News Release
1997 Record Sales Results for Merrimac; Sales Up 32%... Earnings Increase with Strong Backlog
WEST CALDWELL, NJ (February 25, 1998) - Merrimac Industries, Inc. (Amex: MRM) announces results for the fourth quarter and fiscal 1997, reflecting increases in earnings on record annual sales with its backlog solidly positioned for next year.
Fourth quarter 1997 diluted net income per share was $.24 per share, an increase of 33% compared to 1996 fourth quarter diluted net income of $.18 per share, which was increased by a $.05 per share credit for an adjustment to restructuring charges recorded earlier in 1996. After excluding this $.05 per share credit from 1996 results, the fourth quarter comparison reflects an increase of $.11 per share or 85%. Fourth quarter sales of $4,414,000 increased $372,000 or 9% over the fourth quarter sales of the prior year of $4,042,000. Net income increased 43% to $397,000 for the fourth quarter of 1997 compared to net income of $277,000 (after the credit adjustment to restructuring charges of $87,000) for the fourth quarter of 1996. After excluding this $87,000 credit adjustment to 1996 results, the fourth quarter comparison reflects an increase of $207,000 or 109%.
For fiscal 1997, diluted net income per share was $.87 per share compared to the $.19 per share loss in the prior year. Annual sales of $18,659,000 increased $4,506,000 or 32% over the prior year annual sales of $14,153,000. Net income for fiscal 1997 was $1,402,000 compared to the net loss of $297,000 after restructuring charges reported in 1996. The diluted weighted average number of common shares outstanding for fiscal 1997 increased by 43,000 compared to that of the prior year. This increase was due mainly to the "in-the-money" value of Company-issued stock options, which resulted from higher Company stock prices during the year. Common stock repurchases during 1996 partially offset this increase.
The 1997 year-end backlog is $9.7 million, an increase of $1.5 million or 18% above year-end 1996 backlog of $8.2 million. Orders are expected to be strong for Merrimac products in the first quarter of 1998.
"We are extremely pleased with our performance during 1997, a particularly challenging year given the negative growth over the prior dozen years," said Mason N. Carter, Chairman and CEO of Merrimac. "We exceeded our ambitious plan while positioning the Company to build upon its success going forward. This momentum, both internal and external, promises to deliver the commitment for achieving our ‘Goal of Profitable Growth’."
HIGHLIGHTS OF 1997
- Major positive change in operations, marketing, culture and capital reinvestment
- Expanded production capability in Costa Rica operation
- Costa Rica operation achieved ISO 9002 Certification
- Established direct sales management presence in Europe
- Communicated a new level of investor awareness
- Developed twelve new products…one patent applied for
- Increased commercial satellite business
- Produced a three-year strategic plan
- Initiated major new product development program
- Recruited key professional talent to the Company
- Commenced "Merrimac University"…towards establishing a learning organization
Mr. Carter continued: "Concentrating our approach on the driving force issues of the business prepares us well for the market opportunities ahead. This focus has and will allow us to provide new products and services that our customers tell us they require. The promise of a new Merrimac is being realized and the commitment grows daily."
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of RF Microwave components, assemblies and Micro-Multifunction (MMFM®) Modules serving the wireless telecommunications industry worldwide with enabling technologies for commercial applications. Merrimac is focused on providing Total Integrated Packaging SolutionsTM with Multi-MixMicrotechnology®, a leading edge competency providing value to our customers through miniaturization and integration. The Multi-Mix® process for microwave, multilayer integrated MMFM® circuits is a patented method developed at 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, Inc. is ISO 9001 certified.
Merrimac Industries, Inc., with locations in West Caldwell, NJ and San Jose, Costa Rica, has approximately 170 employees in the design and manufacture of high-performance components for communications, defense and aerospace markets. Merrimac (MRM) is listed on the American Stock Exchange. For more information about Merrimac Industries, visit its home page at www.merrimacind.com.
This press release contains statements relating to future results of Merrimac (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; risks relating to governmental regulatory actions in communications and defense programs; and inventory risks due to technological innovation, as well as other risks and uncertainties, including but not limited to those detailed from time to time in Merrimac's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and Merrimac undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Note: These news releases are also available on the Internet at: www.prnewswire.com.
Contacts
Mason N. Carter, Chairman and CEO,
Tel: 973.575.1300, Ext. 1202; Fax: 973.882.5989
E-mail: mnc@merrimacind.com
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MERRIMAC INDUSTRIES, INC.
Summary of Consolidated Statements of Income
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Quarter Ended
(Unaudited)
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Jan 3
1998
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Dec 28
1996
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Net sales
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$4,414,000
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$4,042,000
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Income before income taxes
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547,000
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(a) 493,000
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Provision for income taxes
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150,000
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(a) 216,000
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Net income
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397,000
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(a) 277,000
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Net income per common share - basic
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$.25
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(a) $.18
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Net income per common share - diluted
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$.24
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(a) $.18
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Weighted average number of shares outstanding - basic
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1,573,000
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1,502,000
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Weighted average number of shares outstanding - diluted
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1,653,000
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1,527,000
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Year Ended
(Audited)
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Jan 3
1998
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Dec 28
1996
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Net sales
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$18,659,000
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$14,153,000
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Income (loss) before income taxes
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2,157,000
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(b) (491,000)
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Provision (credit) for income taxes
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755,000
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(b) (194,000)
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Net income (loss)
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1,402,000
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(b) (297,000)
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Net income (loss) per common share - basic
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$.91
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(b) $(.19)
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Net income (loss) per common share - diluted
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$.87
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(b) $(.19)
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Weighted average number of shares outstanding - basic
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1,539,000
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1,549,000
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Weighted average number of shares outstanding - diluted
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1,618,000
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1,575,000
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(a) Reflects the effects of adjustments to restructuring charges of $145,000 which increased net income by $87,000 or $.05 per share for the fourth quarter of 1996.
(b) Reflects the effects of restructuring charges of $1,382,000 which reduced net income by $829,000 or $.52 per share in 1996. |
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