Aeroflex Incorporated Reports Fourth Quarter Fiscal 2003 Operating Results.Business Editors PLAINVIEW Plainview. 1 Uninc. city (1990 pop. 26,207), Nassau co., SE N.Y., on Long Island. It is chiefly residential. 2 City (1990 pop. 21,700), seat of Hale co., NW Tex., on the Llano Estacado; inc. 1907. , N.Y.--(BUSINESS WIRE)--Aug. 13, 2003 Aeroflex Incorporated (Nasdaq Symbol: ARXX)
Sales Increased 19% from Prior Year to a Record $78.6 Million
Net Income of $3.1 Million or $.05 Per Share
Net of $.01 Per Share Charge Related to Loral Bankruptcy
Aeroflex Incorporated (Nasdaq Symbol: ARXX), a leading designer, developer and manufacturer of automated testing (testing) automated testing - Software testing assisted with software tools that require no operator input, analysis, or evaluation. solutions and microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. for the aerospace, defense and broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications markets, today announced operating results for its fourth quarter and year ended June June: see month. 30, 2003. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter ended June 30, 2003 were $78.6 million compared with $66.3 million for the same period of last year, representing an increase of 19%, and $74.9 million for the third quarter ended March 31, 2003, a sequential One after the other in some consecutive order such as by name or number. increase of 5%. The Company reported net income for the fourth quarter ended June 30, 2003 of $3.1 million, or $.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share which is net of a $1.1 million charge ($720,000, net of tax), or $.01 per diluted share, related to the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of Space Systems Loral Lo´ral n. 1. (Zool.) Of or pertaining to the lores. 2. Of or pertaining to lore . , versus a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $150,000, $.00 per share, in 2002 and income from continuing operations of $2.9 million, or $.05 per share, in the third quarter. The loss from continuing operations for the fourth quarter of 2002 included a $4.1 million charge ($2.9 million, net of tax) or $.04 per share, for restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. related to the consolidation of certain operations, and a $1.1 million charge ($1.1 million, net of tax), or $.02 per share, for in-process research and development related to the acquisition of IFR IFR abbr. instrument flight rules Systems, Inc. Net sales for the year ended June 30, 2003 were $291.8 million compared with $202.1 million for last year, which represents an increase of 44%. The Company reported income from continuing operations for the year ended June 30, 2003 of $8.5 million, or $.14 per diluted share, which is net of a $1.1 million charge ($720,000, net of tax), or $.01 per diluted share, related to the Loral bankruptcy, versus income from continuing operations of $324,000, $.01 per diluted share, in 2002. Last year's income from continuing operations included a $9.1 million charge ($5.8 million, net of tax), or $.09 per diluted share, for restructuring charges related to the consolidation of certain operations, and a $1.1 million charge ($1.1 million, net of tax), or $.02 per diluted share, for in-process research and development related to the acquisition of IFR Systems, Inc. "We are pleased to report yet another quarter of sequential sales growth and expanding gross margins despite continuing weakness in worldwide business conditions," said Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Gorin Gorin is an air base in Amur Oblast, Russia located 75 km northwest of Komsomolsk-na-Amure. It contains a 1 km long remote tarmac on the north side. A noteworthy major, but remote airfield. It may have been intended for dispersion of intermediate-range bombers during a Sino-Soviet conflict. , President. "In the fourth quarter, sales increased 5% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. expanded to 40% of sales and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was 6% of sales. Unfortunately, the unexpected bankruptcy filing of Space Systems Loral on July July: see month. 15, 2003 necessitated a $1.1 million charge ($.01 per diluted share) against receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventory which is reflected in our fourth quarter results. With our recent acquisition of the Racal Racal Electronics plc was a British defence electronics firm purchased by Thomson-CSF (now Thales Group) in 2000. History Racal was created in 1950 as Racal Ltd, the name being derived from the partners RAymond Brown and George CALder Cunningham. Instruments Wireless Solutions Group, the pending acquisition of MCE See Media Center Edition. Technologies, Inc., and signs of improving overall business conditions, we are excited about our prospects for fiscal 2004." First Quarter Fiscal 2004 Business Outlook Our estimate of operating results for the September September: see month. 2003 quarter, which includes the Racal Instruments Wireless Solutions Group from August 1, 2003, is as follows: -- Sales are expected to be about the same as the fourth quarter of fiscal 2003. -- Gross profit margins are expected to exceed 40%. -- S,G&A expenses are expected to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25% of sales. -- R&D expenses are expected to be approximately 13% of sales. -- Using an income tax rate of 34% and a share count of 61 million shares, we anticipate pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per diluted share of $.04. Pro forma earnings excludes amortization of acquired intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and a charge for acquired in-process research and development related to Racal. Our conference call discussing fourth quarter results is scheduled for 9:00 a.m. (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of time) on August 14, 2003 and can be accessed by dialing 1-888-396-2386 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and by dialing 617-847-8712 outside of the United States. The participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. passcode is 96457179. There will be a replay of the conference call starting at approximately 11:00 a.m. (New York time) on August 14, 2003 and ending at 11:59 p.m. (New York time) on August 21, 2003. The replay can be accessed by dialing 1-888-286-8010 within the United States and by dialing 617-801-6888 outside of the United States. The access code for both telephone numbers is 35290223. This call is being webcast by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed at Aeroflex's website at www.aeroflex.com. This webcast will be archived on that site for one year. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with this conference call, the Company has also posted on its website certain financial information on its fourth quarter results. About Aeroflex Aeroflex Incorporated is a global provider of high technology solutions to the aerospace, defense and broadband communications markets. The Company's diverse technologies allow it to design, develop, manufacture and market a broad range of test, measurement and microelectronic The miniaturization of electronic circuits. See chip. products. The Company's common stock trades on the Nasdaq National Market System under the symbol ARXX and is included in the S&P SmallCap 600 index. Additional information concerning Aeroflex Incorporated can be found on the Company's Web site: www.aeroflex.com. All statements other than statements of historical fact included in this press release regarding Aeroflex's financial position, business outlook, business strategy and plans and objectives of its management for future operations are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . When used in this press release, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to Aeroflex or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of Aeroflex's management, as well as assumptions made by and information currently available to its management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, competitive factors and pricing pressures, the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the MCE acquisition, the integration of the business of each of MCE Technologies and of the Racal Instruments Wireless Solutions Group with Aeroflex, changes in legal and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , technological change or difficulties, product development risks, commercialization difficulties and general economic conditions. Such statements reflect our current views with respect to the future and are subject to these and other risks, uncertainties and assumptions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Aeroflex's financial condition, results of operations, growth strategy and liquidity. Aeroflex does not undertake any obligation to update such forward-looking statements.
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In thousands, except per share data)
For the Quarter Ended
-----------------------
6/30/03 6/30/02
--------- ---------
(Unaudited)
Net sales $ 78,641 $ 66,255
Cost of sales (including a $150 restructuring
charge in 2002) 47,181 40,901
--------- ---------
Gross profit 31,460 25,354
Selling, general and administrative costs
(including a $3,929 restructuring charge in
2002) 18,456 16,145
Research and development costs 8,351 8,175
Acquired in-process R&D - 1,100
--------- ---------
Operating income (loss) 4,653 (66)
Interest and other expense (income), net 73 316
--------- ---------
Income (loss) before income taxes 4,580 (382)
Provision (benefit) for income taxes 1,530 (232)
--------- ---------
Income (loss) from continuing operations 3,050 (150)
--------- ---------
Discontinued operations
Loss from discontinued operations, net of tax - 9,620
Loss on abandonment of operations, net of tax - -
--------- ---------
Total loss from discontinued operations, net
of tax - 9,620
--------- ---------
Net income (loss) $ 3,050 $ (9,770)
========= =========
Income (loss) per common share:
Basic
Continuing operations $ .05 $ -
Discontinued operations - (.16)
--------- ---------
Net income (loss) $ .05 $ (.16)
========= =========
Diluted
Continuing operations $ . 05 $ -
Discontinued operations - (.16)
--------- ---------
Net income (loss) $ .05 $ (.16)
========= =========
Weighted Average Number of Shares Outstanding
- Basic 60,233 60,115
========= =========
- Diluted 60,795 60,115
========= =========
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(In thousands, except per share data)
For the Year Ended
------------------------
6/30/03 6/30/02
---------- ----------
Net sales $ 291,780 $ 202,129
Cost of sales (including a $900 restructuring
charge in 2002) 178,524 128,352
---------- ----------
Gross profit 113,256 73,777
Selling, general and administrative costs
(including a $8,229 restructuring charge in
2002) 68,459 49,375
Research and development costs 31,102 23,140
Acquired in-process R&D - 1,100
---------- ----------
Operating income 13,695 162
Interest and other expense (income), net 812 (212)
---------- ----------
Income before income taxes 12,883 374
Provision for income taxes 4,350 50
---------- ----------
Income from continuing operations 8,533 324
---------- ----------
Discontinued operations
Loss from discontinued operations, net of tax 404 11,105
Loss on abandonment of operations, net of tax 1,734 -
---------- ----------
Total loss from discontinued operations, net
of tax 2,138 11,105
---------- ----------
Net income (loss) $ 6,395 $ (10,781)
========== ==========
Income (loss) per share:
Basic
Continuing operations $ .14 $ .01
Discontinued operations (.03) (.19)
---------- ----------
Net income (loss) $ .11 $ (.18)
========== ==========
Diluted
Continuing operations $ .14 $ .01
Discontinued operations (.03) (.18)
---------- ----------
Net income (loss) $ .11 $ (.17)
========== ==========
Weighted average number of shares outstanding
- Basic 60,193 59,973
========== ==========
- Diluted 60,753 62,012
========== ==========
AEROFLEX INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2003 2002
---------- ----------
ASSETS
------
Current assets:
Cash and cash equivalents $ 51,307 $ 38,559
Accounts receivable, less allowance for
doubtful accounts 65,243 63,384
Income taxes receivable - 4,432
Inventories 74,738 72,040
Deferred income taxes 14,394 12,259
Assets of discontinued operations - 167
Prepaid expenses and other current assets 5,556 3,360
---------- ----------
Total current assets 211,238 194,201
Property, plant and equipment, net 69,080 73,473
Intangible assets with definite lives, net 15,111 17,815
Goodwill 22,449 20,179
Deferred income taxes 1,002 2,477
Assets of discontinued operations - 1,200
Other assets 11,736 9,120
---------- ----------
Total assets $ 330,616 $ 318,465
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,879 $ 2,171
Accounts payable 19,694 18,356
Advance payments by customers 2,826 1,775
Income taxes payable 1,802 -
Liabilities of discontinued operations 973 366
Accrued expenses and other current liabilities 22,508 26,637
---------- ----------
Total current liabilities 49,682 49,305
Long-term debt 10,956 12,638
Other long-term liabilities 11,563 7,040
---------- ----------
Total liabilities 72,201 68,983
---------- ----------
Stockholders' equity:
Preferred Stock, par value $.10 per share;
authorized 1,000,000 shares:
Series A Junior Participating Preferred
Stock, par value $.10 per share, authorized
110,000; none issued - -
Common Stock, par value $.10 per share;
authorized 110,000,000 shares; issued
60,122,000 and 60,006,000 shares 6,012 6,001
Additional paid-in capital 222,943 222,351
Accumulated other comprehensive income 3,816 1,881
Retained earnings 25,658 19,263
---------- ----------
258,429 249,496
Less: Treasury stock, at cost (4,000 shares) 14 14
---------- ----------
Total stockholders' equity 258,415 249,482
---------- ----------
Total liabilities and stockholders' equity $ 330,616 $ 318,465
========== ==========
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