Profits halved at communications systems developer

A leading developer of communication platforms and systems, has announced its financial results for the fourth quarter and 2006.Performance Technologies has announced its financial results for the fourth quarter and 2006. Revenue in the fourth quarter 2006 amounted to US $12.4 million, compared with $13.3 million in the fourth quarter 2005. Revenue for 2006 amounted to $48.4 million, compared with $49.6 million in 2005.

Net income for the fourth quarter 2006 amounted to $1.2 million, or $.09 per diluted share, including stock-based compensation expense of $.05 million, or $.00 per share, based on 13.3 million shares outstanding.

Net income for the fourth quarter 2005 amounted to $.9 million, or $.06 per diluted share, including restructuring charges amounting to $.1 million, or $.01 per share and an intangible asset write-off amounting to $1.4 million, or $.07 per share, based on 13.3 million shares outstanding.

Net income for 2006 amounted to $1.5 million, or $.11 per diluted share, including restructuring charges amounting to $1.8 million, or $.10 per share; a charge for non-compliant 'RoHS' inventory amounting to $.8 million, or $.05 per share; stock compensation expense of $.5 million, or $.03 per share; and discrete income tax benefits amounting to $.4 million, or $.03 per share, based on 13.3 million shares outstanding.

Net income for 2005 amounted to $3.0 million, or $.23 per diluted share, including restructuring charges amounting to $.4 million, or $.02 per share and an intangible asset write-off amounting to $1.4 million, or $.07 per share, based on 13.2 million shares outstanding.

During 2006, the Company recorded restructuring charges relating to relocating its engineering center in San Luis Obispo, California to a smaller, less expensive facility located in the same city, closing its Norwood, Massachusetts engineering center, and severance costs associated with reductions in force.

During 2005, the Company recorded restructuring charges for severance costs primarily related to its centralisation efforts.

At December 31, 2006, cash and investments amounted to $35.2 million, or approximately $2.64 per share, and the Company had no long-term debt.

'The Company's financial performance in the fourth quarter met our expectations', says John Slusser, President And Chief Executive Officer.

'As we enter 2007, we are optimistic about the Company's prospects as we focus our robust technology suite, strong employee team and capital assets on meaningful future growth'.

'While we are disappointed with the anticipated lower level of end-market spending during the first six months of 2007, we strongly believe that the second half of 2007 can reflect growth based on anticipated customer production deployments and expected solid gains from our reinvigorated sales organisation'.

'In addition, the Company has embarked on a number of initiatives to improve its market positioning and we will continue to examine strategies to maximise our value proposition to customers, and successfully identify and pursue growth opportunities'.