Performance Technologies Inc. Reports Operating Results (10-Q)

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May 07, 2010
Performance Technologies Inc. (PTIX, Financial) filed Quarterly Report for the period ended 2010-03-31.

Performance Technologies Inc. has a market cap of $30.3 million; its shares were traded at around $2.7264 with and P/S ratio of 1. PTIX is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

PT incurred a net loss in the first quarter 2010 in the amount of ($1.9 million), or ($.17) per basic share, including a restructuring charge of $.1 million, or $.01 per share and stock-based compensation expense of $.2 million, or $.01 per share, based on 11.1 million shares outstanding. Net loss in the first quarter 2009 totaled ($1.4 million), or ($.13) per basic share, including a restructuring charge of $.4 million, or $.03 per share and stock-based compensation expense of $.1 million, or $.01 per share, based on 11.2 million shares outstanding.

Revenue from the telecommunications market amounted to $6.2 million and $5.6 million in the first quarter 2010 and 2009, respectively. This increase of $.6 million, or 10%, was largely due to a $1.5 million increase in shipments to Data Connection Ltd., and a $.2 million increase in shipments to Alcatel-Lucent, offset by a decline in shipments to various signaling customers, as several expected equipment orders did not materialize.

Military, aerospace and government systems products revenue amounted to $1.2 million and $1.3 million in the first quarter 2010 and 2009, respectively. This decrease of $.1 million, or 8%, was primarily attributable to a $.5 million decrease in shipments to Raytheon, partially offset by $.4 million in shipments to two other government customers.

Research and development expenses were $2.0 million and $2.1 million in the first quarter 2010 and 2009, respectively. PT capitalizes certain software development costs, which reduces the amount of software development charged to operating expenses. Amounts capitalized were $.6 million and $.5 million during the first quarter of 2010 and 2009, respectively. Gross expenditures amounted to $2.6 million in both periods.

PTs primary sources of liquidity are cash, cash equivalents and long-term investments, which totaled $29.3 million at both March 31, 2010 and December 31, 2009. The Company had working capital of $29.1 million and $32.3 million at March 31, 2010 and December 31, 2009, respectively. There was no decrease in cash, cash equivalents and long-term investments during the first quarter 2010 as the Company generated $.9 million from operations and the Company invested $.9 million in capital expenditures and capitalized software projects.

For the first quarter 2010, cash provided by operating activities amounted to $.9 million. This amount included net loss of ($1.9 million), depreciation and amortization charges of $.6 million and stock-based compensation expense of $.2 million. Cash provided by operations due to changes in operating assets and liabilities included an increase in cash associated with a decrease of accounts receivable, and an increase in accounts payable and accrued expenses of $1.9 million and $.6 million, respectively, offset partially by an increase of inventory of $.5 million. The decrease in accounts receivable was primarily due to the lower level of sales in March 2010, compared to December 2009.

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