Form 8-K API Technologies Corp. For: Apr 08
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 8, 2015
API TECHNOLOGIES CORP.
(Exact Name of registrant as specified in its charter)
Commission File Number: 001-35214
DE | 98-0200798 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
4705 S. Apopka Vineland Rd. Suite 210 Orlando, FL | 32819 | |
(Address of principal executive offices) | (zip code) |
(855) 294-3800
(Registrants telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Items to be Included in this Report
Item 2.02. | Results of Operations and Financial Condition. |
On April 8, 2015, API Technologies Corp. issued a press release announcing its financial results for the three months ended February 28, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein.
The information in this Item 2.02, including the exhibit, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit |
Exhibit Title | |
99.1 | Press Release dated April 8, 2015. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | April 9, 2015 | API TECHNOLOGIES CORP. | ||||||
By: | /s/ Claudio Mannarino | |||||||
Claudio Mannarino | ||||||||
Senior Vice President and Chief Financial Officer |
Exhibit 99.1
API Technologies Reports Results for the Fiscal First Quarter Ended
February 28, 2015
ORLANDO, Fla. (PR Newswire) April 8, 2015 - API Technologies Corp. (NASDAQ: ATNY) (API or the Company), a leading provider of high performance RF, microwave, millimeterwave, power, and security solutions, today announced results for the fiscal first quarter ended February 28, 2015.
Financial Results for the Quarter Ended February 28, 2015
API Technologies reported fiscal first quarter revenue of $50.9 million.
For the fiscal first quarter of 2015, GAAP gross margin as a percentage of sales was 25.5%; non-GAAP gross margin was 26.6%.
The Company posted a net loss of $2.2 million for the fiscal first quarter. Adjusted EBITDA for the fiscal first quarter was $6.0 million or 11.9% of revenue.
Recent Developments
| Robert Tavares was named President and Chief Executive Officer and appointed to the Companys Board of Directors effective March 2, 2015. Mr. Tavares joins API with 30 years of experience in the microelectronics and semiconductor industries; he most recently served as President of Crane Electronics Inc. |
| On March 23, 2015, API announced an expanded agreement with electronic components distributor TTI, Inc. to carry the Companys line of RF, microwave, and microelectronics products; the partnership broadens APIs worldwide sales network and provides customers rapid product delivery. |
First Quarter 2015 Business Highlights
| API added to its line of radiation-hardened power microelectronics with the launch of voltage regulators and a new line of Solid State Relays for satellites and launch vehicles. |
| APIs QBS-609 1-kW pulsed power amplifier received Product of the Year honors from Electronic Products, a leading trade publication for electronic design engineers. |
| API expanded its product presence in the AESA radar market with the launch of standalone modules the Quad Transmit Receive Module (QTRM) part of the Companys Active Antenna Array Unit (AAAU) solution. |
| API received a new patent for the Hawk-i, the Companys aiming device for a bomb disarming disrupter. |
| API expanded its U.S. Department of Defense C4ISR technology footprint with the announcement of $10.3 million in related program awards. |
About API Technologies Corp.
API Technologies (NASDAQ: ATNY) is an innovative designer and manufacturer of high performance systems, subsystems, modules, and components for technically demanding RF, microwave, millimeterwave, electromagnetic, power, and security applications. A high-reliability technology pioneer with over 70 years of heritage, API Technologies products are used by global defense, industrial, and commercial customers in the areas of commercial aerospace, wireless communications, medical, oil and gas, electronic warfare, unmanned systems, C4ISR, missile defense, harsh environments, satellites, and space. Learn more about API Technologies and our products at www.apitech.com.
Non-GAAP Financial Information
In this press release, API has provided the non-GAAP financial measures for Adjusted EBITDA at the Company level and segment level, and non-GAAP gross margin. Non-GAAP gross margin excludes restructuring charges and certain other adjustments described in the reconciliation table and non-GAAP Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) excludes restructuring charges, acquisition and divestiture-related charges, inventory provisions, stock-based compensation expenses, amortization of note discounts and deferred financing costs, and certain other adjustments described in the reconciliation table. API has also provided the non-GAAP financial measure for Adjusted EBITDA before corporate overhead, which is the Adjusted EBITDA number less general corporate overhead. Management believes the supplemental non-GAAP presentations provide investors an additional analytical tool for understanding the Companys financial performance by excluding from operating results the impact of items that management believes do not reflect the Companys core operating performance. These are not recognized measures under US GAAP, do not have a standardized meaning, and are unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that these non-GAAP measures should not be construed as an alternative to net earnings or loss or gross margin determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Companys liquidity and cash flows. We expect our financial statements to continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.
Safe Harbor for Forward-Looking Statements
Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to, general economic and business conditions, including without limitation, reductions in government defense spending; government regulations; our ability to integrate and consolidate our operations; our ability to expand our operations in both new and existing markets; and the ability of our review of strategic alternatives to maximize stockholder value. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K under Part I, Item 1A Risk Factors as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Companys expectations. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements in this press release, whether as a result of new information, future events, or otherwise.
Contact:
Claudio Mannarino
Senior Vice President and Chief Financial Officer
+1 855-294-3800
Tara Flynn Condon
Vice President, Corporate Development & Marketing
+1 908-546-3903
API Technologies Corp.
Financial Results
For the Three Months Ended February 28, 2015 and 2014
Consolidated Statements of Operations (unaudited)
in thousands USD
February 28, 2015 |
February 28, 2014 |
|||||||
Revenue, net |
$ | 50,850 | $ | 58,918 | ||||
Cost of revenues |
||||||||
Cost of revenues |
37,859 | 45,274 | ||||||
Restructuring charges |
42 | 299 | ||||||
|
|
|
|
|||||
Total cost of revenues |
37,901 | 45,573 | ||||||
|
|
|
|
|||||
Gross profit |
12,949 | 13,345 | ||||||
|
|
|
|
|||||
Operating expenses |
||||||||
General and administrative |
5,279 | 5,719 | ||||||
Selling expenses |
3,655 | 3,757 | ||||||
Research and development |
2,000 | 2,074 | ||||||
Business acquisition and related charges |
62 | 110 | ||||||
Restructuring charges |
830 | 118 | ||||||
|
|
|
|
|||||
11,826 | 11,778 | |||||||
|
|
|
|
|||||
Operating income |
1,123 | 1,567 | ||||||
Other expenses (income), net |
||||||||
Interest expense, net |
3,127 | 2,410 | ||||||
Amortization of note discounts and deferred financing costs |
23 | 665 | ||||||
Other expenses (income), net |
(120 | ) | 110 | |||||
|
|
|
|
|||||
3,030 | 3,185 | |||||||
|
|
|
|
|||||
Loss before income taxes |
(1,907 | ) | (1,618 | ) | ||||
Expense for income taxes |
272 | 506 | ||||||
|
|
|
|
|||||
Net loss |
$ | (2,179 | ) | $ | (2,124 | ) | ||
Accretion on preferred stock |
| (393 | ) | |||||
|
|
|
|
|||||
Net loss attributable to common shareholders |
$ | (2,179 | ) | $ | (2,517 | ) | ||
|
|
|
|
|||||
Net loss per share Basic and diluted |
$ | (0.04 | ) | $ | (0.05 | ) | ||
Weighted average shares outstanding |
||||||||
Basic |
55,461,217 | 55,426,635 | ||||||
Diluted |
55,461,217 | 55,426,635 |
Consolidated Balance Sheets (unaudited)
in thousands USD
February 28, 2015 |
November 30, 2014 |
|||||||
Assets |
||||||||
Current |
||||||||
Cash and cash equivalents |
$ | 6,199 | $ | 8,258 | ||||
Accounts receivable, net |
35,955 | 38,657 | ||||||
Inventories, net |
58,231 | 54,718 | ||||||
Deferred income taxes |
539 | 561 | ||||||
Prepaid expenses and other current assets |
1,535 | 1,592 | ||||||
|
|
|
|
|||||
102,459 | 103,786 | |||||||
Fixed assets, net |
29,524 | 30, 574 | ||||||
Goodwill |
116,770 | 116,770 | ||||||
Intangible assets, net |
28,071 | 29,848 | ||||||
Other non-current assets |
1,911 | 1,862 | ||||||
|
|
|
|
|||||
Total assets |
$ | 278,735 | $ | 282,840 | ||||
|
|
|
|
|||||
Liabilities and Shareholders Equity |
||||||||
Current |
||||||||
Accounts payable and accrued expenses |
$ | 28,635 | $ | 27,907 | ||||
Deferred revenue |
2,407 | 2,279 | ||||||
Current portion of long-term debt |
10,916 | 10,097 | ||||||
|
|
|
|
|||||
41,958 | 40,283 | |||||||
Deferred income taxes |
4,651 | 4,575 | ||||||
Other long-term liabilities |
1,386 | 1,216 | ||||||
Long-term debt, net of current portion |
114,865 | 118,214 | ||||||
Deferred gain |
7,639 | 7,788 | ||||||
|
|
|
|
|||||
170,499 | 172,076 | |||||||
|
|
|
|
|||||
Commitments and contingencies |
||||||||
Shareholders equity |
||||||||
Common stock |
55 | 55 | ||||||
Special voting stock |
| | ||||||
Additional paid-in capital |
327,925 | 327,846 | ||||||
Common stock subscribed but not issued |
2,373 | 2,373 | ||||||
Accumulated deficit |
(222,284 | ) | (220,105 | ) | ||||
Accumulated other comprehensive income |
167 | 595 | ||||||
|
|
|
|
|||||
108,236 | 110,764 | |||||||
|
|
|
|
|||||
Total Liabilities and Shareholders Equity |
$ | 278,735 | $ | 282,840 | ||||
|
|
|
|
Consolidated Adjusted EBITDA
in thousands USD
The following table reconciles three months GAAP net loss to non-GAAP Adjusted EBITDA and Adjusted EBITDA less corporate overhead.
Three (3) months ended February 28, 2015 |
||||
Net loss |
$ | (2,179 | ) | |
Adjustments |
||||
Interest expense, net |
3,127 | |||
Amortization of note discounts and deferred financing costs |
23 | |||
Depreciation and amortization |
3,459 | |||
Income taxes |
272 | |||
Restructuring charges |
872 | |||
Acquisition related charges |
62 | |||
Other adjustments (A) |
411 | |||
|
|
|||
Total Adjusted EBITDA |
$ | 6,047 | ||
|
|
|||
Total Adjusted EBITDA percentage |
11.9 | % | ||
|
|
|||
Corporate overhead |
$ | 1,416 | ||
Adjusted EBITDA before corporate overhead |
$ | 7,463 | ||
Adjusted EBITDA less corporate overhead % |
14.7 | % |
(A) Other adjustments primarily include inventory provisions, stock based compensation, franchise taxes, financing and other adjustments, lease payments for the State College, Pennsylvania facility and foreign exchange losses.
Additional Adjusted EBITDA Reconciliations by Segment in thousands USD
Three Months Ending February 28, 2015 |
SSC | SSIA | EMS | Corporate | Total | |||||||||||||||
Q1 | Q1 | Q1 | Q1 | Q1 | ||||||||||||||||
Revenue |
$ | 38,386 | $ | 4,258 | $ | 8,206 | $ | | $ | 50,850 | ||||||||||
Net loss |
(2,179 | ) | ||||||||||||||||||
Adjustments |
||||||||||||||||||||
Interest expense, net |
3,127 | |||||||||||||||||||
Amortization of note discounts and deferred financing costs |
23 | |||||||||||||||||||
Depreciation and amortization |
3,459 | |||||||||||||||||||
Income taxes |
272 | |||||||||||||||||||
Restructuring charges |
872 | |||||||||||||||||||
Acquisition related charges |
62 | |||||||||||||||||||
Other adjustments (A) |
411 | |||||||||||||||||||
Add-Back Total |
8,226 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ | 5,242 | $ | 755 | $ | 50 | $ | | $ | 6,047 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA Margin % |
13.7 | % | 17.7 | % | 0.6 | % | 0.0 | % | 11.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(A) Other adjustments primarily include inventory provisions, stock based compensation, franchise taxes, financing & other adjustments, lease payments for the State College, Pennsylvania facility and foreign exchange losses.
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin $ amounts in thousands USD
Three Months Ended February 28, 2015 |
||||
Revenue |
$ | 50,850 | ||
Gross Profit |
12,949 | |||
GAAP Gross Margin % |
25.5 | % | ||
Restructuring and other adjustments (A) |
573 | |||
Adjusted Gross profit |
13,522 | |||
Adjusted Gross margin % |
26.6 | % |
(A) Other adjustments primarily include inventory provisions.
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