PHAZAR CORP, (NASDAQ: ANTP) designs, manufactures and markets antennas, wireless mesh network solutions, towers, support structures, masts and communication accessories worldwide. Today, PHAZAR CORP announces the audited results of operations for the three and twelve month periods ended May 31, 2010.

Fourth Quarter Fiscal Year 2010

Revenues of $1,732,834 for the fourth quarter increased 4% compared to $1,660,513 for the same period last year. Commercial Wireless sales have made a good recovery, showing gains in excess of 75% over the fourth quarter last year. Sales from our new mesh wireless product became noticeable for the first time as well. But our traditional governmental related categories showed continued sluggish demand, falling 29%.

The net loss in the fourth quarter of fiscal year 2010 is attributed to a 20% increase in cost of goods sold and a 43% increase in sales and administration expense compared to the same three month period in prior year.

The $224,251, or 20% increase in cost of goods sold is largely attributed to a $203,000 warranty reserve for an ongoing voluntary recall of safety climb components and a replacement of a specific production run of a new antenna design that was found to have a manufacturing defect, which has since been rectified. Excluding that reserve charge, ongoing gross profit margins continued the improved pattern seen in prior quarters.

The $314,846, or 43% increase in sales and administration expense reflects higher compensation costs associated with employees working on our mesh radio wireless network product line and indirect labor costs. Research and development costs of $159,533 were down $205,529, or 56% for the three months ended May 31, 2010 compared to $365,062 in the prior year, but that is essentially a timing issue as R&D is flat for the full fiscal year.

The Company recognized a net loss of $569,397, or $.25 per share for the fourth quarter, compared to net loss of $282,245, or $.12 per share, in last year's fiscal fourth quarter.

Fiscal Year Ending May 31, 2010

The Company reported revenues for the fiscal year 2010 of $7,638,611, an increase of 4% compared to $7,310,281 for the comparable period last year. The pattern of sales for the fiscal year was similar to the fourth quarter; steady accelerating recovery and growth in commercial lines and meaningful mesh sales, albeit from a very small base, offset by subdued governmental customer demand.

Net loss for fiscal year 2010 was $937,994, or $.41 per share compared to net loss of $582,195, or $.25 per share for the comparable period last year.

Backlog of Orders

The Company's backlog of orders on May 31, 2010, totaled approximately $2,907,590 compared to $1,741,746 at May 31, 2009, an increase of 67%. Incoming orders for the year ended May 31, 2010 totaled $8,846,659 versus $6,662,609 for the comparable period last year, an increase of 33%.

Commenting on the quarter and year, Garland P. Asher, Chairman and CEO, said, “No one likes to report a loss year and PHAZAR CORP is no exception. Having said that, there was progress made on several fronts. First the backlog is $1.17 million larger at the start of Fiscal 2011 than it was at the start of Fiscal 2010, a hopeful sign. Second, we were able to maintain our R&D investment and continue to invest in new products which are fueling our growth in commercial sales. And last, we have been able to maintain our gross margin improvement, which should positively impact profitability when and as revenue trends improve.”

More information and analysis of PHAZAR CORP’s financial results will be provided in the management discussion and analysis of financial condition and results of operations in the Form 10-K for the year ended May 31, 2010, estimated to be filed with the Securities and Exchange Commission on or around August 29, 2010.

The Form 10-K will be available at the SEC’s website at www.sec.gov and PHAZAR CORP’S website at www.phazarcorp.com .

Product information is available at www.antennaproducts.com, www.truemeshnetworks.com and www.phazar.com.

The common stock of PHAZAR CORP is listed on the NASDAQ Capital Market under the trading symbol “ANTP.” This press release contains forward-looking information within the meaning of Section 29A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performances and underlying assumption and other statements, which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties, which could cause actual results, or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties, but there can be no assurance that management’s expectations, beliefs or projections will result, or be achieved, or accomplished.
PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED MAY 31, 2010 AND 2009
       
 
 
Three Months Ended Year-To-Date

May 31,

 

May 31,

May 31,

May 31,
2010 2009 2010 2009
(Unaudited) (Audited) (Unaudited) (Audited)
Sales and contract revenues $ 1,732,834 $ 1,660,513 $ 7,638,611 $ 7,310,281

Cost of sales and contracts
  1,364,312     1,140,061     4,364,102     4,910,677  
 
Gross Profit 368,522 520,452 3,274,509 2,399,604
Gross Profit Margin 21.2 % 31.3 % 42.9 % 32.8 %
 
Selling, general and administration expenses (1,054,505 ) (739,659 ) (3,683,471 ) (2,555,693 )

Research and development costs
  (159,533 )   (365,062 )   (1,051,021 )   (1,093,462 )
Total selling, general and administration expenses   1,214,038     1,104,721     4,734,492     3,649,155  
 
Operating Loss (845,516 ) (584,269 ) (1,459,983 ) (1,249,551 )
 
Other Income
Interest income (25,154 ) 19,929 11,195 154,691
Other income   8,361     1,007     27,999     42,076  
 
Total Other Income   (16,793 )   20,936     39,194     196,767  
 
Loss from operations before income taxes (862,309 ) (563,333 ) (1,420,789 ) (1,052,784 )
 
 
Income tax benefit   (292,912 )   (281,088 )   (482,795 )   (470,589 )
 
Net loss $ (569,397 ) $ (282,245 ) $ (937,994 ) $ (582,195 )
 
 
 
 
Basic loss per common share $ (.25 ) $ (.12 ) $ (.41 ) $ (.25 )
 
Diluted loss per common share $ (.25 ) $ (.12 ) $ (.41 ) $ (.25 )
 
 
 
Weighted Average Shares Outstanding
Basic 2,302,995 2,338,315 2,300,191 2,358,101
Diluted 2,302,995 2,338,315 2,300,191 2,358,101

   

PHAZAR CORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MAY 31, 2010 AND 2009
 

ASSETS
 
May 31, 2010 May 31, 2009
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 2,030,774 $ 3,320,647
Accounts receivable:

Trade, net of allowance for doubtful accounts of $0 as of May 31, 2010 and $1,120 as of May 31, 2009
748,671 663,499
Inventories 3,481,074 2,531,816
Prepaid expenses and other assets 95,586 76,261
Income taxes receivable 316,374 343,145
Note receivable 432,146 -
Deferred income taxes   105,314     74,853  
Total current assets 7,209,939 7,010,221
 
Property and equipment, net 1,170,090 1,140,141

 
Long – term deferred income tax   232,188     116,995  
TOTAL ASSETS $ 8,612,217   $ 8,267,357  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 477,111 $ 215,840
Accrued liabilities 899,072 486,666
Deferred revenues   207,514     16,884  
Total current liabilities 1,583,697 719,390
 
TOTAL LIABILITIES   1,583,697     719,390  
 
COMMITMENTS AND CONTINGENCIES - -
 

SHAREHOLDERS’ EQUITY

Preferred Stock, $1 par, 2,000,000 shares authorized, none issued or outstanding, attributes to be determined when issued
- -

Common stock, $0.01 par, 6,000,000 shares authorized 2,378,428 and 2,371,728 issued and outstanding
23,785 23,718
Additional paid in capital 4,403,261 3,974,476
Treasury stock , at cost, 71,341 shares in 2010 (215,918 ) (205,611 )
Retained earnings   2,817,392     3,755,384  
Total shareholders’ equity   7,028,520     7,547,967  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,612,217   $ 8,267,357  

 

PHAZAR CORP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED MAY 31, 2010 AND 2009
   
2010 2009
(Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (937,994 ) $ (582,195 )

Adjustments to reconcile net loss to net cash provided (used) by
Operating activities:
Depreciation 142,299 115,854

 

 
Stock based compensation 428,855 251,338
Tax benefit for employee stock options (145,810 ) (87,283 )
Deferred federal income tax (145,655 ) (48,487 )
Changes in operating assets and liabilities:
Accounts receivable (85,172 ) 323,759
Inventory (949,258 ) (754,481 )
Income taxes receivable 26,771 (173,548 )
Prepaid expenses (19,325 ) (28,498 )
Accounts payable 261,271 (82,352 )
Accrued expenses 412,406 23,987
Deferred revenue   190,630     (298,770 )
Net cash used by operating activities (820,982 ) (1,340,678 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Funding of Note Receivable (432,146 ) -
Redemption of marketable securities - 2,650,000
Purchase of property and equipment (172,248 ) (316,911 )
Purchase of treasury stock   (10,307 )   (205,611 )
Net cash provided by (used in) investing activities (614,701 ) 2,127,478
 
CASH FLOWS FROM FINANCING ACTIVITIES:

 

 
Federal income tax benefit-stock options expensed   145,810     87,283  
Net cash provided by financing activities 145,810 87,283
 
Net increase (decrease) in cash and cash equivalents   (1,289,873 )   874,084  
 
CASH AND CASH EQUIVALENTS, beginning of year   3,320,647     2,446,563  
 
CASH AND CASH EQUIVALENTS, end of year $ 2,030,774   $ 3,320,647  
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION:
Cash paid during the period for:
Interest expense $ 6,666 $ 5,521
 
Income taxes $ - $ -

Copyright Business Wire 2010

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