PEAK Peak Resorts Com (MM)

HONG KONG, May 16 /PRNewswire-FirstCall/ -- Peak International Limited (NASDAQ:PEAK) today announced financial results for the quarter and year ended March 31, 2007. Revenues for the quarter were $12.1 million, a decrease of 28.6% compared to $16.9 million in the comparable quarter of the previous year. Peak recorded a net loss of $2.2 million, or $0.18 per basic and diluted share, for the quarter, compared to a net loss of $1.0 million, or $0.08 per basic and diluted share, for the same quarter of the previous year. For fiscal year 2007, Peak had net sales of $60.2 million, down 9.0% compared to $66.1 million for fiscal 2006. Peak recorded a net loss of $3.9 million for fiscal year 2007, or loss per share of $0.31 on a basic and diluted basis, compared to a net loss of $4.6 million, or $0.37 loss per share on a basic and diluted basis in the prior year. Loss of disc caddy business during the fourth quarter impacted results versus the comparable quarter last year. Gross profit margin for the just completed quarter was 11.9% compared to 27.5% in the same quarter last year. This decrease was mainly attributable to the reduction in revenues, which resulted in a greater proportion of fixed manufacturing overheads that was absorbed into the cost of goods sold. The gross margin for the fourth quarter also included a charge of approximately $0.3 million for plant and equipment that was written off due to obsolescence. For the year, the gross margin improved slightly to 17.8% up from 17.4% for the previous year. 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 quarter and fiscal year ended March 31, 2007, the Company reported non-cash, stock-based compensation of $81,000 and $565,000, or $0.01 and $0.05 per share, respectively. At the conclusion of the fourth quarter, the financial condition of the Company continued to be very strong with approximately $21.5 million in cash and cash equivalents and no long-term debt. Dean Personne, president and chief executive officer of Peak International, said, "While we are not pleased with the shortfall in sales during fiscal year 2007, we are pleased that we substantially narrowed the net loss for the year compared to the prior year. The efficiencies achieved in our manufacturing operations and the reductions in our operating expenses in fiscal 2007 significantly impacted the improvement in cutting the net loss. We believe there are opportunities to achieve additional manufacturing efficiencies going forward and we are determined to make those efficiencies materialize." "Our challenge throughout fiscal 2007 has been to drive future sales," continued Mr. Personne. During the course of the year we commenced a number of initiatives aimed at improving the effectiveness of our sales and marketing efforts. We are more aggressively driving our branding and marketing messages throughout the geographical regions in which we operate; we have provided our sales force with a much more experienced U.S. sales management team; and we have installed new client relationship management tools designed to help our sales force become more productive in substantially driving sales. In addition, we partnered with Global Precision to develop new products that can enhance our ability to drive sales in a number of new market segments." Mr. Personne concluded, "Another more recent development that we believe can be a catalyst to drive sales going forward is the introduction of our new UltraLite(TM) product line, which features a unique combination of tooling, process technology and materials. Not only does UltraLite meet or exceed the performance of previous material and process combinations, but it is delivered with lower weight and overall product costs. The reduced weight translates into reduced air and ground shipping costs throughout the supply chain for our customers. This new process also reduces material waste and recycling volumes. We believe that our customers will be extremely well served with this technological advancement. We expect to experience improved sales results as we achieve additional traction from all of our initiatives in fiscal 2008." Earnings Call Peak will host a conference call to discuss the Company's fourth quarter results on Thursday, May 17, 2007 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://www.peakinternational.com/investor.html and click on the fourth quarter 2007 teleconference link. A replay of the call will be available at (800) 642-1687 (domestic) or (706) 645-9291 (international), access number 4765829 for 3 days following the call, and the web cast will be archived on the company's website, http://www.peakinternational.com/investor.html, for 30 days. About Peak International Limited Peak International Limited is a leading supplier of precision-engineered packaging products for storage, transportation and automated handling of semiconductor devices and other electronic components. There are approximately 1,600 people who are working for Peak directly worldwide or indirectly in its factory 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 leading semiconductor manufacturers and assemblers. 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) achieve additional manufacturing efficiencies, (ii) improve the effectiveness of our sales and marketing efforts to increase revenues, (iii) develop new products that can enhance our ability to drive sales in a number of new market segments, (iv) realize increased revenues with our new UltraLite(TM) product line, (v) achieve customer satisfaction with our products, (vi) improve sales results and (vii) improve our overall performance in fiscal 2008. 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 Quarterly Reports on Form 10-Q and Annual Report on Form 10-K filed on June 29, 2006. 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, Hong Kong Joe Dorame +852-3193-6000 Robert Blum (602) 889-9700 Consolidated Statements of Operations (in thousands of United States Dollars, except share and per share data) Three Months Ended March 31, 2007 2006 (Unaudited) (Unaudited) Net Sales $12,068 $16,893 Cost of Goods Sold 10,628 12,253 Gross Profit 1,440 4,640 Selling and Marketing 2,165 2,283 General and Administrative 1,642 3,450 Research and Development 86 37 Loss from operations (2,453) (1,130) Other Income - net 54 102 Interest income 157 65 Loss Before Income Taxes (2,242) (963) Income Tax Benefit (Expense) 66 (56) NET LOSS $(2,176) $(1,019) LOSS PER SHARE - Basic $(0.18) $(0.08) - Diluted $(0.18) $(0.08) 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) Year Ended March 31, 2007 2006 (Unaudited) (Unaudited) Net Sales $60,159 $66,119 Cost of Goods Sold 49,424 54,632 Gross Profit 10,735 11,487 Selling and Marketing 8,647 10,184 General and Administrative 6,611 8,663 Research and Development 172 145 Gain on Disposal of a Subsidiary -- (2,189) Loss from operations (4,695) (5,316) Other Expense - net (117) (82) Interest income 622 350 Loss Before Income Taxes (4,190) (5,048) Income Tax Benefit 283 473 NET LOSS $(3,907) $(4,575) LOSS PER SHARE - Basic $(0.31) $(0.37) - Diluted $(0.31) $(0.37) Weighted Average Number of Shares Outstanding - Basic 12,421,000 12,420,000 - Diluted 12,422,000 12,420,000 Consolidated Balance Sheets (in thousands of United States Dollars) March 31, March 31, 2007 2006 (Unaudited) (Unaudited) ASSETS Current Assets: Cash and cash equivalents $20,366 $17,441 Restricted Cash 1,128 2,182 Accounts receivable - net of allowance for doubtful accounts of $427 at March 31, 2007 and $128 at March 31, 2006 9,279 12,277 Inventories 10,959 12,782 Other receivables, deposits and prepayments 852 615 Total Current Assets 42,584 45,297 Property, plant and equipment - net 19,278 22,358 Land use rights 703 722 Deposits for acquisition of property, plant and equipment 60 133 Other deposit 301 301 TOTAL ASSETS $62,926 $68,811 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable: - Trade $3,689 $5,601 - Property, plant and equipment 78 536 Accrued payroll and employee benefits 1,165 1,007 Accrued other expenses 1,990 2,019 Income taxes payable 95 111 Total Current Liabilities 7,017 9,274 Deferred Income Taxes -- 288 Total Liabilities 7,017 9,562 Stockholders' Equity: Share capital 124 124 Additional paid-in capital 27,707 27,135 Retained earnings 29,331 33,238 Accumulated other comprehensive loss (1,253) (1,248) Total stockholders' equity 55,909 59,249 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $62,926 $68,811 Consolidated Statements of Cash Flows (in thousands of United States Dollars) Year Ended March 31, 2007 2006 (Unaudited) (Unaudited) Operating activities: Net loss $(3,907) $(4,575) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 6,805 6,444 Deferred income taxes (288) (587) Loss on disposal/write-off of property, plant and equipment 439 437 Allowance for doubtful accounts 299 8 Non-cash share-based compensation 565 -- Gain on disposal of a subsidiary -- (2,189) Changes in operating assets and liabilities: Accounts receivable 2,699 293 Inventories 1,823 957 Other receivables, deposits and prepayments (237) 233 Income taxes receivable -- 3 Accounts payable-trade (1,912) (2,687) Accrued payroll, employee benefits and other expenses 129 (165) Income taxes payable (16) (16) Cash held in escrow for terms of sale agreement for disposal of a subsidiary 641 -- Cash held in escrow for funding of certain contingent obligations under existing contracts with senior management 413 (901) Net cash provided by (used in) operating activities 7,453 (2,745) Investing activities: Sales proceeds on disposal of a subsidiary -- 2,254 Sales proceeds on disposal of property, plant and equipment -- 15 Acquisition of property, plant and equipment (4,603) (4,297) Decrease (Increase) in deposits for acquisition of property, plant and equipment 73 (100) Net cash used in investing activities (4,530) (2,128) Financing activities: Proceeds from issuance of common stock 7 -- Net cash provided by financing activities 7 -- Net increase (decrease) in cash and cash equivalents 2,930 (4,873) Cash and cash equivalents at beginning of year 17,441 22,301 Effects of exchange rate changes on cash and cash equivalents (5) 13 Cash and cash equivalents at end of year $20,366 $17,441 Supplemental cash flow information: Cash paid during the year Income taxes 21 127 DATASOURCE: Peak International Limited CONTACT: John Supan, Chief Financial Officer of Peak International Limited, Hong Kong, +852-3193-6000; or Joe Diaz, Joe Dorame or Robert Blum, all of Lytham Partners, LLC, +1-602-889-9700, for Peak International Limited Web site: http://www.peakinternational.com/investor.html

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