WEST CALDWELL, N.J., Aug. 8 /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 second quarter and first six months of 2005.
Sales for the second quarter of 2005 were $7,569,000, a 4.1 percent
decrease compared to second quarter of 2004 sales of $7,896,000. Operating
income for the second quarter of 2005 decreased to $416,000 compared to
operating income of $459,000 for the second quarter of 2004. Net income for
the second quarter of 2005 was $332,000 or $.10 per diluted share compared to
net income of $444,000 or $.14 per diluted share for the second quarter of
2004, which included a tax benefit of $75,000 or $.02 per share related to
certain Canadian tax credits.
For the first six months of 2005 sales of $14,827,000 decreased 4.6
percent compared to sales of $15,544,000 for the first six months of 2004.
Operating income for the first six months of 2005 was $599,000 compared to
operating income for the first six months of 2004 of $781,000. Net income for
the first six months of 2005 was $416,000 or $.13 per diluted share compared
to net income of $675,000 or $.21 per diluted share for the first six months
of 2004, which included a tax benefit of $75,000 or $.02 per share related to
certain Canadian tax credits.
Sales for the second quarter and first six months of 2005 were lower
primarily due to the timing of the receipt of orders and their scheduled
delivery dates, resulting in later shipment and conversion of these orders
into sales than in the comparable periods of 2004. Gross profit percentage
increased in the second quarter of 2005 due to a stronger product mix and cost
and production efficiencies. Operating results for the second quarter were
lower due to a reduction of gross profit resulting from decreased sales.
Operating results for the first six months were lower due to a reduction of
gross profit resulting from decreased sales, partially offset by lower
operating expenses during the first six months of 2005 compared to the first
six months of 2004.
Orders of $8,140,000 were received during the second quarter of 2005, an
increase of $1,227,000 or 17.7 percent compared to $6,913,000 in orders
received during the second quarter of 2004. Orders of $16,335,000 were
received for the first six months of 2005, an increase of $813,000 or 5.2
percent compared to $15,522,000 in orders received for the first six months of
2004. Backlog increased by $1,508,000 or 11.6 percent to $14,453,000 at the
end of second quarter 2005 compared to $12,945,000 at year-end 2004.
Chairman and CEO Mason N. Carter commented, "This was the seventh
consecutive profitable quarter for the Company. Backlog and gross margin
increases are primarily attributed to the product mix generated from
satellite, defense and commercial wireless customers. By developing our
relationships within the commercial wireless and WiMAX segments and by making
further inroads in product qualification for new and existing base station
infrastructure programs, we have laid the groundwork for future sales and
backlog gains. In addition, our gross margins continue to benefit from
increased operating efficiencies as we leverage our manufacturing capacity.
Current commercial wireless demand still remains limited.
"In May, we announced the receipt of a $1.0 million advance contract for
product documentation and materials procurement for Multi-Mix(R) integrated
modules. In July we received a contract for an additional $2.1 million for
this program. The Multi-Mix(R) subsystem provides a cost effective and
enabling solution for use in this multi-year military program."
Mr. Carter continued, "Our financial results reflecting consistent
performance include:
* Gross profit of 43.2 percent for the second quarter and 42.5 percent for
the first six months of 2005.
* Orders booked of $8.1 million for the second quarter and $16.3 million
for the first six months of 2005 with the year-to-date book-to-bill
ratio of 1.1 to 1.
* Cash of $4.2 million (includes $1.5 million of restricted cash) exceeds
the total of current and long-term debt of $3.5 million.
* Working capital of $10.0 million and current ratio of 3.5 to 1."
Investors are invited to participate in the financial results conference
call on Monday, August 8, 2005 at 4:15 p.m. (Eastern) by dialing
1-800-262-1292 (for International callers: 1-719-457-2680) ten minutes prior
to the scheduled start time, and reference the Merrimac Industries second
quarter 2005 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 2456395.
This conference call will also be broadcast live over the Internet by
logging on to the web at this address:
http://phx.corporate-ir.net/playerlink.zhtml?c=73209&s=wm&e=1115783
If you are unable to participate during the live webcast, a link to the
archived webcast will be listed 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 230 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; general
economic and industry conditions; the possibilities of impairment charges to
the carrying value of our Multi-Mix(R) assets, thereby resulting in charges to
our earnings; slower than anticipated penetration into the satellite
communications, defense and wireless markets; 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; failure of our Original Equipment
Manufacturer, or OEM, customers to successfully incorporate our products into
their systems; 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; 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; 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; 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.
Merrimac Industries, Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
Quarter Ended
July 2, 2005 July 3, 2004
Net sales $7,569,000 $7,896,000
Gross profit 3,268,000 3,308,000
Selling, general and administrative expenses 2,344,000 2,453,000
Research and development 508,000 396,000
Operating income 416,000 459,000
Interest and other expense, net (64,000) (70,000)
Income before income taxes 352,000 389,000
Provision (benefit) for income taxes 20,000 (55,000)
Net income 332,000 444,000
Basic net income per common share $.11 $.14
Diluted net income per common share $.10 $.14
Weighted average number of shares
outstanding - basic 3,141,000 3,124,000
Weighted average number of shares
outstanding - diluted 3,173,000 3,164,000
Six Months Ended
July 2, 2005 July 3, 2004
Net sales $14,827,000 $15,544,000
Gross profit 6,303,000 6,656,000
Selling, general and administrative expenses 4,655,000 4,908,000
Research and development 1,049,000 967,000
Operating income 599,000 781,000
Interest and other expense, net (117,000) (151,000)
Loss on disposition of assets (36,000) --
Income before income taxes 446,000 630,000
Provision (benefit) for income taxes 30,000 (45,000)
Net income 416,000 675,000
Basic net income per common share $.13 $.22
Diluted net income per common share $.13 $.21
Weighted average number of shares
outstanding - basic 3,139,000 3,122,000
Weighted average number of shares
outstanding - diluted 3,174,000 3,146,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
July 2, 2005 January 1, 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,721,000 $ 2,166,000
Income tax refunds receivable -- 98,000
Accounts receivable, net 6,364,000 6,473,000
Inventories 3,520,000 2,931,000
Other current assets 704,000 583,000
Deferred tax assets 680,000 676,000
Total current assets 13,989,000 12,927,000
Property, plant and equipment, net 14,223,000 15,584,000
Restricted cash 1,500,000 1,500,000
Other assets 678,000 747,000
Deferred tax assets 407,000 439,000
Goodwill, net 3,309,000 3,378,000
Total Assets $34,106,000 $34,575,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $ 984,000 $ 905,000
Other current liabilities 2,992,000 3,558,000
Total current liabilities 3,976,000 4,463,000
Long-term debt, net of current portion 2,477,000 2,778,000
Deferred liabilities 53,000 88,000
Deferred tax liabilities 648,000 648,000
Total liabilities 7,154,000 7,977,000
Stockholders' equity 26,952,000 26,598,000
Total Liabilities and Stockholders' Equity $34,106,000 $34,575,000
Contact: Mason N. Carter, Chairman & CEO
973-575-1300, ext. 1202
mnc@merrimacind.com
SOURCE Merrimac Industries, Inc.
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Related links:
http://www.merrimacind.com
http://www.filtranmicro.com
Company News On-Call:
http://www.prnewswire.com/comp/567525.html
CONTACT:
Mason N. Carter, Chairman & CEO of Merrimac
Industries, Inc., +1-973-575-1300, ext. 1202, mnc@merrimacind.com
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