Pulse Electronics Corporation (NYSE:PULS), a leading provider of electronic components, today reported results for its second quarter ended July 1, 2011.
Second Quarter Highlights
- Net sales were $94.8 million compared with $116.5 million in the prior-year quarter, and up 7.7 percent from $88.0 million in the first quarter.
- Operating loss according to U.S. GAAP was $4.2 million in the quarter compared with a profit of $2.4 million in the prior-year quarter.
- Non-GAAP operating profit was $1.5 million in the quarter, compared with a non-GAAP profit of $7.7 million in the prior-year quarter and a non-GAAP loss of $2.9 million in the first quarter. This operating profit exceeded upper-end guidance of $1 million. (See Schedule A for a reconciliation of U.S. GAAP results to non-GAAP measures.)
- Additional cost and expense actions taken which the company expects will enable it to meet its objective of reducing operating expenses $12 million in the next 12-18 months.
- Wireless segment sales trough likely reached one quarter earlier than previously forecasted as sales to new antenna customers increased 12 percent from the first quarter.
“Overall, our performance was well within guidance this quarter,” said Pulse Chairman and Chief Executive Officer Ralph Faison. “We are executing on our strategic turnaround plan and have growing confidence that we will achieve our objectives. We delivered operating profit above our guidance on revenue that was about as expected as sales improved from the prior quarter in our network and power segments. We believe wireless segment sales have troughed and will begin to increase in future quarters.
“I am encouraged with the progress we are making on our strategic turnaround plan. Pulse employees around the world are working tirelessly to execute on this plan. During this quarter we:
- Took further actions that will increase savings, with the net effects of approximately $6 million (net of necessary spending increases in certain areas) to begin in the third quarter, and completed the cost and expense reduction actions we announced in the first quarter. We remain on track to achieve our objective of reducing operating expenses by approximately $12 million in the next 12 to 18 months.
- Generated $7.5 million in sales from new antenna customers, an increase of 12 percent from the first quarter and comprising 59 percent of total wireless sales, secured 41 wireless design wins including three projected high volume programs from three major handset OEMs, and announced Samsung’s selection of our laser direct structuring (LDS) process for producing three-dimensional antennas for future Samsung products.
- Began the process to close another factory in coastal China late in 2011 as part of the rationalization of our manufacturing footprint in China.
- Selected our ERP system provider, staffed an internal project team, and prepared to begin implementation in the third quarter.
“Early in the third quarter, we also amended our credit facility to provide the financial flexibility to continue our strategic turnaround plans, particularly investments in wireless to support LDS manufacturing volume, new manufacturing automation projects, the new ERP system, and restructuring actions.”