WEST CALDWELL, N.J., Nov. 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 third quarter and first nine months of 2003.
Third quarter 2003 sales of $6,357,000 increased 7.0 percent compared to
third quarter 2002 sales of $5,939,000. Operating loss in the third quarter
of 2003 was $431,000, which takes into account a third quarter personnel
restructuring charge of $54,000, compared to operating income of $72,000 in
the third quarter of 2002.
Net loss for the third quarter of 2003 was $484,000 or $.16 per share,
giving effect to the impact of the personnel restructuring charge of $.02 per
share and the gain on the disposition of real estate assets of $33,000 or $.01
per share, compared to net income of $57,000 or $.02 per share recorded for
the third quarter of 2002.
For the first nine months of 2003 sales of $19,481,000 increased
1.2 percent compared to sales of $19,252,000 for the first nine months of
2002. Operating loss for the first nine months of 2003 was $1,437,000, which
takes into account personnel restructuring charges of $128,000, compared to
operating income of $193,000, which takes into account a personnel
restructuring charge of $240,000, for the first nine months of 2002. Expenses
associated with bank modification agreements incurred during the second
quarter and additional professional fee expenses in connection with our prior
bank facilities totaling approximately $300,000, impacted results for the
first nine months of 2003.
The net loss for the first nine months of 2003 was $1,415,000 or $.45 per
share, giving effect to the impact of the personnel restructuring charges of
$.04 per share and gains on the dispositions of assets of $104,000 or $.03 per
share, compared to net income of $146,000 or $.05 per share, giving effect to
the impact of the second quarter 2002 personnel restructuring charge of $.05
per share, for the first nine months of 2002.
The decline in gross profit during the third quarter of 2003 to
34.6 percent from 44.0 percent in the third quarter of 2002, and to
37.0 percent from 45.7 percent during the first nine months of 2003 compared
to the first nine months of 2002, was primarily attributable to competitive
pricing, cost overruns, increases in depreciation and other occupancy expenses
related to expansion and underutilization of manufacturing facilities.
The backlog at the end of the third quarter of 2003 was $12.2 million, an
increase of $2.1 million or 21.3 percent compared to year-end 2002, and
$1.3 million or 11.6 percent when compared to the backlog of $11.0 million at
the end of the third quarter of 2002. Orders received during the third quarter
of 2003, totaling $6.4 million, approximated the third quarter of 2003 sales
level. Orders received for the first nine months of 2003, totaling $21.6
million, exceeded sales in the first nine months of 2003 by approximately 11.0
percent.
Chairman and CEO Mason N. Carter commented, "The Company believes that the
economy is starting to recover, and anticipates performance improvement for
the fourth quarter of 2003 and beyond. Cost overruns that negatively impacted
third quarter 2003 results should not continue as a major factor and, as sales
increase, underutilization of manufacturing facilities should lessen.
"On October 8, 2003, we successfully completed refinancing approximately
$5.7 million of debt obligations with a new facility provided by CIT Business
Credit, a unit of CIT Group Inc. The refunding represents a
three-year secured revolving credit, term loan and letter of credit facility
for $9,250,000."
Management of the Company has implemented certain cost and capital
expenditure reductions as a means to improve cash flow. The new revolving
credit facility combined with the expected cash flows from operations should
be sufficient to meet the Company's current obligations and to fund its
currently contemplated operations during the next twelve months.
Investors are invited to participate in the financial results conference
call on Thursday November 13, 2003 at 4:15 p.m. (Eastern) by dialing
1-800-838-4403 (for International callers: 1-973-317-5319) ten minutes prior
to the scheduled start time, and reference the Merrimac Industries third
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 313101.
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/ajwz393633644gf12.html
If you are unable to participate during the live webcast, a link to the
archived webcast will be 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; 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
September 27, September 28,
2003 2002
Net sales $6,357,000 $5,939,000
Gross profit 2,201,000 2,616,000
Selling, general and administrative expenses 2,262,000 1,821,000
Research and development 316,000 723,000
Restructuring charge 54,000 -
Operating income (loss) (431,000) 72,000
Interest and other expense, net 52,000 25,000
Gain on disposition of assets (33,000) -
Income (loss) before income taxes (450,000) 47,000
Provision (benefit) for income taxes 34,000 (10,000)
Net income (loss) (484,000) 57,000
Basic and diluted net income (loss) per
common share $(.16) $.02
Weighted average number of shares outstanding:
Basic 3,121,000 3,145,000
Diluted 3,121,000 3,148,000
Nine Months Ended
September 27, September 28,
2003 2002
Net sales $19,481,000 $19,252,000
Gross profit 7,207,000 8,795,000
Selling, general and administrative expenses 7,176,000 6,451,000
Research and development 1,340,000 1,911,000
Restructuring charges 128,000 240,000
Operating income (loss) (1,437,000) 193,000
Interest and other expense, net 165,000 127,000
Gain on disposition of assets (104,000) -
Income (loss) before income taxes (1,498,000) 66,000
Benefit for income taxes (83,000) (80,000)
Net income (loss) (1,415,000) 146,000
Basic and diluted net income (loss) per
common share $(.45) $.05
Weighted average number of shares outstanding:
Basic 3,120,000 3,056,000
Diluted 3,120,000 3,099,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
September 27, 2003 December 28, 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 557,000 $3,611,000
Income tax refunds receivable 46,000 301,000
Accounts receivable, net 5,461,000 3,801,000
Inventories 3,582,000 4,015,000
Other current assets 687,000 318,000
Deferred tax assets 945,000 945,000
Total current assets 11,278,000 12,991,000
Property, plant and
equipment, net 17,870,000 19,282,000
Restricted cash 1,500,000 -
Other assets 669,000 818,000
Deferred tax assets, non-current 1,084,000 905,000
Goodwill, net 2,953,000 2,491,000
Total Assets $ 35,354,000 $ 36,487,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $ 1,007,000 $ 6,240,000
Other current liabilities 3,065,000 3,134,000
Total current liabilities 4,072,000 9,374,000
Long-term debt, net of current portion 5,330,000 429,000
Deferred compensation 96,000 123,000
Deferred liabilities 48,000 156,000
Deferred tax liabilities 1,736,000 1,703,000
Total liabilities 11,282,000 11,785,000
Stockholders' equity 24,072,000 24,702,000
Total Liabilities and
Stockholders' Equity $ 35,354,000 $ 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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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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