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Pulse Electronics Corporation Reports First Quarter Results

Based on discussions with investors and equity analysts, we believe that a reader’s understanding of the company’s operating performance is enhanced by references to these non-GAAP measures. Removing charges for severance, impairment and other associated costs, non-cash stock-based compensation expenses and other adjustments may facilitate comparisons of operating performance among financial periods and peer companies. These charges result from facility closures, the exit of a product line, production relocations and capacity reductions and / or restructuring of overhead and operating expenses to enhance or maintain profitability in an increasingly competitive environment. Removing non-cash stock-based compensation expenses facilitates comparisons of the company’s operating performance with that of other companies with differing compensation structures and with the company’s performance in periods during which its own compensation structure may have been different. Impairment charges, accelerated depreciation and costs related to an unsolicited takeover attempt are not part of the normal operating expense structure of the relevant business in the period in which the charge is recorded.

Copyright © 2012 Pulse Electronics Corporation. All rights reserved. All brand names and trademarks are properties of their respective holders.

     
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per-share amounts)
Three Months Ended

3/30/12

4/1/11

 
Net sales $ 94,135 $ 88,039
Cost of sales   75,737     69,615  
Gross profit 18,398 18,424
Operating expenses 18,993 21,541
Severance, impairment and other associated costs 1,537 6,756
Costs related to unsolicited takeover attempt   --     430  
Operating loss (2,132 ) (10,303 )
 
Interest expense, net (2,593 ) (1,293 )
Other income, net   1,079     1,542  
Loss from continuing operations before income taxes (3,646 ) (10,054 )
Income tax expense (benefit)   657     (5,065 )
Net loss from continuing operations (4,303 ) (4,989 )
Earnings from discontinued operations, net of taxes   -     612  
Net loss (4,303 ) (4,377 )
Non-controlling interest, net of taxes   197     (48 )
Net loss attributable to Pulse Electronics Corporation (4,106 ) (4,425 )
 
Basic shares outstanding 41,422 41,034
Basic loss per share from continuing operations (0.10 ) (0.12 )
Basic earnings per share from discontinued operations   -     0.01  
Basic loss per share (0.10 ) (0.11 )
 
Diluted shares outstanding 41,422 41,034
Diluted loss per share from continuing operations (0.10 ) (0.12 )
Diluted earnings per share from discontinued operations   -     0.01  
Diluted loss per share (0.10 ) (0.11 )
 
AMOUNTS ATTRIBUTABLE TO PULSE ELECTRONICS CORPORATION:
 
Net loss from continuing operations excluding non-controlling interest $ (4,106 ) $ (5,037 )
Net earnings from discontinued operations   -     612  
Net loss attributable to Pulse Electronics Corporation (4,106 ) (4,425 )
 
     
BUSINESS SEGMENT INFORMATION (UNAUDITED)
(in thousands)
Three Months Ended

3/30/2012

4/1/2011

Net Sales
Network 38,754 42,544
Power 31,690 31,899
Wireless   23,691     13,596  
Total net sales 94,135 88,039
 
Operating profit (loss)
Network (873 ) 409
Power 2,332 528
Wireless   (2,054 )   (4,054 )

Operating loss excluding severance, impairment and other associated costs and costs related to unsolicited takeover attempt

(595 ) (3,117 )
Severance, impairment and other associated costs 1,537 6,756
Costs related to unsolicited takeover attempt   --     430  
Operating loss (2,132 ) (10,303 )
 
FINANCIAL POSITION (UNAUDITED)
(in thousands)

3/30/2012

12/30/2011

 
Cash and cash equivalents $ 21,146 $ 17,606
Accounts receivable, net 68,426 59,507
Inventory 34,472 36,968
Prepaid expenses and other current assets 22,516 19,842
Net property, plant and equipment 30,179 28,605
Other assets   10,283     10,909  
Total assets 187,022 173,437
 
 
Accounts payable 55,270 52,802
Accrued expenses and other current liabilities 47,306 42,855
Current portion of long-term debt 54,950 -
Long-term Debt 50,000 93,950
Other long-term liabilities   19,275     21,650  
Total liabilities 226,801 211,257
 
Total deficit   (39,779 )   (37,820 )
 
Total liabilities and deficit 187,022 173,437
 
Shares outstanding 42,106 41,980
 
     

Schedule A

NON-GAAP MEASURES (UNAUDITED)

(in thousands, except per-share amounts)

 
1. Adjusted EBITDA
 

Quarter Ended

3/30/12

4/1/11

 
Net loss attributable to Pulse Electronics Corporation $ (4,106 ) $ (4,425 )
Net earnings from discontinued operations - (612 )
Non-controlling interest (197 ) 48
Income tax expense (benefit) 657 (5,065 )
Interest expense, net 2,593 1,293
Non-cash stock-based compensation expenses 407 248
Depreciation and amortization 1,942 2,598
Other income (1,079 ) (1,542 )
Severance, impairment and other associated costs 1,537 6,756
Costs related to unsolicited takeover attempt   -     430  
Adjusted EBITDA 1,754 (271 )
 
 

2. Net earnings (loss) per diluted share from continuing operations excluding severance, impairment and other associated costs, costs related to unsolicited takeover attempt, non-cash stock-based compensation expenses and other adjustments

 

Quarter Ended

3/30/12

4/1/11

 
Net loss per diluted share $ (0.10 ) $ (0.11 )
Diluted earnings per share from discontinued operations -- (0.01 )
After-tax severance, impairment and other associated costs, per share 0.04 0.12
After-tax non-cash stock-based compensation expenses, per share 0.01 -
After-tax costs related to unsolicited takeover attempt, per share   --     0.01  
Net earnings (loss) per diluted share from continuing operations excluding severance, impairment and other associated costs, non-cash stock-based compensation expense and other adjustments (0.05 ) 0.01
 
3. Operating loss excluding severance, impairment and other associated costs, costs related to unsolicited takeover attempt, non-cash stock-based compensation expenses and other adjustments
 

Quarter Ended

3/30/12

4/1/11

 
Operating loss $ (2,132 ) $ (10,303 )
Pre-tax severance, impairment and other associated costs 1,537 6,756
Pre-tax non-cash stock-based compensation expenses 407 248
Pre-tax costs related to unsolicited takeover attempt   --     430  
Operating loss excluding severance, impairment and other associated costs, non-cash stock-based compensation expense and other adjustments (188 ) (2,869 )
 
Net sales $ 94,135 $ 88,039
Operating margin excluding severance, impairment and other associated costs, costs related to unsolicited takeover attempt, non-cash stock-based compensation expense and other adjustments -0.2 % -3.3 %
 




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