Conference Call Scheduled for Friday, June 12, 2009
LANCASTER, Pa., June 11 /PRNewswire-FirstCall/ -- Herley Industries, Inc. (Nasdaq: HRLY) today reported financial results for the third quarter ended May 3, 2009.
Net sales from continuing operations for the thirteen weeks ended May 3, 2009 were approximately $41.8 million, up 25% as compared to $33.5 million in the thirteen weeks ended May 4, 2008.
Income from continuing operations before income taxes for the thirteen weeks ended May 3, 2009 was $3.0 million, versus an operating loss of $11.7 million for the thirteen weeks ended May 4, 2008, an improvement of $14.7 million.
Basic and diluted earnings per common share from continuing operations for the thirteen weeks ended May 3, 2009 were $.18 per common share, as compared to basic and diluted loss per common share from continuing operations of ($.33) in the prior year's third quarter.
Net sales for the thirty-nine weeks ended May 3, 2009 were $117.1 million, up 19% as compared to $98.2 million in the first forty weeks of fiscal 2008.
Income from continuing operations before income taxes for the thirty-nine weeks ended May 3, 2009 was $3.9 million, versus an operating loss of $18.0 million for the forty weeks ended May 4, 2008, an improvement of $21.9 million.
Basic and diluted earnings per common share from continuing operations for the thirty-nine weeks ended May 3, 2009 were $.27 per common share; as compared to basic and diluted loss per common share from continuing operations of ($.67) in the forty weeks ended May 4, 2008.
Myron Levy, Chairman and CEO commented, "I said at the end of our second quarter that Herley was on track for a solid fiscal year. The Company's third quarter results show continuing improvement in productivity and reflect the Company's underlying strength. Revenues are up, profits are up, and bookings continue to be strong. We are a valued supplier on many essential military programs for the U. S. Government, U. S prime contractors, and the international marketplace. The Company's backlog has risen from a record $178 million in January of 2009 to approximately $186 million today, with over $52 million of the current backlog at our Israeli operations, Herley General Microwave Israel and Eyal."
Mr. Levy continued, "More than many of our peers, we have focused on investing in the international defense marketplace for new products, new programs, and new technologies. Approximately 50% of the overall defense business available is international, and our long-time goal is to realize 50% of our business from the international defense community. We are beginning to see a return on our investments. Currently foreign sales are approximately 33% of net sales, and we expect that number to grow. The combination of our General Microwave Israel and Eyal operations is helping to make us a major player in the international defense community for sophisticated microwave products."
A Conference Call has been scheduled for 9:00 a.m. Eastern Time on Friday, June 12, 2009. Interested parties may join the conference by dialing: (888) 425-4188 referencing Conference ID # 12744436.
Replay of the conference call is scheduled to begin on June 12, 2009, two hours after completion of the call, and end on June 19 at 11:59 p.m. Eastern Time. To listen to the replay dial: 1 (800) 642-1687 (U.S.) or 1 (706) 645-9291 (International), and Conference ID #12744436.
This conference call will be broadcast live over the Internet and can be accessed by interested parties through URL: http://www.videonewswire.com/event.asp?id=59457.
To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the site.
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.
For information at Herley contact: Tel: (717) 735-8117 Peg Guzzetti, Investor Relations 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. Forward-looking statements involve various important assumptions, risks, uncertainties and other factors which could cause our actual results to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this discussion can be identified by words such as "anticipate," "believe," "could," "estimate," "expect," "plan," "intend," "may," "should" or the negative of these terms or similar expressions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievement. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain 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, including the potential for significant changes in US defense spending under the new Administration which could affect future funding of programs and allocations within the budget to various programs as well as the factors set forth in this report and in our public filings with the Securities and Exchange Commission.
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) May 3, 2009 August 3, (Unaudited) 2008 --------- -------- ASSETS Current Assets: Cash and cash equivalents $14,139 $14,347 Trade accounts receivable, net 27,427 27,003 Income Taxes Receivable - 2,056 Costs incurred and income recognized in excess of billings on uncompleted contracts and claims 15,013 19,490 Other receivables 1,169 1,286 Inventories, net 67,261 61,559 Deferred income taxes 16,364 11,263 Other current assets 2,171 1,276 -------- -------- Total Current Assets 143,544 138,280 Property, Plant and Equipment, net 33,801 30,552 Goodwill 85,615 73,900 Intangibles, net of accumulated amortization of $6,421 at May 3, 2009 and $7,505 at August 3, 2008 12,283 16,145 Other Assets 900 541 -------- -------- Total Assets $276,143 $259,418 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $1,838 $1,394 Current portion of employment settlement agreement - (net of imputed interest of $88 at May 3, 2009 and $138 at August 3, 2008) 1,169 1,119 Current portion of litigation settlement - (net of imputed interest of $62 at May 3, 2009 and $46 at August 3, 2008) 938 954 Accounts payable and accrued expenses 21,420 27,546 Billings in excess of costs incurred and income recognized on uncompleted contracts 113 613 Income taxes payable - 43 Accrual for contract losses 4,841 2,994 Accrual for warranty costs 860 1,142 Advance payments on contracts 17,248 8,120 -------- -------- Total Current Liabilities 48,427 43,925 Long-term Debt 13,606 7,092 Long-term Portion of Employment Settlement Agreement - (net of imputed interest of $254 at May 3, 2009 and $387 at August 3, 2008) 2,243 3,074 Long-term Portion of litigation settlement - (net of imputed interest of $108 at August 3, 2008) - 892 Other Long-term Liabilities 2,126 1,652 Deferred Income Taxes 13,936 8,839 Accrued Income Taxes Payable 516 509 -------- -------- Total Liabilities 80,854 65,983 -------- -------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 20,000,000 shares; issued and outstanding 13,559,427 at May 3, 2009, and 13,521,902 at August 3, 2008 1,356 1,352 Additional paid-in capital 102,231 101,403 Retained earnings 92,295 89,058 Accumulated other comprehensive (loss) income (593) 1,622 -------- -------- Total Shareholders' Equity 195,289 193,435 -------- -------- Total Liabilities and Shareholders' Equity $276,143 $259,418 -------- --------
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands except per share data) Thirty-nine Forty Thirteen weeks ended weeks ended weeks ended -------------------- ----------- ----------- May 3, May 4, May 3, May 4, 2009 2008 2009 2008 --------- --------- --------- --------- Net sales $ 41,811 $ 33,516 $ 117,129 $ 98,221 --------- --------- --------- --------- Cost and expenses: Cost of products sold 30,613 27,030 89,658 76,982 Selling and administrative expenses 7,513 7,540 22,049 21,978 Gain on sale of assets - - (573) - Litigation costs 664 1,163 1,055 2,261 Litigation settlement - 9,500 - 15,542 --------- --------- --------- --------- 38,790 45,233 112,189 116,763 Operating income (loss) 3,021 (11,717) 4,940 (18,542) --------- --------- --------- --------- Other (expense) income: Interest income and other 58 154 94 945 Interest expense (246) (163) (945) (426) Foreign exchange transactions gains (losses) 157 42 (233) (6) --------- --------- --------- --------- (31) 33 (1,084) 513 --------- --------- --------- --------- Income (loss) from continuing operations before income taxes 2,990 (11,684) 3,856 (18,029) Provision for income taxes (benefit) 567 (7,258) 163 (8,832) --------- --------- --------- --------- Income (loss) from continuing operations $ 2,423 $ (4,426)$ 3,693 $ (9,197) --------- --------- --------- --------- Discontinued operations: Income (loss) from operations of discontinued subsidiary - 826 (734) (1,306) Income taxes benefit - (8) (278) (480) --------- --------- --------- --------- Income (loss) from discontinued operations - 834 (456) (826) --------- --------- --------- --------- Net income (loss) $ 2,423 $ (3,592)$ 3,237 $ (10,023) ========= ========= ========= ========= Earnings (loss) per common share - Basic Income (loss) from continuing operations $ .18 $ (.33)$ .27 $ (.67) Income (loss) from discontinued operations - .06 (.03) (.06) --------- --------- --------- --------- Net income (loss) - basic $ .18 $ (.27)$ .24 $ (.73) ========= ========= ========= ========= Basic weighted average shares 13,559 13,507 13,545 13,696 ========= ========= ========= ========= Earnings (loss) per common share - Diluted Income (loss) from continuing operations $ .18 $ (.33)$ .27 $ (.67) Income (loss) from discontinued operations - .06 (.03) (.06) --------- --------- --------- --------- Net income (loss) - diluted $ .18 $ (.27)$ .24 $ (.73) ========= ========= ========= ========= Diluted weighted average shares 13,721 13,507 13,774 13,696 ========= ========= ========= =========
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Thirty-nine Forty weeks ended weeks ended May 3, May 4, 2009 2008 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 3,237 $ (10,023) ----------- ----------- Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities: Depreciation and amortization 6,374 5,573 (Gain) loss on sale of fixed assets (573) 8 Loss from goodwill impairment of discontinued subsidiary 1,000 - Stock-based compensation costs 458 800 Excess tax benefit from exercises of stock options (61) (57) Litigation settlement costs - 15,442 Imputed interest 275 347 Foreign exchange transaction losses - 48 Inventory valuation reserve charges 1,164 1,287 Reduction in accrual for contract losses - (826) Warranty reserve charges 1,130 848 Deferred taxes 16 (4,999) Changes in operating assets and liabilities Cash of discontinued subsidiary (712) - Trade accounts receivable (2,285) 4,416 Income taxes receivable 2,056 (1,237) Costs incurred and income recognized in excess of billings on uncompleted contracts and claims 3,477 (5,385) Other receivables 1,020 (1,021) Inventories (6,167) (9,876) Other current assets (965) (477) Accounts payable and accrued expenses (6,094) 10,079 Billings in excess of costs incurred and income recognized on uncompleted contracts 175 428 Income taxes payable 18 (2,543) Accrual for contract losses 1,420 - Employment settlement payments (964) (1,034) Litigation settlement payments (1,000) (4,000) Advance payments on contracts 9,361 (52) Other, net (224) (531) ----------- ----------- Total adjustments 8,899 7,238 ----------- ----------- Net cash provided by (used in) operating activities 12,136 (2,785) ----------- ----------- Cash flows from investing activities: Acquisition of business, net of cash acquired of $417 (30,010) - Proceeds from sale of discontinued subsidiary 15,000 - Capital expenditures (4,524) (3,912) ----------- ----------- Net cash used in investing activities (19,534) (3,912) ----------- ----------- Cash flows from financing activities: Borrowings under bank line of credit 31,000 13,900 Borrowings - other 10,000 - Proceeds from exercise of stock options 313 225 Excess tax benefit from exercises of stock options 61 57 Payments of long-term debt (1,595) (1,044) Payments under bank line of credit (32,500) (13,900) Purchase of treasury stock - (7,138) ----------- ----------- Net cash provided by (used in) financing activities 7,279 (7,900) ----------- ----------- Effect of exchange rate changes on cash (89) (1) ----------- ----------- Net decrease in cash and cash equivalents (208) (14,598) Cash and cash equivalents at beginning of period 14,347 35,181 ----------- ----------- Cash and cash equivalents at end of period $ 14,139 $ 20,583 =========== ===========
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