WEST CALDWELL, N.J., Aug. 15 /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 2006.
Sales for the second quarter of 2006 were $8,251,000, a $682,000 or a
9.0 percent increase compared to the second quarter of 2005 sales of
$7,569,000. Sales increased due to the shipment of a $750,000 order to a
significant military customer and $1,200,000 of revenue recognized in
connection with the early close out of a fixed price customer contract,
offset by a sales reduction in the microwave micro-circuitry segment of
$650,000 due to delays in renewals of the segment's defense orders. Gross
profit for the second quarter of 2006 was $3,710,000, an increase of
$442,000 or 13.5 percent and was 45.0 percent of sales as compared to gross
profit of $3,268,000 or 43.2 percent of sales for the second quarter of
2005. Second quarter 2006 gross profit includes $1,200,000 of revenue
recognized from the early contract close out as to which second quarter
expenses were approximately $140,000 because the Company had ceased work
when the contract ended. Gross profit percent in the second quarter of 2006
increased from the second quarter of 2005 due to the revenue recognized as
a result of the early contract close out previously mentioned.
Operating income for the second quarter of 2006 increased $133,000 to
$549,000 compared to operating income of $416,000 for the second quarter of
2005 due to revenue recognized as a result of the contract close out
previously mentioned. Operating income for the second quarter of 2006
included a non-cash charge of $35,000 for share-based compensation expense
resulting from the adoption of SFAS No. 123R at the beginning of fiscal
year 2006. Net income for the second quarter of 2006 was $529,000 or $.17
per diluted share compared to net income of $332,000 or $.10 per diluted
share for the second quarter of 2005.
For the first six months of 2006 sales of $14,482,000 decreased
$345,000 or 2.3 percent compared to sales of $14,827,000 for the first six
months of 2005. Sales for the first six months of 2006 were lower than the
first six months of 2005 primarily due to the lower bookings levels
received during the second half of 2005 and the first quarter of 2006 as
compared to comparable prior periods from delays in space and defense
programs. 2006 sales included a reduction in the microwave micro-circuitry
segment of $640,000 due to delays in renewals of the segment's defense
orders, offset by the revenue recognized as a result of the early contract
close out previously mentioned. Gross profit for the first six months of
2006 was $6,112,000, a decrease of $191,000 or 3.0 percent and was 42.2
percent of sales as compared to gross profit of $6,303,000 or 42.5 percent
of sales for the first six months of 2005.
Operating income for the first six months of 2006 was $93,000 compared
to operating income for the first six months of 2005 of $599,000. The
reduction in operating income for the first six months of 2006 as compared
to the first six months of 2005 was due to the lower gross profit from the
decrease in sales, partially offset by revenue recognized as a result of
the early contract close out previously mentioned, and due to higher
selling, general and administrative expenses compared to the first six
months of 2005. Operating income for the first six months of 2006 included
a non-cash charge of $79,000 for share-based compensation expense resulting
from the adoption of SFAS No. 123R. Net income for the first six months of
2006 was $89,000 or $.03 per diluted share compared to net income of
$416,000 or $.13 per diluted share for the first six months of 2005. Net
income for the first six months of 2006 also included a tax benefit of
$48,000 or $.02 per share representing refundable Canadian provincial
technology tax credits for which the Company has qualified.
Orders of $8,919,000 were received during the second quarter of 2006,
an increase of $779,000 or 9.6 percent compared to $8,140,000 in orders
received during the second quarter of 2005. Orders of $12,864,000 were
received for the first six months of 2006, a decrease of $3,471,000 or 21.2
percent compared to $16,335,000 in orders received for the first six months
of 2005. The decrease in orders for the first six months of 2006 as
compared to the first six months of 2005 was due to delays in expected
satellite and defense programs for all product lines, including our
Multi-Mix(R) products. Backlog decreased by $1,617,000 or 12.3 percent to
$11,521,000 at the end of the second quarter of 2006 compared to
$13,138,000 at year-end 2005. The book-to- bill ratio for the second
quarter of 2006 was 1.08 to 1 and for the second quarter of 2005 was 1.08
to 1. The book-to-bill ratio for the first six months of 2006 was 0.89 to 1
and for the first six months of 2005 was 1.10 to 1.
Chairman and CEO Mason N. Carter commented, "Working closely with our
customers during their initial design stage has enabled us to position
ourselves for the future. However, we are experiencing some timing delays
with respect to our space and defense customers for all product lines,
including our Multi-Mix(R) customers, as they continue to finalize their
system designs and work out contract details with their customers."
Mr. Carter continued, "Our financial highlights include:
-- Orders booked of $8.9 million for the second quarter.
-- Cash of $4.9 million (includes $1.5 million of restricted cash)
exceeds the total of current and long-term debt of $2.7 million.
-- Working capital of $10.4 million and current ratio of 3.8 to 1."
Investors are invited to participate in the financial results
conference call on Tuesday, August 15, 2006 at 4:15 p.m. (Eastern) by
dialing 1-800-946-0715 (for International callers: 1-719-457-2643) ten
minutes prior to the scheduled start time, and reference the Merrimac
Industries second quarter 2006 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 6839549.
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=35272
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; 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; 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
(Unaudited)
Quarter Ended
July 1, 2006 July 2, 2005
Net sales $8,251,000 $7,569,000
Gross profit 3,710,000 3,268,000
Selling, general and administrative expenses 2,645,000 2,344,000
Research and development 516,000 508,000
Operating income 549,000 416,000
Interest and other expense, net (33,000) (64,000)
Income before income taxes 516,000 389,000
Provision (benefit) for income taxes (13,000) 20,000
Net income 529,000 332,000
Basic net income per common share $.17 $.11
Diluted net income per common share $.17 $.10
Weighted average number of shares
outstanding - basic 3,144,000 3,141,000
Weighted average number of shares
outstanding - diluted 3,183,000 3,173,000
Six Months Ended
July 1, 2006 July 2, 2005
Net sales $14,482,000 $14,827,000
Gross profit 6,112,000 6,303,000
Selling, general and administrative expenses 5,131,000 4,655,000
Research and development 888,000 1,049,000
Operating income 93,000 599,000
Interest and other expense, net (52,000) (117,000)
Loss on disposition of assets - (36,000)
Income before income taxes 41,000 446,000
Provision (benefit) for income taxes (48,000) 30,000
Net income 89,000 416,000
Basic net income per common share $.03 $.13
Diluted net income per common share $.03 $.13
Weighted average number of shares
outstanding - basic 3,146,000 3,139,000
Weighted average number of shares
outstanding - diluted 3,166,000 3,174,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
July 1, 2006 December 31, 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $3,383,000 $4,081,000
Income tax refunds receivable 433,000 418,000
Accounts receivable, net 5,545,000 5,310,000
Inventories 4,003,000 3,710,000
Other current assets 619,000 693,000
Deferred tax assets 140,000 140,000
Total current assets 14,123,000 14,352,000
Property, plant and equipment, net 13,618,000 13,973,000
Restricted cash 1,500,000 1,500,000
Other assets 646,000 614,000
Deferred tax assets 502,000 482,000
Goodwill, net 3,681,000 3,501,000
Total Assets $ 34,070,000 $ 34,422,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $ 856,000 $ 908,000
Other current liabilities 2,834,000 3,590,000
Total current liabilities 3,690,000 4,498,000
Long-term debt, net of current portion 1,842,000 2,071,000
Deferred liabilities 31,000 23,000
Deferred tax liabilities 140,000 140,000
Total liabilities 5,703,000 6,732,000
Stockholders' equity 28,367,000 27,690,000
Total Liabilities and
Stockholders' Equity $ 34,070,000 $ 34,422,000
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 of Merrimac
Industries, Inc., +1-973-575-1300, ext. 1202, mnc@merrimacind.com
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