DPAC reports wider loss for 2006

HUDSON, Ohio — DPAC Technologies Corp., which makes device networking and connectivity solutions, reported a net loss of $1 million (all figures U.S. dollars) for the that ended Dec.31. That compared to a net loss of $114,000 for 2005.

Net sales for 2006 were $13.8 million, up 30 per cent from net sales of $10.5 million for 2005.

These results include the combined operations of DPAC Technologies Corp. and QuaTech, Inc., which combined on Feb. 28, 2006. As a result of the merger, QuaTech has become a wholly-owned subsidiary of DPAC. For accounting purposes, the transaction is considered a “reverse merger” under which QuaTech is considered the acquirer of DPAC. Accordingly, the purchase price was allocated among the fair values of the assets and liabilities of DPAC, while the historical results of QuaTech are reflected in the results of the combined company. The results of operations are those of QuaTech prior to the merger date, and consolidated QuaTech and DPAC after the merger.

DPAC Technologies provides embedded wireless networking products for machine-to-machine communication applications.

Among the highlights of the year listed was a new relationship with Ingram Micro Canada.

For the fourth quarter of 2006, net sales were $3.2 million, up four per cent from net sales of $3.1 million in the fourth quarter of 2005, and down 18 per cent from net sales of $3.9 million in the third quarter of 2006. The company reported an operating loss of $165,000 as compared to an operating loss of $59,000 for the fourth quarter of 2005 and an operating profit of $347,000 for the third quarter of 2006.

The company reported a net loss for the current year fourth quarter of $498,000 as compared to a net loss of $154,000 for the prior year’s fourth quarter, and a net profit of $39,000 for the third quarter of 2006.

“Our fourth quarter results continued our trend of year over year revenue growth, resulting in a 30 per cent growth rate for fiscal year 2006 with both the Device Connectivity and the Device Networking product lines contributing to that growth,” said CEO and president Steve Runkel.

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