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Articles 

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

November 13, 2012 | About:

Performance Technologies Inc. (PTIX) filed Quarterly Report for the period ended 2012-09-30.

Performance Technologies, Inc. has a market cap of $11 million; its shares were traded at around $0.92 with and P/S ratio of 0.3.

Highlight of Business Operations:

Revenue in the third quarter 2012 amounted to $4.7 million, compared to $9.0 million in the third quarter 2011. Revenue for the nine months ended September 30, 2012 was $18.0 million, compared to $27.1 million in the corresponding period in 2011. The decrease in revenue in the third quarter 2012 over the comparable prior year period was widespread across much of PT’s customer base, with three customers accounting for $3.1 million of the decline. The decrease in revenue in the nine months ended September 30, 2012 over the comparable prior year period was primarily due to a $4.7 million decline in sales to the Company’s traditionally largest customer, the non-recurrence of a 2011 shipment totaling $1.6 million to a government systems customer, as well as, general weakness in demand among PT’s customer base. The Company had been expecting its largest customer to transition away from using PT’s IPnexus platforms in some of their products during 2012 although this process occurred earlier and much more rapidly than was anticipated. Shipments to customers outside of the United States represented 47% and 53% in the third quarter of 2012 and 2011, respectively, and 47% and 48% in the nine months ended September 30, 2012 and 2011, respectively.

Cash provided by operating activities amounted to $2.2 million in the nine months ended September 30, 2012, as compared to cash used by operating activities of $.5 million in the nine months ended September 30, 2011. The large swing in cash provided by operating activities was primarily due to a $1.5 million net decrease in accounts receivable in 2012, as compared with a net increase of $2.5 million in the prior year, and a $.2 million decrease in accounts payable and accrued expenses in 2012, as compared with a $2.6 million decrease in the comparable 2011 period, offset by a smaller decrease in inventory in 2012 than 2011 ($.7 million, as compared to $1.8 million in the prior year) and a $.4 million increase in deferred revenue in 2012, as compared with a $1.4 million increase in deferred revenue in the comparable 2011 period. The decrease in accounts receivable was due to the lower sales level in the third quarter 2012, as compared with the fourth quarter 2011. The decrease in inventory is primarily attributable to the Company’s ongoing efforts to manage inventory levels relative to revenue expectations. The smaller decrease in accounts payable and accrued expenses in 2012 as compared with 2011 was due largely to the smaller year-over-year decrease in inventories.

Total revenue for the nine months ended September 30, 2012 amounted to $18.0 million, compared to $27.1 million for the comparable period in 2011. The decrease in 2012 revenue over the prior year was primarily due to a $4.7 million decline in sales to the Company’s traditionally largest customer, the non-recurrence of a 2011 shipment totaling $1.6 million to a government systems customer, and general weakness in demand across the Company’s customer base. The Company's four largest customers comprised 33% and 43% of sales in the nine months ended September 30, 2012 and 2011, respectively.

Shipments to customers outside of the United States represented 47% and 53% of PT’s sales during the third quarter of 2012 and 2011, respectively. Shipments to customers outside of the United States represented 47% and 48% of the Company's sales for the nine months ended September 30, 2012 and 2011, respectively. Total shipments to customers in the United Kingdom represented 3% of sales in the third quarter 2012, compared to 15% of sales in the third quarter 2011. Total shipments to customers in the United Kingdom represented 10% and 23% of sales in the nine months ended September 30, 2012 and 2011, respectively. The decrease in sales to customers in the United Kingdom was due to the decrease in sales to PT’s traditionally largest customer.

For the nine months ended September 30, 2012, cash provided by operating activities amounted to $2.2 million. This amount reflects the net loss of ($3.1 million), non-cash items such as depreciation and amortization charges of $2.9 million and stock-based compensation expense of $.2 million, and non-cash revenue of $.3 million. Cash provided by operations due to changes in operating assets and liabilities included an increase in cash associated with a $1.5 million decrease in accounts receivable, a $.7 million decrease in inventories, and a $.4 million increase in deferred revenue. The decrease in accounts receivable was primarily attributable to the lower level of sales in the third quarter 2012, as compared with the fourth quarter 2011. The decrease in inventory was primarily attributable to the Company’s ongoing efforts to manage inventory levels relative to revenue expectations. The increase in deferred revenue was due primarily to the receipt of a progress payment in advance of revenue recognition on the Company’s signaling systems installation in Nigeria.

Read the The complete Report

About the author:

10qk
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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