Axsys Technologies Announces 106% Increase in Fourth Quarter Operating Income and Establishes 2005 Guidance.ROCKY HILL Rocky Hill, town (1990 pop. 16,554), Hartford co., central Conn., a suburb of Hartford, on the Connecticut River; settled c.1650, inc. 1843. Chemical coatings and synthetic textiles are made there. Rocky Hill was an important river port from 1700 to 1820. , Conn. -- Axsys Technologies, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AXYS), a global leader in the design, manufacture and distribution of precision optical solutions, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004. Fourth Quarter Highlights - versus fiscal 2003 fourth quarter: --Sales rose 28% to $28.0 million. --Gross margin increased to 28.9% from 27.1%. --Operating income was up 106% to $3.0 million; operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: rose to 10.9% from 6.8%. --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 grew to $3.6 million, or $0.49 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, from $1.5 million or $0.20 per diluted share. --A $620,000 income tax benefit was recognized in continuing operations in the quarter compared to income tax expense of $69,000 in the same quarter of 2003, largely due to the $1.4 million reversal of a previously recorded tax valuation allowance. --Total backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of firm orders at the close of 2004 was $88.2 million, up from $68.9 million at the end of 2003. Growth in the quarter included the results of the Company's most recent acquisition, Axsys Technologies IR Systems, formerly Telic telic (tel´ik), adj (teleologic), assigning purpose to functions as if they were provided by a creative planner. Optics optics, scientific study of light. Physical optics is concerned with the genesis, nature, and properties of light; physiological optics with the part light plays in vision; and geometrical optics with the reflection and refraction of light as encountered in the study , Inc. Excluding this acquisition, revenues increased 18% in the fourth quarter. A net 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. of $495,000, or $.06 per diluted share, was recognized during the quarter largely related to the 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. of the remaining real estate lease obligations of the Company's divested automation businesses. Segment Sales Axsys has modified its segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four by combining what were previously referred to as the 'Aerospace and Defense' and 'Commercial Products' groups into a new segment, 'Optical Systems.' This change reflects the increasing collaboration Working together on a project. See collaborative software. among the Company's facilities in the development of products that serve both the aerospace and commercial markets.
(In millions):
Three Months Twelve Months
Ended: Ended:
----------------- -----------------
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
-------- -------- -------- --------
Optical Systems Group $21.8 $15.8 $78.2 $63.2
Distributed Products Group 6.2 6.0 25.3 21.9
"The Axsys team has delivered another great quarter for our shareholders," said Stephen W. Bershad, Chairman and Chief Executive Officer of Axsys. "This performance is a direct result of our customers' growing reliance on Axsys to solve their most demanding optical and motion control challenges. Axsys has established a strong track record of revenue and earnings growth, and our large backlog positions us to continue this trend in the coming year." Fiscal 2004 Results and Fiscal 2005 Guidance For the fiscal year 2004, Axsys achieved sales of $103.5 million 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. of $9.3 million. These results represent a 22% increase in sales and 86% growth in operating income over 2003 results. In fiscal 2005, Axsys anticipates annual revenues of approximately $114.0 million and annual operating income of approximately $11.0 million. "Increasing demand for applications that require precision optical systems such as infrared An invisible band of radiation at the lower end of the visible light spectrum. With wavelengths from 750 nm to 1 mm, infrared starts at the end of the microwave spectrum and ends at the beginning of visible light. imaging, surveillance and smart munitions mu·ni·tion n. War materiel, especially weapons and ammunition. Often used in the plural. tr.v. mu·ni·tioned, mu·ni·tion·ing, mu·ni·tions To supply with munitions. , in conjunction with our proven ability to deliver quality solutions to our marquee customers, gives us confidence with regard to the coming fiscal year," continued Mr. Bershad. "We fully intend to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our unique technical capabilities and our growing presence in the markets we serve to deliver strong financial results in 2005." Conference Call Management will conduct a conference call reviewing the financial results on Thursday, February 10, 2005 at 10:00 am ET. Interested parties may participate in the call by dialing 706-679-3148 - please call in 10 minutes before the call is scheduled to begin and ask for the Axsys Technologies call. The conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via the Investors section of the Company's web site at www.axsys.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company's web site. About Axsys Axsys Technologies, Inc. is a vertically integrated OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and supplier of precision optical solutions for high technology applications, serving the aerospace, defense and high performance commercial markets. For more information, visit www.axsys.com. This press release contains 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. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . One can identify these forward-looking statements by the use of the words such as "expect," "anticipate," "plan," "may," "will," "estimate" or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, are described in Axsys' reports 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. and 10-Q on file with the Securities and Exchange Commission, including without limitation: the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers, a reversal or slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of the modest economic recovery presently being experienced 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. , Axsys' inability to achieve synergies in connection with any acquisition, the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of unexpected costs in connection with the acquisition and other contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. and risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the integration of Telic's operations and business. These statements reflect the Company's current beliefs and are based upon information currently available to Axsys. Be advised that developments subsequent to this release are likely to cause these statements to become outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. with the passage of time, and we specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to update these statements. For more information concerning the foregoing risks and uncertainties, see the Securities and Exchange Commission filings for Axsys.
AXSYS TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Unaudited, in thousands)
For the Three For the Twelve
Months Ended Months Ended
----------------- ------------------
December 31, December 31,
----------------- ------------------
2004 2003 2004 2003
-------- -------- --------- --------
Sales $28,039 $21,840 $103,530 $85,109
Cost of sales 19,934 15,914 72,874 62,036
-------- -------- --------- --------
Gross profit 8,105 5,926 30,656 23,073
Selling, general and
administrative expenses 4,363 4,018 18,684 15,986
Research, development and
engineering expenses 693 431 2,677 2,059
Reversal of restructuring accrual -- -- (50) --
-------- -------- --------- --------
Operating income 3,049 1,477 9,345 5,028
Interest (expense) income, net (16) 3 (156) (57)
Other (expense) income, net (9) 52 (38) 263
-------- -------- --------- --------
Income from continuing operations
before income taxes 3,024 1,532 9,151 5,234
(Benefit from) provision for
income taxes (620) 69 (8) 236
-------- -------- --------- --------
Income from continuing operations $3,644 $1,463 $9,159 $4,998
Loss from discontinued operations (495) -- (495) --
-------- -------- --------- --------
Net income $3,149 $1,463 $8,664 $4,998
======== ======== ========= ========
BASIC INCOME PER SHARE (1):
Income from continuing operations $0.52 $0.21 $1.30 $0.72
Loss from discontinued operations (0.07) -- (0.07) --
-------- -------- --------- --------
Total $0.45 $0.21 $1.23 $0.72
-------- -------- --------- --------
Weighted-average basic common
shares outstanding 7,053 6,990 7,020 6,986
DILUTED INCOME PER SHARE (1):
Income from continuing operations $0.49 $0.20 $1.26 $0.71
Loss from discontinued operations (0.06) -- (0.07) --
-------- -------- --------- --------
Total $0.43 $0.20 $1.19 $0.71
-------- -------- --------- --------
Weighted-average dilutive common
shares outstanding 7,408 7,155 7,289 7,074
(1) Earnings per share and shares outstanding for the three months and
twelve months ended December 31, 2003 have been restated to
reflect the 3:2 stock split on June 30, 2004.
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Unaudited, in thousands)
December December
31, 31,
2004 2003
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $6,000 $5,197
Short-term investments -- 6,983
Accounts receivable - net 15,715 10,197
Inventories - net 29,698 24,786
Income taxes - deferred and current 3,553 2,203
Other current assets 1,020 1,223
-------- --------
TOTAL CURRENT ASSETS 55,986 50,589
PROPERTY, PLANT AND EQUIPMENT - net 13,337 11,315
INTANGIBLE ASSET - net 2,127 --
EXCESS OF COST OVER NET ASSETS ACQUIRED 13,013 3,600
OTHER ASSETS 1,352 1,341
-------- --------
TOTAL ASSETS $85,815 $66,845
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $6,459 $4,240
Accrued expenses and other liabilities 9,513 8,170
Deferred income 7,195 4,546
Current portion of capital lease obligation 368 423
Current portion of long-term debt 1,000 --
-------- --------
TOTAL CURRENT LIABILITIES 24,535 17,379
CAPITAL LEASES, less current portion 150 568
LONG-TERM DEBT, less current portion 3,333 --
OTHER LONG-TERM LIABILITIES 4,704 5,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 72 72
Capital in excess of par 39,612 39,375
Accumulated other comprehensive loss (97) (39)
Retained earnings 14,389 5,725
Treasury stock (883) (1,235)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 53,093 43,898
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $85,815 $66,845
======== ========
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