Axsys Technologies, Inc. Announces Fourth Quarter and Full Year 1998 Results.ENGLEWOOD Englewood (ĕng`gəlw  d).1 City (1990 pop. 29,387), Arapahoe co., N central Colo., on the South Platte River, a residential and industrial suburb of Denver; inc. 1903. CLIFFS, N.J.--(BUSINESS WIRE)--Feb. 10, 1999--Axsys Technologies, Inc. (Nasdaq: AXYS), a leading maker of micro-positioning and precision optical products, today announced sales of $26,659,000 for the quarter ended December December: see month. 31, 1998, compared with 1997 fourth quarter sales of $31,716,000. Sales of the company's Precision Systems Group were $17,553,000, compared with $20,217,000 in 1997, while sales of its Industrial Components Group were $9,106,000, compared with $11,499,000 in 1997. The decrease in fourth quarter sales was due primarily to the continued softness in the Electronics Capital Equipment market and the manufacturing sector in general, the winding down of production on two major satellite programs, and the timing of several Defense orders received too late in the period to ship. Income 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 was $2,099,000 for the fourth quarter of 1998, or $0.51 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, compared with $1,694,000 for the fourth quarter of 1997, or $0.42 per diluted share. Excluding the effect of a tax valuation allowance reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its , as discussed below, income from continuing operations for the fourth quarter of 1998 would have been $1,237,000 or $0.30 per diluted share. Income from continuing operations in 1997 is before an extraordinary charge in connection with the prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of $109,000, net of taxes. 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 year ended December 31, 1998 were $116,581,000, compared with 1997 sales of $117,294,000. Sales of the company's Precision Systems Group were $73,462,000, compared with $72,367,000 in 1997, and sales of its Industrial Components Group were $43,119,000, compared with $44,927,000 in 1997. The increase in the Precision Systems Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. was due primarily to a business acquisition made during 1997. Axsys reported 1998 income from continuing operations, before extraordinary items, of $8,525,000 or $2.02 per diluted share, compared to $5,562,000 or $1.55 per diluted share in 1997. Excluding the effect of the tax valuation allowance reversal, as discussed below, net income from continuing operations would have been $5,672,000, or $1.35 per diluted share. Fully diluted weighted average common shares outstanding were 4,211,702 in 1998, compared to 3,513,302 in 1997. Axsys Technologies' Chairman Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and Bershad Bershad (Ukrainian: Бершадь, translit., Bershad’), is a small city in the Vinnytsia Oblast (province) of western Ukraine. It is the administrative center of the Bershadsky Raion (district). said, "After a strong first half in 1998, industry wide softness in the Electronics Capital Equipment market and the manufacturing sector in general, as well as the reduction of revenue on major satellite programs impacted our sales and earnings during the third and fourth quarters. While we expect this trend to continue into the first quarter of 1999, we do see some signs of improvement. For example, our fourth quarter 1998 book to bill ratio was 1.06 as compared to 0.95 for the nine month period ended September September: see month. 30, 1998. In addition, we are receiving positive feedback from our business units on bid activity and new product development. All of these factors should help sales later in 1999. While sales and earnings per share for the first quarter of 1999 are projected to be substantially lower than 1998's strong first quarter, we expect the full 1999 year to show improved results over 1998." Based upon the level of its current taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. , Axsys has determined that it can recognize the benefit of its deferred tax assets that previously had been fully reserved with a valuation allowance. Consequently, beginning in the 1998 second quarter, the company reversed its tax valuation allowance to the extent it would have recorded a tax provision on income before taxes during the period. As a result, Axsys reduced its fourth quarter and year ended December 31, 1998 continuing operations tax provision by $862,000 and $2,853,000, respectively. During the third quarter, Axsys announced the sale of its Sensor Systems division ("SSD See solid state disk. "). The sale of SSD has been accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. and, accordingly, the operating results of SSD have been reported separately from continuing operations in all years presented. For the year ended December 31, 1998, Axsys reported a loss on the sale of SSD of $2,489,000, net of taxes. In 1997, Axsys reported an after tax-charge of $244,000 to increase its reserve for the environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a of a previously discontinued operation site. In total, Axsys reported a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the years ended December 31, 1998 and 1997 of $0.57 and $0.09 per diluted share, respectively. Net income for the fourth quarter and year ended December 31, 1998, was $0.51 and $1.45 per diluted share, respectively, compared to $0.39 and $1.43 per diluted share, respectively, in 1997. Axsys Technologies, Inc. supplies micro-positioning and precision optical products for a variety of markets, including defense, space, digital imaging and electronics capital equipment. The company also produces 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. devices and distributes precision ball bearings ball bearings n → roulement m à billes for industrial, commercial and consumer applications. More information is available at www.axsys.com. This news release contains certain 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. . The company's business is subject to a variety of risks and uncertainties. As a result, actual future results and developments may be materially different from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in any forward-looking statement. Disclosure regarding factors affecting the company's future results and developments is contained in the company's public filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 1997. -0-
AXSYS TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Unaudited - dollars in thousands, except per share data)
Quarter Ended Dec. 31, Year Ended Dec. 31,
--------------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
NET SALES $26,659 $31,716 $116,581 $117,294
------------------------------------------
Cost of sales 18,288 21,714 81,238 81,196
Selling, general and
administrative expenses 5,029 5,659 20,666 20,621
Research and development 933 922 3,641 3,173
Amortization of
intangible assets 105 105 428 322
------------------------------------------
OPERATING INCOME 2,304 3,316 10,608 11,982
Interest expense 171 467 932 2,633
Other expense 34 1 88 25
------------------------------------------
INCOME FROM CONTINUING OPERATIONS
BEFORE TAXES AND
EXTRAORDINARY ITEM 2,099 2,848 9,588 9,324
Provision for
income taxes -- 1,154 1,063 3,762
------------------------------------------
------------------------------------------
INCOME FROM CONTINUING
OPERATIONS BEFORE
EXTRAORDINARY ITEM 2,099 1,694 8,525 5,562
DISCONTINUED OPERATIONS:
Income /(loss)
from operations,
net of taxes -- (23) 63 (75)
Gain/(loss)
on disposal,
net of taxes 19 -- (2,489) (244)
------------------------------------------
INCOME BEFORE
EXTRAORDINARY ITEM 2,118 1,671 6,099 5,243
Extraordinary loss on early
extinguishment of debt,
net of taxes -- (109) -- (109)
------------------------------------------
NET INCOME 2,118 1,562 6,099 5,134
Preferred stock
dividends -- -- -- 102
------------------------------------------
NET INCOME APPLICABLE TO
COMMON SHAREHOLDERS $ 2,118 $ 1,562 $ 6,099 $ 5,032
==========================================
BASIC EARNINGS/(LOSS) PER SHARE:
Continuing operations $ 0.51 $ 0.43 $ 2.04 $ 1.66
Discontinued operations 0.01 (0.01) (0.58) (0.10)
Extraordinary charge -- (0.03) -- (0.03)
------------------------------------------
TOTAL $ 0.52 $ 0.39 $ 1.46 $ 1.53
==========================================
Weighted average common
shares outstanding 4,104,344 3,952,652 4,182,676 3,281,092
==========================================
DILUTED EARNINGS/(LOSS)
PER SHARE:
Continuing operations $ 0.51 $ 0.42 $ 2.02 $ 1.55
Discontinued operations -- -- (0.57) (0.09)
Extraordinary charge -- (0.03) -- (0.03)
==========================================
TOTAL $ 0.51 $ 0.39 $ 1.45 $ 1.43
==========================================
Weighted average
common shares outstanding 4,116,971 4,051,320 4,211,702 3,513,302
==========================================
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Unaudited - dollars in thousands)
December 31, December 31,
1998 1997
------------- -------------
ASSETS
CURRENT ASSETS:
Cash $ 69 $ 573
Accounts receivable - net 16,877 17,603
Inventories - net 26,841 26,003
Other current assets 3,532 977
------------- -------------
TOTAL CURRENT ASSETS 47,319 45,156
PROPERTY, PLANT
AND EQUIPMENT - net 15,080 13,377
EXCESS OF COST OVER
NET ASSETS ACQUIRED - net 12,216 12,729
NET ASSETS OF
DISCONTINUED OPERATIONS 750 7,002
OTHER ASSETS 1,353 430
------------- -------------
TOTAL ASSETS $ 76,718 $ 78,694
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,535 $ 9,437
Accrued expenses
and other liabilities 8,889 9,868
Current portion of long-term debt
and capital lease obligations 1,179 904
------------- -------------
TOTAL CURRENT LIABILITIES 16,603 20,209
LONG-TERM DEBT & CAPITAL LEASES,
less current portion 5,612 8,629
OTHER LONG-TERM LIABILITIES 2,252 2,284
DEFERRED INCOME 123 255
SHAREHOLDERS' EQUITY:
$1.20 CUMULATIVE EXCHANGEABLE REDEEMABLE
PREFERRED STOCK, $.01 PAR VALUE:
authorized 4,000,000 shares, none
issued and outstanding at
December 31, 1998
and December 31, 1997 -- --
COMMON STOCK, $.01 PAR VALUE:
authorized 30,000,000
shares, issued 4,122,767 shares
at December 31, 1998 and
4,113,190 shares at
December 31, 1997 41 41
CAPITAL IN EXCESS OF PAR 40,761 40,409
RETAINED EARNINGS 12,966 6,867
TREASURY STOCK, at cost,
117,750 shares at December 31, 1998
and none at December 31, 1997 (1,640) --
------------- --------------
TOTAL SHAREHOLDERS' EQUITY 52,128 47,317
------------- --------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 76,718 $ 78,694
============= ==============
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