Waytronx Announces 2010 Annual Shareholder Meeting & Operational Update
Sep. 29, 2010 (Business Wire) -- Waytronx, Inc. (OTCBB: WYNX), a platform company dedicated to the acquisition, development, and commercialization of new, innovative technologies along with its wholly owned subsidiaries, CUI Inc, a provider of electromechanical components and CUI-Japan, its Japanese subsidiary, and Comex Electronics, a partially owned (49%) Japanese subsidiary, today announced that it will host its annual Shareholder Meeting at 9:00 AM PST on December 2, 2010 at its Tualatin Facility. The meeting will be simultaneously webcast.
In conjunction with that meeting, Waytronx CEO & President, William Clough, issued the following operational update:
“The last several years have clearly been transformational at Waytronx. We changed the company’s name; changed the company’s focus; acquired both business subsidiaries and new technologies; and completely changed the company’s business model.
During the latter part of 2008, 2009 and now into 2010, we have taken the technology platform we created by acquiring CUI and its facilities and incorporated that platform into our public company. We have added new product lines; made strategic geographic acquisitions; vertically integrated our sales force; secured several proprietary licensing agreements; and begun to see the fruits of our transformation from a pre-revenue R&D company to a revenue generating, profitable technology/licensing business model.
We have re-structured and/or eliminated more than $25,000,000 in debt; we have reported our first net-net profitable quarter; and we’ve done all of this while reducing our SG&A as a percentage of our gross revenue.
As in previous years, the continued commitment and support of our efforts by our shareholders is of tremendous importance to our company, its employees, and its executive team. We value that support and are working hard to maintain your trust and increase shareholder value.
This year culminates many of the company’s strategic efforts to change its business model and transform itself from a pre-revenue, patent portfolio company to a revenue generating; profitable platform company dedicated to identifying, acquiring, and commercializing leading edge technologies. Briefly, the significant milestones we reached in order to accomplish this transformation were:
In May 2008, the company acquired CUI Inc, a Tualatin, Oregon based solutions provider of electromechanical components and industrial controls for OEM manufacturing (Press Release dtd: May 19, 2008).
In October 2008, the company signed and announced the first of its exclusive worldwide licensing agreements for the C14 encoder. That product is now being sold in the marketplace and is generating revenue for the company (Press Release dtd: October 7, 2008).
In May 2009, the company signed and announced the worldwide, exclusive licensing agreement for the AMT encoder. This encoder has already received several design wins, is currently in the market, and generating revenue for the company (Press Release dtd: May 12, 2009).
In May 2009, the company was able to reach an agreement with the former owners of CUI (IED, Inc.) to reduce the value of its $17,500,000 convertible acquisition note to a market value of $4,900,000.
In July 2009, after lengthy negotiations, the company was able to announce the acquisition of Comex Electronics and forty-nine percent (49%) of Comex Instruments and its rebranding to “CUI-Japan.” This acquisition of Comex revenues (full year 2009 gross revenues of approximately $4.1 million) and a customer list including such iconic Japanese companies as Mitsubishi, Honda, Fujitsu, Toshiba, Sony, Japan Rail, the Japan Defense Force, and others was the culmination of the company’s efforts to significantly increase its presence in Japan for its own existing product lines (Press Release dtd: July 6, 2009).
In July 2009, after hiring Mark Adams the new VP of Worldwide Sales, the company was able to announce the re-structure and vertical expansion of its sales force – Increasing its outside sales group to seventy-four (74) reps, with comprehensive coverage of the United States and service in Mexico, Puerto Rico, and Western Canada (Press Release dtd: July 15, 2009). Since that announcement, the company has added additional sales reps and now includes Europe in its coverage.
In September 2009, the company entered into a licensing agreement with Power One, Inc. (NASDAQ: PWER). The non-exclusive license agreement provides access to Power-One’s portfolio of digital power technology patents for incorporation into the company’s new line of digital point of load power modules (Press Release dtd: September 21, 2009).
In January 2010, the company announced that it had finalized negotiations with GL Industrial Services UK [formerly: Advantica Ltd.] for exclusive worldwide licensing rights to the unique new GASPT2 technology. That technology allows, for the very first time, “live time” monitoring of the quantity, quality, and composition of natural gas intra-pipeline. That contract calls for a minimum of between $35,000,000 and $40,000,000 in sales during the first four years of the agreement. The company is currently in the final phase of safety certification of the device by BASEEFA and fiscal certification by the American Gas Association and Ofgem in the United Kingdom (Press Release dtd: January 4, 2010).
In March 2010, the company entered into an exclusive Field of Use Agreement with California Power Research Inc to license their BPS-5 advanced power topology. BPS-5 provides advantages across a wide range of ac-dc and dc-dc power conversion applications through a significant reduction in switching losses within PWM circuits. The company is commercializing this technology though its V-Infinity line of power products (Press Release dtd: March 30, 2010).
In March 2010, the company retained Innovaro, Inc. (AMEX: INV), a patent portfolio company dedicated to, and specializing in developing compelling strategies and modeling breakthrough ideas, to find a strategic partner to either develop or acquire its WayCool Technology, so that the company can continue to focus on its and CUI’s core business, developing those products that are either already in the market or very close to actual commercialization. Innovaro has and continues to aggressively market the WayCool Technology portfolio and has already identified and introduced several potential partners to the company.
In April 2010, the company was able to re-negotiate with IED and two other “Angel” Investors, allowing it to reduce its debt by another $7,200,000. IED exchanged the entire convertible (acquisition) note of $4,900,000 and related accrued interest of $850,500 for 1,000,000 shares of common stock and a one-time $50,000 payment. Additionally, the other two investors converted approximately $1,500,000 in debt to equity (Press Release dtd: April 20, 2010).
After complicated negotiations with Wells Fargo Capital Finance (NYSE: WFC), in August 2010, the company was able to transfer its entire banking relationship, along with its working line-of-credit and term (acquisition) note to Wells Fargo Capital Finance, bringing it into compliance with all financial covenants and allowing it to move from a regional banking relationship to an international banking relationship, much better equipped to service the company’s ever expanding product line and customer base (Press Release dtd: August 31, 2010). In conjunction with this move to Wells Fargo, the company was able to retire an additional $2,000,000 in debt when five (5) investors agreed to convert their SBLC’s into equity in the company (Press Release dtd: August 10, 2010).
In August 2010, the company was pleased to report its first net-net profitable quarter. For the Second Quarter ending June 30, 2010, the company reported consolidated revenues of $10,716,227 (up 77% year-over-year) and EBITDA of $6,494,479 – EPS of $0.02 per share. Those numbers represent a 40% quarter-to-quarter increase in revenues, up from $7,668,805 in the first quarter 2010. This revenue growth and operating profit was accomplished while the company’s Selling, General, and Administrative (“SG&A”) expenses were reduced from 41% of total revenue in second quarter 2009 to 29% of total revenue for the second quarter 2010 – a decline of more than 12%. Significantly, the SG&A dropped from 37% of total revenue in first quarter 2010 to 29% of total revenues in second quarter 2010 – a quarter-to-quarter drop of 8% (Press Release dtd: August 16, 2010).
Finally, and maybe most significantly, in September 2010, the company reached agreement with IED to reduce its remaining approximately $14,000,000 Term Note, then due and payable on or before May 15, 2011, to approximately $10,309,000 and extend the terms of that Note, making it “interest only” and due and payable on or before May 15, 2018 – transforming it from short-term debt into long-term debt. In exchange for this accommodation by IED, the company agreed to pay IED a one-time payment of $1,500,000 on or before December 1, 2010 (Press Release dtd: September 9, 2010).
In sum and put quite succinctly, the company’s immediate future looks especially bright.
With a significant total addressable market (TAM) for our proprietary products and emerging technologies;
A quarter-to-quarter growth rate of more than 40% and a year-over-year growth rate of more than 70%;
Reduction in our SG&A as a percentage of total revenues;
Increasing profitability of $0.02 earnings per share (EPS) for the second quarter of 2010, along with a reduction in debt and associated reduction in cash and non-cash interest expenses from approximately $400,000 per month in May 2008 to approximately $145,000 per month now ($88,000 in cash and $57,000 in non-cash expense); and,
Continuing our emphasis on increasing operational efficiencies, expanding our “legacy” business, and bringing our Novum Digital Power Product Line and GasPT2 device to market, the company has, and continues to implement its strategic plan to increase its market share, acquire and introduce new technologies, and drive shareholder value.
As always, we recognize our shareholders for their continued support and we look forward to providing more value and return on investment to each of you during the coming year.”
About Waytronx, Inc.
Waytronx, Inc. has pioneered and is developing innovative thermal management solutions capable of revolutionizing the semiconductor, solar and electronic packaging industries, among others, utilizing its patented WayCool™/WayFast™ hybrid mesh architecture. In addition, through its acquisition of CUI in May 2008, Waytronx has developed the infrastructure, expertise, and platform necessary to acquire, develop, and commercialize new technologies. For its part, CUI is a solutions provider of electromechanical components and industrial controls for OEM manufacturing. Since its inception in 1989, CUI has been delivering quality products, extensive application solutions, and superior personal service. CUI’s solid customer commitment and honest corporate message are a hallmark in the industry.
Waytronx also holds CUI-Japan as a wholly owned subsidiary and Comex Electronics as a partially owned subsidiary (49%). CUI-Japan and Comex are Japanese solutions provider of electromechanical components and industrial controls for OEM manufacturing. For more information, please visit www.waytronx.com and www.cui.com.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, including, among other things, our reliance on third-party manufacturers and suppliers, government agency budgetary and political constraints, new or increased competition, changes in market demand, and the performance or reliability of our products. These factors and others could cause operating results to vary significantly from those in prior periods, and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the company and its operations, are included in certain forms the company has filed with the Securities and Exchange Commission.
WayCool, WayFast, Waytronx and OnScreen are trademarks of Waytronx, Inc. Other names and brands are the property of their respective owners.
Media Contact:
CUI
Maggie Lefor, 503-612-2300
info@waytronx.com
or
Investor Relations:
Waytronx, Inc.
Fred Schultz, 760-429-7775 or 760-855-8880
fschultz@waytronx.com
Source: Business Wire (September 29, 2010 - 5:30 AM EDT)
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