Phoenix Gold Announces Second Quarter Results

Apr 20, 2001, 01:00 ET from Phoenix Gold International, Inc.

    PORTLAND, Ore., April 20 /PRNewswire/ --
 Phoenix Gold International, Inc. (Nasdaq: PGLD) today reported a net loss for
 the second quarter of fiscal 2001 which ended March 31, 2001.  The net loss
 was $157,000, or $0.05 per diluted share, for the three months ended
 March 31, 2001 as compared to net earnings of $241,000, or $0.08 per diluted
 share, in last year's second quarter.  Revenue for the second quarter of
 fiscal 2001 was $6.0 million, a decrease of 8% from revenue of $6.6 million in
 the second quarter of fiscal 2000.
     "As previously disclosed, a slowing domestic market as well as continuing
 softness in international markets has created a difficult sales environment,"
 stated Keith A. Peterson, Chairman, President and Chief Executive Officer.
 "International sales decreased 26% while domestic sales, which benefited from
 a full quarter of sales of AudioSource products, decreased 2%.  We are
 encouraged by the initial success of the recent AudioSource acquisition."
     "We began shipping our new contractor series of professional sound
 amplifiers earlier this month," continued Mr. Peterson.  "Further, we are
 nearing the completion of several new product development activities,
 including our new Tantrum series of car audio amplifiers and Titanium series
 of car audio speakers.  We expect these products to begin to ship in the
 third quarter."
     The Company also provided the following information on its second quarter
 and outlook for fiscal 2001:  International sales decreased $425,000 to
 $1.2 million.  Softness was displayed in all major international markets.
 Domestic sales decreased $117,000 to $4.8 million as a result of decreased
 sales of Phoenix Gold and Carver Professional products offset in part by the
 first full quarter of sales of AudioSource products.  Phoenix Gold acquired
 certain assets of AudioSource on December 15, 2000.  Sales of electronics to a
 significant customer and speakers to a domestic OEM customer were essentially
 unchanged from a year ago.  The amount and timing of purchase orders from
 these customers may fluctuate from quarter to quarter.  The Company expects
 international sales for fiscal 2001 to remain at levels lower than
 historically achieved and domestic sales to remain soft due to the current
 economic environment.  Sales of AudioSource products and sales of new products
 are expected to partially offset the expected lower sales of older products.
     Phoenix Gold also reported that on April 12, 2001, the Nasdaq Stock
 Market, Inc. notified the Company that its common stock had failed to maintain
 a minimum market value of public float of $1 million over the last
 30 consecutive trading days as required for continued listing on the Nasdaq
 SmallCap Market.  The Company was provided until July 10, 2001 to regain
 compliance with this rule or request a hearing with the Nasdaq Listings
 Qualifications Panel.  The Company was able to regain compliance when it was
 previously notified in November 2000 that it also failed to meet this
 requirement.
     Phoenix Gold International, Inc. designs, manufactures, markets and sells
 innovative, high quality, high performance electronics, accessories and
 speakers for the audio market.  The Company sells its products under the brand
 names Phoenix Gold, Carver Professional and AudioSource.
     This press release may contain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995, including,
 without limitation, statements as to expectations, beliefs and future
 financial performance, and are based on current expectations and are subject
 to certain risks, trends and uncertainties that could cause actual results to
 vary from those projected, which variances may have a material adverse effect
 on the Company.  Among the factors that could cause actual results to differ
 materially are the following:  competitive factors; potential fluctuations in
 quarterly results and seasonality; the adverse effect of reduced discretionary
 consumer spending; dependence on a significant customer; the need for the
 introduction of new products and product enhancements; dependence on
 suppliers; control by current shareholders; high inventory requirements;
 business conditions in international markets; the Company's dependence on key
 employees; the need to protect intellectual property; environmental
 regulation; and the potential delisting of the Company's common stock, as well
 as other factors discussed in Exhibit 99.1 to the Phoenix Gold International,
 Inc.  Annual Report on Form 10-K for the fiscal year ended September 24, 2000
 which exhibit is hereby incorporated by reference.  Given these uncertainties,
 readers are cautioned not to place undue reliance on the forward-looking
 statements.  The Company does not intend to update its forward-looking
 statements.
 
 
                        PHOENIX GOLD INTERNATIONAL, INC.
                                 BALANCE SHEETS
                                  (Unaudited)
 
                                                    March 31,   September 30,
                                                       2001           2000
 
     ASSETS
 
     Current assets:
       Cash and cash equivalents                       $1,001     $1,653,683
       Accounts receivable, net                     3,811,478      4,170,885
       Inventories:
         Raw materials and work-in-process          2,905,444      2,598,709
         Finished goods and supplies                3,744,971      3,146,151
                                                    6,650,415      5,744,860
       Prepaid expenses                               374,487        229,049
       Deferred taxes                                 390,000        315,000
         Total current assets                      11,227,381     12,113,477
 
     Property and equipment, net                      850,402        807,139
     Goodwill, net                                    304,572        138,459
     Deferred taxes                                   620,000        610,000
     Other assets                                     520,948        285,127
 
         Total assets                            $ 13,523,303   $ 13,954,202
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                              $661,444       $797,249
       Accrued payroll and benefits                   439,259        557,099
       Other accrued expenses                         409,892        346,318
       Income taxes payable                                --         40,910
         Total current liabilities                  1,510,595      1,741,576
 
     Deferred gain on sale of facility                809,139        858,178
 
     Shareholders' equity:
       Preferred stock;
         Authorized - 5,000,000 shares;
          none outstanding                                 --             --
       Common stock, no par value;
         Authorized - 20,000,000 shares
         Issued and outstanding - 3,026,945
          and 3,026,945 shares                      6,550,928      6,550,928
       Retained earnings                            4,652,641      4,803,520
         Total shareholders' equity                11,203,569     11,354,448
 
         Total liabilities and
          shareholders' equity                   $ 13,523,303   $ 13,954,202
 
 
                        PHOENIX GOLD INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
                                  Three Months Ended
 Six Months Ended
                                        March 31                March 31
                                    2001        2000        2001        2000
 
     Net sales                 $6,045,836  $6,588,249 $11,676,793  $13,563,895
 
     Cost of sales              4,640,786   4,704,618   8,918,200    9,879,495
 
       Gross profit             1,405,050   1,883,631   2,758,593    3,684,400
 
     Operating expenses:
       Selling                  1,050,788     913,768   1,846,255    1,840,537
       General and
        administrative            606,609     573,553   1,184,387    1,104,940
 
       Total operating
        expenses                1,657,397   1,487,321   3,030,642    2,945,477
 
     Income (loss) from
      operations                (252,347)     396,310   (272,049)      738,923
 
     Other income (expense):
       Interest income                193       3,300      29,030       11,660
       Interest expense           (3,732)          --     (6,564)           --
       Other income, net                4          --       3,704           --
 
       Total other income
        (expense)                 (3,535)       3,300      26,170       11,660
 
     Earnings (loss) before
      income taxes              (255,882)     399,610   (245,879)      750,583
 
     Income tax benefit
      (expense)                    99,000   (159,000)      95,000    (298,000)
 
     Net earnings (loss)       $(156,882)    $240,610  $(150,879)     $452,583
 
     Earnings (loss) per share
      - basic and diluted         $(0.05)       $0.08     $(0.05)        $0.15
 
     Average shares outstanding
      - basic and diluted       3,026,945   3,048,212   3,026,945    3,102,466
 
 

SOURCE Phoenix Gold International, Inc.
    PORTLAND, Ore., April 20 /PRNewswire/ --
 Phoenix Gold International, Inc. (Nasdaq: PGLD) today reported a net loss for
 the second quarter of fiscal 2001 which ended March 31, 2001.  The net loss
 was $157,000, or $0.05 per diluted share, for the three months ended
 March 31, 2001 as compared to net earnings of $241,000, or $0.08 per diluted
 share, in last year's second quarter.  Revenue for the second quarter of
 fiscal 2001 was $6.0 million, a decrease of 8% from revenue of $6.6 million in
 the second quarter of fiscal 2000.
     "As previously disclosed, a slowing domestic market as well as continuing
 softness in international markets has created a difficult sales environment,"
 stated Keith A. Peterson, Chairman, President and Chief Executive Officer.
 "International sales decreased 26% while domestic sales, which benefited from
 a full quarter of sales of AudioSource products, decreased 2%.  We are
 encouraged by the initial success of the recent AudioSource acquisition."
     "We began shipping our new contractor series of professional sound
 amplifiers earlier this month," continued Mr. Peterson.  "Further, we are
 nearing the completion of several new product development activities,
 including our new Tantrum series of car audio amplifiers and Titanium series
 of car audio speakers.  We expect these products to begin to ship in the
 third quarter."
     The Company also provided the following information on its second quarter
 and outlook for fiscal 2001:  International sales decreased $425,000 to
 $1.2 million.  Softness was displayed in all major international markets.
 Domestic sales decreased $117,000 to $4.8 million as a result of decreased
 sales of Phoenix Gold and Carver Professional products offset in part by the
 first full quarter of sales of AudioSource products.  Phoenix Gold acquired
 certain assets of AudioSource on December 15, 2000.  Sales of electronics to a
 significant customer and speakers to a domestic OEM customer were essentially
 unchanged from a year ago.  The amount and timing of purchase orders from
 these customers may fluctuate from quarter to quarter.  The Company expects
 international sales for fiscal 2001 to remain at levels lower than
 historically achieved and domestic sales to remain soft due to the current
 economic environment.  Sales of AudioSource products and sales of new products
 are expected to partially offset the expected lower sales of older products.
     Phoenix Gold also reported that on April 12, 2001, the Nasdaq Stock
 Market, Inc. notified the Company that its common stock had failed to maintain
 a minimum market value of public float of $1 million over the last
 30 consecutive trading days as required for continued listing on the Nasdaq
 SmallCap Market.  The Company was provided until July 10, 2001 to regain
 compliance with this rule or request a hearing with the Nasdaq Listings
 Qualifications Panel.  The Company was able to regain compliance when it was
 previously notified in November 2000 that it also failed to meet this
 requirement.
     Phoenix Gold International, Inc. designs, manufactures, markets and sells
 innovative, high quality, high performance electronics, accessories and
 speakers for the audio market.  The Company sells its products under the brand
 names Phoenix Gold, Carver Professional and AudioSource.
     This press release may contain "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995, including,
 without limitation, statements as to expectations, beliefs and future
 financial performance, and are based on current expectations and are subject
 to certain risks, trends and uncertainties that could cause actual results to
 vary from those projected, which variances may have a material adverse effect
 on the Company.  Among the factors that could cause actual results to differ
 materially are the following:  competitive factors; potential fluctuations in
 quarterly results and seasonality; the adverse effect of reduced discretionary
 consumer spending; dependence on a significant customer; the need for the
 introduction of new products and product enhancements; dependence on
 suppliers; control by current shareholders; high inventory requirements;
 business conditions in international markets; the Company's dependence on key
 employees; the need to protect intellectual property; environmental
 regulation; and the potential delisting of the Company's common stock, as well
 as other factors discussed in Exhibit 99.1 to the Phoenix Gold International,
 Inc.  Annual Report on Form 10-K for the fiscal year ended September 24, 2000
 which exhibit is hereby incorporated by reference.  Given these uncertainties,
 readers are cautioned not to place undue reliance on the forward-looking
 statements.  The Company does not intend to update its forward-looking
 statements.
 
 
                        PHOENIX GOLD INTERNATIONAL, INC.
                                 BALANCE SHEETS
                                  (Unaudited)
 
                                                    March 31,   September 30,
                                                       2001           2000
 
     ASSETS
 
     Current assets:
       Cash and cash equivalents                       $1,001     $1,653,683
       Accounts receivable, net                     3,811,478      4,170,885
       Inventories:
         Raw materials and work-in-process          2,905,444      2,598,709
         Finished goods and supplies                3,744,971      3,146,151
                                                    6,650,415      5,744,860
       Prepaid expenses                               374,487        229,049
       Deferred taxes                                 390,000        315,000
         Total current assets                      11,227,381     12,113,477
 
     Property and equipment, net                      850,402        807,139
     Goodwill, net                                    304,572        138,459
     Deferred taxes                                   620,000        610,000
     Other assets                                     520,948        285,127
 
         Total assets                            $ 13,523,303   $ 13,954,202
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                              $661,444       $797,249
       Accrued payroll and benefits                   439,259        557,099
       Other accrued expenses                         409,892        346,318
       Income taxes payable                                --         40,910
         Total current liabilities                  1,510,595      1,741,576
 
     Deferred gain on sale of facility                809,139        858,178
 
     Shareholders' equity:
       Preferred stock;
         Authorized - 5,000,000 shares;
          none outstanding                                 --             --
       Common stock, no par value;
         Authorized - 20,000,000 shares
         Issued and outstanding - 3,026,945
          and 3,026,945 shares                      6,550,928      6,550,928
       Retained earnings                            4,652,641      4,803,520
         Total shareholders' equity                11,203,569     11,354,448
 
         Total liabilities and
          shareholders' equity                   $ 13,523,303   $ 13,954,202
 
 
                        PHOENIX GOLD INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
                                  Three Months Ended
 Six Months Ended
                                        March 31                March 31
                                    2001        2000        2001        2000
 
     Net sales                 $6,045,836  $6,588,249 $11,676,793  $13,563,895
 
     Cost of sales              4,640,786   4,704,618   8,918,200    9,879,495
 
       Gross profit             1,405,050   1,883,631   2,758,593    3,684,400
 
     Operating expenses:
       Selling                  1,050,788     913,768   1,846,255    1,840,537
       General and
        administrative            606,609     573,553   1,184,387    1,104,940
 
       Total operating
        expenses                1,657,397   1,487,321   3,030,642    2,945,477
 
     Income (loss) from
      operations                (252,347)     396,310   (272,049)      738,923
 
     Other income (expense):
       Interest income                193       3,300      29,030       11,660
       Interest expense           (3,732)          --     (6,564)           --
       Other income, net                4          --       3,704           --
 
       Total other income
        (expense)                 (3,535)       3,300      26,170       11,660
 
     Earnings (loss) before
      income taxes              (255,882)     399,610   (245,879)      750,583
 
     Income tax benefit
      (expense)                    99,000   (159,000)      95,000    (298,000)
 
     Net earnings (loss)       $(156,882)    $240,610  $(150,879)     $452,583
 
     Earnings (loss) per share
      - basic and diluted         $(0.05)       $0.08     $(0.05)        $0.15
 
     Average shares outstanding
      - basic and diluted       3,026,945   3,048,212   3,026,945    3,102,466
 
 SOURCE  Phoenix Gold International, Inc.