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N E W S R E L E A S E
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TeraForce Reports Fourth Quarter and Full Year 2004 Results |
Contact:
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Patty Dickerson, Investor Relations — 469-330-4969 pdickerson@teraforce-tech.com |
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RICHARDSON, TEXAS (March 30, 2005) – TeraForce Technology Corporation (OTCBB: TERA) today announced financial results for the fourth quarter and fiscal year ended December 31, 2004.
Financial Results
Net revenue for the fourth quarter of 2004 was $971,000, compared to $2,170,000 in the same quarter
last. For the full year of 2004, net revenue was $9,385,000 compared to $6,207,000 in 2003.
Gross profit for the fourth quarter of 2004 was $350,000. This compares to gross profit for the fourth quarter last year of $937,000. The operating loss for the fourth quarter of 2004 amounted to $1,369,000 versus $759,000 in the fourth quarter of 2003. For the full year of 2004 the operating loss was $1,239,000 as compared to $5,771,000 in 2003. Net revenue and operating loss for the year ended December 31, 2004 include the effect of $3,400,000 in license fees received pursuant to the Company’s technology licensing agreement with VISTA Controls.
The net loss for the fourth quarter of 2004 was $1,801,000 ($0.01 per share) as compared to $1,822,000 ($0.01 per share) in the fourth quarter of 2003. For the year ended December 31, 2004, the net loss was $2,880,000 ($0.02 per share) versus a loss of $8,559,000 ($0.07 per share) in the previous year.
Net income for 2004 includes non-cash charges totaling approximately $1,026,000 related to the amortization of warrant and other costs arising from financing transactions.
Management Comment
Herman M. Frietsch, Chairman and CEO of TeraForce commented, “Despite an overall year to year
improvement in operating results, our progress during the second half of 2004 and the first quarter
of 2005 has been disappointing, primarily due to an unexpected shortfall in revenue attributable to
delays in orders from certain key programs. These delays were not related to our products and are
not unusual in the early stages of new production programs.
“From a current perspective, we continue to see strong growth prospects in our primary markets and have recently seen a decided up-tick in order flow. In addition, we are encouraged by early market response to our new Nexus product that was launched at the annual Bus and Board industry show in late January of this year. We are optimistic that the resumed order flow, as well as the impact of Nexus, will contribute to a much-improved second quarter of 2005 and beyond.
“We are working directly with VISTA Controls to resolve the delays in availability of the ruggedized VQG4. Though we had expected this new product to be available in 2004, we continue to see opportunities for this product.
“Our recent financing transactions announced two weeks ago help meet working capital needs created by the shortfall in our operating results. We are continuing to work with our other debt holders in order to address debt maturities scheduled for later in 2005. While these arrangements have not been concluded, we have made considerable progress.”
Conference Call Scheduled
The Company will also host a management conference call Wednesday, March 30, 2005 at
2:30 p.m. Central Standard Time, to review the matters discussed in this release. Stockholders and
investors interested in attending the conference call should dial 800-374-1498 ten minutes prior to
the call, reservation code 5050183. A live webcast of the conference call will also be available
on the TeraForce website http://www.teraforcetechnology.com/.
A replay of the conference call will be available later that day from 5:00 p.m. Central Standard
Time through 5:00 p.m. Central Daylight Time on April 30, 2005. To access the playback, please
call
800-642-1687. The reservation code for the replay is 5050183. A replay will be available online
through the TeraForce website http://www.teraforcetechnology.com/.
About TeraForce Technology Corporation
Based in Richardson, Texas, TeraForce Technology Corporation (OTCBB: TERA) designs, develops,
produces and sells high-density embedded computing platforms and digital signal processing
products, primarily for applications in the defense electronics industry. TeraForce’s primary
operating unit is DNA Computing Solutions, Inc., www.dnacomputingsolutions.com.
Except for the historical information contained herein, the statements in this announcement are forward looking statements which involve risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the forward looking statements. Factors that might cause such a difference include, but are not limited to, those relating to: general economic conditions; success in the development and market acceptance of new and existing products; dependence on suppliers, third party manufacturers and channels of distribution; contingent liabilities; customer and product concentration; fluctuations in customer demand; maintaining access to external sources of capital; ability to attract and retain key management and technical personnel; issues regarding intellectual property rights; overall management of the Company’s expansion; and other risk factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
December 31, 2004 and 2003
(Thousands of dollars, except share data)
| 2004 | 2003 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 3 | $ | 165 | ||||
Accounts receivable, net of allowance of $30 in 2003 |
150 | 1,935 | ||||||
Inventories |
854 | 1,595 | ||||||
Prepaid expenses and other current assets |
516 | 537 | ||||||
Total current assets |
1,523 | 4,232 | ||||||
Property and equipment, net |
335 | 378 | ||||||
Investment in affiliate |
100 | 250 | ||||||
Other assets |
1,086 | 488 | ||||||
| $ | 3,044 | $ | 5,348 | |||||
Liabilities and Stockholders’ Deficit |
||||||||
Current liabilities: |
||||||||
Current portion of notes payable |
$ | 6,634 | $ | 700 | ||||
Accrued liabilities |
2,670 | 1,686 | ||||||
Accounts payable |
584 | 1,495 | ||||||
Deferred revenue |
100 | 1,550 | ||||||
Total current liabilities |
9,988 | 5,431 | ||||||
Long-term notes payable |
1,364 | 5,909 | ||||||
Other long-term liabilities |
- | 795 | ||||||
Commitments and contingencies |
||||||||
Stockholders’ deficit: |
||||||||
Common Stock, $.01 par value. Authorized 250,000,000 shares,
133,561,425 and 130,837,186 shares issued in 2004 and
2003, respectively |
1,336 | 1,308 | ||||||
Additional paid-in capital |
190,525 | 189,194 | ||||||
Accumulated deficit |
(198,582 | ) | (195,702 | ) | ||||
| (6,721 | ) | (5,200 | ) | |||||
Less 400,474 shares of common stock in treasury -at cost |
(1,587 | ) | (1,587 | ) | ||||
Total stockholders’ deficit |
(8,308 | ) | (6,787 | ) | ||||
| $ | 3,044 | $ | 5,348 | |||||
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Thousands of dollars, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
| (unaudited) | ||||||||||||||||
Net revenue |
$ | 971 | $ | 2,170 | $ | 9,385 | $ | 6,207 | ||||||||
Cost of revenue |
621 | 1,233 | 3,634 | 3,998 | ||||||||||||
Gross profit |
350 | 937 | 5,751 | 2,209 | ||||||||||||
Expenses: |
||||||||||||||||
Engineering and development |
478 | 511 | 2,009 | 2,574 | ||||||||||||
Selling and administrative |
1,241 | 1,185 | 4,981 | 4,707 | ||||||||||||
Write-off of receivable from unconsolidated
affiliate |
– | – | – | 699 | ||||||||||||
| 1,719 | 1,696 | 6,990 | 7,980 | |||||||||||||
Operating loss |
(1,369 | ) | (759 | ) | (1,239 | ) | (5,771 | ) | ||||||||
Other income (expense): |
||||||||||||||||
Litigation costs, net of
insurance reimbursement |
– | (25 | ) | (50 | ) | (442 | ) | |||||||||
Share of loss and adjustment to carrying
value of unconsolidated affiliate |
– | – | (50 | ) | (452 | ) | ||||||||||
Interest expense |
(461 | ) | (1,072 | ) | (1,560 | ) | (1,847 | ) | ||||||||
Interest income and other |
29 | 34 | 19 | (47 | ) | |||||||||||
| (432 | ) | (1,063 | ) | (1,641 | ) | (2,788 | ) | |||||||||
Net loss |
$ | (1,801 | ) | $ | (1,822 | ) | $ | (2,880 | ) | $ | (8,559 | ) | ||||
Basic and diluted loss per share: |
||||||||||||||||
Net loss per share |
$ | (0.01 | ) | $ | (.01 | ) | $ | (.02 | ) | $ | (0.07 | ) | ||||
Weighted average number of common shares
outstanding (thousands) basic and diluted |
133,161 | 125,073 | 132,430 | 119,111 | ||||||||||||
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Thousands of dollars)
| Years ended December 31, | ||||||||
| 2004 | 2003 | |||||||
Cash flows from operating activities: |
||||||||
Net loss $ |
(2,880 | ) | $ | (8,559 | ) | |||
Adjustments to reconcile net loss to
net cash used in operating activities: |
||||||||
Utilization of prepaid services |
- | 193 | ||||||
Depreciation and amortization |
221 | 247 | ||||||
Amortization of deferred financing costs |
1,026 | 1,448 | ||||||
Amounts related to unconsolidated affiliate |
50 | 1,151 | ||||||
Other |
(19 | ) | 369 | |||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable |
1,786 | (1,362 | ) | |||||
Inventories |
741 | 758 | ||||||
Deferred revenue |
(1,550 | ) | 1,550 | |||||
Accounts payable and accrued liabilities |
(411 | ) | (571 | ) | ||||
Net cash used in operating activities |
(1,036 | ) | (4,776 | ) | ||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(156 | ) | (32 | ) | ||||
Investment in temporary cash investments |
- | 457 | ||||||
Investment in affiliate |
100 | - | ||||||
Software development costs |
(9 | ) | (137 | ) | ||||
Net cash provided by
investing activities |
(65 | ) | 288 | |||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of notes payable |
1,175 | 4,046 | ||||||
Proceeds from issuance of common stock |
- | 1,494 | ||||||
Principal payments on notes payable |
(300 | ) | (1,000 | ) | ||||
Proceeds from exercise of common stock warrants |
57 | 36 | ||||||
Proceeds from exercise of employee stock options |
7 | 22 | ||||||
Net cash provided by financing
activities |
939 | 4,598 | ||||||
Net increase (decrease) in cash and cash equivalents |
(162 | ) | 110 | |||||
Cash and cash equivalents, beginning of year |
165 | 55 | ||||||
Cash and cash equivalents, end of year |
$ | 3 | $ | 165 | ||||
The following information was filed by Teraforce Technology Corp (TERA) on Wednesday, March 30, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
View differences made from one quarter to another to evaluate Teraforce Technology Corp's financial trajectory
Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were removed , added and changed by Teraforce Technology Corp.
TERA Quarterly Reports
-
10-Q Quarterly Report May 2005
- 10-Q Quarterly Report November 2004
- 10-Q Quarterly Report August 2004
- 10-Q Quarterly Report May 2004
