Axsys Technologies Announces 79% Increase in Third Quarter Operating Income and Increases 2004 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 opto-mechanical subsystems and components, today announced financial results for the third quarter and nine-month period ended October October: see month. 2, 2004. Third Quarter Highlights - versus fiscal 2003 third quarter --Sales rose 24.3% to $26.4 million. --Gross margin increased to 30.2% from 26.9%. --Operating income was up 79.3% to $2.2 million; operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: rose to 8.4% from 5.8%. --Net income grew to $1.9 million, or $0.27 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 $1.2 million or $0.17 per diluted share, a 58.8% increase in diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. . --Effective tax rate for the current quarter was 10.0%, compared to a 4.5% rate in the third quarter of 2003. --Third quarter bookings rose 87.8% to a record $37.7 million, bringing 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. to a record $93.1 million. --Significant bookings for the quarter include the $9.8 million James Webb Space Telescope This article or section documents a scheduled or expected spaceflight. Details may change as the launch date approaches or more information becomes available. project. Axsys exceeded its sales and bookings expectations for the quarter as a result of heightened defense spending, general economic growth and the sale of increasingly complex electro-optical solutions. In addition, growth in the quarter included the results of the newly integrated 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 the acquisition, revenues increased 18.0% and bookings increased 81.6% in the third quarter.
Segment Sales (in millions):
Three Months Ended: Nine Months Ended:
------------------- --------------------
October September October September
2, 27, 2, 27,
2004 2003 2004 2003
------------------- --------------------
Aerospace and Defense $16.6 $12.5 $45.5 $37.1
Commercial Products 3.3 3.3 10.9 10.3
Distributed Products 6.5 5.4 19.1 15.9
"Our third quarter results continue to build upon our successful track record," 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, Chairman and Chief Executive Officer of Axsys. "Not only have we delivered solid revenue and income growth, but our backlog is the strongest in the Company's history. Our continuing efforts to deliver high quality, competitive products to our broad base of customers in a timely manner are resulting in larger and more sophisticated orders. Importantly, higher margins are stemming from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix, volume-driven leverage and improved production efficiencies." Financial Guidance The financial results for the first nine months of 2004, combined with the Company's strong backlog, have led Axsys to increase its financial guidance for fiscal 2004. Axsys now anticipates 2004 revenues of approximately $102 million and 2004 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 approximately $9 million, representing year-over-year growth of 20% and 79%, respectively. This compares to previous guidance of 15% - 16% revenue growth and 55% - 60% operating income growth. Mr. Bershad concluded, "We are confident that Axsys is positioned for continued growth. The Company's strong financial performance, large and growing backlog and solid balance sheet provide the financial foundation to drive the business forward. We intend to build upon our successful products and capabilities to deliver increasingly sophisticated electro-optical solutions to our 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 customers." Conference Call Management will conduct a conference call reviewing the financial results on Tuesday, November 2, 2004 at 10:00 am ET. Interested parties may participate in the call by dialing 913-905-3161 - 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 website 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 supplier of precision optical and motion control assemblies and components for high technology applications, serving the aerospace, defense, health imaging, semiconductor and graphic arts graphic arts: see aquatint; drawing; drypoint; engraving; etching; illustration; linoleum block printing; lithography; mezzotint; niello; pastel; poster; silk-screen printing; silhouette; silverpoint; sketch; stencil; woodcut and wood engraving. 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 the acquisition of Telic Optics, Inc., 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 Nine
Months Ended Months Ended
------------------- -------------------
October September October September
2, 27, 2, 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $ 26,356 $ 21,203 $ 75,491 $ 63,269
Cost of sales 18,407 15,489 52,940 46,122
--------- --------- --------- ---------
Gross margin 7,949 5,714 22,551 17,147
Selling, general and
administrative expenses 5,055 3,906 14,321 11,968
Research, development and
engineering expenses 681 574 1,984 1,628
Write off of restructuring
accrual -- -- (50) --
--------- --------- --------- ---------
Operating income 2,213 1,234 6,296 3,551
Interest expense (75) (39) (183) (137)
Interest income 9 21 43 77
Other (expense) income, net (7) 67 (29) 211
--------- --------- --------- ---------
Income before income taxes 2,140 1,283 6,127 3,702
Provision for income taxes 213 58 612 167
--------- --------- --------- ---------
Net income $ 1,927 $ 1,225 $ 5,515 $ 3,535
========= ========= ========= =========
BASIC INCOME PER SHARE (1):
Total $ 0.27 $ 0.18 $ 0.79 $ 0.51
Weighted average basic common
shares outstanding 7,040 6,987 7,009 6,985
DILUTED INCOME PER SHARE (1):
Total $ 0.27 $ 0.17 $ 0.77 $ 0.50
Weighted average dilutive
common shares outstanding 7,191 7,103 7,182 7,047
(1) Earnings per share and shares outstanding for the three months and
nine months ended September 27, 2003 have been restated to reflect
the 3:2 stock split on June 30, 2004.
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Unaudited, in thousands)
October December
2, 31,
2004 2003
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,259 $ 5,197
Short-term investments -- 6,983
Accounts receivable - net 15,506 10,197
Inventories - net 30,137 24,786
Income taxes - deferred and current 2,203 2,203
Other current assets 1,002 1,223
---------- ----------
TOTAL CURRENT ASSETS 53,107 50,589
PROPERTY, PLANT AND EQUIPMENT - net 12,758 11,315
INTANGIBLE ASSET - net 2,151 --
EXCESS OF COST OVER NET ASSETS ACQUIRED 13,013 3,600
OTHER ASSETS 1,371 1,341
---------- ----------
TOTAL ASSETS $ 82,400 $ 66,845
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,463 $ 4,240
Accrued expenses and other liabilities 8,093 7,955
Deferred income 7,907 4,546
Current portion of capital lease obligation 372 423
Current portion of long-term debt 1,000 --
---------- ----------
TOTAL CURRENT LIABILITIES 23,835 17,164
CAPITAL LEASES, less current portion 243 568
LONG-TERM DEBT, less current portion 3,583 --
OTHER LONG-TERM LIABILITIES 4,820 5,215
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock 72 72
Capital in excess of par 39,591 39,375
Accumulated other comprehensive loss (37) (39)
Retained earnings 11,240 5,725
Treasury stock (947) (1,235)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 49,919 43,898
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 82,400 $ 66,845
========== ==========
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