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PRESS RELEASES
WEST CALDWELL, N.J., May 13 /PRNewswire-FirstCall/ -- Merrimac Industries,
Inc. (Amex: MRM), a leader in the design and manufacture of RF Microwave
components, subsystem assemblies and micro-multifunction modules (MMFM(R)),
today announced results for the first quarter 2008.
Previously reported results of operations of Filtran Microcircuits Inc.
("FMI") for the first quarter of 2007 have been reclassified and reported as
discontinued operations.
Net sales from continuing operations for the first quarter of 2008 were
$5,758,000, an increase of $1,247,000 or 27.6 percent compared to the first
quarter of 2007 sales of $4,511,000. Net sales increased due to the higher
level of orders received during 2007, including higher sales of Multi-Mix(R)
products to the defense industry. First quarter 2007 sales were negatively
impacted by $1,000,000 due to a problem with purchased material. The problem
was resolved during the second quarter of 2007.
Gross profit for the first quarter of 2008 was $2,306,000, an increase of
$609,000 or 35.9 percent, and was 40.0 percent of sales as compared to gross
profit of $1,697,000 or 37.6 percent of sales for the first quarter of 2007.
The increase in gross profit and gross profit percentage for the first quarter
of 2008 was due to the impact of the higher level of sales allowing the
Company to absorb fixed manufacturing costs.
Operating loss for the first quarter of 2008 was $(312,000) compared to an
operating loss of $(1,004,000) for the first quarter of 2007. The $692,000
decrease in operating loss for the first quarter of 2008 was due to an
increase in gross profit resulting from the increase in net sales, and reduced
research and development costs compared to the first quarter of 2007.
Loss from continuing operations was $(372,000) or $(.13) per share for the
first quarter of 2008 compared to a loss from continuing operations of
$(983,000) or $(.32) per share for the first quarter of 2007.
There was no loss from discontinued operations in the first quarter of
2008 compared to a loss from discontinued operations of $(281,000) or $(.09)
per share for the first quarter of 2007.
Net loss was $(372,000), or $(.13) per share on approximately 2.9 million
shares outstanding for the first quarter of 2008, compared to a net loss of
$(1,264,000) or $(.41) per share on approximately 3.1 million shares
outstanding for the first quarter of 2007.
Orders of $8,155,000 were received during the first quarter of 2008, an
increase of $2,186,000 or 36.6 percent compared to $5,969,000 in orders
received during the first quarter of 2007. Backlog increased by $2,397,000 or
13.3 percent to $20,388,000 at the end of the first quarter of 2008 compared
to $17,991,000 at year-end 2007. The increased orders received during the
first three months of 2008 were primarily from defense industry related
customers that are scheduled for shipment later in 2008 and 2009. The book-to-
bill ratio for the first quarter of 2008 was 1.42 to 1 and for the first
quarter of 2007 was 1.32 to 1. The orders, backlog, and book-to-bill data
exclude FMI information for the first quarter of 2007.
Chairman and CEO Mason N. Carter commented, "We are pleased to report a
continuation of strong incoming orders with a corresponding growth in backlog.
The backlog has a favorable mix with a blended margin within our target range.
We recently announced the booking of a $3.29 million contract to supply RF
components to a major prime government contractor. While our first quarter
operating results were disappointing, we expect a considerable improvement in
second quarter operating results. Our important Multi-Mix(R) development
program focused on RF Module Amplifiers for both WiMAX and UMTS wireless
telecommunications segments will be providing design confirmation prototypes
in the second quarter."
Mr. Carter continued, "Our financial highlights include:
-- Orders booked of $8.2 million for the first quarter of 2008, an
increase of more than 36 percent over 2007.
-- Record quarter-end backlog of $20.4 million.
-- Book-to-bill ratio of 1.42 to 1 for the first quarter of 2008.
-- Working capital of $9.8 million and current ratio of 3.9 to 1."
Investors are invited to participate in the financial results conference
call on Tuesday, May 13, 2008 at 4:15 p.m. (Eastern) by dialing 1-888-215-7030
(for International callers: 1-913-981-4905) five minutes prior to the
scheduled start time, and reference the Merrimac Industries first quarter 2008
conference call. For those unable to participate, a replay will be available
for seven days by dialing 1-888-203-1112, or 1-719-457-0820 for international
callers, passcode number 8982348.
This conference call will also be broadcast live over the internet by
logging on to the web at this address:
http://www.videonewswire.com/event.asp?id=48590
If you are unable to participate during the live webcast, a link to the
archived webcast will be posted on the Merrimac Industries, Inc. website
http://www.merrimacind.com .
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of RF
Microwave signal processing components, subsystem assemblies, and Multi-Mix(R)
micro-multifunction modules (MMFM(R)), for the worldwide Defense, Satellite
Communications (Satcom), Commercial Wireless and Homeland Security market
segments. Merrimac is focused on providing Total Integrated Packaging
Solutions(R) with Multi-Mix(R) Microtechnology, a leading edge competency
providing value to our customers through miniaturization and integration.
Multi-Mix(R) MMFM(R) provides a patented and novel packaging technology that
employs a platform modular architecture strategy that incorporates embedded
semiconductor devices, MMICs, resistors, passive circuit elements and
plated-through via holes to form a three-dimensional integrated module used in
High Power, High Frequency and High Performance mission-critical applications.
Merrimac Industries facilities are registered under ISO 9001:2000, an
internationally developed set of quality criteria for manufacturing
operations.
Merrimac Industries, Inc. has facilities located in West Caldwell, NJ and
San Jose, Costa Rica and has approximately 190 co-workers dedicated to the
design and manufacture of signal processing components, gold plating of
high-frequency microstrip and bonded stripline Teflon (PTFE) circuits and
subsystems providing Total Integrated Packaging Solutions(R) for wireless
applications. Merrimac (MRM) is listed on the American Stock Exchange.
Multi-Mix(R), Multi-Mix PICO(R), MMFM(R), System In A Package(R), SIP(R) and
Total Integrated Packaging Solutions(R) are registered trademarks of Merrimac
Industries, Inc. For more information about Merrimac Industries, Inc. please
visit our website http://www.merrimacind.com .
This press release contains statements relating to future results of the
Company (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected
as a result of certain risks and uncertainties. These risks and uncertainties
include, but are not limited to: risks associated with demand for and market
acceptance of existing and newly developed products as to which the Company
has made significant investments, particularly its Multi-Mix(R) products; the
possibilities of impairment charges to the carrying value of our Multi-Mix(R)
assets, thereby resulting in charges to our earnings; risks associated with
adequate capacity to obtain raw materials and reduced control over delivery
schedules and costs due to reliance on sole source or limited suppliers;
slower than anticipated penetration into the satellite communications, defense
and wireless markets; failure of our Original Equipment Manufacturer or OEM
customers to successfully incorporate our products into their systems; changes
in product mix resulting in unexpected engineering and research and
development costs; delays and increased costs in product development,
engineering and production; reliance on a small number of significant
customers; the emergence of new or stronger competitors as a result of
consolidation movements in the market; the timing and market acceptance of our
or our OEM customers' new or enhanced products; general economic and industry
conditions; the ability to protect proprietary information and technology;
competitive products and pricing pressures; our ability and the ability of our
OEM customers to keep pace with the rapid technological changes and short
product life cycles in our industry and gain market acceptance for new
products and technologies; risks relating to governmental regulatory actions
in communications and defense programs; and inventory risks due to
technological innovation and product obsolescence, as well as other risks and
uncertainties as are detailed from time to time in the Company's Securities
and Exchange Commission filings. These forward-looking statements are made
only as of the date hereof, and the Company undertakes no obligation to update
or revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact: Mason N. Carter, Chairman & CEO
973-575-1300, ext. 1202
mnc@merrimacind.com
Merrimac Industries, Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
Quarter Ended
March 29, March 31,
2008 2007(a)
Net sales $5,758,000 $4,511,000
Gross profit 2,306,000 1,697,000
Selling, general and administrative expenses 2,245,000 2,217,000
Research and development 373,000 484,000
Operating loss (312,000) (1,004,000)
Interest and other (expense) income, net (60,000) 21,000
Loss from continuing operations (372,000) (983,000)
Loss from discontinued operations - (281,000)
Net loss (372,000) (1,264,000)
Net loss per common share:
Loss from continuing operations $(.13) $(.32)
Loss from discontinued operations - $(.09)
Net loss per common share-basic and diluted $(.13) $(.41)
Weighted average number of shares
outstanding-basic and diluted 2,933,000 3,096,000
(a) In accordance with the provisions of SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," the operating results of
Filtran Microcircuits Inc. for the prior period have been reported as
discontinued operations.
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
March 29, 2008 December 29, 2007
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 627,000 $ 2,004,000
Accounts receivable, net 5,797,000 5,300,000
Inventories 6,074,000 5,040,000
Other current assets 742,000 774,000
Due from assets sale contract - 664,000
Total current assets 13,240,000 13,782,000
Property, plant and equipment, net 10,690,000 10,956,000
Restricted cash - 250,000
Other assets 539,000 532,000
Deferred tax assets 52,000 52,000
Total Assets $ 24,521,000 $ 25,572,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Current portion of long-term debt $ 550,000 $ 550,000
Accounts payable 977,000 944,000
Other current liabilities 1,808,000 2,328,000
Deferred tax liabilities 52,000 52,000
Total current liabilities 3,387,000 3,874,000
Long-term debt, net of current portion 3,375,000 3,763,000
Deferred liabilities 62,000 61,000
Total liabilities 6,824,000 7,698,000
Stockholders' equity:
Common stock 33,000 33,000
Additional paid-in capital 19,985,000 19,790,000
Retained earnings 801,000 1,173,000
Treasury stock (3,122,000) (3,122,000)
Stockholders' equity 17,697,000 17,874,000
Total Liabilities and
Stockholders' Equity $ 24,521,000 $ 25,572,000
Merrimac Industries, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Quarter Ended
March 29, March 31,
2008 2007(a)
Cash flows from operating activities:
Net loss $(372,000) $(1,264,000)
Less, loss from discontinued operations - (281,000)
Loss from continuing operations (372,000) (983,000)
Adjustments to reconcile loss from continuing
operations to net cash provided by (used in)
operating activities:
Depreciation and amortization 618,000 571,000
Amortization of deferred financing costs 8,000 7,000
Share-based compensation 120,000 52,000
Changes in operating assets and liabilities:
Accounts receivable (497,000) 1,024,000
Inventories (1,034,000) (175,000)
Other current assets 32,000 246,000
Other assets (15,000) 17,000
Other current liabilities (488,000) (98,000)
Deferred liabilities 1,000 6,000
Net cash provided by (used by) operating
activities-continuing operations (1,627,000) 667,000
Net cash used by operating
activities-discontinued operations - (152,000)
Net cash provided by (used by) operating
activities (1,627,000) 515,000
Cash flows from investing activities:
Purchases of capital assets (351,000) (396,000)
Proceeds from sale of discontinued operations 664,000 -
Net cash provided by (used in) investing
activities-continuing operations 313,000 (401,000)
Net cash used in investing
activities-discontinued operations - (98,000)
Net cash provided by (used in) investing
activities 313,000 (499,000)
Cash flows from financing activities:
Repurchase of common stock for the treasury - (2,148,000)
Repayment of borrowings (388,000) (137,000)
Restricted cash returned 250,000 -
Proceeds from stock sales 75,000 51,000
Net cash provided by (used in) financing
activities-continuing operations (63,000) (2,234,000)
Net cash used in financing
activities-discontinued operations - (43,000)
Net cash provided by (used in) financing
activities (63,000) (2,277,000)
Effect of exchange rate changes - 2,000
Net increase (decrease) in cash and cash
equivalents (1,377,000) (2,259,000)
Cash and cash equivalents at beginning of
period, including $562,000 in 2007 reported
under assets held for sale 2,004,000 5,961,000
Cash and cash equivalents at end of period
including $271,000 reported under assets held
for sale in 2007 $627,000 $3,702,000
(a) In accordance with the provisions of SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," the operating results of
Filtran Microcircuits Inc. for the prior period have been reported as
discontinued operations.
SOURCE Merrimac Industries, Inc.
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