HONG KONG, Jan. 30 /PRNewswire-FirstCall/ -- Peak International
Limited (NASDAQ:PEAK) today announced financial results for the
third quarter of fiscal year 2008 ended December 31, 2007. Net
sales for the quarter ended December 31, 2007 were $12.4 million
compared to $12.2 million in the previous quarter and $13.6 million
in the comparable quarter of fiscal 2007. Net sales for the nine
months ended December 31, 2007 were $36.6 million compared to $48.1
million for the same period of fiscal 2007. Peak recorded a net
loss of $4.1 million, or $0.33 per basic and diluted share, for the
quarter ended December 31, 2007, compared to a net loss of $1.5
million, or $0.12 per share on a basic and diluted basis for the
same quarter of fiscal 2007. The net loss for the nine months ended
December 31, 2007 was $10.2 million, or $0.82 per share on a basic
and diluted basis, compared to a net loss of $1.7 million, or $0.14
per share on a basic and diluted basis, for the same period of
fiscal 2007. Dean Personne, president and chief executive officer
of Peak International, said, "We have devoted a significant amount
of time and energy in enhancing our sales capabilities. Despite the
challenging revenue trend in recent quarters, the third quarter
revenue performance exceeded that of the second fiscal quarter. We
hope that this modest revenue increase represents an important step
in driving our legacy semiconductor related business in the
direction of consistently improving financial performance." Mr.
Personne continued, "During the past 12 months Peak initiated a
number of projects to diversify sales. We believe that those
programs are being welcomed by existing and new customers. We have
prepared quotes, tooling, and first articles for companies in the
medical disposables and automotive industries. We will also
continue with our efforts to grow the sales of our UltraCare(TM)
wafer carrier products, UltraLite(TM) trays and disc caddies."
Gross loss margin for the quarter ended December 31, 2007 was 0.9%,
compared to gross profit margins of 2.6% in the previous quarter
and 13.5% in the comparable quarter of fiscal 2007. Lower net sales
in the most recent quarter versus the comparable quarter of fiscal
2007 resulted in a greater proportion of fixed manufacturing
overhead being absorbed in cost of goods sold. Like the quarter
ended September 30, 2007, the lower production level was simply
insufficient to cover all of the Company's factory overhead costs.
The gross margin for the quarter ended December 31, 2007 also
included approximately $1.4 million of unfavorable material cost
and usage variances and a $0.5 million write-off of finished goods
that were produced more than one year ago. The erosion of gross
margin in the most recent quarter versus the previous quarter was
mainly due to increased unfavorable material cost and usage
variances as a result of more extensive usage of higher cost
materials and the write-off of obsolete materials in line with our
efforts to improve the quality of our products with the goal of
unimpeded sales growth. During the most recently concluded quarter
the Company appointed Splendid Zuo as Country Manager for China in
addition to his duties as General Manager for the Company's
Shenzhen manufacturing operations. Mr. Zuo will be responsible for
Peak's China strategy, including the growth of Peak's presence in
the Chinese market, driving sales and establishing strategic
partnerships that allow Peak to expand on existing product lines,
add new product lines, and develop additional production
capabilities. The Company also appointed Jerry Herrera as Vice
President, responsible for managing all aspects of the Company's
manufacturing operations. "Over the past 25 years Jerry has
established a long track record of success as a manufacturing
professional in Asia with the ability to build focused
problem-solving teams," Mr. Personne said. During the quarter the
Company also delivered its first UltraCare(TM) wafer carrier
product, the 300 mm wafer shipper. The Company believes that the
delivery of this order represents an important step in the
Company's strategic plan to more broadly diversify its product
offerings, as well as the number of industries that it serves. The
Company expects several more wafer shipper products will be
introduced throughout 2008 under the UltraCare(TM) brand. Effective
April 1, 2006, Peak adopted Statement of Financial Accounting
Standards SFAS No. 123R using the modified prospective method,
which requires the expensing of all stock-based compensation. For
the quarters ended December 31, 2007 and 2006, the Company reported
non-cash, stock-based compensation of $117,000 and $102,000, or
$0.01 and $0.01 per share, respectively. For the nine months ended
December 31, 2007 and 2006, the Company reported non-cash,
stock-based compensation of $349,000 and $484,000, or $0.03 and
$0.04 per share, respectively. At the end of the quarter ended
December 31, 2007, the Company had approximately $17 million in
cash and cash equivalents and no long-term debt. Mr. Personne
concluded, "We intend to continue to build our legacy business
while we carry forward our diversification efforts. Although there
are indications that our initiatives are attracting interest in the
marketplace, we recognize that this is a long-term effort that
could be impacted in a recessionary environment. We are undertaking
a rationalization of our cost structure and are cautiously
optimistic that this exercise will enable us to achieve
profitability at our current sales level without impeding our
future sales growth." Earnings Call Peak will host a conference
call to discuss the Company's fiscal 2008 third quarter results on
Thursday, January 31, 2008 at 10:00 AM ET. To access the
teleconference, please call (888) 413-9033 (domestic) or (706)
679-5076 (international). To listen to the teleconference via the
Internet, go to http://investors.peakinternational.com/ and click
on the third quarter 2008 teleconference link. A replay of the call
will be available at (800) 642-1687 (domestic) or (706) 645-9291
(international), access number 32156216 for 3 days following the
call, and the web cast will be archived on the Company's website,
http://investors.peakinternational.com/, for 30 days. About Peak
International Limited Peak International Limited
(http://www.peakinternational.com/) is a leading supplier of
precision-engineered packaging products for storage, transportation
and automated handling of disk drive components, semiconductor
devices, wafer fab products as well as precision medical products.
There are approximately 1,400 people who work directly or
indirectly for Peak worldwide and its headquarters are in Hong Kong
with major manufacturing operations in Shenzhen, the PRC, which is
operated pursuant to a processing agreement with an unaffiliated
party. Peak operates warehouses throughout the world and offers JIT
services to some of the world's largest disk drive and other
companies. Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the "safe harbor" provision of the Private Securities
Litigation Reform Act of 1995, including, without limitation,
statements related to our ability to: (i) determine whether the
Company's net sales decline has ended or whether the Company's net
sales will increase, (ii) achieve and manage manufacturing
efficiencies while increasing sales, (iii) achieve increased sales
as a result of our sales initiatives (including without limitation
the launch of new products and the preparation of quotes, tooling
and first articles for companies) in order to increase sales,
diversify our markets and mitigate cyclical risks, (iv) convert
indications of interest from current and prospective customers to
actual sales, (v) introduce new products, including without
limitation under the UltraCare(TM) and UltraLite(TM) brands, (vi)
rationalize our cost structure, (vii) achieve profitability on a
quarterly or yearly basis and (viii) increase shareholder value
while managing our assets. These and other forward-looking
statements are not guarantees of future results and are subject to
known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include but are not limited to: price of
raw materials, factors relating to conditions in semiconductor,
disk drive and electronic industries, the amounts the Company may
have to pay for workers at the PRC factory operated by a third
party, difficulties related to working in the PRC, including
regional government and processing partner relations, the market
acceptance of its products, the introduction of new products by the
Company's competitors, any future economic downturn, and other
matters that could cause actual results to differ materially from
the projections made herein. Additional risks are detailed in the
Company's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K for the year
ended March 31, 2007, filed on June 29, 2007 and the Company's
Quarter Report on Form 10-Q for the quarter ended September 30,
2007. Statements included in this press release are based on
information known to the Company as of the date of this release,
and the Company assumes no obligation to update or revise any
forward-looking statements or to update the reasons why actual
results could differ from those projected in any forward-looking
statement in this release. Contacts: John Supan Lytham Partners,
LLC Chief Financial Officer Joe Diaz Peak International Limited,
Joe Dorame Hong Kong Robert Blum +852-3193-6000 (602) 889-9700
Consolidated Statements of Operations (in thousands of United
States Dollars, except share and per share data) Three Months Ended
December 31, 2007 2006 (Unaudited) (Unaudited) Net Sales $12,364
$13,621 Cost of Goods Sold 12,477 11,785 Gross (Loss) Profit (113)
1,836 Selling and Marketing 2,106 2,040 General and Administrative
1,668 1,674 Research and Development 206 22 Loss from operations
(4,093) (1,900) Other expenses-net (93) (5) Interest income 128 183
Loss Before Income Taxes (4,058) (1,722) Income Tax (Expense)
Benefit (46) 196 NET LOSS $(4,104) $(1,526) LOSS PER SHARE -- Basic
$(0.33) $(0.12) -- Diluted $(0.33) $(0.12) Weighted Average Number
of Shares Outstanding -- Basic 12,423,000 12,420,000 -- Diluted
12,423,000 12,420,000 Consolidated Statements of Operations (in
thousands of United States Dollars, except share and per share
data) Nine Months Ended December 31, 2007 2006 (Unaudited)
(Unaudited) Net Sales $36,551 $48,091 Cost of Goods Sold 35,703
38,796 Gross Profit 848 9,295 Selling and Marketing 6,052 6,482
General and Administrative 4,513 4,969 Research and Development 611
86 Loss from operations (10,328) (2,242) Other expenses-net (324)
(171) Interest income 468 465 Loss Before Income Taxes (10,184)
(1,948) Income Tax (Expense) Benefit (21) 217 NET LOSS $(10,205)
$(1,731) LOSS PER SHARE -- Basic $(0.82) $(0.14) -- Diluted $(0.82)
$(0.14) Weighted Average Number of Shares Outstanding -- Basic
12,423,000 12,420,000 -- Diluted 12,423,000 12,420,000 Consolidated
Balance Sheets (in thousands of United States Dollars) December 31,
March 31, 2007 2007 (Unaudited) (Audited) ASSETS Current Assets:
Cash and cash equivalents $16,880 $20,366 Restricted Cash 983 1,128
Accounts receivable-net of allowance for doubtful accounts of $309
at December 31, 2007 and $427 at March 31, 2007 10,400 9,279
Inventories 9,973 10,959 Other receivables, deposits and
prepayments 810 852 Total Current Assets 39,046 42,584 Property,
plant and equipment --net 16,762 19,278 Land use rights 688 703
Deposits for acquisition of property, plant and equipment 72 60
Deferred income taxes 35 - Other deposit 301 301 TOTAL ASSETS
$56,904 $62,926 LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities: Accounts payable: -- Trade $7,118 $3,689 -- Property,
plant and equipment 428 78 Accrued payroll and employee benefits
1,314 1,165 Accrued other expenses 1,839 1,990 Income taxes payable
32 95 Total Current Liabilities 10,731 7,017 Stockholders' Equity:
Share capital 124 124 Additional paid-in capital 28,056 27,707
Retained earnings 19,126 29,331 Accumulated other comprehensive
loss (1,133) (1,253) Total stockholders' equity 46,173 55,909 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $56,904 $62,926 Consolidated
Statements of Cash Flows (in thousands of United States Dollars)
Nine Months Ended December 31, 2007 2006 (Unaudited) (Unaudited)
Operating activities: Net loss $(10,205) $(1,731) Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities: Depreciation and amortization 4,789 5,092 Deferred
income taxes (35) (221) Loss on disposal/write-off of property,
plant and equipment 138 75 Allowance for doubtful accounts (118)
323 Non-cash share-based compensation 349 484 Changes in operating
assets and liabilities: Accounts receivable (1,003) 1,573
Inventories 986 539 Other receivables, deposits and prepayments 42
(96) Accounts payable-trade 3,429 (1,847) Accrued payroll, employee
benefits and other expenses (2) (123) Income taxes payable (63)
(17) Cash held in escrow for terms of sale agreement for disposal
of a subsidiary 641 641 Cash held in escrow for funding of certain
contingent obligations under existing contracts with senior
management (496) 413 Net cash (used in) provided by operating
activities (1,548) 5,105 Investing activities: Acquisition of
property, plant and equipment (2,046) (3,794) (Increase) Decrease
in deposits for acquisition of property, plant and equipment (12)
100 Net cash used in investing activities (2,058) (3,694) Net
(decrease) increase in cash and cash equivalents (3,606) 1,411 Cash
and cash equivalents at beginning of period 20,366 17,441 Effects
of exchange rate changes on cash and cash equivalents 120 3 Cash
and cash equivalents at end of period $16,880 $18,855 Supplemental
cash flow information: Cash paid during the period Income taxes 119
21 DATASOURCE: Peak International Limited CONTACT: John Supan,
Chief Financial Officer of Peak International Limited,
+852-3193-6000; or Joe Diaz, or Joe Dorame, or Robert Blum, all of
Lytham Partners, LLC, +1-602-889-9700, for Peak International
Limited Web site: http://www.peakinternational.com/
http://investors.peakinternational.com/
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