SYS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands, except per share data) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 28, | March 30, | March 28, | March 30, | |||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues | $ | 18,715 | $ | 19,069 | $ | 57,346 | $ | 54,528 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Costs of revenue | 13,371 | 14,811 | 41,788 | 41,996 | ||||||||||||
| Selling, general and administrative expenses | 3,319 | 4,299 | 10,069 | 11,019 | ||||||||||||
| Research, engineering and development expenses | 1,021 | 1,059 | 3,235 | 3,050 | ||||||||||||
| Merger transaction costs | 537 | -- | 537 | -- | ||||||||||||
| Total operating costs and expenses | 18,248 | 20,169 | 55,629 | 56,065 | ||||||||||||
| Income (loss) from operations | 467 | (1,100 | ) | 1,717 | (1,537 | ) | ||||||||||
| Other (income) expense: | ||||||||||||||||
| Other income | (28 | ) | (29 | ) | (102 | ) | (90 | ) | ||||||||
| Interest expense | 112 | 146 | 312 | 529 | ||||||||||||
| Total other (income) expense | 84 | 117 | 210 | 439 | ||||||||||||
| Income (loss) before income taxes | 383 | (1,217 | ) | 1,507 | (1,976 | ) | ||||||||||
| Income tax provision (benefit) | 357 | (162 | ) | 909 | (464 | ) | ||||||||||
| Net income (loss) | $ | 26 | $ | (1,055 | ) | $ | 598 | $ | (1,512 | ) | ||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.00 | $ | (0.06 | ) | $ | 0.03 | $ | (0.09 | ) | ||||||
| Diluted | $ | 0.00 | $ | (0.06 | ) | $ | 0.03 | $ | (0.09 | ) | ||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 19,749 | 18,666 | 19,517 | 17,196 | ||||||||||||
| Diluted | 19,757 | 18,666 | 19,596 | 17,196 | ||||||||||||
SYS TECHNOLOGIES (In thousands except per share data) |
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RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 28, | March 30, | March 28, | March 30, | |||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| GAAP net income (loss) | $ | 26 | $ | (1,055 | ) | $ | 598 | $ | (1,512 | ) | ||||||
| Amortization of intangibles | 254 | 257 | 764 | 830 | ||||||||||||
| Share-based compensation expense | 74 | 104 | 304 | 331 | ||||||||||||
| Tax effect | (281 | ) | 45 | (644 | ) | (273 | ) | |||||||||
| Non-GAAP net income (loss) | $ | 73 | $ | (649 | ) | $ | 1,022 | $ | (624 | ) | ||||||
| Basic Non-GAAP income (loss) per share | $ | 0.00 | $ | (0.03 | ) | $ | 0.05 | $ | (0.03 | ) | ||||||
| Diluted Non-GAAP income (loss) per share | $ | 0.00 | $ | (0.03 | ) | $ | 0.05 | $ | (0.03 | ) | ||||||
| Shares used in the calculation of basic Non-GAAP EPS | 19,749 | 18,666 | 19,517 | 17,196 | ||||||||||||
| Shares used in the calculation of diluted Non-GAAP EPS | 19,757 | 18,666 | 19,596 | 17,196 | ||||||||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 28, | March 30, | March 28, | March 30, | |||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net income (loss) | $ | 26 | $ | (1,055 | ) | $ | 598 | $ | (1,512 | ) | ||||||
| Provision for income taxes (benefit) | 357 | (162 | ) | 909 | (464 | ) | ||||||||||
| Interest expense | 112 | 146 | 312 | 529 | ||||||||||||
| Other income | (28 | ) | (29 | ) | (102 | ) | (90 | ) | ||||||||
| Depreciation and amortization | 532 | 475 | 1,515 | 1,443 | ||||||||||||
| Non-recurring merger transaction costs | 537 | -- | 537 | -- | ||||||||||||
| Share-based compensation expense | 74 | 104 | 304 | 331 | ||||||||||||
| Adjusted EBITDA | $ | 1,610 | $ | (521 | ) | $ | 4,073 | $ | 237 | |||||||
| Revenues | $ | 18,715 | $ | 19,069 | $ | 57,346 | $ | 54,528 | ||||||||
| Adjusted EBITDA margin | 8.6 | % | (2.7 | )% | 7.1 | % | 0.4 | % | ||||||||
| SYS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (amounts in thousands, except par value amounts) |
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| March 28, 2008 |
June 30, 2007 |
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| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 1,639 | $ | 2,770 | ||||
| Accounts receivable, net | 16,467 | 16,321 | ||||||
| Inventories, net | 546 | 599 | ||||||
| Prepaid expenses | 412 | 603 | ||||||
| Deferred taxes | 748 | 275 | ||||||
| Total current assets | 19,812 | 20,568 | ||||||
| Furniture, equipment and leasehold improvements, net | 1,907 | 1,951 | ||||||
| Intangible assets, net | 5,346 | 6,111 | ||||||
| Goodwill | 23,107 | 23,477 | ||||||
| Other assets | 220 | 276 | ||||||
| Total assets | $ | 50,392 | $ | 52,383 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Line of credit | $ | 250 | $ | -- | ||||
| Accounts payable | 3,061 | 5,270 | ||||||
| Accrued payroll and related expenses | 2,471 | 3,887 | ||||||
| Income taxes payable | 278 | 194 | ||||||
| Other accrued liabilities | 1,019 | 1,474 | ||||||
| Current portion of convertible notes payable, related party | 975 | -- | ||||||
| Current portion of convertible notes payable | 2,150 | -- | ||||||
| Current portion of note payable | 188 | -- | ||||||
| Deferred revenue | 1,276 | 1,552 | ||||||
| Total current liabilities | 11,668 | 12,377 | ||||||
| Convertible notes payable, related party | -- | 975 | ||||||
| Convertible notes payable | -- | 2,150 | ||||||
| Note payable, net of current portion | 312 | 500 | ||||||
| Other long-term liabilities | 51 | 69 | ||||||
| Deferred revenue, net of current portion | 259 | 210 | ||||||
| Deferred taxes | 1,023 | 1,023 | ||||||
| Total liabilities | 13,313 | 17,304 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity: | ||||||||
4% convertible preferred stock, $.50 par value; 250 shares authorized; none issued or outstanding |
-- | -- | ||||||
9% preference stock, $1.00 par value; 2,000 shares authorized; none issued or outstanding |
-- | -- | ||||||
Common stock, no par value; 48,000 shares authorized; and 19,844 and 19,232 shares issued and outstanding as of March 28, 2008 and June 30, 2007, respectively |
37,305 | 35,903 | ||||||
| Accumulated deficit | (226 | ) | (824 | ) | ||||
| Total stockholders’ equity | 37,079 | 35,079 | ||||||
| Total liabilities and stockholders’ equity | $ | 50,392 | $ | 52,383 | ||||