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Pulse Electronics Corporation (NYSE:PULS), a leading provider of electronic components, today reported results for its fourth quarter ended December 30, 2011.
Fourth Quarter Highlights
Net sales were $90.5 million compared with $101.2 million in the prior-year quarter, and down 5.8 percent from $96.0 million in the third quarter.
Operating loss (U.S. GAAP) was $2.7 million compared with a profit of $4.1 million in the prior-year quarter and a loss of $0.7 million in the third quarter.
Non-GAAP operating loss was $0.9 million, compared with a non-GAAP profit of $5.4 million in the prior-year quarter and a non-GAAP profit of $2.6 million in the third quarter. (See Schedule A for a reconciliation of U.S. GAAP results to non-GAAP measures.)
Wireless segment sales increased 43 percent from the prior quarter as new product programs continued to ramp significantly.
Operating expenses continued to decline as a result of expense reduction actions earlier in the year.
“Overall, given the market and economic environment that we knew would be challenging, we are pleased that our performance was within our guidance range this quarter,” said Pulse Chairman and Chief Executive Officer Ralph Faison. “Revenue and non-GAAP operating loss were within our guidance, albeit at the low end of the range. We are continuing to make excellent progress on our strategic turnaround plan, including strong growth in wireless sales, reduced operating expenses and manufacturing footprint, and implementation of our ERP system.”
“At the same time, the continuing volatile nature of our industry and protracted soft markets demonstrate that the current financing structure of Pulse, with a high leverage ratio and restrictive financial terms and covenants, is simply not suitable for our company to maintain its commitment to its turnaround plan and our ability to pursue significant growth opportunities. Therefore, we have accelerated our efforts to significantly delever the balance sheet with the ultimate goal of being essentially debt-free. To accelerate our delevering actions, we are engaged in a process to sell some non-strategic product lines with the objective of raising sufficient funds to retire significant debt. As we previously announced, we have been working with several lenders on the refinancing of our existing senior credit facility and have determined that our best near-term option was to amend our existing facility while seeing to completion of some of our delevering actions. We believe that the results of delevering will yield much more economically favorable terms for a new, more appropriately sized long-term credit facility. Finally, we believe that if the company continues to improve its operating performance and markets recover and return to expected growth rates, we expect to begin to generate positive operating cash flow and be able to retire the remaining debt.”