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Maxwell Is Closing in on a Profitable Quarter

Maxwell Technologies, a San Diego-based maker of ultra-capacitors and other power delivery devices for industrial use, is close to making a profit, but still isn’t there yet.

For its second quarter, Maxwell reported a net loss of $1.7 million on revenues of $11 million. This compared with a net loss of $995,000 on $7.1 million in sales in the second quarter of last year.

Chief Executive Officer Richard Balanson highlighted the 13 percent revenue gain from the first quarter, and its fourth consecutive increase in revenues, as evidence things were going well in a variety of product lines.

However, he also noted the company was exploring outsourcing some of its manufacturing to a lower cost for an expected increase in volume in the next couple of years.

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Maxwell has about 200 employees, including about 120 in San Diego.

Maxwell said it expects third-quarter revenues to equal the same amount as its second quarter, this despite the annual three-week summer shutdown of its Swiss operations.

Traded on Nasdaq under MXWL, shares dropped 63 cents on Aug. 8 to $12.64. Its 52-week range is between $7.41 and $15.12.

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Healthy Profits:

AMN Healthcare, Inc., a San Diego-based provider of nursing staffing services, reported net income of $4.4 million on revenues of $160.7 million for its second quarter ended June 30. That compares with net income of $4.3 million on revenues of $153.4 million for the like period of 2004.

The company’s earnings per share and sales met earlier forecasts.

For the six months ended June 30, AMN reported net income of $8.4 million on $317.5 million in revenues, compared with profits of $8.8 million on revenues of $314.6 million for the first half of 2004.

The company forecast third-quarter revenues to come between $165 million

and $168 million, and diluted earnings per share between 17 to 19 cents per share.

Full-year sales guidance was given between $654 million to $658 million, while earnings should reach between 64 to 66 cents per share.

Traded on the New York Stock Exchange as AHS, shares closed at $15.76 on Aug. 8, and have ranged from $10.70 to $17.46.

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Building Income:

Realty Income Corp., an Escondido-based real estate investment trust that leases retail space, reported net income of $43.5 million on revenues of $94.2 million for the first six months of the year, compared with net income of $43.9 million on revenues of $85.3 million for the same period of 2004.

In June, the company announced its 31st consecutive quarterly increase in the amount of its dividends since first being traded on the New York Stock Exchange in 1994.

The Realty Income portfolio consists of 1,582 properties located in 48 states.

Traded under the ticker O, shares closed at $22.80 on Aug. 8 and ranged from $20.05 to $26.08 in the last 52 weeks.

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Buying Paradise:

Carlsbad-based Phoenix Footwear acquired the Paradise Shoe Co., the exclusive licensee of Tommy Bahama footwear, from Atlanta-based Oxford Industries Inc. for an undisclosed sum.

In other news, Phoenix Footwear reported a net loss of $1 million on revenues of $15.4 million for its second quarter ended July 2, compared with a net profit of $643,000 on revenues of $13.9 million for the same period of 2004.

The company blamed the loss on softness with two of its product lines and a poor sandal-selling season, but said it anticipated returning to profitability in the current quarter and for the full year.

Traded on the American Stock Exchange under PXG, shares closed at $6.35 on Aug. 8 and have ranged from $5.10 to $11.25 in the last 52 weeks.

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Second Bid:

Callaway Golf Co. received a second unsolicited bid on the Carlsbad-based maker of drivers and other equipment this month. The latest offer comes from private equity firm Bain Capital and another golf company, MacGregor Golf, and represents an increase over an earlier bid from another private group.

While Callaway declined to confirm the names of the parties that have expressed interest in the company, it did hire investment-banking firm Lazard Ltd. to help it determine its fair market value.

A Los Angeles Times story stated Bain and MacGregor offered an all-cash bid of $16.25 per share that totaled $1.24 billion for Callaway, above the $1.2 billion cash offer made by Thomas H. Lee Partners and insurance executive William Foley in June.

“I don’t think anyone is that surprised there’s more than one company that is interested in buying Callaway Golf, but it remains to be seen how high they are willing to pay for it,” said Terry McAndrew, the publisher of Web Street Golf Report, a Phoenix-based trade newsletter.

In other news, Callaway named George Fellows as its new chief executive officer, replacing William Baker, who had held the position for close to a year after the ouster of former CEO Ron Drapeau.

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Radio Days:

Remec Inc., the Del Mar-based defense contractor that is liquidating itself, agreed to sell its outdoor radio business to a group of existing management headed by Dave Newman, vice president, and Domingo Bonifacio, the general manager of the unit’s Philippines manufacturing division. The agreed-upon price was $15 million in cash, with closing costs and taxes expected between $3 million and $4 million.

Remec’s outdoor unit and trans-receiver business has about 50 employees in Poway and some 300 in the Philippines, and annual revenues of about $20 million.

In recent months, Remec completed the sale of three other business lines: a defense unit to Chelton Microwave Corp., a division of Chelton LLC of Great Britain; its wireless unit to Powerwave Technologies of Irvine; and an electronic contract services unit to that unit’s management team.

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Big Loss:

Overland Storage Inc., a San Diego-based maker of data tape storage systems, reported that Hewlett-Packard Co., its biggest customer, would not be buying its next-generation product.

Overland said its current three-year contract with HP expires in July 2006, and that the impact on the fiscal year ended June 30, 2006, will be minimal.

HP sales accounted for 53 percent of Overland’s total during the third quarter of this year, a company spokeswoman said.

For the nine months ended June 30, Overland reported net income of $5.9 million on $180 million in sales, compared with net income of $8.6 million on $183 million in sales during the like period in the prior fiscal year.

In other news, Overland said it acquired Zetta Systems, Inc., a privately held developer of data protection software, for $9 million in cash.

Traded under OVRL on Nasdaq, shares dropped 20 percent the day the HP news was released. As of Aug. 8, it was at $7.84, and during the last 52 weeks has ranged between $7.47 and $17.34.

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Less Loss:

Applied Micro Circuits Corp., a San Diego-based maker of high-speed chips used in telecom networks, reported a net loss of $4.2 million on revenues of $64.7 million for its first quarter ended June 30. That compared with a net loss of $21.8 million on revenues of $67.4 million for the like period of 2004.

In what seems to be a recurring theme, AMCC announced yet another round of job cuts, this time reducing its total staff of about 750 by 5 percent or about 35 people.

The company said the cuts would reduce ongoing operating expenses by about $1 million per quarter beginning in the third quarter of this fiscal year.

The news pushed down AMCC shares by 28 cents on the day following the results to $2.87. By Aug. 8, shares dropped an additional 8 cents. The 52-week range was between $2.50 and $4.37.

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Ticker Takes:

PriceSmart Inc. sold its ownership interest in its Philippine subsidiary with its four warehouse club stores, and resolved outstanding litigation with E-Class Corp. and William Go, a minority shareholder of PriceSmart Philippines who sued PriceSmart in the Philippine courts. As part of the agreement, E-Class assumes $9.5 million in the subsidiary’s debt.

American Mortgage Network funded $1.5 billion in mortgage loans in July, compared with $623 million in funded mortgages for the same month in 2004.


Send any news of public companies to Mike Allen at mallen@sdbj.com. He can be reached at (858) 277-6359.

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