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Merix's Revenues Down 21% Sequentially

Published: 08 April 2009
 by Staff
BEAVERTON, OR -- Merix Corp. reported a net loss of $32.7 million on revenue of $60.7 million for the third quarter ended Feb. 28.

Revenue was down 21% compared to the second quarter. The decline was due in part to a 34% decrease in sales to the automotive end market caused by a sharp global decrease in automobile sales.

Factory utilization was reported to be 65% to 75% in the North American and Asian facilities. Cost structure changes have been made to reduce the break even point by 15%. Kelly Lang, Merix CFO indicated break even for the operation was "roughly $75 million or maybe $80 million (per quarter)... today."

Included in the fiscal 2009 third quarter loss was a non-cash impairment charge of $20.5 million for goodwill recorded on the 2005 acquisition of the Asian business and $1.8 million of severance and other restructuring charges associated with recent cost reduction activities.

Gross margins averaged 1.4% of revenue for the third quarter compared 7.8% in the second quarter.

Investments have been made to support Merix's value proposition. Yields, according to president and CEO Michael Burger, are "consistently above 90%." On time delivery is above 95%.

During the quarter, Merix generated $10.3 million of cash from operations and ended the quarter with $19.1 million of cash and cash equivalents, up $7.6 million from the second quarter.

Operating expenses, not including impairment and restructuring charges, totaled $9.4 million in the third quarter, compared to $9.2 million in the second quarter.



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