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Memry Corporation FY 2007 Revenues $51.7M; Net Income $317,000 or $0.01 Per Share

Q4 Nitinol and Polymer Sales Up From Q3

BETHEL, Conn., Sept. 17 /PRNewswire-FirstCall/ -- Memry Corporation (Amex: MRY), a leading provider of nitinol and polymer components to the medical device industry, reported today revenues of $51,677,000 for the fiscal year ended June 30, 2007 versus $52,588,000 in fiscal year 2006. Net income for fiscal 2007 was $317,000, or $0.01 per diluted share, compared with net income of $2,673,000, or $0.09 per diluted share, for the previous fiscal year.

For the fourth fiscal quarter ended June 30, 2007, revenues were $13,129,000, compared with $13,279,000 in the fourth fiscal quarter of 2006. Fourth quarter net income was $42,000, or $0.00 per diluted share, compared with net income of $887,000, or $0.03 per diluted share, in the comparable period of fiscal year 2006.

Memry Chief Executive Officer Robert Belcher said, "Although this has been an extremely difficult year for Memry, our fourth quarter financial results were stronger than we expected and, as we announced in our preliminary report last month, we believe Memry has turned the corner. In the fourth fiscal quarter both nitinol and polymer sales resumed growth on a sequential quarter basis. Thanks to our strong cash flow, total debt was reduced from $10.0 million a year ago to $1.6 million at June 30, 2007.

"We are encouraged with both the revenue and net income results achieved in the fourth quarter. Although modest, the $42,000 net income in the fourth quarter is the first positive net income quarter since the first quarter of the 2007 fiscal year.

"Our fourth quarter revenue results showed Memry is rebounding from the weakness we experienced simultaneously in both our nitinol and p Intangible assets, net 6,500,000 7,171,000

Goodwill 14,146,000 14,146,000

Deferred financing costs, net 89,000 355,000

Deferred tax assets 1,769,000 1,821,000

Investment 409,000 409,000

Deposits and other assets 155,000 159,000

Total other assets 23,068,000 24,061,000

TOTAL ASSETS $48,746,000 $55,300,000


Current liabilities

Accounts payable and accrued expenses $5,606,000 $5,478,000

Notes payable 970,000 2,173,000

Income tax payable 50,000 215,000

Total current liabilities 6,626,000 7,866,000

Notes payable, less current maturities 645,000 7,818,000

Other non-current liabilities 125,000 116,000

Stockholders' equity

Common stock, $0.01 par value, 60,000,000

shares authorized; 29,851,870 and 29,077,486

shares issued and outstanding at June 30,

2007 and 2006, respectively 299,000 291,000

Additional paid-in capital 56,471,000 54,946,000

Accumulated deficit (15,420,000) (15,737,000)

Total stockholders' equity 41,350,000 39,500,000


Investor Relation Information:

Hawk Associates, Inc.

Frank N. Hawkins, Jr. or Julie Marshall

Phone: (305) 451-1888


olymer segments in the second and third quarters. On a comparative basis, nitinol revenue for the fourth quarter of fiscal 2007 increased 2.4% versus the fourth quarter revenue of fiscal 2006 and posted a second consecutive increase in sequential quarterly revenue. In our polymer business, revenue was down 8.3% in the fourth quarter versus the fourth quarter of fiscal 2006, which was an exceptionally strong quarter, but on a consecutive basis we are pleased to report polymer revenues increased 20.2% in the fourth quarter versus the third quarter of 2007.

"Our research and development initiatives have been a strong focus and point of investment in 2007 as we plan for Memry's future growth. These investments are helping us resume growth and we are beginning to see the benefits of our new capabilities and customer-sponsored development projects. We closed out our fiscal year 2007 with a number of accomplishments, such as the launch of our ultra small V2 tubing, our Putnam Plastics Plus (PPC+) product line that provides specialized secondary operations solutions for medical polymer tubing and our new customer-focused PPC+ website. I am extremely pleased to report that our emphasis on developing customer-sponsored research and development resulted in revenue of $5.1 million in fiscal year 2007, representing a three year compound annual growth rate of approximately 58% since 2004.

"For the year ended June 30, 2007, revenues for the nitinol products segment decreased 3% or $1.0 million to $36.0 million from $37.0 million during fiscal year 2006. This represented approximately 70% of consolidated revenues in fiscal year 2007, similar to last year. The decrease was primarily a result of price reductions granted for mature products in a contract renewal, together with unit volume decreases experienced for older generation stent components. We experienced revenue decreases for superelastic nitinol tube, nitinol tube-based stent components, shipments of Endocatch products and arch wire and high pressure sealing plugs. This was partially offset with increased sales of etched wire-based stents and increased revenues from prototype development and research and development activities funded by our customers. In addition, a nitinol catheter product launched during the year generated new revenue. Gross margin in the nitinol products segment decreased to 30.2% in fiscal year 2007 from 36.1% in fiscal year 2006, primarily due to the contracted price reductions, reduced sales volume and resultant production variances.

"Polymer segment revenues for fiscal year 2007 were $15.8 million, the same level as in fiscal year 2006. Gross margins decreased to 36.1% in fiscal year 2007, versus 44.4% in fiscal year 2006, due to mix change and increased strategic investment in personnel and equipment to support future growth. We continue to invest in our polymer manufacturing operations because we believe this segment has attractive growth opportunities over the next several years. Although these investments will affect profitability in the short term, we are carefully building our business for the future. The polymer segment gross margins remained higher than those for nitinol. The polymer segment of our business represented 31% of consolidated revenue for the fiscal year 2007, just slightly up from a year ago," Belcher said.

Memry CFO Rick Sowerby added, "The company continues to be a strong cash generator. In fiscal year 2007 Memry produced $5.4 million in net cash from operating activities despite incurring incremental litigation and professional fees of $1.6 million. Days sales outstanding improved to 44 days at June 30, 2007 from 54 days at June 30, 2006, underscoring our ongoing effort to improve our business operations. As a percent of revenues, Adjusted EBITDA for the fiscal year 2007 was a strong 12.6%. The positive ongoing cash flow provides us with the means to continue to invest in growth opportunities."

Belcher said, "We are confident our investments are building a stronger foundation for Memry to provide innovative and strategic technology solutions for our customers and ultimately improved valuation for our shareholders. Memry remains focused on delivering highly unique and precision-crafted components to our customers in the growing medical device market.

"We continue to anticipate higher net income in the first quarter on a sequential basis. In addition we expect improved results for fiscal year 2008," Belcher said.

The company will host a conference call with Belcher and senior members of the management team on Tuesday, September 18 at 11 a.m. EDT. The call will cover Memry's fourth quarter and Fiscal Year 2007 financial results. Belcher will open the conference call, followed by a question-and-answer session. To participate in this call, dial (877) 407-8031 any time after 10:55 a.m. EDT on September 18. International callers should dial (201) 689-8031. While in conference, if callers should experience any difficulty or require operator assistance, they can press the (*) followed by the (0) button. This will call an operator to the line.

A copy of the unaudited financial information follows.

About Memry Corporation

Memry Corporation provides design, engineering, development and manufacturing services to the medical device and other industries using the company's proprietary shape memory alloy and polymer extrusion technologies. Medical device products include stent components, catheter components, guidewires, laparoscopic surgical sub-assemblies and orthopedic instruments as well as complex, multi-lumen, multi-layer polymer extrusions used for guidewires, catheters, delivery systems and various other high-end interventional medical devices. Detailed information about Memry Corporation can be found at

An investment profile on Memry may be found at

For more information, contact CFO Richard F. Sowerby at (203) 739-1100, e-mail: or Frank Hawkins or Julie Marshall, Hawk Associates, at (305) 451-1888, e-mail: Detailed information about Memry Corporation can be found at Copies of Memry Corporation press releases, SEC filings, current price quotes, stock charts and other valuable information for investors may be found at and To receive notification of future Memry news releases, sign up at

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's Form 10-K and other periodic filings with the Securities and Exchange Commission. In this release, the company refers to EBITDA and Adjusted EBITDA, financial measures that are not recognized under accounting principles generally accepted in the United States of America (GAAP). The company defines EBITDA as earnings before income taxes, interest expense, net, depreciation and amortization. The company defines Adjusted EBITDA as EBITDA further adjusted to exclude material non-cash items and items that may be infrequent in occurrence or, in management's view, not indicative of the company's continuing operating performance and cash flows. EBITDA and Adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income, operating income, cash flows from operations or other traditional indications of a company's operating performance or liquidity that are derived in accordance with GAAP. In addition, the company's calculations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures being disclosed by other companies, limiting their usefulness as comparative measures. The company discloses EBITDA and Adjusted EBITDA as each is a commonly referred to financial metric used in the investing community to evaluate the performance of companies in our industry. The company believes that disclosure of EBITDA and Adjusted EBITDA is helpful to those reviewing its performance, as EBITDA and Adjusted EBITDA provide information on the company's ability to meet debt service, capital expenditure and working capital requirements, and management believes that EBITDA and Adjusted EBITDA are also useful indicators of the company's operating performance. We present Adjusted EBITDA as a percentage of revenues because management believes it is a useful indicator of the company's operating performance.

Memry Corporation and Subsidiaries

Condensed Consolidated Statements of Income

For the Three Months and Year Ended June 30, 2007 and 2006


Three Months Ended June 30, Year Ended June 30,

2007 2006 2007 2006

Revenues $13,129,000 $13,279,000 $51,677,000 $52,588,000

Cost of revenues 9,237,000 8,487,000 35,087,000 32,215,000

Gross profit 3,892,000 4,792,000 16,590,000 20,373,000

Operating expenses

Research and development 568,000 522,000 1,645,000 2,016,000

General, selling and

administration 2,908,000 2,503,000 13,205,000 12,615,000

Amortization of

intangible assets 126,000 126,000 504,000 504,000

Other (17,000) (63,000) (72,000) (141,000)

3,585,000 3,088,000 15,282,000 14,994,000

Operating income 307,000 1,704,000 1,308,000 5,379,000

Loss on extinguishment

of debt (171,000) -- (215,000) --


Expense (107,000) (317,000) (975,000) (1,258,000)

Income 36,000 60,000 331,000 195,000

(71,000) (257,000) (644,000) (1,063,000)

Income before income

taxes 65,000 1,447,000 449,000 4,316,000

Provision for income taxes 23,000 560,000 132,000 1,643,000

Net income $42,000 $887,000 $317,000 $2,673,000

Net income per common share

Basic $0.00 $0.03 $0.01 $0.09

Diluted $0.00 $0.03 $0.01 $0.09

Weighted average common shares

used in calculation

Basic 29,847,965 28,934,354 29,572,975 28,788,594

Diluted 30,069,420 29,734,303 29,955,046 29,507,780

Memry Corporation and Subsidiaries

Condensed Segment Data

For the Three Months and Year Ended June 30, 2007 and 2006


Three Months Ended Year Ended

June 30, June 30,

2007 2006 2007 2006


Nitinol Products $9,241,000 $9,026,000 $36,036,000 $37,015,000

Polymer Products 3,933,000 4,290,000 15,821,000 15,811,000

Eliminations (45,000) (37,000) (180,000) (238,000)

Consolidated $13,129,000 $13,279,000 $51,677,000 $52,588,000

Gross profit

Nitinol Products $2,593,000 $2,981,000 $10,880,000 $13,351,000

Polymer Products 1,299,000 1,811,000 5,710,000 7,022,000

Consolidated $3,892,000 $4,792,000 $16,590,000 $20,373,000

Memry Corporation and Subsidiaries

EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)

For the Three Months and Year Ended June 30, 2007 and 2006


Three Months Ended Year Ended

June 30, June 30,

2007 2006 2007 2006

Revenues $13,129,000 $13,279,000 $51,677,000 $52,588,000

Net Income $42,000 $887,000 $317,000 $2,673,000

Income Taxes 23,000 560,000 132,000 1,643,000

Interest Expense, Net 71,000 257,000 644,000 1,063,000

Depreciation 654,000 525,000 2,393,000 2,130,000

Amortization (a) 167,000 167,000 671,000 671,000

EBITDA 957,000 2,396,000 4,157,000 8,180,000

CEO Separation Charges -- -- -- 1,130,000


Compensation (b) 136,000 (6,000) 519,000 436,000

Incremental Litigation

and Professional

Fees (c) 115,000 83,000 1,640,000 212,000

Loss on Extinguishment

of Debt (d) 171,000 -- 215,000 --

Adjusted EBITDA $1,379,000 $2,473,000 $6,531,000 $9,958,000

Adjusted EBITDA as

a % of Revenues 10.5% 18.6% 12.6% 18.9%

a. Amortization excludes the amortization of deferred financing costs,

which is included in interest expense, net.

b. Stock-based compensation represents non-cash items. Effective July 1,

2005, the company adopted SFAS No. 123( R ), 'Share-Based Payment.'

c. Incremental litigation and professional fees are 1) excess litigation

fees and 2) professional fees for litigation defense and the

implementation of Sarbanes-Oxley Section 404 compliance.

d. The loss on the extinguishment of debt represents the write-off of

unamortized deferred financing costs and a cash prepayment penalty on

the prepayment of a portion of the company's subordinated debt.

Memry Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

June 30, 2007 and 2006


June 30,

2007 2006


Current assets

Cash and cash equivalents $2,401,000 $6,965,000

Accounts receivable, net 6,312,000 8,156,000

Inventories 6,230,000 5,418,000

Deferred tax assets 1,537,000 1,663,000

Prepaid expenses and other current assets 381,000 41,000

Total current assets 16,861,000 22,243,000

Property, plant and equipment, net 8,817,000 8,996,000

Other assets


SOURCE Memry Corporation
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