EMRISE CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
June 30,
2010
2009
Net Sales
Cost of Sales
Gross profit
$
6,474
4,533
1,941
Operating expenses:
Selling, general and administrative
Engineering and product development
Total operating expenses
Loss from operations
Other income (expense):
Interest income
Interest expense
Other, net
Total other expense, net
Loss before income taxes
Income tax (benefit) provision
Loss from continuing operations
Discontinued and held for sale operations:
Income from discontinued and held for sale
operations including gain on sale in 2009
Tax provision on discontinued and held for sale operations
Net income on discontinued and held for sale operations
Net (loss) income
$
8,189
5,527
2,662
$
13,566
9,674
3,892
$
16,710
11,071
5,639
2,566
402
2,968
(1,027)
2,905
470
3,375
(713)
5,099
925
6,024
(2,132)
5,922
839
6,761
(1,122)
32
(746)
147
(567)
23
(779)
201
(555)
47
(1,570)
291
(1,232)
69
(2,324)
159
(2,096)
(1,594)
(303)
(1,291)
(1,268)
125
(1,393)
(3,364)
(439)
(2,925)
(3,218)
275
(3,493)
1,887
709
1,178
8,630
805
7,825
975
479
496
Weighted average shares outstanding
Basic
Diluted
Earnings (loss) per share:
Basic
Continuing operations
Discontinued operations
Net earnings (loss)
Diluted
Continuing operations
Discontinued operations
Net earnings (loss)
$
Six Months Ended
June 30,
2010
2009
(795)
942
54
888
$
10,213
10,213
(505)
$
10,205
10,205
(1,747)
$
10,213
10,213
4,332
10,205
10,205
$
$
$
(0.13)
0.05
(0.08)
$
$
$
(0.14)
0.09
(0.05)
$
$
$
(0.29)
0.12
(0.17)
$
$
$
(0.34)
0.77
0.42
$
$
$
(0.13)
0.05
(0.08)
$
$
$
(0.14)
0.09
(0.05)
$
$
$
(0.29)
0.12
(0.17)
$
$
$
(0.34)
0.77
0.42
Page 1 of 3
EMRISE CORPORATION
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net of allowances for doubtful accounts of
$125 at June 30, 2010 and $160 at December 31, 2009
Inventories
Current deferred tax assets
Prepaid and other current assets
Current assets of discontinued and held for sale operations
Total current assets
Property, plant and equipment, net
Goodwill
Intangible assets other than goodwill, net
Deferred tax assets
Other assets
Noncurrent assets of discontinued and held for sale operations
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Accrued expenses
Line of credit
Current portion of long-term debt, net of discount of $0 and $290
Notes payable to stockholders, current portion
Income taxes payable
Other current liabilities
Current liabilities of discontinued and held for sale operations
Total current liabilities
June 30,
2010
(unaudited)
$
$
1,987
December 31,
2009
$
3,994
4,228
7,203
117
771
5,935
20,241
6,059
8,031
158
841
6,368
25,451
784
3,484
1,040
500
88
18,040
44,177
987
2,878
1,107
308
121
19,425
50,277
$
$
3,064
4,102
3,556
7,569
179
289
356
6,619
25,734
Long-term debt
Deferred income taxes
Other liabilities
Noncurrent liabilities of discontinued and held for sale operations
Total liabilities
Commitments and contingencies
Stockholders' equity:
Preferred stock,$0.01 par value. Authorized 10,000,000 shares, no shares issued and outstanding
Common stock,$0.0033 par value. Authorized 150,000,000 shares; 10,213,214 issued and
outstanding at June 30, 2010 and December 31, 2009
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total stockholders' equity
Total liabilities and stockholders' equity
$
2,883
315
1,386
1,175
31,493
2,938
144
688
1,572
34,889
-
-
126
43,554
(28,333)
(2,663)
12,684
44,177
126
43,480
(26,586)
(1,632)
15,388
50,277
Page 2 of 3
$
$
2,734
5,232
5,156
8,109
348
604
370
6,994
29,547
Reconciliation of Adjusted EBITDA to Net (Loss) Income
(Unaudited, in thousands)
Three Months Ended
June 30,
2010
2009
Net (loss) income as reported
$
Additions:
Depreciation and amortization
Stock based expense
Interest expense (income), net
Other, net
Income tax (benefit) provision
Subtractions:
Income from discontinued and held for
sale operations
Adjusted EBITDA
$
(795)
(505)
$ (1,747)
108
38
714
(147)
(303)
133
41
756
(201)
125
227
74
1,523
(291)
(439)
266
77
2,255
(159)
275
496
888
1,178
7,825
(881)
$
Six Months Ended
June 30,
2010
2009
$
(539)
$ (1,831)
$ 4,332
$
(779)
Use of Non-GAAP Financial Measures
In evaluating its business, EMRISE considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. EMRISE defines Adjusted
EBITDA as earnings before interest, taxes, depreciation and amortization, non-cash stock compensation, and net other income, less net gain or loss on
discontinued operations. Management believes that Adjusted EBITDA is a meaningful measure of liquidity and the Company’s ability to service debt because
it provides a measure of cash available for such purposes. Management provides an Adjusted EBITDA measure so that investors will have the same financial
information that management uses with the belief that it will assist investors in properly assessing the Company’s performance on a period-over-period basis.
The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income,
operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the
Company’s operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated
income statement data prepared in accordance with U.S. GAAP. Other companies may calculate similar measures differently than EMRISE, limiting their
usefulness as comparative tools. EMRISE compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only
supplementally.
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