WEST CALDWELL, N.J., May 14 /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 of 2007.
Sales for the first quarter of 2007 were $5,424,000, a decrease of
$807,000 or 12.9 percent compared to the first quarter of 2006 sales of
$6,231,000. The sales decrease was due to a problem with purchased material
that was utilized in certain products. The Company has evaluated the
material and found the problem with the material does not affect the
functionality and reliability of the products. The customers purchasing
these products agreed with the Company's conclusions. This problem did
cause shipment delays of approximately $1,000,000 of products that were
expected to be sold in the first quarter of 2007. Substantially all of the
products impacted should be shipped during the second quarter of 2007.
Gross profit for the first quarter of 2007 was $1,782,000, a decrease of
$619,000 or 25.8 percent, and was 32.8 percent of sales as compared to
gross profit of $2,401,000 or 38.5 percent of sales for the first quarter
of 2006. Gross profit percent in the first quarter of 2007 decreased from
the first quarter of 2006 due to the impact of the lower level of sales
having to absorb fixed manufacturing costs.
Operating loss for the first quarter of 2007 was $(1,220,000), compared
to an operating loss of $(457,000) for the first quarter of 2006. Operating
loss for the first quarter of 2007 was due to the lower gross profit from
the decrease in sales and higher research and development costs related to
the Company's Multi-Mix(R) products.
Net loss for the first quarter of 2007 was $(1,264,000) compared to a
net loss of $(441,000) for the first quarter of 2006. Net loss per share
was $(.41) for the first quarter of 2007, compared to net loss per share of
$(.14) reported for the first quarter of 2006. Net loss for the first
quarter of 2006 included a tax benefit of $35,000 or $.01 per share
representing refundable Canadian provincial technology tax credits for
which the Company has qualified and lower net interest expense.
Orders of $6,485,000 were received during the first quarter of 2007, an
increase of $2,540,000 or 64.4 percent compared to $3,945,000 in orders
received during the first quarter of 2006. Backlog increased by $1,061,000
or 8.6 percent to $13,446,000 at the end of the first quarter of 2007
compared to $12,385,000 at year-end 2006, due to the shipment delays caused
by the problem with the purchased material. The book-to-bill ratio for the
first quarter of 2007 was 1.20 to 1 and for the first quarter of 2006 was
0.63 to 1.
Chairman and CEO Mason N. Carter commented, "We are currently working
closely with our key account customers in establishing new Multi-Mix(R)
Solutions that may become the foundation for the next-generation of
integrated modules, platforms and subassemblies.
-- We received an Internal Research and Development contract (IRAD) for
Multi-Mix(R) integrated modules from a major satellite customer. Final
design and manufacture of the first space IRAD qualified assembly
modules have been completed and delivered in April. We are continuing
co-design efforts with our customer in developing innovative and
enabling Multi-Mix(R) Microtechnology solutions that offer size,
weight, and cost solutions. Our customer design engineers are co-
designing with our design teams in offering and optimizing compelling
reasons for technology adoption by their customers. These applications
can be utilized for the next-generation of military satellite
communications.
-- We received a contract from another key account satellite customer to
develop a variety of custom solutions for use in beam forming
communications networks for some of the largest and most powerful
satellites ever built.
-- We continue our research and development investment focused on our
Integrated Multi-Mix(R) High Power Amplifier Resource Module and
continue to work on very significant developments on highly integrated
radar platforms."
Mr. Carter continued, "Our financial information includes:
-- Cash of $3.7 million after the repurchase in March of 238,700 shares of
Merrimac Common Stock at $9.00 per share for approximately $2.2
million.
-- Working capital of $10.1 million and a current ratio of 4.0 to 1.
-- Research and development costs increased $139,000 for 2007 to support
new Multi-Mix(R) products to be available later this year.
-- First quarter 2007 book-to-bill ratio of 1.2 to 1."
Investors are invited to participate in the financial results
conference call on Monday, May 14, 2007 at 4:15 p.m. (Eastern) by dialing
1-800-474-8920 (for International callers: 1-719-457-2727) ten minutes
prior to the scheduled start time, and reference the Merrimac Industries
first quarter 2007 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 8993342.
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=39841
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, etched
resistors, passive circuit elements and plated-through via holes to form a
three-dimensional integrated module applicable to 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,
San Jose, Costa Rica and Ottawa, Ontario, Canada, and has approximately 210
co- workers dedicated to the design and manufacture of signal processing
components, gold plating of high-frequency microstrip, bonded stripline and
thick metal-backed Teflon (PTFE) micro-circuitry 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) and Total Integrated Packaging Solutions(R) are trademarks
of Merrimac Industries, Inc. For more information about Merrimac
Industries, Inc. and its Canadian subsidiary Filtran Microcircuits Inc.,
please visit http://www.merrimacind.com and http://www.filtranmicro.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 risk that the benefits expected from the Company's
acquisition of Filtran Microcircuits Inc. are not realized; 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;
foreign currency fluctuations between the U.S. and Canadian dollars; 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
Quarter Ended
(Unaudited)
March 31, April 1,
2007 2006
Net sales $5,424,000 $6,231,000
Gross profit 1,782,000 2,401,000
Selling, general and administrative
expenses 2,491,000 2,486,000
Research and development expense 511,000 372,000
Operating loss (1,220,000) (457,000)
Interest and other expense, net 44,000 19,000
Loss before income taxes (1,264,000) (476,000)
Benefit for income taxes - (35,000)
Net loss (1,264,000) (441,000)
Net loss per common share $(.41) $(.14)
Weighted average number of shares
outstanding 3,096,000 3,149,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
March 31, December 30,
2007 2006
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $3,702,000 $5,961,000
Accounts receivable, net 4,830,000 5,852,000
Income tax refunds receivable 99,000 99,000
Inventories 4,074,000 3,917,000
Other current assets 647,000 882,000
Deferred tax assets 10,000 10,000
Total current assets 13,362,000 16,721,000
Property, plant and equipment, net 12,862,000 12,985,000
Other assets 467,000 493,000
Deferred tax assets 557,000 552,000
Goodwill 3,545,000 3,503,000
Total Assets $30,793,000 $34,254,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $622,000 $649,000
Deferred tax liabilities 100,000 100,000
Other current liabilities 2,577,000 2,618,000
Total current liabilities 3,299,000 3,367,000
Long-term debt, net of current portion 4,413,000 4,564,000
Deferred liabilities 44,000 38,000
Total liabilities 7,756,000 7,969,000
Stockholders' equity
Common stock 33,000 33,000
Additional paid-in capital 19,340,000 19,237,000
Retained earnings 5,336,000 6,600,000
Accumulated other comprehensive income 1,450,000 1,389,000
Less treasury stock (3,122,000) (974,000)
Stockholders' equity 23,037,000 26,285,000
Total Liabilities and
Stockholders' Equity $30,793,000 $34,254,000
Merrimac Industries, Inc.
Condensed Consolidated Statements of Cash Flows
Quarter Ended
(Unaudited)
March 31, April 1,
2007 2006
Cash flows from operating activities:
Net loss $(1,264,000) $(441,000)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 635,000 663,000
Amortization of deferred financing costs 7,000 12,000
Share-based compensation 51,000 44,000
Changes in operating assets and liabilities:
Accounts receivable 1,029,000 (83,000)
Inventories (155,000) (514,000)
Other current assets 236,000 39,000
Other assets 17,000 (11,000)
Other current liabilities (47,000) 76,000
Deferred liabilities 6,000 (6,000)
Net cash provided by (used in) operating
activities 515,000 (221,000)
Cash flows from investing activities:
Purchases of capital assets (499,000) (552,000)
Net cash used in investing activities (499,000) (552,000)
Cash flows from financing activities:
Borrowings under revolving lease line - 160,000
Repurchase of stock for the treasury (2,148,000) -
Repayment of borrowings (180,000) (233,000)
Proceeds from stock sales 51,000 71,000
Net cash used in financing activities (2,277,000) (2,000)
Effect of exchange rate changes 2,000 (4,000)
Net decrease in cash and cash equivalents (2,259,000) (779,000)
Cash and cash equivalents at beginning
of year 5,961,000 4,081,000
Cash and cash equivalents at end of
period $ 3,702,000 $ 3,302,000
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,
973-575-1300, ext. 1202, mnc@merrimacind.com
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