IFR Systems Reports Q3 Results; Implements Cost-Reduction Program
For the nine months ended Dec. 31, 1999, revenue was $103,961,000, compared with $109,044,000 for the same period last year. Excluding the one-time charges, the net loss from continuing operations was $2,806,000, or $0.34 per diluted share, vs. a net loss of $5,122,000, or $0.62 per diluted share, a year earlier. Including the non-recurring charges, the net loss from continuing operations for the first nine months of fiscal 2000 was $4,726,000, or $0.57 per diluted share.
"IFR's third-quarter revenue compared to the prior-year quarter was affected by a decline in shipments of radio test sets to government customers. This was offset by double-digit growth in our core commercial radio test sets and analyzer markets. We continue to see signs of improving conditions in our industry, which should set the stage for renewed revenue growth and improving bottom-line performance in the future," said CEO Jeffrey Bloomer.
"In the meantime, we estimate that cost reductions implemented in the third quarter will reduce costs by approximately $5 million annually. In addition, using proceeds from the sale in July 1999 of our discontinued OTM Division and internally generated cash flow, total debt has been reduced by approximately $40,500,000 since March 31, 1999, generating additional savings in the form of reduced interest expense. "These steps have built substantial operating leverage into the business. We are working to take advantage of this opportunity by redefining our marketing program and continuing to invest in new product development, with particular emphasis on the expanding wireless communications and related test and measurement market segments. "We began releasing some of these new products in the third quarter, including a high-power version of our 6800 Microwave Analyzer and a new comprehensive tester, the 1900 Base Site Analyzer (BSA), that addresses the rigorous field installation and troubleshooting requirements of Ericsson, Lucent and Nortel wireless telecommunications infrastructure equipment.
"We are pleased by our customers' response to these new products and plan to release additional new products during the coming year." Mr. Bloomer added: "We have re-organized our marketing and engineering into focused product groups, which will allow us to respond to customer-specific test solutions and react more quickly to new product opportunities as they develop. In addition, we implemented a new strategy in bringing training resources and additional exposure directly to our customers via the Internet.
"Using the new 'NetSeminar' format available from ENEN, IFR presented a one-hour technical presentation to over 150 customers on our 2026 signal generator and 2309 signal analyzer products. IFR is using this new method of marketing communications as opposed to traditional print advertising to bring high-value technical content to our customers rapidly and with faster revenue-generating results.
"We plan to expand this method of customer communication significantly in the future, with additional programs slated during the upcoming year. "Our forecast for the fourth quarter is that revenue will be comparable to the third quarter. We currently expect improved bottom-line performance given the cost reductions now in place."
IFR Systems is a leading designer and manufacturer of electronic test instruments for wireless communications, avionics and general test and measurement applications.
IFR Systems Inc., Phone: 316/522-4981.