Southwall: net income up, revenue down in 2005 financialsSouthwall: net income up, revenue down in 2005 financials

Thin film coatings manufacturer Southwall Technologies Inc. posted financial results on 28 February 2006 for the 4Q and fiscal 2005 which President and CEO Thomas G. Hood described as respectable from…

Thin film coatings manufacturer Southwall Technologies Inc. posted financial results on 28 February 2006 for the 4Q and fiscal 2005 which President and CEO Thomas G. Hood described as respectable from the gross margin and net income standpoint while conceding that softening revenue was the main challenge ahead. For the 4Q 2005, Southwall posted revenue of USD 11.9 million, down 25% from USD 16.0 million in the 4Q of 2004 and 1% lower than USD 12.0 million in the 3Q of 2005. Gross margin for the 4Q 2005 was 31%, a decrease of 11% from the 4Q 2004 gross margin of 42% and down 3% on 3Q 2005. Net income was USD 211,000, a fall of USD 3.0 million compared to the 4Q 2004 but USD 196,000 higher than the 3Q 2005. Fourth quarter 2005 net income per fully diluted share was USD 0.01, a decrease from the 4Q 2004 of USD 0.10 and unchanged from the 3Q 2005. For fiscal 2005, annual revenues decreased 5% to USD 54.8 million in 2005 from USD 57.6 million in 2004. Annual gross margins decreased to 32% in 2005 from 36% in 2004. Annual net income before deemed dividend on preferred stock improved USD 3.5 million from a USD 0.2 million loss in 2004 to net income of USD 3.3 million in 2005. Annual net income attributable to common stockholders improved USD 3 million from a USD 0.2 million loss in 2004 to net income of USD 2.8 million in 2005. “In 2006, we expect to continue to improve our operations performance and to control costs while we emphasize new product development. As we previously announced, as part of our cost control effort, we will consolidate all of our manufacturing into our German plant before mid-year, which will allow us to reduce our footprint and costs here in Palo Alto”, said Mr. Hood. Southwall Technologies Inc. designs and produces thin film coatings that selectively absorb, reflect or transmit light. Southwall products are used in a number of automotive, electronic display and architectural glass products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs.