“The closing of the recapitalization with Oaktree marks an important turning point for Pulse,” continued Mr. Faison. “Not only did it achieve our goals of improving liquidity, addressing the looming maturity of our previous credit facility, and reducing cash debt service costs, it also allows the focus of our organization to return to improving operational performance and renewing revenue and profit growth. I am extremely proud of the way Pulse employees around the world continued to focus on the objectives of our core business during the weak market and economic environment and resulting financial stress on our company over the past two years. The situation was clearly a distraction to everyone and severely constrained our resources. With the recapitalization behind us, I am more confident than ever that the commitment of our people to technology leadership and serving our customers paints a bright future for Pulse.”
Fourth Quarter Operating Performance
Net sales were $90.4 million compared with $90.5 million in the prior-year quarter, reflecting ongoing economic and industry weakness which constrained demand for network and power products, partially offset by higher wireless sales for new antenna programs and customers. Sequentially, consolidated net sales increased 2.5 percent compared with third quarter net sales of $88.2 million mainly due to recovery of sales in wireless from lower revenue in the third quarter resulting from delayed customer product ramps.
Cost of sales decreased 3.5 percent to $70.7 million from $73.2 million in the prior-year quarter. The company’s gross profit margin was 21.8 percent compared with 19.1 percent in the prior-year quarter and 19.2 percent in the third quarter. The higher gross profit margin compared to the prior year reflects improved operating efficiencies and lower new product ramp costs in wireless and the favorable effects of manufacturing plant consolidations, among other cost reduction programs. The sequential improvement in gross margin was due mainly to improved cost absorption resulting from the higher revenue in wireless.