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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