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Merix’s Sales Down 6%, Loss Narrows

Published: 30 July 2008
 by Staff
BEAVERTON, OR – Merix Corp. announced a fourth-quarter loss from continuing operations of $3.5 million on revenue of $87.6 million. The results were much improved over a year ago, when the PWB fabricator reported a loss from continuing operations of $80.1 million on revenue of $93.6 million.

The fiscal 2007 fourth quarter loss included an $80.4 million charge for impairment of goodwill and other assets acquired as part of the Merix San Jose and Asia acquisitions.

For the period ended May 31, revenue declined 6% year-over-year, which the company called normal cyclicality, and 7% sequentially. North American revenue declined 6% sequentially to $45.5 million. Asian revenues declined 8% to $42.1 million due to the annual Chinese New Year shutdown combined with a temporary gap in demand due to product transitions at one customer.

In a press release, president and chief executive Michael D. Burger said, "Although many of our financial measures remain well below acceptable levels, these measures improved sequentially when compared to the third quarter. This reflects the successful execution of the restructuring plans and actions we have taken over the last six to nine months.”

Gross margin averaged 12.2% of revenue, down from 16.5% year-over-year and 10.3% sequentially, primarily from a drop in North American revenue and its impact on fixed cost absorption. North American gross margin improved sequentially by nearly 3 points to 11.7% sequentially, on restructuring and a better product mix. Asia gross margins improved to 12.8%, up one point sequentially. Asia's gross margins have improved for four straight quarters.

Backlogs at quarter’s end were $66.3 million.

Merix guided for first-quarter revenue of $86 million to $90 million, and a loss of $2 million to $4.5 million, excluding one-time charges.
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