Pulse Electronics Corporation (NYSE:PULS), a leading provider of electronic components, today reported results for its second quarter ended June 28, 2013.
Second Quarter Highlights
- Net sales were $88.3 million, down 12.1% from $100.4 million in the prior-year quarter, and up 4.1% from $84.8 million in the first quarter, in line with industry trends.
- Operating profit (U.S. GAAP) was $1.6 million compared with a loss of $0.1 million in the prior-year quarter and a profit of $1.0 million in the first quarter.
- Non-GAAP operating profit was $2.2 million, compared with $0.9 million in the prior-year quarter and $1.6 million in the first quarter. (See Schedule A for a reconciliation of U.S. GAAP results to non-GAAP measures.)
- Initiated a new expense reduction program to continue the path toward target 15% operating expense model.
- Reduced lead times for a majority of products to 4-5 weeks, 50% of those typical in the industry.
“We were pleased that this quarter’s results were a continuation of our trend of improving operational performance despite a muted demand environment,” said Pulse Chairman and Chief Executive Officer Ralph Faison. “We exceeded our non-GAAP operating profit guidance on revenue that was within our guidance range. We have been largely successful in stabilizing gross margin even though labor costs continue to rise, and with good control over operating expenses our non-GAAP operating profit margin maintained its upward trajectory. We are also pleased that our ongoing improvements in operating efficiency and commitment to improved customer service and satisfaction have allowed us to reduce product lead times to four to five weeks, half that of typical industry lead times.“With our ERP implementation progressing toward completion and driving many of the expected efficiencies, we have initiated a program of further expense reductions,” Mr. Faison continued. “These reductions are a natural step in getting to our target 15% operating expense model, and they also make sense to implement now because of the prolonged nature of lower demand in our industry. While we believe that the underlying fundamentals of our industry will eventually drive significant future growth and help improve our expense structure, more rapidly achieving an expense level appropriate for existing revenues will help assure continued earnings and cash growth even if muted industry sales trends continue.”