Axsys Technologies Announces 45% Increase in First Quarter Operating Income; Annual Guidance Reaffirmed.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 first quarter ended April 1, 2006 and reaffirmed its previously announced annual guidance. First Quarter Financial Highlights - versus fiscal 2005 first quarter: --Sales increased 31% to $37.5 million. --Gross margin rose to 31.2% from 29.5%. --Operating income grew 45% to $3.8 million. --Net income grew by 49% to $2.4 million. --Diluted earnings per share was unchanged at $0.22, despite a $.01 impact from the implementation of stock option expensing per FAS 123R in the 2006 period and a 46% increase in the weighted-average 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. shares outstanding associated with the Company's September September: see month. 2005 public equity offering. --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 the first quarter was $112.1 million. The Company's acquisition of Diversified diversified (di·verˑ·s Optical Products, Inc. (DiOP) on May 2, 2005 and continued strong military spending on surveillance and targeting programs, particularly in the 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 business, were the primary sources of year-over-year growth.
Segment Sales (in millions):
Three Months Ended:
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April 1, April 2,
2006 2005
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Optical Systems Group $30.9 $22.3
Distributed Products Group 6.6 6.4
"Axsys' strong first quarter results are consistent with our expectations," said 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 W. 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). , Chairman and Chief Executive Officer of Axsys. "As anticipated, the Optical Systems Group was the primary catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. for quarter-over-quarter growth, due primarily to increased demand for our infrared camera systems and lens assemblies. Our increasing recognition as a key supplier of optical systems continues to generate optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. among the management team." Fiscal 2006 Guidance "The Company's solid performance in the first quarter has led us to reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our fiscal year 2006 guidance," concluded Mr. Bershad. "At this time, we continue to expect sales of $151 - $155 million, net income of $10.0 - $10.5 million and earnings per diluted share of $0.91 - $0.95 for fiscal 2006. We remain enthusiastic about Axsys' short and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. business prospects based on our strong backlog, growing market presence and attractive mix of products and capabilities." Conference Call Management will conduct a conference call reviewing the financial results on Thursday Thursday: see week. , April 27, 2006 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 webcast live 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: changes in the U.S. federal government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. priorities; the Company's ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. pricing pressures from competitors and/or customers; the potential for the Company's backlog to be reduced or cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. ; the Company's ability to implement its acquisition strategy and integrate its acquired companies successfully, including the acquisition of Diversified Optical Products; the Company's ability to manage costs under the Company's fixed-price contracts effectively; and changes in general economic and business conditions. 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, except per share data)
For the Three Months Ended
---------------------------
April 1, 2006 April 2, 2005
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Sales $37,458 $28,648
Cost of sales 25,786 20,192
------------- -------------
Gross margin 11,672 8,456
Selling, general and administrative
expenses 6,986 5,100
Research, development and engineering
expenses 907 744
------------- -------------
Operating income 3,779 2,612
Interest expense (17) (67)
Interest income 109 42
Other expense, net (20) (15)
------------- -------------
Income before income taxes 3,851 2,572
Provision for income taxes 1,461 965
------------- -------------
Net income $2,390 $1,607
============= =============
------------- -------------
Basic earnings per share $0.23 $0.23
============= =============
Weighted-average basic common shares
outstanding 10,619,774 7,064,907
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Diluted earnings per share $0.22 $0.22
============= =============
Weighted-average diluted common shares
outstanding 10,878,399 7,450,024
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(In thousands)
April 1, December 31,
2006 2005
----------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,734 $7,079
Accounts receivable - net 21,555 18,821
Inventories - net 39,146 37,866
Income taxes - deferred 3,313 3,256
Other current assets 1,300 1,182
----------- ------------
TOTAL CURRENT ASSETS 68,048 68,204
PROPERTY, PLANT AND EQUIPMENT - net 15,272 15,351
NET INTANGIBLE ASSETS 10,181 10,461
GOODWILL 61,048 61,048
OTHER ASSETS 1,066 1,144
----------- ------------
TOTAL ASSETS $155,615 $156,208
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $10,015 $8,019
Accrued expenses and other liabilities 13,152 16,835
Deferred income 5,287 7,044
----------- ------------
TOTAL CURRENT LIABILITIES 28,454 31,898
OTHER LONG-TERM LIABILITIES 4,981 4,769
SHAREHOLDERS' EQUITY:
Common stock 106 106
Capital in excess of par 98,129 97,875
Accumulated other comprehensive income - 3
Retained earnings 24,102 21,712
Treasury stock (157) (155)
----------- ------------
TOTAL SHAREHOLDERS' EQUITY 122,180 119,541
----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $155,615 $156,208
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