TROY Group, Inc. Posts Fiscal Year 2007 Results and Provided Notice of
Exposure to Auction Rate Securities Liquidity Concern
COSTA MESA, Calif., Feb. 28 /PRNewswire-FirstCall/ -- TROY Group, Inc.
(Pink Sheets: TROY) announced today that financial results for the fiscal year
2007, which ended November 30, 2007, have been posted on the company's
web-site at http://www.troygroup.com. To access the report, click on About
TROY Group then click on Financials. TROY's 2007 financial results are also
posted at http://www.pinksheets.com. Enter TROY in the symbol field then click
on Financial Report.
Revenue for the year ended November 30, 2007 decreased to $47.7 million
compared to revenue for the year ended November 30, 2006 of $49.4 million
largely due to the one time purchase of printers by one customer. Earnings
from continuing operations for the year ended November 30, 2007 decreased to
$0.47 per share compared to $0.63 per share for the year ended November 30,
2006.
As of February 28, 2008 the majority of the Company's current assets
consisted of $14.1 million in investments that are auction rate securities.
These auction rate securities consist of preferred stock of various closed-end
mutual funds which have an AAA credit rating. The auctions for these
securities have failed since February 13, 2008 resulting in the investment
being illiquid. There has been no default on the underlying securities, and
investment income continues to be received in a timely manner while we wait
for a return of the market. It's possible that a market for auction rate
securities may not return before the Company has a need to sell its
investments, which would result in TROY having to borrow on its $5 million
line of credit. In addition, a prolonged decline in marketability could
result in a reduced value of the securities. There can be no assurance when
or if the market for these securities will return.
The consolidated balance sheet and consolidated statement of income are
attached to this press release. Please refer to the annual report including
financial statements for more detailed information.
TROY Group, Inc.
3535 Hyland Avenue, Suite 200
Costa Mesa, CA 92626
(714) 241-4760
(714) 241-4762 Fax
http://www.troygroup.com
Contact: Myra Erickson
Investor Relations
TROY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Fiscal Years Ended November 30,
2005 2006 2007
Net sales $41,255,000 $49,448,000 $47,679,000
Cost of goods sold (including
rent paid to majority
stockholders: 2005 $291,000,
2006 $315,000 and 2007
$334,000) 24,347,000 28,357,000 28,107,000
Gross profit 16,908,000 21,091,000 19,572,000
Operating expenses:
Selling, general and
administrative 8,144,000 9,556,000 10,055,000
Research and development 2,427,000 2,555,000 2,298,000
Amortization of intangible
assets 75,000 10,000 -
Total operating expenses 10,646,000 12,121,000 12,353,000
Operating income 6,262,000 8,970,000 7,219,000
Interest income 321,000 874,000 673,000
Income from continuing
operations before income
taxes 6,583,000 9,844,000 7,892,000
Provision for income taxes 2,482,000 3,290,000 2,920,000
Income from continuing
operations 4,101,000 6,554,000 4,972,000
Income (loss) from
discontinued operations,
net of tax (1,568,000) 5,155,000 (730,000)
Net income $2,533,000 $11,709,000 $4,242,000
Net income per share:
Basic income from continuing
operations $0.39 $0.63 $0.47
Basic income (loss) from
discontinued operations (0.15) 0.49 (0.07)
Basic income $0.24 $$1.12 $0.40
Diluted income from continuing
operations $ 0.39 $0.63 $0.47
Diluted income (loss) from
discontinued operations (0.15) 0.49 (0.07)
Diluted income $ 0.24 $1.12 $0.40
Weighted average shares
outstanding:
Basic 10,607,000 10,469,000 10,527,000
Diluted 10,608,000 10,475,000 10,580,000
TROY GROUP, INC.
CONSOLIDATED BALANCE SHEET
November 30,
2006 2007
ASSETS
Current assets:
Cash and cash equivalents $350,000 $782,000
Investment in available-for-sale securities 9,650,000 11,400,000
Accounts receivable, net of allowances 2006
$282,000; 2007 $293,000 5,297,000 6,302,000
Inventories 3,980,000 3,050,000
Prepaid expenses and other 917,000 840,000
Deferred tax assets 874,000 734,000
Current assets of discontinued operations held
for sale 491,000 311,000
Total current assets 21,559,000 23,419,000
Equipment and leasehold improvements, net 2,126,000 1,725,000
Goodwill 281,000 281,000
Other assets, including receivables from
stockholders of $1,903,000 3,324,000 3,535,000
Total assets $27,290,000 $28,960,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,304,000 $2,645,000
Accrued expenses 2,935,000 2,085,000
Deferred revenue 1,291,000 1,286,000
Current liabilities of discontinued operations
held for sale 945,000 1,976,000
Total current liabilities 9,475,000 7,992,000
Non-current liabilities - 881,000
Total liabilities 9,475,000 8,873,000
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value, authorized
100,000 shares; issued none - -
Common stock, par value $0.01 per share;
authorized 13,000,000 shares; issued
10,563,701 shares; outstanding 10,563,701
in 2006 and 9,948,235 in 2007 106,000 106,000
Additional paid-in capital 20,510,000 21,587,000
Retained earnings (deficit) (2,801,000) 1,441,000
Less cost of treasury stock -
2007 615,466 shares - (3,047,000)
Total stockholders' equity 17,815,000 20,087,000
Total liabilities and stockholders' equity $27,290,000 $28,960,000
About TROY Group
TROY Group, Inc. ("TROY") is a leading provider of on-demand printing
solutions. TROY solutions manage, secure and simplify end-to-end enterprise
printing environments. TROY offers application software, security printing
hardware and specialized consumables for securely printing checks, money
orders, transcripts, prescriptions and other important documents. TROY
solutions are used by enterprises and governmental organizations to manage
fraud, operational risk and comply with government regulations related to
protecting information privacy. As a Gold Solutions Partner to Hewlett
Packard, TROY is authorized to enhance HP printers and consumables. We sell
and service our products to major corporations, banks, key government accounts
and distributors worldwide. Visit TROY at http://www.troygroup.com.
Forward-looking statements of TROY (statements that are not historical
fact) in this news release are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as believe, expect, may, will,
could and should, and the negative of these terms or other similar
expressions. These statements are subject to risks and uncertainties that
could cause actual results to differ materially from those discussed in the
forward-looking statements. These risks and uncertainties include, but, are
not limited to, the ability to sell investments when needed, the ability to
develop new products, the ability to hire and retain qualified management,
technology and other personnel, the impact of competition from existing and
new technologies and companies and the other factors set forth in our periodic
reports and other documents that we distribute from time to time which are
available in our financial statements under certain important factors on our
website TROYgroup.com or pinksheets.com. Statements included in this news
release are based upon information known to TROY as of the date of this
release, and TROY assumes no obligation to update information contained in
this news release.
SOURCE TROY Group, Inc.
Myra Erickson, Investor Relations of TROY Group, Inc., +1-714-241-4760, fax,
+1-714-241-4762
