LANCASTER, Pa., March 17 /PRNewswire-FirstCall/ -- Herley Industries, Inc. (Nasdaq: HRLY) Chairman and CEO, Myron Levy, addressed stockholders at the company's Annual Stockholders' Meeting today at The Eden Resort Inn in Lancaster, Pennsylvania. His comments follow:
"Good morning and thank you for coming. At last year's annual shareholders meeting, I said we believed that the U. S. would withdraw from Iraq in the reasonably near term. We now have a new President and administration with a plan to withdraw from Iraq within the next year and a half. What does that mean for Herley? In two years I will be able to tell you exactly what it meant. Today, we can only speculate and plan. Unlike the commercial markets, where changes happen very quickly, we don't have to figure out what will come up tomorrow to change our plans. Governments move at glacial speed. Herley's seasoned, experienced management team has made strategic decisions about the programs and platforms that we should target over the years, and our 'batting average' has been very good. We will continue on the course that we have set, making minor adjustments as necessary.
With most of our troops out of Iraq, even with some troops shifting to Afghanistan, we believe that there will be a downturn in equipment for combat such as IED's and MWRAPS. We believe that in the post-Iraq period the large well-planned major programs on which we currently build equipment will continue to be mainstays within the U. S. Government defense procurement. We have significant contracts, and see long term involvement in programs for the F/A-18 and E/A 18G programs, the Trident D5 Program, the ICAP Program and AMRAAM, just to name a few.
We believe that the programs described by President Obama as 'Cold War Relics' will be either canceled or severely cut back, or pushed far to the right. Among these are the F-22 fighter, the Army's Future Combat System (FCS), the Navy's DDG1000 and even the F-35 Joint Strike Fighter. A change in these programs will have little effect on our business. We never invested in them because we never thought they would be big production programs. As we have said for a number of years, our plans for a post-Iraq scenario include programs with long legs and a belief that the U. S. and other Governments around the world would turn to upgrades rather than development of costly new hardware. We do not believe that there will be another manned aircraft program for air-to-air combat. For the next twenty years or so, until only unmanned aircraft fly in combat, we believe that upgrades for the F-15, F-16, and F-18's will be big worldwide business.
We think, for example, that is more likely that we will see the U.S. Air Force, and other countries continue to upgrade the radar and electronic warfare systems on their existing F-15s, F-16s, and F-18s, rather than build F-35s. We are very well positioned to benefit from current and future upgrade programs. We are also in an excellent position to continue our business of providing equipment for testing of weapons and training of troops.
We expect to see growth in the area of UAV, drones, on-board instrumentation, targets, and command and control systems. Herley has partnered with one of our customers and been successful in providing avionics and electronics as a single source provider for their UAVs. We have positioned the Company for future growth in this business area.
We will also continue our drive to increase our share in the international marketplace. Our Israel operations, including our newest addition, GMIC Eyal will soon reach a sales level of approximately $50 million a year, thanks to the careful management of Yonah Adelman and his team. As of today, our Israel operations have a backlog of approximately $50 million.
Worldwide insecurity, fear of one's neighbors, and worry about shifting alliances still exists in the world; and for those who are established in the defense business, there will be continuing business. We have achieved a new milestone with a near $200 million backlog, and we are on track for a return to normal operations, with normal operating margins. We will continue to streamline the company and integrate our businesses for efficiency. Herley's customers demand a very high level of technical expertise; and Herley has earned their respect over more than 40 years of successful performance. Reaching a $200 million backlog is a clear indication that Herley has made good choices and set a path for success."
Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. Based in Lancaster, PA, Herley has seven manufacturing locations and approximately 1000 employees. Additional information about the company can be found on the Internet at www.herley.com.
Safe Harbor Statement - Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. When used in this report, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. The Company's results could differ materially based on various factors, including, but not limited to, competitive factors and pricing pressures, changes in legal and regulatory requirements, cancellation or deferral of customer orders, technological change or difficulties, difficulties in the timely development of new products, difficulties in manufacturing, commercialization and trade difficulties, and current economic conditions. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.
For information at Herley contact: Peg Guzzetti Tel: (717) 735-8117 Investor Relations www.herley.com
|SOURCE Herley Industries, Inc.|
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