Cyalume Technologies Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2012 Financial Results

Cyalume Technologies Holdings, Inc. ReportsFourth Quarter and Fiscal Year 2012 Financial Results

2012 Revenues Increased 11.4% Over 2011; Further Improvement Expected in 2013

Schedules Conference Call for Thursday, April 4, 2013 at 10:00am ET


WEST SPRINGFIELD, Mass.--(BUSINESS WIRE)-- Cyalume Technologies Holdings, Inc. (OTCBB: CYLU) ("the Company" or "Cyalume") today reported its financial results for the fourth quarter and year ended December 31, 2012.

$ in thousands
(except per share data)

3 Months Ended

Change**

Year Ended

Change**

12/31/12

12/31/11

12/31/12

12/31/11

Revenues

$

11,630

$

8,348

39.3%

$

38,642

$

34,703

11.4%

Gross profit

$

5,561

$

3,393

63.9%

$

17,112

$

16,135

6.1%

Gross margin

47.8%

40.6%

717 bps

44.3%

46.5%

(221) bps

Net income (loss) **

$

(1,692)

$

(1,133)

(49.3%)

$

(50,218)

$

327

NM*

Adjusted EBITDA

$

1,682

$

844

99.3%

$

4,167

$

6,679

(37.6)%

* NM - Not meaningful

** The year ended 12/31/12 includes $47.4 million of non-cash impairment charges related to an acquisition made several years ago. Both the net loss for the three months ended and the year ended 12/31/2012 include expense of approximately $3.1 million and $3.4 million, respectively relating to contingent consideration for earn-out provisions of a 2011 acquisition.

Adjusted EBITDA is an important measure because it presents a view of our performance on an ongoing basis without regard to capital structure, capital investment cycles and corresponding ages of related assets among comparable companies. A more detailed description of Adjusted EBITDA and a reconciliation to GAAP net income (loss) is contained later in this release.

Revenues by product
category ($ in millions)

3 Months Ended

Change***

Year Ended

Change***

12/31/12

12/31/11

12/31/12

12/31/11

Military (non-ammunition)

$

8.0

$

5.0

$

3.0

$

24.3

$

23.8

$

0.5

Ammunition

$

0.0

$

1.0

$

(1.0

)

$

2.1

$

5.2

$

(3.1

)

Law enforcement / commercial public safety

$

1.4

$

0.8

$

0.6

$

4.0

$

3.8

$

0.2

Specialty products

$

2.3

$

1.5

$

0.8

$

8.2

$

1.9

$

6.3

Total ***

$

11.7

$

8.3

$

3.4

$

38.6

$

34.7

$

3.9

*** Numbers may not add exactly due to rounding

Cyalume's President & CEO, Zivi Nedivi noted, "We are pleased to report that the 2012 fourth quarter was the strongest period of the year in terms of revenues, due to several major initiatives and strategies we put in place earlier in the year to first turnaround and then rebuild our business. Fourth quarter revenues grew by 15%, 30% and 46% as compared to revenues reported for the 2012 third, second and first quarters, respectively.

"In 2012, we completed the realignment of our corporate structure, significantly strengthened senior management and our sales force, redefined the objectives of our R&D program, and put in place enhanced pay-for-performance incentives."

He concluded, "For 2013, we expect our business to further improve as compared to 2012, driven by a meaningful pipeline of new product launches and current product upgrades. We have formulated strategies to expand our presence in certain existing markets and also enter new markets. Furthermore, we are exploring several new business partnerships, and other M&A activities that could accelerate our top line growth and also improve our profitability for 2013 and beyond."

Conference Call

Cyalume's President & CEO, Zivi Nedivi, and CFO, Michael Bielonko will host a conference call on Thursday, April 4, 2013 at 10:00am ET to discuss these results as well as recent corporate developments. After opening remarks, there will be a question and answer period. Interested parties may participate in the call by dialing (201) 493-6739. Please call in 10 minutes before the conference call is scheduled to begin and ask for the Cyalume call. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to lcati@equityny.com.

The conference call will also be broadcast live over the Internet. To listen to the live call, please go to www.cyalume.com click on the Investors section, then to the Events and Presentations where the conference call is posted. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days. We suggest listeners use Microsoft Explorer as their browser.

About Cyalume Technologies Holdings, Inc.

Cyalume designs and manufactures non-pyrotechnic tactical products and training solutions for the world's militaries and law enforcement agencies, as well as for certain safety markets. Cyalume is the exclusive supplier to the U.S. and NATO-country militaries for all of their chemical light needs and operates manufacturing facilities in the U.S. and France. Through its subsidiary Cyalume Specialty Products, Cyalume also manufactures specialty chemical components for various markets.

Forward-Looking Statements

This press release and the accompanying scheduled investor conference call include forward-looking statements concerning sales and operating earnings. These forward-looking statements are based upon management's expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company and which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to: the effect of regional and global economic and industrial market conditions including our expectations concerning their impact on the markets we serve; the effect of conditions in the financial and credit markets and their impact on the Company and our customers and suppliers; the impact of the Company's cost reduction initiatives; the Company's ability to execute its business plan to meet its sales, operating income, cash flow and capital expenditure guidance; the impact on the Company's gross profit margins as a result of changes in product mix; the Company's vulnerability to industry conditions and competition; the effect of any interruption in the Company's supply of raw materials or a substantial increase in the price of raw materials; ongoing capital expenditures and investment in research and development; compliance with any changes in government regulations and environmental and health and safety laws; the effect on the Company's international operations of unexpected changes in legal and regulatory requirements, export restrictions, currency controls, tariffs and other trade barriers, difficulties in staffing and managing foreign operations, political and economic instability, difficulty in accounts receivable collection and potentially adverse tax consequences; the effect of foreign currency exchange rates as the Company's non-U.S. sales continue to increase; reliance for a significant portion of the Company's total revenues on a limited number of large organizations and the continuity of business relationships with major customers; the loss of key personnel; the nature and extent of military operations being conducted by customers.

Actual results and events may differ significantly from those projected in the forward-looking statements. Reference is made to Cyalume's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K, its quarterly reports on Form 10-Q, and other periodic filings, for a description of the foregoing and other factors that could cause actual results to differ materially from those in the forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

The footnotes and other disclosures contained in the Company's annual report on Form 10-K, its quarterly reports on Form 10-Q, and other periodic filings are an integral part of its financial statements and should be read in conjunction with any review of its financial statements.

Cyalume Technologies Holdings, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except shares and per share information)

For the Three

For the Three

For the Year

For the Year

Months Ended

Months Ended

Ended

Ended

December 31,

December 31,

December 31,

December 31,

2012

2011

2012

2011

Revenues

$

11,630

$

8,348

$

38,642

$

34,703

Cost of revenues

6,069

4,955

21,530

18,568

Gross profit

5,561

3,393

17,112

16,135

Other expenses (income):

Sales and marketing

1,286

1,144

5,515

4,402

General and administrative

2,710

1,578

7,815

6,135

Research and development

539

461

1,963

1,888

Interest expense, net

544

559

2,219

2,330

Interest expense - related party

1

8

19

43

Amortization of intangible assets

438

549

1,858

1,805

Change in fair value of contingent consideration

3,139

59

3,380

59

Impairment loss on equipment

0

0

273

0

Impairment loss on goodwill and intangible assets (1)

0

0

47,369

0

Other (income) loss, net

33

(41

)

(112

)

(489

)

Total other expenses

8,690

4,317

70,299

16,173

Loss before income taxes

(3,129

)

(924

)

(53,187

)

(38

)

Provision for (benefit from) income taxes

(1,437

)

209

(2,969

)

(365

)

Net income (loss)

(1,692

)

(1,133

)

(50,218

)

327

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

168

(301

)

108

(67

)

Unrealized gain (loss) on cash flow hedges, net of taxes of $(15), $(21), $(45) and $(23), respectively

25

36

73

41

Other comprehensive income (loss)

193

(265

)

181

(26

)

Comprehensive income (loss)

$

(1,499

)

$

(1,398

)

$

(50,037

)

$

301

Net income (loss) per common share:

Basic

$

(2.76

)

$

0.02

Diluted

$

(2.76

)

$

0.02

Weighted average shares used to compute net income (loss) per common share:

Basic

18,205,586

16,911,103

Diluted

18,205,586

18,470,638

(1)