Mar 06, 2003
Toronto-based PCB manufacturer Coretec, Inc. this week reported its financial results for the fourth quarter and year ended December 31, 2002. Sales in the 2002 fourth quarter were $18.6 million, exceeding the $15- to 18-million revenue range suggested in the company's press release dated November 6, 2002. This sales level represents an 11% increase from sales of $16.7 million in the fourth quarter of 2001 and a sequential increase of 8% over Q3 2002 sales of $17.2 million.
For the year, Coretec reported revenues of $69.5 million, a decline of 9% versus prior-year sales of $76.4 million. Coretec experienced sequential growth in sales over the last four quarters and, while its yearly sales did decline, said its sales record still compares favorably "against a North American industry that has seen a year-over-year decline in shipments of approximately 25%."
Coretec said it recorded a net loss of $8.3 million ($0.44 per share) in the fourth quarter of 2002, compared to a net loss of $1.6 million ($0.10 per share) in the 2001 fourth quarter. In the fourth quarter of 2002, the company took a charge of $6.3 million to write down the carrying value of its Sheppard facility, the development of which was put on hold in the fall of 2001.
The loss for the year 2002 was reported as $16.6 million ($0.90 per share), compared to a loss of $1.2 million ($0.08 per share) in 2001. Net loss for 2002 included a pre-tax charge for asset impairment of $8.1 million related to the Sheppard facility and assets in the company's UK operations.
EBITDA in the 2002 fourth quarter was $0.2 million inclusive of $0.2 million in nonrecurring charges related to the cancellation of equipment purchase commitments, compared to EBITDA of $0.2 million in the 2001 fourth quarter, which included restructuring charges of $0.3 million. For the year 2002, EBITDA was negative ($2.3) million inclusive of nonrecurring charges of $1.2 million related to equipment cancellations, inventory write downs and restructuring charges compared to EBITDA of $6.2 million in 2001, which included restructuring charges of $1.8 million.
"Market conditions have remained extremely difficult for our industry in North America and Europe, as evidenced by the IPC book-to-bill ratio which has remained below parity for virtually every month in 2002. In comparison, we experienced bookings in excess of our billings throughout most of the year. Interestingly, our bookings strengthened throughout 2002 causing us to experience revenue growth of approximately 14% from Q1 to Q4. We attribute this better-than-market performance to sector and customer diversity, a very broad and technologically advanced product offering, as well as significant investments in sales and marketing. Similarly, we are expecting to continue to take market share throughout 2003, particularly from the financially weak and the technologically challenged," commented Paul Langston, Coretec's President and CEO.
Mr. Langston added, "We believe that a dichotomy is developing in the circuit board industry between advancing technology requirements and capacity reductions. Estimates are that upwards of 35% of the industry's capacity has been taken off-line. Interestingly, most of the reductions in capacity have involved the larger and more technologically capable players in the industry. In contrast, the small regional facilities have survived but have been unable to make the required investments to keep up with technology. All the while, the electronics sector has been undergoing a great deal of new product development activity, incorporating advanced technology at the PCB level. We therefore believe that a void is forming in the supply landscape, namely PCB fabricators with the ability to satisfy increasing technology demands in a scalable fashion."
"It is this very supply-demand dynamic that we think Coretec is ideally positioned to take advantage of. We believe that our equipment and systems platforms, our talent pool, as well as our focus on time, technology and value-added services are in harmony with the current and future needs of the North American and European electronics marketplaces. In fact, we are quite enthused by our particular prospects for the coming year due to our proven ability to gain market share; the expectation that the industry will resume growth in 2003, albeit at a modest pace; and our belief that the restructuring initiatives completed to date coupled with our strong, tangible financial position will prove to be competitive advantages in the market," said Mr. Langston.
Coretec is expecting sales in the $17- to 19-million range in the first quarter and looks forward to a resumption of growth year-over-year, said Mr. Langston.
»
