Optelecom-NKF Reports Fourth Quarter and Full Year 2008 Results

GERMANTOWN, Md. , March 5 /PRNewswire-FirstCall/ -- Optelecom-NKF, Inc. (Nasdaq: OPTC), a leading global provider of Siqura(R) advanced IP-video network solutions, today announced fourth quarter and full year 2008 results. Strong IP product sales in 2008 pushed company revenue to record levels for the year.

Revenues for the fourth quarter totaled $11.8 million compared to $13.0 million for the same quarter of 2007. For the full year 2008, revenue totaled a record $45.2 million compared to $42.5 million in 2007, an increase of 6%. IP-related revenue in the fourth quarter totaled $4.1 million, a 4% increase compared to IP-related revenue of $4.0 million in the fourth quarter of last year. For the full year 2008, IP-related revenue increased 41% to $14.5 million compared to $10.3 million in 2007.

"We reported solid revenue and reduced operating expense in the fourth quarter of 2008. Income from operations totaled $1.2 million for the quarter and $2.5 million for the full year," said Ed Ludwig , Optelecom-NKF's Chairman of the Board and CEO. "As with other companies, however, we are not immune to global economic forces. Given the circumstances, we decided to record a full write-down of the Company's U.S. deferred tax assets. This non-cash charge eliminates uncertainty in our future financial statements. Going forward, we believe we are positioned to compete and to succeed in this environment."

The Company reported a net loss of $3.0 million, or $(0.81) per share, in the quarter ending December 31, 2008 , including non-cash charges of $3.5 million primarily for the write-down of deferred tax assets. This compares to net income of $873 thousand, or $0.24 per share, one year earlier. For the full year 2008 the net loss totaled $1.8 million, or $(0.48) per share, compared to net income of $1.3 million, or $0.37 per share, in 2007.

Adjusted EBITDA for the quarter (as defined in the addendum to this release) was $1.6 million in the fourth quarter 2008 compared to $2.0 million for the same quarter in 2007. For the full year adjusted EBITDA totaled $4.2 million compared to $4.7 million one year earlier.

At year-end, Optelecom-NKF, Inc. completed a reduction in force in select business units. The reduction in force will reduce costs in mature areas of the Company's technology offerings while focusing critical investments in growing Video over IP products. The Company recorded pre-tax charges of approximately $525 thousand in connection with the reduction in force during the fourth quarter of 2008.

"We are sized appropriately for the opportunities at hand," Mr. Ludwig added. "Our team is dedicated to staying on top of operations and we are prepared to respond quickly to changing market conditions. Efforts in our technology development area will lead to a continuing flow of new products that meet our customers' needs and drive our success. This has positioned us to capture business as stimulus plans take shape at home and abroad."

"We continue to address our sales effectiveness and we plan to gain market share as some competitors, lacking our strength, have to reign in their efforts. Our management team was strengthened by bringing David Patterson on board as our new president and as my successor designee," Mr. Ludwig concluded.

Fourth Quarter Conference Call

Optelecom-NKF CEO Ed Ludwig will lead a conference call to discuss fourth quarter results at 10:00 a.m. Eastern Time , Friday, March 6, 2009 .

Interested parties are welcome to call 866-543-6408 (International Dial In: 617-213-8899) and request the "Optelecom-NKF conference call" shortly before the designated start time or provide the participant passcode 40321348. The telephone conference call will feature a question and answer segment with management. For those parties unable to participate in the live conference call, a replay will be available from 1:00 p.m. following the teleconference until March 13, 2009 . Those wishing to listen to the replay should call 888-286-8010 (International Dial In: 617-801-6888) and enter passcode number 12381497 when prompted.

The call is being web cast by Thomson Reuters and can be accessed at www.earnings.com or at Optelecom-NKF's website www.optelecom-nkf.com.

About Optelecom-NKF

Optelecom-NKF, Inc., developer of Siqura(R) advanced IP video network solutions, is a global supplier of advanced video surveillance solutions, including IP cameras, video servers/codecs, network video recorders, fiber transmission equipment, video management, and video analytics software. We deliver complete solutions for traffic monitoring and security of airports, seaports, casinos, prisons, utilities, public transit, city centers, hospitals, and corporate campuses.

Founded in 1972, Optelecom-NKF is committed to providing its customers with expert technical advice and support in addition to products that are developed and tested for professional and mission critical applications. All Optelecom-NKF IP surveillance solutions are marketed under the Siqura(R) name.

The Optelecom-NKF corporate headquarters is in Germantown, Maryland , USA, with European corporate offices in Gouda, the Netherlands , and sales offices or support covering Latin America , France , Spain , the UK, Germany , Italy , Dubai , and Singapore .

About Siqura(R)

All Optelecom-NKF IP surveillance solutions are marketed under the Siqura(R) brand. Siqura(R) is a total IP surveillance solution and includes IP cameras, video servers/codecs, network video recorders, video management, and video analytics software. Siqura(R) can be used in hybrid installations and is compatible with all Optelecom-NKF fiber transmission equipment.

Investor inquiries should be directed to Mr. Rick Alpert at 301-948-7872.

Non-GAAP Earnings Addendum

We define Adjusted EBITDA as net income or net loss plus interest expense, income taxes, foreign exchange losses, depreciation and amortization. Adjusted EBITDA is not a measure of cash flow or liquidity as determined by generally accepted accounting principles (GAAP). We have included Adjusted EBITDA as a supplemental disclosure because we believe that it is widely used by investors, industry analysts and others as a useful supplemental measure. Optelecom-NKF calculates and uses Adjusted EBITDA as an indicator of its ability to generate cash from reported operating results.

Adjusted EBITDA does not represent funds available for our discretionary use and is not intended to represent or to be used as a substitute for net income or cash flows from operations data as measured under U.S. generally accepted accounting principles ("GAAP"). The items excluded from Adjusted EBITDA but included in the calculation of Optelecom-NKF's reported net income are significant components of the accompanying unaudited consolidated statements of operations, and must be considered in performing a comprehensive assessment of overall financial performance. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.

The table below presents a reconciliation of net income to Adjusted EBITDA:

SOURCE Optelecom-NKF, Inc.



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