WEST CALDWELL, N.J., Aug. 12 /PRNewswire-FirstCall/ -- Merrimac
Industries, Inc. (Amex: MRM), a leader in the design and manufacture of RF
Microwave components, assemblies and micro-multifunction modules (MMFM(R)),
today announced results for the second quarter and first six months of 2003.
Second quarter 2003 sales of $6,613,000 increased 2.3 percent compared to
second quarter 2002 sales of $6,462,000. Expenses associated with bank
modification agreements entered into during the second quarter and additional
professional fee expenses were incurred totaling approximately $300,000 and
impacted the second quarter and first six months of 2003 results. In
addition, a personnel restructuring charge of $74,000 was taken during the
second quarter of 2003. Operating loss in the second quarter of 2003 was
$529,000 compared to an operating loss of $153,000 in the second quarter of
2002. The Company recognized a gain on the disposition of assets of $71,000
during the second quarter of 2003.
Net loss for the second quarter of 2003 was $475,000 or $.15 per share,
compared to a net loss of $54,000 or $.02 per share, recorded for the second
quarter of 2002.
For the first six months of 2003 sales of $13,124,000 decreased 1.4
percent compared to sales of $13,313,000 for the first six months of 2002.
Operating loss for the first six months of 2003 was $1,006,000, which takes
into account a second quarter personnel restructuring charge of $74,000,
compared to operating income of $122,000, which takes into account a second
quarter restructuring charge of $240,000 for the first six months of 2002.
Net loss for the first six months of 2003 was $930,000 or $.30 per share,
giving effect to the impact of the $.02 per share second quarter personnel
restructuring charge and the $.02 per share second quarter gain on the
disposition of assets, compared to net income of $89,000 or $.03 per share,
giving effect to the impact of a $.05 per share personnel restructuring charge
in the second quarter of 2002 for the first six months of 2002.
Chairman and CEO Mason N. Carter commented, "While the sales, order input
and backlog for the quarter showed improvement we are still managing the
economic challenges faced by our industry. We are focused on targeted key
account penetration, product development and cost reduction."
The backlog at the end of the second quarter of 2003 was $12.1 million, an
increase of $2.1 million or 21.0 percent compared to year-end 2002, and $1.0
million or 9.0 percent when compared to the backlog of $11.1 million at the
end of the second quarter of 2002. Orders received during the second quarter
of 2003, totaling $7.1 million, exceeded the second quarter of 2003 sales
level by approximately 7.3 percent. Orders received for the first six months
of 2003, totaling $15.2 million, exceeded sales in the first six months of
2003 by approximately 16%, reflecting the defense contracts awarded to
Merrimac during the first six months of 2003.
Management of the Company has implemented certain cost and capital
expenditure reductions and is contemplating additional cost reductions as a
means to improve cash flow. Management also believes that the potential
exists for various financing alternatives, including but not limited to
obtaining secured financing from an asset based lender and/or a sale and
lease-back of certain property. While management believes any one of these
financing alternatives, combined with current liquid resources and the
expected cash flows from operations, should be sufficient to meet the
obligations to Fleet Bank ($5,807,000 and any revolving credit balance due
January 31, 2004) and currently contemplated operations during the next twelve
months, there can be no assurance that any alternative financings can be
obtained by the Company.
Investors are invited to participate in the financial results conference
call on Wednesday August 13, 2003 at 4:15 p.m. (Eastern) by dialing
1-800-915-4836 (for International callers: 1-973-317-5319) ten minutes prior
to the scheduled start time, and reference the Merrimac Industries second
quarter 2003 conference call. For those unable to participate, a replay will
be available for seven days by dialing 1-800-428-6051 or 1-973-709-2089 for
international callers, passcode number 303721.
This conference call will also be broadcast live over the Internet by
logging on to the web at this address:
http://www.firstcallevents.com/service/ajwz387477820gf12.html
If you are unable to participate during the live webcast, the call will be
archived on the Merrimac website http://www.merrimacind.com .
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of
Multi-Mix PICO(TM) RF Microwave components, assemblies and micro-multifunction
modules (MMFM), serving the wireless telecommunications industry worldwide
with enabling technologies for space, defense and commercial applications.
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. The Multi-Mix(R) process
for microwave, multilayer integrated MMFM circuitry is a patented method
developed by Merrimac Industries based on fluoropolymer composite substrates.
The fusion bonding of multilayer structures provides a homogeneous dielectric
medium for superior electrical performance at microwave frequencies. The
bonded layers may incorporate embedded semiconductor devices, MMICs, etched
resistors, passive circuit elements and plated-through via holes to form a
three-dimensional subsystem enclosure that requires no further packaging.
Merrimac Industries facilities are registered under ISO 9000, an
internationally developed set of quality criteria for manufacturing
operations.
Merrimac Industries, Inc. and its subsidiary Filtran Microcircuits Inc.,
are located in West Caldwell, NJ, San Jose, Costa Rica and Ottawa, Ontario,
Canada, and have 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(TM) MMFM(R) and Total
Integrated Packaging Solutions(R) are trademarks of Merrimac Industries, Inc.
For more information about Merrimac Industries, Inc. and 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 products; the
risk that the Company will not be able to refinance or retire its existing
indebtedness or consummate alternate financing in order to fund its operations
as currently contemplated by its business strategy; general economic and
industry conditions; slower than anticipated penetration into the satellite
communications, defense and wireless markets; the risk that the benefits
expected from the acquisition of Filtran Microcircuits Inc. are not realized;
the ability to protect proprietary information and technology; competitive
products and pricing pressures; 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, including but not limited to those 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
June 28, 2003 June 29, 2002
Net sales $6,613,000 $6,462,000
Gross profit 2,554,000 2,986,000
Selling, general and
administrative expenses 2,585,000 2,287,000
Research and development 424,000 612,000
Restructuring charges 74,000 240,000
Interest and other expense, net 53,000 41,000
Gain on disposition of assets (71,000) -
Loss before income taxes (512,000) (194,000)
Benefit for income taxes (37,000) (140,000)
Net loss (475,000) (54,000)
Basic and diluted net loss per common share $(.15) $(.02)
Weighted average number of shares
outstanding - basic and diluted 3,121,000 3,186,000
Six Months Ended
June 28, 2003 June 29, 2002
Net sales $13,124,000 $13,313,000
Gross profit 5,006,000 6,180,000
Selling, general and
administrative expenses 4,914,000 4,631,000
Research and development 1,024,000 1,187,000
Restructuring charges 74,000 240,000
Interest and other expense, net 113,000 103,000
Gain on disposition of assets (71,000) -
Income (loss) before income taxes (1,048,000) 19,000
Benefit for income taxes (118,000) (70,000)
Net income (loss) (930,000) 89,000
Basic and diluted net income (loss) per
common share $(.30) $.03
Weighted average number of shares
outstanding - basic 3,120,000 3,011,000
Weighted average number of shares
outstanding - diluted 3,120,000 3,093,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
June 28, 2003 December 28, 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,891,000 $3,611,000
Income tax refunds receivable 44,000 301,000
Accounts receivable, net 5,359,000 3,801,000
Inventories 3,861,000 4,015,000
Other current assets 497,000 318,000
Deferred tax assets 945,000 945,000
Total current assets 12,597,000 12,991,000
Property, plant and
equipment, net 18,644,000 19,282,000
Other assets 689,000 818,000
Deferred tax assets, non-current 1,109,000 905,000
Goodwill, net 2,967,000 2,491,000
Total Assets $36,006,000 $36,487,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $5,989,000 $6,240,000
Other current liabilities 3,198,000 3,134,000
Total current liabilities 9,187,000 9,374,000
Long-term debt 406,000 429,000
Deferred compensation 107,000 123,000
Deferred liabilities 48,000 156,000
Deferred tax liabilities 1,737,000 1,703,000
Total liabilities 11,485,000 11,785,000
Stockholders' equity 24,521,000 24,702,000
Total Liabilities and
Stockholders' Equity $36,006,000 $36,487,000
Contact: Mason N. Carter, Chairman & CEO
973-575-1300, ext. 1202
mnc@merrimacind.com
SOURCE Merrimac Industries, Inc.
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http://www.merrimacind.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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