Second Quarter and Six Months 2002 Results

 
Second quarter 2002 sales of $6,462,000 decreased 4.5 percent compared to second quarter 2001 sales of $6,766,000. The decline in sales was attributable to softness in the microwave micro-circuitry business, partially offset by sales growth from defense and satellite communications applications in the RF Microwave Products Group. Operating income was $87,000, before the second quarter 2002 personnel restructuring charge of $240,000. The charge resulted in an operating loss for the second quarter of 2002 of $153,000, compared to operating income of $198,000 for the second quarter of 2001.

The net loss for the second quarter of 2002 was $54,000, giving effect to the after-tax impact of the personnel restructuring charge of $150,000, compared to net income of $136,000 for the second quarter of 2001.

Net loss per share was $.02 for the second quarter of 2002, giving effect to the after-tax impact of the second quarter personnel restructuring charge of $.05 per share, compared to net income of $.05 per share for the second quarter of 2001.

For the first six months of 2002 sales of $13,313,000 increased 3.5 percent compared to sales of $12,857,000 for the first six months of 2001. Operating income for the first six months of 2002 was $362,000, before the second quarter 2002 personnel restructuring charge of $240,000, compared to operating income of $396,000 for the first six months of 2001, before the first quarter 2001 reincorporation charge of $330,000. Operating income for the first six months of 2002 was $122,000, giving effect to the personnel restructuring charge, compared to operating income of $66,000 for the first six months of 2001, giving effect to the first quarter 2001 reincorporation charge of $330,000.

Net income for the first six months of 2002 was $89,000, giving effect to the after-tax impact of the second quarter 2002 personnel restructuring charge of $150,000. For the first six months of 2001, net income was $106,000 giving effect to the after-tax impact of the first quarter 2001 reincorporation charge of $198,000.

 
Net income per share for the first six months of 2002 was $.03 giving effect to the after-tax impact of the $.05 per share second quarter personnel restructuring charge. For the first six months of 2001, net income per diluted share was $.04, giving effect to the after-tax impact of a $.07 per share reincorporation charge in the first quarter of 2001.

The weighted average number of basic shares outstanding increased by approximately 567,000 shares or 21.6 percent for the second quarter of 2002 compared to the second quarter of 2001, and increased by 399,000 shares or 15.3 percent for the first six months of 2002 compared to the first six months of 2001, primarily due to the issuance of 528,000 new shares to DuPont Electronic Technologies during the first quarter of 2002.

"The first six months reflected a softness in bookings, but a strong period of design wins for all business groups. We have recently signed a number of non-disclosure agreements with potentially high volume commercial customers. We are maintaining our commitment to new product development."

The backlog at the end of the second quarter of 2002 was $11.1 million, a decrease of $.8 million or 6.6 percent compared to year-end 2001, and a decrease of $1.1 million or 9.6 percent when compared to the backlog of $12.2 million at the end of the second quarter of 2001. Orders received during the second quarter of 2002 totaling $6.7 million exceeded sales in the second quarter 2002 by approximately 3.8 percent. Orders received for the first six months of 2002, totaling $12.5 million, were exceeded by sales in the first six months of 2002 by approximately 6.2 percent, reflecting continuing softness in certain communications markets that are served by the Company.

Thank you for your continued support and confidence,

Mason N. Carter
Chairman and CEO
August 13, 2002

 
Note: 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: 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; the risk that the Company will not be able to continue to raise sufficient capital to expand its operations as currentlycontemplated by its business strategy; risks relating to governmental regulatory actions in communications and defense programs; risks associated with demand for and market acceptance of existing and newly developed products; 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.