Aeroflex Incorporated Reports Fourth Quarter and Fiscal 2002 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. 12, 2002 Sales Increased 31% Sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to $66.3 Million Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Net Income of $2.9 Million or $ .05 Per Share Aeroflex Incorporated (Nasdaq Symbol: ARXX), a leading designer, developer and manufacturer of microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. and automated testing (testing) automated testing - Software testing assisted with software tools that require no operator input, analysis, or evaluation. solutions for the 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 market, today announced operating results for its fourth quarter and fiscal year ended June June: see month. 30, 2002. 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, 2002 were $66,327,000 compared with $59,207,000 for the same period of last year and $50,617,000 in the third quarter ended March 31, 2002. On a pro forma basis, the Company reported net income for the fourth quarter ended June 30, 2002 of $2,907,000, 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, versus net income of $4,174,000, or $.07 per diluted share, in 2001. Pro forma net income for the fourth quarter of 2002 excludes previously announced 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. of $15,026,000 ($11,576,000, net of tax), or $.19 per share, and excludes an in-process research and development write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. related to the acquisition of IFR IFR abbr. instrument flight rules Systems, Inc. of $1,100,000 ($1,100,000, net of tax), or $.02 per share. On a U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the Company reported a net loss for the current period of $9,769,000, or $.16 per share. Net sales for the year ended June 30, 2002 were $202,634,000 compared with $232,808,000 last year. On a pro forma basis, the Company reported net income for the year ended June 30, 2002 of $5,245,000, or $.08 per diluted share, versus pro forma net income of $23,344,000, or $.38 per diluted share, in 2001. Pro forma net income for fiscal 2002 excludes previously announced restructuring charges of $20,076,000 ($14,926,000, net of tax), or $.25 per share, and excludes an in-process research and development write-off related to the acquisition of IFR Systems, Inc. of $1,100,000 ($1,100,000, net of tax), or $.02 per share. For fiscal 2001, pro forma net income excludes an in-process research and development write-off of $2,500,000 ($1,990,000, net of tax), or $.03 per diluted share. On a U.S. GAAP basis, the Company reported a net loss for the current year of $10,781,000, or $.18 per share, versus net income of $21,354,000, or $.35 per diluted share, in 2001. "Net sales for the fourth quarter, which includes sales of IFR from its May 20, 2002 acquisition date, increased approximately 31% sequentially as compared to the third quarter and 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 share increased to $.05 from $.03 in the third quarter," 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. "IFR is the largest purchase in our Company's history and we expect it to contribute substantially to our sales and earnings in the future. "Also during the fourth quarter, we announced plans to consolidate certain of our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. to take advantage of excess manufacturing capacity and reduce operating costs operating costs npl → gastos mpl operacionales . We expect the last of these consolidations to be completed by March 2003. We also recorded charges to eliminate excess equipment capacity and for impairments to goodwill and other intangibles related to two of our fiber optic subsidiaries. "While the continuing worldwide weakness in the broadband and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. markets will impact our operating results in fiscal 2003, we believe our broad diversity of product lines will enable us to achieve continuing growth in sales, profitability and positive cash flow." Fiscal First Quarter 2003 Business Outlook Our estimate of operating results for the September September: see month. 2002 quarter is as follows: -- Sales are expected to be slightly higher than the fourth quarter of 2002. -- Gross profit margins are expected to be in the range of 35% to 36% of sales. -- Operating expenses are expected to be approximately 33% to 34% of sales. -- Using an income tax rate of 34% and a share count of 62 million shares, we anticipate earnings per diluted share of $.01. With the anticipated completion of our plant consolidations, the integration of IFR and the introduction of several new products, we expect substantial improvement in our operating results in the second half of fiscal 2003. 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 13, 2002 and can be accessed by dialing 1-877-531-2988 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 651-291-0344 outside of the United States. There will be a replay of the conference call starting at 12:30 p.m. (New York Time) on August 13, 2002 and ending at 11:59 p.m. (New York Time) on August 20, 2002. The replay can be accessed by dialing 1-800-475-6701 within the United States and by dialing 320-365-3844 outside of the United States. The access code for both telephone numbers is 645253. About Aeroflex Aeroflex Incorporated, through its subsidiaries, designs, develops and manufactures state-of-the-art microelectronic The miniaturization of electronic circuits. See chip. module, integrated circuit integrated circuit (IC), electronic circuit built on a semiconductor substrate, usually one of single-crystal silicon. The circuit, often called a chip, is packaged in a hermetically sealed case or a nonhermetic plastic capsule, with leads extending from it for , interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. and testing solutions used in broadband communication applications. 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 r egarding 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 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, 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, the integration of IFR Systems with Aeroflex, the implementation of the facilities consolidations, 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 INCORPORATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data and footnotes)
For the Quarter Ended (Unaudited)
6/30/02(a) 6/30/02(a) 6/30/01
---------- ---------- -------
Actual Pro forma Actual
Net Sales $ 66,327 $ 66,327 $ 59,207
Cost of Sales (including
a $150 restructuring
charge in 2002 Actual) 41,210 41,060 35,479
--------- -------- ---------
Gross Profit 25,117 25,267 23,728
Selling, General and
Administrative Costs
(including a $14,876
restructuring charge
in 2002 Actual)(d) 27,621 12,745 12,134
Research and Development Costs 8,323 8,323 5,808
Acquired In-Process R&D 1,100 - -
--------- --------- ---------
Operating Income (Loss) (11,927) 4,199 5,786
Interest and Other Income
(Expense), net (317) (317) 538
--------- --------- ---------
Income (Loss) Before
Income Taxes (12,244) 3,882 6,324
Provision (Benefit)
for Income Taxes (2,475) 975 2,150
--------- --------- ---------
Net Income (Loss) $ (9,769) $ 2,907 $ 4,174
========= ========= =========
Net Income (Loss) Per Share (e):
Basic $(.16) $ .05 $ .07
====== ====== ======
Diluted $(.16) $ .05 $ .07
====== ====== ======
Weighted Average Number of Shares
Outstanding - Basic 60,115 60,115 59,742
======= ======== =======
- Diluted 60,115 62,072 61,404
======= ======== =======
For the Year Ended
------------------
6/30/02(b)6/30/02(b)6/30/01(c)6/30/01(c)
Actual Pro forma Actual Pro forma
(Unaudited) (Unaudited)
Net Sales $202,634 $202,634 $232,808 $232,808
Cost of Sales (including
a $900 restructuring
charge in 2002 Actual) 129,457 128,557 136,659 136,659
--------- -------- -------- --------
Gross Profit 73,177 74,077 96,149 96,149
Selling, General and
Administrative
Costs (including a $19,176
restructuring charge in
2002 Actual)(d) 62,327 43,151 44,277 44,277
Research and
Development Costs 23,693 23,693 18,909 18,909
Acquired In-Process R&D 1,100 - 2,500 -
--------- -------- -------- --------
Operating Income (Loss) (13,943) 7,233 30,463 32,963
Interest and Other Income
(Expense), net 212 212 2,209 2,209
--------- -------- -------- --------
Income (Loss) Before
Income Taxes (13,731) 7,445 32,672 35,172
Provision (Benefit)
for Income Taxes (2,950) 2,200 11,450 11,960
--------- -------- -------- --------
Income (Loss) Before
Cumulative Effect of
a Change in Accounting (10,781) 5,245 21,222 23,212
Cumulative Effect of
a Change in
Accounting, net of tax - - 132 132
--------- -------- -------- --------
Net Income (Loss) $(10,781) $ 5,245 $ 21,354 $ 23,344
========= ======== ======== ========
Net Income (Loss)
Per Share (e)
Basic
Income (Loss) Before
Cumulative Effect $(.18) $ .09 $ .37 $ .40
Cumulative Effect
of a Change
in Accounting - - - -
----- ------ ------ --------
Net Income (Loss) $(.18) $ .09 $ .37 $ .40
====== ====== ====== ======
Diluted
Income (Loss) Before
Cumulative Effect $(.18) $ .08 $ .35 $ .38
Cumulative Effect
of a Change in
Accounting - - - -
------ ------ ------ ------
Net Income (Loss) $(.18) $ .08 $ .35 $ .38
====== ====== ====== ======
Weighted Average
Number of Shares
Outstanding - Basic 59,973 59,973 58,124 58,124
======= ======= ======= ========
- Diluted 59,973 62,012 61,041 61,041
======= ======= ======= ========
(a) Actual results include, and pro forma results exclude, restructuring charges of $15,026,000 ($11,576,000, net of tax), $0.19 per share. Of the $15,026,000, $150,000 was charged to cost of sales and $14,876,000 was charged to selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . The $15,026,000 includes goodwill and other intangible impairments of $10,666,000, plant shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down costs, including the elimination of excess plant and equipment capacity and lease buyouts of $2,312,000, personnel charges, including severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , of $1,898,000, and an inventory charge of $150,000. Also included in actual results and excluded from the pro forma results was a non-recurring charge of $1,100,000 ($1,100,000, net of tax), $.02 per share, for in-process research and development costs related to the Company's acquisition of IFR Systems, Inc. in May 2002. (b) Actual results include, and pro forma results exclude, restructuring charges of $20,076,000 ($14,926,000, net of tax), $0.25 per share. Of the $20,076,000, $900,000 was charged to cost of sales and $19,176,000 was charged to selling, general and administrative costs. The $20,076,000 includes goodwill and other intangible impairments of $10,666,000, plant shutdown costs, including the elimination of excess plant and equipment capacity and lease buyouts of $6,052,000, personnel charges, including severance, of $2,458,000 and an inventory charge of $900,000. Also included in actual results and excluded from the pro forma results was a non-recurring charge of $1,100,000 ($1,100,000, net of tax), $.02 per share, for in-process research and development costs related to the Company's acquisition of IFR Systems, Inc. in May 2002. (c) Actual results include, and pro forma results exclude, non-recurring charges of $1.0 million ($1.0 million, net of tax) and $1.5 million ($990,000, net of tax), combined $0.03 per diluted share, for in-process research and development costs related to the Company's acquisition of TriLink Communications Corp. in March 2001 and RDL RDL - Requirements and Development Language. ["RDL: A Language for Software Development", H.C. Heacox, SIGPLAN Notices 14(9):71-79 (Sep 1979)]. , Inc. in October October: see month. 2000, respectively. (d) Selling, general and administrative costs for the fourth quarter and fiscal year ended June 30, 2001 include amortization of goodwill of $490,000 and $1,157,000, respectively. No such amortization expense was recognized in the comparable periods of fiscal 2002, due to the Company's adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," effective July July: see month. 1, 2001. (e) Basic and diluted per share amounts for 2002 actual results are based on the same number of weighted average shares outstanding due to the actual reported loss for the fourth quarter and fiscal year ended June 30, 2002.
BALANCE SHEET DATA
(In thousands)
June 30, June 30,
2002 2001
Working Capital $144,896 $152,374
Total Assets 318,465 310,252
Total Debt 14,809 13,333
Stockholders' Equity 249,482 255,121
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