Quarterly Continuing Operations Results Improve
Record Quarter-End Backlog Exceeds $20 Million
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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Related links:
http://www.merrimacind.com/
http://www.prnewswire.com/comp/567525.html /
CONTACT:
Mason N. Carter, Chairman & CEO, Merrimac
Industries, Inc., +1-973-575-1300, ext. 1202, mnc@merrimacind.com
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