LOUD Technologies Reports 47% Increase In First Quarter Revenue
May 5, 2006 – Woodinville, Wash. - LOUD Technologies Inc. (LOUD) (NASDAQ:LTEC) today announced financial results for the three months ended March 31, 2006, highlighted by a 47% increase in revenue to a new first quarter record. The net loss was $0.12 per share versus net income from continuing operations for last year's first quarter of $0.10 per diluted share.
"Our strong top-line growth reflected solid increases in sales of LOUD brands as well as last year's successful acquisition of St. Louis Music (SLM)," said Chairman and CEO Jamie Engen. "During the quarter we implemented a variety of initiatives to realize the potential for enhanced efficiency and improved margins of our larger scale of operations. One example is our recent shift from independent sales representatives to direct distribution in North America, which we expect to result in significant savings. Additional initiatives are planned for coming months. We expect these programs to be reflected in our results beginning later this year."
First Quarter Results
Revenue for the first quarter of 2006 increased to $58.6 million from $39.9 million for the first quarter of 2005. Sales of LOUD brand products increased 16% to $39.2 million from $33.8 million for the first quarter a year ago. Sales of St. Louis Music brand products were $19.4 million for this year's first quarter, as compared with sales of $6.1 million a year earlier, which represented revenue from March 7, 2005, the date of the acquisition, through the end of the quarter.
SG&A expenses increased 55% for this year's first quarter compared to the first quarter of 2005, primarily reflecting a full quarter of SLM expenses, higher tradeshow costs stemming from the timing of major events this year, and one-time costs associated with the shift to direct distribution in North America. "We expect SG&A expenses for the remainder of the year to be below the first quarter pace, both because of lower tradeshow costs and the impact of our new direct sales system," Engen said.
Operating income for the first quarter of 2006 was $1.5 million, which included restructuring costs of $150,000 primarily for severance payments related to reductions in workforce in engineering and manufacturing at SLM and compensation expense of $124,000 relating to the adoption of SFAS No. 123R. This compares to operating income of $1.8 million for the first quarter of 2005.
The net loss for the first quarter of 2006 was $595,000, or $0.12 per share. This compares to net income for the first quarter of 2005 of $3.3 million, or $0.68 per diluted share, which included a gain from the discontinued operations of the Company's former Italian subsidiary of $2.8 million, or $0.58 per diluted share.
About LOUD Technologies Inc.
LOUD Technologies Inc. (www.loudtechinc.com) is one of the world's largest manufacturers and distributors of professional audio and music products. As the corporate parent for world-recognized brands including Alvarez, Ampeg, Crate, EAW, Knilling, Mackie, SIA and TAPCO, LOUD Technologies produces and distributes a wide range of digital recording products, loudspeakers, commercial audio systems, audio and music software, guitars, guitar and bass amplifiers, and orchestral string instruments. LOUD Technologies' brands can be found in professional and project recording studios, video and broadcast suites, post-production facilities, sound reinforcement applications including churches and nightclubs, and retail locations and on major musical tours.
Forward Looking Statements
Statements in this release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as: market acceptance of new products; continued acceptance of existing products; delays in product development and related product release schedules; product price discounts; reliance on third party manufacturers and reliance on sole or limited source suppliers for key components that could result in component shortages and delays in product delivery, any of which may cause revenues and income to fall short of anticipated levels; obsolete inventory or product returns by distributors, resellers and retailers; warranty and other claims on products; changes or delays in product shipments; technological shifts; the availability of competitive products at lower prices; the continued ability to protect the company's intellectual property rights; changes in product mix; maturing product life cycles; product sale terms and conditions; the financial condition of our customers and vendors; adverse results in litigation; the effects of terrorist activity and armed conflict such as disruptions in general economic activity and changes in our operations and security arrangements; continued softness in retail spending or other changes in general economic conditions that affect demand for our products; currency fluctuations; and vigorous competition. For further information regarding risks and uncertainties associated with LOUD's business, please refer to the "Management's Discussion and Analysis of Results of Operations and Financial Condition" section of LOUD's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting LOUD's investor relations department at 1-866-858-LTEC (5832) or 425-892-6500, or on LOUD's website at www.loudtechinc.com/invest/index.html.
Mackie, EAW, and EAW Commercial are registered trademarks of LOUD Technologies Inc. in the United States and other countries. All other trademarks are the property of their respective owners.
For more information please contact: LOUD Technologies Inc. – 16220 Wood-Red Road N.E. – Woodinville, WA 98072 – Phone: (425) 487-4333 – Fax: (425) 487-4337 – Internet: www.loudtechinc.com |
