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Directed Electronics took a non-cash impairment charge of $146 million for its fiscal year, ended Dec. 31, resulting in a GAAP net loss of $140 million.
For the year Directed reported net sales were $401.1 million, down 8.4 percent from the prior year's $437.8 million. Its pro-forma adjusted EBITDA profit was $58.7 million in 2007, down from $79.2 million in 2006.
Jim Minarik, president/CEO, said Directed took the charge, net of tax, “related to goodwill and intangibles.” In a conference call with analysts he added the charge was due to “the decline in our stock price as compared to our book value. However, while this is a large number, I want to emphasize that this was a non-cash charge and does not effect our ongoing operations.”
In its fiscal fourth quarter Minarik said Directed “achieved most of our goals” which included bringing its full year 2007 debt down by $75 million, or 22 percent.
Those goals for the quarter included “strong sales and EBITDA performance,” he noted. Its net sales were $152 million compared with net sales of $210.3 million in the previous year's final quarter, due to lower satellite radio sales. Gross sales for satellite radio were down 51 percent to $114 million compared with the previous year. Gross sales of security and entertainment products were almost flat with the previous fourth quarter, down to $101.2 million vs. $103.6 million.
Gross profit for the quarter was up 610 basis points to 34.6 percent and GAAP gross margin increased 850 basis points to 34.3 percent compared to the prior year.
Its pro-forma EBITDA profit was $28.8 million compared with $34.7 million for the prior year's fourth quarter. Pro-forma adjusted EBITDA, which includes adjustments as defined by the company's lending agreement, was $29.1 million in the fourth quarter vs. $36.7 million in the prior year's fourth quarter.
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