DULUTH, GA.: Wegener Corp. executives are soul-searching for a turnaround strategy after the company posted a fiscal 2009 loss of $2.6 million, compared to a modest profit a year earlier.
“Our performance in fiscal 2009 was very disappointing," stated Troy Woodbury, president and CEO of Wegener. “We cannot continue to perform in this manner in the future.”
Woodbury said Wegener (NASDAQ: WGNR) was “committed to a top-down assessment of our product lines, sales methodology, engineering, operations and customer service and are taking significant steps to better serve both our customers and our shareholders.”
For the fiscal year ending Aug. 28, 2009, WGNR posted revenues of $12.7 million compared to $21.5 million for FY2008. Net loss was 21 cents a share compared to net earnings of 3 cents a share, or $383,000 a year earlier. The 18-month backlog as of Aug. 28 was $4.3 million, compared to $8.5 million the previous year. Full backlog was $6.8 million compared to $13.3 million. Bookings were $5.5 million in FY2009 compared to $16.4 million in FY2008.
“Our performance in fiscal 2009 was very disappointing,” Woodbury said “During October of this year we reduced our headcount by 19 percent as we have continued to lower our breakeven point. The first quarter of fiscal 2010, which ends on Nov. 27, 2009 will reflect an operating loss and contains a substantial amount of severance costs.”
Woodbury, who took the reins of the company in October, said a $4 million investment from the David E. Chymiak Trust helped put the company on more “sound financial footing,” but that significant orders were needed “for the balance of fiscal 2010.” Woodbury’s ascent from chief financial officer to CEO coincided with the Chymiak funding. He said WGNR would also start releasing preliminary quarterly results rather than waiting for the audits to be completed.
“We will also make a concerted effort to communicate with our shareholders more often and in as clear a manner as possible,” he said in the company’s earnings release. “Many shareholders have expressed their thoughts about these issues and I am listening.”
Wegener’s revenues for the fourth quarter of FY2009 were $2.9 million compared to $5.4 million a year earlier. Net loss for the quarter was $583,000 or 4 cents a share compared to a profit of $873,000, or 7 cents a share for F4Q08, when the company gained $894,000 on the sale of patents.
Wegener ended the year with $3,000 in cash and nearly $2.8 million drawn on its bank line of credit.
More on Wegener
October 14, 2009“Wegener Lands $4 Million in Financing”
The David E. Chymiak Trust paid Wegener’s $2.9 million debt with the Bank of America, ending the satellite transport company’s relationship with the bank. Wegener had amended it’s 13-year-old BoA loan terms 11 times. It entered the agreement with the Chymiak Trust that provides a total of $4 million, excluding interest.
September 17, 2009: “Sencore Deal to Buy Wegener Cancelled”
Wegener Corp. today announced the cancellation of it’s letter of intent with Sencore of Sioux Falls, S.D.
July 21, 2009: “Sencore Aims to take Wegener in $6 Million Deal”
Sencore has made the first move to buy Wegener, the Duluth, Ga., content distributor, for the equivalent of $6 million.
July 14, 2009: “Wegener’s Fiscal 3Q Revenues Down 34 Percent”
“Our third quarter results were down from prior years but did fall in line with our expectations for the quarter given the economic climate.”
April 14, 2009: “Wegener Breaks Even in Fiscal 2Q09”
“We expect an operating loss in the third quarter and are focused on controlling costs to see us through these challenging times.”
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