains forward-looking statements which reflect the Company's
current views with respect to future events and financial
performance, within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and is
subject to the safe harbor provisions of those Sections. The
Company's future operating results are subject to various risks and
uncertainties and could differ materially from those discussed in the
forward-looking statements and may be affected by various trends and
factors which are beyond the Company's control. These risks and
uncertainties include, among other factors, business and economic
conditions, rapid technological changes accompanied by frequent new
product introductions, competitive pressures, dependence on key
customers and the potential loss of key customers, inability to gauge
order flows from customers, fluctuations in quarterly and annual
results, the reliance on a limited number of third party suppliers,
limitations of PT's manufacturing capacity and arrangements, the
protection of PT's proprietary technology, errors or defects in our
products, the effects of pending or threatened litigation, the
dependence on key personnel, changes in critical accounting
estimates, potential impairments related to investments, foreign
regulations, possible loss or significant curtailment of significant
government contracts or subcontracts, possible effects related to
compliance with new conflict-free mineral regulations, potential
material weaknesses in internal control over financial reporting, and
the potential ramifications of our possible inability to comply with
NASDAQ's continued listing requirements. In addition, during weak or
uncertain economic periods, customers' visibility deteriorates
causing delays in the placement of their orders. These factors often
result in a substantial portion of PT's revenue being derived from
orders placed within a quarter and shipped in the final month of the
same quarter. Forward-looking statements should be read in
conjunction with the most recent audited Consolidated Financial
Statements, the Notes thereto, Risk Factors, and Management's
Discussion and Analysis of Financial Condition and Results of
Operations of the Company, as contained in the Company's Annual
Report on Form 10-K, and other documents filed with the Securities
and Exchange Commission. 
Non-GAAP Financial Measures 
As a supplement to the GAAP-based consolidated financial statements
contained in this press release, the Company is providing a
presentation of non-GAAP financial measures which can be useful to
investors to gain an overall understanding of the Company's current
financial performance. Specifically, the Company believes the
non-GAAP financial measures provide useful information to investors
by excluding certain expenses the Company believes are not indicative
of its core operating results. The non-GAAP financial measures
exclude certain expenses such as the effects of (a) amortization of
purchased intangible assets, (b) stock-based compensation costs, and
(c) restructuring costs. 
Management utilizes a number of different financial measures, both
GAAP and non-GAAP, in analyzing and assessing the overall performance
of our business, in making operating decisions and forecasting and
planning for future periods. We also consider the use of the non-GAAP
financial measures to be helpful in assessing various aspects of our
business operations. 
Non-GAAP financial measures are not meant to be considered a
substitute for the corresponding GAAP financial information and
should not be considered in isolation from measures of financial
performance prepared in accordance with GAAP. Investors are cautioned
that there are material limitations associated with the use of
non-GAAP financial measures as an analytical tool and that these
measures should only be used to evaluate the Company's results of
operat
ions in conjunction with the corresponding GAAP financial
information. 
A reconciliation of non-GAAP measures to GAAP measures is included
herein. 
A conference call will be held on Friday, May 3, at 10:00 a.m., New
York time, to discuss the results. All institutional investors can
participate in the conference by dialing (866) 494-3746 or (416)
915-1196. The call will be available simultaneously for all other
investors at (866) 494-3387 or (416) 915-1198. A digital recording of
this conference call may be accessed immediately after its completion
from May 3 through May 7, 2013. To access the recording, participants
should dial (866) 245-6755 or (416) 915-1035 using passcode 817644. A
live webcast of the conference call will be available on the PT
website at www.pt.com and will be archived to the site within two
hours after the completion of the call.  
PT is a trademark of Performance Technologies, Inc. The names of
actual companies, products, or services may be the trademarks,
registered trademarks, or service marks of their respective owners in
the United States and/or other countries. 


 
                                                                            
          PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES           
                        CONSOLIDATED BALANCE SHEETS                         
                                (unaudited)                                 
                                                                            
                                   ASSETS                                   
                                                                            
                                                 March 31,     December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Current assets:                                                             
  Cash and cash equivalents                    $   9,004,000  $   7,546,000 
  Investments                                      3,024,000      4,794,000 
  Accounts receivable                              5,386,000      3,775,000 
  Inventories                                      3,246,000      3,615,000 
  Prepaid expenses and other assets                1,067,000        932,000 
  Prepaid income taxes                               255,000        206,000 
  Deferred income taxes                              444,000        445,000 
                                               -------------  ------------- 
    Total current assets                          22,426,000     21,313,000 
                                                                            
Investments                                          453,000      1,969,000 
Property, equipment and improvements, net          1,629,000      1,683,000 
Software development costs, net                    3,697,000      3,716,000 
Purchased intangible assets, net                   2,601,000      2,835,000 
                                               -------------  ------------- 
    Total assets                               $  30,806,000  $  31,516,000 
                                               =============  ============= 
                                                                            
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
                                                                            
Current liabilities:                                                        
  Accounts payable                             $   1,046,000  $   1,134,000 
  Accrued expenses                                 1,481,000      1,664,000 
  Deferred revenue                                 3,367,000      3,002,000 
  Fair value of foreign currency hedges               15,000                
                                               -------------  ------------- 
    Total current liabilities                      5,909,000      5,800,000 
Deferred income taxes                                704,000        696,000 
                                               -------------  ------------- 
    Total liabilities                              6,613,000      6,496,000 
                                               -------------  ------------- 
                                                                            
Stockholders' equity:                                                       
  Preferred stock                                                           
  Common stock                                       133,000        133,000 
  Additional paid-in capital                      17,648,000     17,591,000 
  Retained earnings                               16,233,000     17,099,000 
  Accumulated other comprehensive income              (3,000)        15,000 
  Treasury stock                                  (9,818,000)    (9,818,000)
                                               -------------  ------------- 
    Total stockholders' equity                    24,193,000     25,020,000 
                                               -------------  ------------- 
    Total liabilities and stockholders' equity $  30,806,000  $  31,516,000 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
          PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES           
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                                (unaudited)                                 
                                                                            
                                                    Three Months Ended      
                                                         March 31,          
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Sales                                          $   6,285,000  $   8,356,000 
Cost of goods sold                                 3,456,000      3,797,000 
                                               -------------  ------------- 
Gross profit                                       2,829,000      4,559,000 
                                               -------------  ------------- 
                                                                            
Operating expenses:                                                         
  Selling and marketing                            1,395,000      1,614,000 
  Research and development                         1,181,000      1,697,000 
  General and administrative                         849,000        950,000 
  Restructuring                                      243,000                
                                               -------------  ------------- 
    Total operating expenses                       3,668,000      
4,261,000 
                                               -------------  ------------- 
(Loss) income from operations                       (839,000)       298,000 
                                                                            
Other expense, net                                    (9,000)       (30,000)
                                               -------------  ------------- 
(Loss) income before income taxes                   (848,000)       268,000 
                                                                            
Income tax provision (benefit)                        18,000        (21,000)
                                               -------------  ------------- 
    Net (loss) income                          $    (866,000) $     289,000 
                                               =============  ============= 
                                                                            
                                                                            
Basic (loss) income per share                  $       (0.08) $        0.03 
                                               =============  ============= 
Diluted income per share                                      $        0.03 
                                                              ============= 
                                                                            
Weighted average common shares used in basic                                
 and diluted income (loss) per share              11,116,000     11,116,000 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
          PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES           
           RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES            
                                (unaudited)                                 
                                                                            
                                                    Three Months Ended      
                                                         March 31,          
                                                    2013           2012     
                                               -------------  ------------- 
Gross Profit Reconciliation                                                 
  GAAP gross profit                            $   2,829,000  $   4,559,000 
    Amortization of purchased intangible                                    
     assets(a)                                       234,000        279,000 
    Stock-based compensation(b)                        5,000          3,000 
                                               -------------  ------------- 
      Non-GAAP gross profit                        3,068,000      4,841,000 
                                               -------------  ------------- 
      Non-GAAP gross profit percentage of                                   
       sales                                            48.8%          57.9%
                                                                            
Operating Expense Reconciliation                                            
  GAAP operating expense                           3,668,000      4,261,000 
    Stock-based compensation (b)                     (52,000)       (64,000)
    Restructuring costs(c)                          (243,000)               
                                               -------------  ------------- 
      Non-GAAP operating expenses                  3,373,000      4,197,000 
                                               -------------  ------------- 
                                                                            
Net (Loss) Income Reconciliation                                            
  GAAP net (loss) income                            (866,000)       289,000 
    Amortization of purchased intangible                                    
     assets(a)                                       234,000        279,000 
    Stock-based compensation (b)                      57,000         67,000 
    Restructuring costs(c)                           243,000                
                                               -------------  ------------- 
      Non-GAAP net (loss) income               $    (332,000) $     635,000 
                                               -------------  ------------- 
                                                                            
Net (Loss) Income per Common Share                                          
  GAAP basic and diluted(d) net (loss) income                               
   per share                                   $       (0.08) $        0.03 
                                               -------------  ------------- 
  Non-GAAP basic and diluted(d) net (loss)                                  
   income per share                            $       (0.03) $        0.06 
                                               -------------  ------------- 

 
The Non-GAAP measures above, and the reconciliation to our GAAP
results for the periods presented, reflect adjustments relating to
the following items:  
(a) Amortization of purchased intangible assets - a non-cash expense
arising from the acquisition of intangible assets that the Company is
required to amortize over their expected useful life. The amount of
purchased intangible assets increased significantly as a result of
the acquisition of the USP and SP2000 signaling technologies acquired
from GENBAND. 
(b) Stock-based compensation costs - a non-cash expense incurred in
accordance with share-based compensation accounting guidance.  
(c) Restructuring costs - costs incurred as a result of restructuring
activities taken to bring operating expenses more in line with
expected revenues.  
(d) Basic and diluted net income per common share are identical for
the three months ended March 31, 2012. 
For more information contact: 
Dorrance W. Lamb
SVP and Chief Financial Officer 
PT 
585-256-0200 ext. 7276
http://www.pt.com 
finance@pt.com 
 
 
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