Merrimac Third Quarter and Nine Months 2000 Results; Backlog Continues to Increase

 
Merrimac and Filtran have both received strong order input, and our backlog is at an all-time high, ahead of plan for nine months. A significant revenue increase of almost 21 %, coupled with a 49 % gross margin, provided a strong operating performance by our management team. We are very encouraged by the increase in development activity for our Multi-Mix^TM technology with the wireless telecommunications industry.

Third quarter 2000 sales of $6,437,000 increased $1,109,000 or 20.8 % compared to third quarter sales of the prior year of $5,328,000. Net income for the third quarter of 2000 was $219,000, an increase of $110,000 compared to 1999. Diluted net income per share was $.09 compared to the diluted per share amount of $.06 reported for the third quarter of the prior year.

For the first nine months of 2000, sales of $16,298,000 increased $1,106,000 or 7.3 % compared to prior year's nine-month sales of $15,192,000. Net income for the first nine months of $94,000 was recorded, after the net effects of a first quarter personnel restructuring charge of $189,000. Net income of $405,000 was reported for the first nine months of 1999. Diluted net income per share was $.04, reflecting the first quarter of 2000 restructuring charge of $.09 per diluted share. For the first nine months of the prior year, diluted net income per share of $.23 was reported.

The weighted average number of basic and diluted shares outstanding increased for the third quarter and first nine months of 2000 resulting from the issuance of 375,000 shares to Ericsson Holding International, B.V. in the second quarter 2000, and higher average common stock prices that increased dilution from stock options.

 
The backlog at the end of the third quarter of 2000 was $11.7 million, an increase of $5.6 million or 92 % over year-end 1999, and $3.8 million or 47 % when compared to the backlog of $8.0 million at the end of the third quarter of last year. Orders received during the third quarter of 2000, totaling $7.3 million, exceeded the third quarter 2000 sales level by approximately 14 %, and orders for the first nine months of 2000, totaling $21.9 million, exceeded the nine months 2000 sales level by approximately 35 %.

Multi-Mix^TM wireless product development is proceeding with a focus on basestation, broadband internet systems, with wireless local loop and point-to-point radio applications. A major Multi-Mix^TM R&D program offers what we believe is a breakthrough technology for innovative wireless applications solutions going forward.

During this quarter, we announced the completion of a $4.6 million private placement with a group of investors including Ericsson Holding International B.V., Adam Smith Investment Partners and three members of our Board of Directors. This brings Ericsson's holdings in Merrimac to 18.5 %. The funds will be used for working capital and to finance the continued growth of operations resulting from the increased demand for telecommunications components and multifunction modules.

Thank you for your continued support and confidence,

Mason N. Carter
Chairman and CEO November 14, 2000

 
Note: Certain statements in this report are "forward-looking statements" based on current management expectations and are subject to risks and uncertainties. Factors that could cause future results to differ from these expectations include general economic and industry conditions, competitive products and pricing pressures, risks relating to governmental regulatory actions in communications and defense programs, and inventory risks due to technological innovation. Additional factors to which the Company’s performance is subject are described in the Company’s reports filed from time to time with the Securities and Exchange Commission.
 
 

$6,437,186

$5,328,250

3,134,690

2,633,768

7,954,664

7,344,653

2,272,521

1,821,110

6,067,676

5,053,253

483,877

577,410

1,332,658

1,523,728

-     

-     

369,144

169,708

124,462

622,593

150,000

60,000

30,000

218,000

219,144

109,708