Emrise Corp. (ERI, Financial) filed Quarterly Report for the period ended 2011-09-30.
Emrise Corp. has a market cap of $15.3 million; its shares were traded at around $0 .
Loss from continuing operations was $2.2 million in the first nine months of 2011 compared to $4.3 million in the first nine months of 2010. The improvement in loss from continuing operations in the first nine months of 2011 is related to increased sales and related gross profit, lower interest expense of $1.6 million in 2011 and certain amounts absent from the 2011 period compared to the 2010 period consisting of $1.4 million in non-recurring employee transaction costs and transaction related activities and a $0.5 million of gain on extinguishment of debt.
We reported income from discontinued operations of $0.4 million (net of tax of $0.2 million) during the first nine months of 2011. In April 2011, we negotiated a settlement associated with the level of adjusted net working capital of the ACC Operations as of the closing date of the ACC Transaction. At December 31, 2010, the estimated additional net working capital adjustment was $0.4 million, which was accrued and recorded as an additional purchase price adjustment. The Company and Aeroflex agreed that we would satisfy the net working capital obligation through the release of $0.6 million of funds held in escrow from the date of the ACC Transaction. As a result of the settlement associated with the level of adjusted net working capital of the ACC Operations and the release of funds held in escrow, we recorded an additional gain on the sale of ACC of $0.3 million. In September 2011, we resolved all outstanding claims submitted under the terms of the ACC Purchase Agreement and all unused funds in the escrow account in the amount of $0.1 million were returned to us and recorded as a purchase price adjustment and a gain (net of tax) from the sale of discontinued operations in the third quarter of 2011. We reported income from discontinued operations of $1.5 million (net of tax of $0.8 million) during the first nine months of 2010. The income from discontinued operations in the first nine months of 2010 related to income earned and gains or losses on sales from the RO Operations and the ACC Operations.
We fund our daily cash flow requirements through funds provided by operations and through borrowings under our various financing arrangements. Working capital was $7.8 million as of September 30, 2011 as compared to $9.9 million as of December 31, 2010. The decrease in working capital was the result of increased inventory levels as we prepare for higher shipments of products in the second half of 2011, the reclassification of $0.4 million in cash to a restricted escrow account to partially securitize a new term loan, and the classification of $1 million of term loans from long term to short term, partially offset by a significant increase in accounts receivable as a result of increased sales of products, particularly in the third quarter of 2011. As of September 30, 2011 and December 31, 2010, we had accumulated deficits of $31.8 million and $30.0 million, respectively, and cash and cash equivalents of $1.5 million and $3.7 million, respectively.
Our future book of shippable orders (backlog) was $27.0 million as of September 30, 2011 as compared to $27.1 million as of December 31, 2010. The amount of backlog orders represents revenue that we anticipate recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or is currently in progress. As of September 30, 2011, approximately 93% of our backlog related to our electronic devices business, which tends to provide us with long lead-times for our manufacturing processes due to the custom nature of the products. Approximately 7% of this backlog related to our communications equipment business, which tends to deliver standard or modified standard products from stock as orders are received. We believe that a significant portion of our current backlog will be shipped within the next 12 months. However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected as backlog.
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Emrise Corp. has a market cap of $15.3 million; its shares were traded at around $0 .
Highlight of Business Operations:
Loss from continuing operations was $53,000 in the third quarter of 2011 compared to $1.4 million in the third quarter of 2010. The improvement in loss from continuing operations in the third quarter of 2011 compared to the third quarter of 2010 was related to higher sales volumes and related gross profit improvements, the absence of employee transaction costs of $0.9 million, reduced interest expense of $0.2 million and the absence of $0.2 million of warrant fair value adjustments, all partially offset by a $0.5 million gain on extinguishment of debt recorded in the third quarter of 2010.Loss from continuing operations was $2.2 million in the first nine months of 2011 compared to $4.3 million in the first nine months of 2010. The improvement in loss from continuing operations in the first nine months of 2011 is related to increased sales and related gross profit, lower interest expense of $1.6 million in 2011 and certain amounts absent from the 2011 period compared to the 2010 period consisting of $1.4 million in non-recurring employee transaction costs and transaction related activities and a $0.5 million of gain on extinguishment of debt.
We reported income from discontinued operations of $0.4 million (net of tax of $0.2 million) during the first nine months of 2011. In April 2011, we negotiated a settlement associated with the level of adjusted net working capital of the ACC Operations as of the closing date of the ACC Transaction. At December 31, 2010, the estimated additional net working capital adjustment was $0.4 million, which was accrued and recorded as an additional purchase price adjustment. The Company and Aeroflex agreed that we would satisfy the net working capital obligation through the release of $0.6 million of funds held in escrow from the date of the ACC Transaction. As a result of the settlement associated with the level of adjusted net working capital of the ACC Operations and the release of funds held in escrow, we recorded an additional gain on the sale of ACC of $0.3 million. In September 2011, we resolved all outstanding claims submitted under the terms of the ACC Purchase Agreement and all unused funds in the escrow account in the amount of $0.1 million were returned to us and recorded as a purchase price adjustment and a gain (net of tax) from the sale of discontinued operations in the third quarter of 2011. We reported income from discontinued operations of $1.5 million (net of tax of $0.8 million) during the first nine months of 2010. The income from discontinued operations in the first nine months of 2010 related to income earned and gains or losses on sales from the RO Operations and the ACC Operations.
We fund our daily cash flow requirements through funds provided by operations and through borrowings under our various financing arrangements. Working capital was $7.8 million as of September 30, 2011 as compared to $9.9 million as of December 31, 2010. The decrease in working capital was the result of increased inventory levels as we prepare for higher shipments of products in the second half of 2011, the reclassification of $0.4 million in cash to a restricted escrow account to partially securitize a new term loan, and the classification of $1 million of term loans from long term to short term, partially offset by a significant increase in accounts receivable as a result of increased sales of products, particularly in the third quarter of 2011. As of September 30, 2011 and December 31, 2010, we had accumulated deficits of $31.8 million and $30.0 million, respectively, and cash and cash equivalents of $1.5 million and $3.7 million, respectively.
Our future book of shippable orders (backlog) was $27.0 million as of September 30, 2011 as compared to $27.1 million as of December 31, 2010. The amount of backlog orders represents revenue that we anticipate recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or is currently in progress. As of September 30, 2011, approximately 93% of our backlog related to our electronic devices business, which tends to provide us with long lead-times for our manufacturing processes due to the custom nature of the products. Approximately 7% of this backlog related to our communications equipment business, which tends to deliver standard or modified standard products from stock as orders are received. We believe that a significant portion of our current backlog will be shipped within the next 12 months. However, there can be no assurance that we will be successful in fulfilling such orders and commitments in a timely manner or that we will ultimately recognize as revenue the amounts reflected as backlog.
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