WEST CALDWELL, N.J., Nov. 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 third quarter and first nine months
of 2005.
Sales for the third quarter of 2005 were $7,890,000, an increase of
3.5 percent compared to third quarter of 2004 sales of $7,620,000. Operating
income in the third quarter of 2005 was $291,000 compared to operating income
of $384,000 in the third quarter of 2004. Net income for the third quarter of
2005 was $228,000 or $.07 per diluted share compared to net income of
$315,000 or $.10 per diluted share for the third quarter of 2004.
For the first nine months of 2005 sales of $22,717,000 decreased 1.9
percent compared to sales of $23,164,000 for the first nine months of 2004.
Operating income for the first nine months of 2005 was $890,000 compared to
operating income for the first nine months of 2004 of $1,165,000. Net income
for the first nine months of 2005 was $644,000 or $.20 per diluted share
compared to net income for the first nine months of 2004 of $990,000 or $.31
per diluted share.
Sales for the third quarter 2005 were higher due to our successful efforts
to diversify Filtran Microcircuits into wireless base station, automotive and
defense applications, which increased Filtran's sales by $516,000, partly
offset by a reduction in electronic components and sub-assemblies sales of
$256,000, compared to the third quarter of 2004. Sales for the first nine
months of 2005 were lower primarily due to reduced orders from delays in
satellite and defense programs. Gross profit percentage for the third quarter
and first nine months of 2005 was approximately the same as the third quarter
and first nine months of 2004. Operating results for the third quarter 2005
were lower than 2004 due to an increase in research and development costs to
support new Multi-Mix(R) products. Operating results for the first nine
months of 2005 were lower than 2004 due to a reduction of gross profit of
$265,000, resulting from decreased sales of electronic components and sub-
assemblies of $1,575,000 partly offset by a $1,121,000 increase in sales for
Filtran, and an increase in research and development costs of $212,000 as
previously noted.
Orders of $5,176,000 were received during the third quarter of 2005, a
decrease of $2,592,000 or 33.4 percent compared to $7,768,000 in orders
received during the third quarter of 2004. Orders of $21,511,000 were
received for the first nine months of 2005, a decrease of $1,779,000 or
7.6 percent compared to $23,290,000 in orders received for the first nine
months of 2004. The reduction in orders for the third quarter and nine months
was due to delays in expected satellite and defense programs. The delayed
satellite and defense programs, which resulted in lower orders for the third
quarter, may result in lower fourth quarter sales and slightly lower fiscal
2005 sales as compared to 2004. Backlog decreased by $1,206,000 to
$11,739,000 at the end of third quarter 2005 compared to $12,945,000 at year-
end 2004. Orders received during the first nine months of 2005 were
approximately 5.3 percent below sales for the first nine months of 2005.
Chairman and CEO Mason N. Carter commented, "The Company achieved eight
consecutive profitable quarters while, just as importantly, continues its
research and development investment which should fuel our Multi-Mix(R)
strategic growth plan.
"Multi-Mix(R) is an enabling technology that provides integrated platform
families that are key to our strategic growth plan. Our research and
development is currently taking RF Microwave integration to a new level and
provide "plug and play" modules that represent leading-edge product
solutions."
Mr. Carter continued, "The reduction in backlog reflects timing delays in
expected third quarter orders. As we make this report, we have received
nearly $1.5 million of those delayed orders in the current fourth quarter.
Included was an important order for key satellite radio components. Our
financial results continue to reflect consistent profitable, asset-managed
performance:
-- Gross profit of 41.2 percent for the third quarter and 42.1 percent for
the first nine months of 2005.
-- Cash of $4.9 million (includes $1.5 million of restricted cash) exceeds
the total of current and long-term debt of $3.3 million.
-- Working capital of $10.2 million and current ratio of 3.4 to 1.
-- Research and development costs increased $130,000 for the third quarter
and $212,000 for the first nine months of 2005 to support new Multi-
Mix(R) products to be available in 2006."
Investors are invited to participate in the financial results conference
call on Tuesday November 15, 2005 at 4:15 p.m. (Eastern) by dialing
1-800-310-1961 (for International callers: 1-719-457-2692) ten minutes prior
to the scheduled start time, and reference the Merrimac Industries third
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 8566482.
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=1162357
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 240 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
October 1, October 2,
2005 2004
Net sales $ 7,890,000 $ 7,620,000
Gross profit 3,250,000 3,162,000
Selling, general and administrative expenses 2,470,000 2,419,000
Research and development 489,000 359,000
Operating income 291,000 384,000
Interest and other expense, net (61,000) (54,000)
Loss on disposition of assets (7,000) --
Income before income taxes 223,000 330,000
Provision (benefit) for income taxes (5,000) 15,000
Net income 228,000 315,000
Basic and diluted net income per
common share $ 0.07 $ 0.10
Weighted average number of shares
outstanding -- basic 3,145,000 3,131,000
Weighted average number of shares
outstanding -- diluted 3,179,000 3,155,000
Nine Months Ended
October 1, October 2,
2005 2004
Net sales $22,717,000 $23,164,000
Gross profit 9,553,000 9,818,000
Selling, general and administrative expenses 7,125,000 7,327,000
Research and development 1,538,000 1,326,000
Operating income 890,000 1,165,000
Interest and other expense, net (178,000) (205,000)
Loss on disposition of assets (43,000) --
Income before income taxes 669,000 960,000
Provision (benefit) for income taxes 25,000 (30,000)
Net income 644,000 990,000
Basic net income per common share $ 0.21 $ 0.32
Diluted net income per share $ 0.20 $ 0.31
Weighted average number of shares
outstanding -- basic 3,141,000 3,125,000
Weighted average number of shares
outstanding -- diluted 3,175,000 3,151,000
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
October 1, 2005 January 1, 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,385,000 $ 2,166,000
Income tax refunds receivable -- 98,000
Accounts receivable, net 5,958,000 6,473,000
Inventories 3,503,000 2,931,000
Other current assets 867,000 583,000
Deferred tax assets 681,000 676,000
Total current assets 14,394,000 12,927,000
Property, plant and equipment, net 14,261,000 15,584,000
Restricted cash 1,500,000 1,500,000
Other assets 640,000 747,000
Deferred tax assets 429,000 439,000
Goodwill, net 3,518,000 3,378,000
Total Assets $ 34,742,000 $ 34,575,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $ 955,000 $ 905,000
Other current liabilities 3,205,000 3,558,000
Total current liabilities 4,160,000 4,463,000
Long-term debt, net of current portion 2,305,000 2,778,000
Deferred liabilities 36,000 88,000
Deferred tax liabilities 648,000 648,000
Total liabilities 7,149,000 7,977,000
Stockholders' equity 27,593,000 26,598,000
Total Liabilities and Stockholders' Equity $ 34,742,000 $ 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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