Axsys Technologies Announces Third Quarter Results Improved Earnings From Operations, Record Orders and Backlog.Business Editors 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.--(BUSINESS WIRE)--Nov. 1, 2000 Axsys Technologies Inc. (Nasdaq:AXYS), a global leader in designing, manufacturing and distributing micro-positioning and precision optical products, today announced third quarter fiscal 2000 results. Sales amounted to $23.6 million in the quarter ended Sept. 30, 2000, compared to $21.9 million in the comparable quarter in fiscal 1999. The increase amounted to $1.7 million, or 8 percent, and was attributed to continued strong sales of the company's precision ball bearings ball bearings n → roulement m à billes , digital imaging scanners and motion control components sold to commercial markets. Sales of the company's Commercial Products Group totaled $14.5 million compared to $11.3 million last year, an increase of 28 percent over the third quarter of 1999. Sales of the company's Aerospace and Defense Group totaled $9.1 million, a 14 percent reduction from the prior year quarter of $10.6 million. Aerospace and Defense 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. were below last year's comparable quarter due to relatively weak bookings in the latter half of 1999. Excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges to complete the previously announced restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , the company reported net 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 of $198,000, or 5 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , as compared to $139,000, or 3 cents per share of net earnings in the third quarter of 1999. The company recorded $281,000, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta , of one-time restructuring related costs in the third quarter of 2000 completing its previously announced program. Comparable earnings for the third quarter of 1999 exclude a non-recurring $216,000 pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern adjustment to a special charge recorded earlier in 1999. For the nine months ended Sept. 30, 2000, the company recorded sales of $66.7 million, compared to $64.5 million in the first nine months of 1999. Commercial Group sales were $42.2 million for the nine-month period compared to $34.9 million last year. Aerospace and Defense Group sales totaled $24.5 million vs. $29.6 million in the comparable nine-month period of 1999. Excluding year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. restructuring and one-time charges, Axsys reported a net loss of $1.1 million, or ($0.29) per share for the nine months ended Sept. 30, 2000, compared to a loss from continuing operations of $156,000, or ($0.04) per share in the comparable period last year. The company recorded new orders totaling $31.9 million in the third quarter ended Sept. 30, 2000. Orders increased nine percent over the second quarter, the fourth consecutive quarter of improving orders on strength in nearly all market segments. Compared to the third quarter of 1999, orders increased by 82 percent, with particularly strong orders for precision machined components and motion control products. As a result of the significant rise in orders, the company's 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. increased to another record level, $60.9 million, up from $42.6 million at Dec. 31, 1999, and $52.7 million from last quarter end. Commenting on the quarter, 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 stated, "It continues to be very rewarding to see our orders, sales and profitability improved as a result of many initiatives we have launched over the past year." Bershad added, "As we continue to improve our operations, we have even greater ability to add strategic initiatives such as our recently completed merger of Automation Engineering, Inc., and our new fiber automation division in Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. ." Mark J. Bonney Bon·ney , William H. Known as Bil·ly the Kid 1859-1881. American outlaw who murdered 21 men and was shot dead by Sheriff Pat Garrett (1850-1908). Noun 1. , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented, "In the third quarter our company achieved many important milestones. Our core business continues to improve. Our gross margins reached 25.2% up from 22.9% in the second quarter and 24.8% a year ago. Three facilities have begun producing products utilizing our Lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. methods, and all operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon have now been trained in our Lean manufacturing approach and the importance of it to our future. Also, in the quarter, substantial additional talent continued to be added throughout the company." Bonney added, "Our company's strategy has been to leverage our component capabilities and core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
n. 1. The science of magnetism. Noun 1. magnetics - the branch of science that studies magnetism magnetism , precision machining and electronics into subsystems and systems. With the merger of AEI AEI American Enterprise Institute AEI Archive of European Integration AEI Australian Education International AEI Automotive Engineering International AEI Australian Education Index AEI Albert Einstein Institute and the formation of our new Automation Group, we are now positioned for substantial growth by focusing on the expanding market for fiber optic optic /op·tic/ (op´tik) ocular (1). op·tic or op·ti·cal adj. 1. Of or relating to the eye or vision. 2. component automation. We believe Axsys is uniquely positioned to grow in this market due to our vertical integration which will allow us to design solutions specific to customers needs faster than non-vertically integrated competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ." Results for all periods exclude results of Automation Engineering, Inc. (AEI), acquired by Axsys on Oct. 18, 2000. Fourth quarter and full year 2000 comparative results will include AEI, which is being accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. . Axsys has not historically provided estimates of future quarterly performance. The predictability of our operating results is highly dependent upon factors that we cannot precisely project. In addition, the company's recently completed merger with AEI, and the formation of the Axsys Automation Group will result in one-time pretax acquisition related charges of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $300,000 and start-up Start-up The earliest stage of a new business venture. expenses in the Fiber Automation Division and Automation Group of approximately $400,000 that will negatively impact fourth quarter results. Based on the level of our backlog and our expectation that a strong market for our products will continue, we anticipate fourth quarter sales of approximately $24.0 million to $25.0 million. We expect earnings per share, including the shares issued in the merger with AEI, will be approximately break-even, after the one-time acquisition related charges and start-up expenses mentioned earlier. Axsys management invites you to listen to a conference call regarding third quarter results, scheduled for Thursday Thursday: see week. , Nov. 2, 2000 at 10 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ). The telephone number for listener participation is 888/211-7905. A post conference replay will be available beginning Thursday, Nov. 2, 2000 at 12 noon (EST) and will continue until Thursday, Nov. 9, 2000 at 5 p.m. (EST). To access the conference replay please call 1/800-633-8284 and refer to reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. access code 16809779. Axsys Technologies, Inc. is a vertically integrated supplier of precision system solutions for high technology applications, including aerospace guidance and electronic capital equipment serving the data storage, semiconductor, and fiber optic components markets. This has been achieved by creating a precision systems capability that leverages Axsys' unique component capabilities. For more information, contact Axsys Technologies Inc. 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 various 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 December: see month. 31, 1999.
AXSYS TECHNOLOGIES, INC
Consolidated Balance Sheets
September 30, December 31,
2000 1999
------------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 14,105 $ 385
Accounts receivable - net 14,195 11,537
Inventories - net 24,399 25,866
Net assets held for sale -- 7,227
Other current assets 3,099 2,994
-------- --------
TOTAL CURRENT ASSETS 55,798 48,009
NET PROPERTY, PLANT AND EQUIPMENT 12,325 11,949
EXCESS OF COST OVER NET ASSETS ACQUIRED - net 3,775 3,883
OTHER ASSETS 297 309
-------- --------
TOTAL ASSETS $ 72,195 $ 64,150
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,094 $ 6,207
Accrued expenses and other liabilities 7,820 5,282
Current portion of long-term debt and
capital lease obligations 749 5,125
-------- --------
TOTAL CURRENT LIABILITIES 14,663 16,614
LONG-TERM DEBT & CAPITAL LEASES, less current
portion 1,266 1,793
OTHER LONG-TERM LIABILITIES 2,458 2,042
SHAREHOLDERS' EQUITY:
Common Stock, $.01 Par Value 41 41
Capital in Excess of Par 39,502 39,454
Retained Earnings 15,709 5,844
Treasury Stock (1,444) (1,638)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 53,808 43,701
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 72,195 $ 64,150
======== ========
AXSYS TECHNOLOGIES, INC.
Condensed Statements of Operations
(Unaudited - dollars in thousands)
Three Months Ended
September 30,
------------------------
2000 1999
----------- -----------
NET SALES $ 23,606 $ 21,877
Cost of sales 17,654 16,456
Selling, general
and administrative
expenses 5,357 4,289
Research and
development
expenses 747 744
Amortization of
intangible
assets 35 100
----------- -----------
OPERATING
(LOSS)/INCOME (187) 288
Interest (income)/
expense, net (175) 51
Adjustment to
special charge -- (216)
Other (income)/
expense (60) 1
----------- -----------
INCOME FROM
CONTINUING
OPERATIONS
BEFORE TAXES 48 452
Provision for
income taxes 19 186
----------- -----------
INCOME FROM
CONTINUING
OPERATIONS 29 266
DISCONTINUED
OPERATIONS:
Income
from operations,
net of taxes -- 1,015
NET INCOME $ 29 $ 1,281
----------- -----------
BASIC EARNINGS
PER SHARE:
Continuing
operations $ 0.01 $ 0.07
Discontinued
operations -- .25
----------- -----------
TOTAL $ 0.01 $ 0.32
=========== ===========
Weighted average
basic common
shares
outstanding(a) 3,996,246 4,010,820
=========== ===========
DILUTED EARNINGS
PER SHARE:
Continuing
operations $ 0.01 $ 0.07
Discontinued
operations -- 0.25
----------- -----------
TOTAL $ 0.01 $ 0.32
=========== ===========
Weighted average
diluted
common shares
outstanding(a) 4,101,554 4,022,713
=========== ===========
(a) The difference between weighted average basic and diluted shares
outstanding is attributed to the conversion of common stock
equivalents (stock options).
AXSYS TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Unaudited, dollars in thousands)
Nine Months Ended
September 30,
------------------------
2000 1999
----------- -----------
NET SALES $ 66,695 $ 64,482
Cost of sales 54,558 47,739
Selling, general
and administrative
expenses 15,671 12,938
Research and
development
expenses 2,441 2,649
Restructuring
charge 1,655 --
Amortization of
intangible
assets 105 300
----------- -----------
OPERATING
(LOSS) INCOME (7,735) 856
Interest (income)/
expense, net (304) 344
Special charge -- 784
Other (income)/
expense (165) 3
----------- -----------
LOSS FROM
CONTINUING
OPERATIONS
BEFORE TAXES (7,266) (275)
Benefit for
income taxes (2,841) (119)
----------- -----------
LOSS FROM
CONTINUING
OPERATIONS (4,425) (156)
DISCONTINUED
OPERATIONS:
Income
from operations,
net of taxes 513 2,174
Gain on disposal,
net of taxes 13,776 --
----------- -----------
NET INCOME $ 9,864 $ 2,018
=========== ===========
BASIC EARNINGS
(LOSS) PER SHARE:
(Loss) from
continuing
operations $ (1.11) $ (0.04)
Discontinued
operations 3.59 0.53
----------- -----------
TOTAL 2.48 0.49
=========== ===========
Weighted average
basic common
shares
outstanding(a) 3,985,475 4,073,640
=========== ===========
DILUTED EARNINGS
(LOSS) PER SHARE:
(Loss) from
continuing
operations $ (1.11) $ (0.04)
Discontinued
operations 3.59 0.53
----------- -----------
TOTAL 2.48 0.49
=========== ===========
Weighted average
diluted
common shares
outstanding(a) 3,985,475 4,073,640
=========== ===========
(a) As per generally accepted accounting principals, the computation
of the net loss per share is based on the weighted average basic
shares outstanding when there is an operating loss from continuing
operations.
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