News Release
Merrimac Reports First Quarter 2005 Results and Sixth Consecutive Profitable Quarter
WEST CALDWELL, N.J. May 17, 2005: Merrimac Industries, Inc. (AMEX: MRM), a leader
in the design and manufacture of RF Microwave components, assemblies and micro-multifunction modules
(MMFM®), today announced results for the first quarter of 2005. Sales for the first quarter of 2005 were $7,258,000, a 5.1 percent
decrease compared to first quarter of 2004 sales of $7,648,000.
First quarter 2005 sales were lower primarily due to reduced
currently shippable orders to customers by contract shipment
dates. Operating income for the first quarter of 2005 was $182,000 compared
to operating income of $322,000 for the first quarter of 2004.
Operating results for the first quarter were lower as a result
of decreased sales, offset by lower operating expenses during
the first quarter of 2005 compared to the first quarter of
2004. Net income for the first quarter of 2005 was $84,000 compared
to net income of $231,000 for the first quarter of 2004. Net
income per diluted share was $.03 for the first quarter of
2005, compared to net income per diluted share of $.07 reported
for the first quarter of 2004. Net income for the first quarter
of 2005 included a loss on the disposition of capital assets
of $36,000 or $.01 per share. The backlog at the end of the first quarter of 2005 was $13.8
million, an increase of $0.9 million or approximately 7.0
percent compared to the backlog of $12.9 million at year-end
2004 and an increase of $0.4 million or 3.0 percent when compared
to the backlog of $13.4 million at the end of the first quarter
of 2004. Orders received during the first quarter of 2005
totaled $8.2 million and were approximately 12.9 percent above
first quarter 2005 sales. Chairman and CEO Mason N. Carter commented, “The decrease
in our consolidated sales for the first quarter of 2005 compared
to 2004 was tempered by our successful efforts to diversify
Filtran Microcircuits into wireless base stations, automotive
and defense applications, which raised its sales approximately
$300,000 as compared to the first quarter of 2004. This sales
increase, however, did not increase Filtran’s contribution
to consolidated operating or net income as a higher Canadian
dollar negatively impacted local manufacturing and operating
costs. This resulted in a $.01 per share loss for this segment
and a negative change of $.04 per share from the first quarter
of 2004. “Sales for our electronic components segment were reduced
due to lower orders in the first quarter of 2005 from satellite
and defense customers and a lower opening backlog at the beginning
of 2005. The lower opening backlog reflects delays in expected
orders from defense customers during 2004. Higher manufacturing
yield and efficiencies and lower operating expenses for the
electronic components segment partially offset this segment’s
reduced contribution from its lower sales to operating income
and net income, allowing us to achieve overall profitable
operations for the first quarter of 2005, and in fact, matching
the per share performance of the first quarter of 2004 for
this segment.”
Mr. Carter continued, “Other quarterly
financial results reflecting consistent performance include:
- Gross profit of 41.8 percent.
- Cash (including restricted cash) of $3.8 million exceeds the total of current and long-term debt of $3.7 million.
- Working capital of $9.4 million and current ratio of 3.3 to 1.
- Orders booked of $8.2 million and a book-to-bill ratio of 1.13 to 1."
Investors are invited to participate in the financial results
conference call on Tuesday, May 17, 2005 at 3:00 p.m. (Eastern)
by dialing 1-800-231-9012 (for International callers: 1-719-457-2617)
ten minutes prior to the scheduled start time, and reference
the Merrimac Industries first 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 9184550.
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=1069532
If you are unable to participate during the live webcast, the call will be
archived on the Merrimac 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® micro-multifunction modules (MMFM®),
for the worldwide Defense, Satellite Communications (Satcom),
Commercial Wireless and Homeland Security market segments.
Merrimac is focused on providing Total Integrated Packaging
Solutions® with Multi-Mix® Microtechnology, a leading
edge competency providing value to our customers through miniaturization
and integration. Multi-Mix® MMFM® 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 230 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® for wireless applications.
Merrimac (MRM)
is listed on the American Stock Exchange. Multi-Mix®,
Multi-Mix PICO®, MMFM® and Total Integrated Packaging
Solutions® 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® 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.
Contact:
Mason N. Carter, Chairman & CEO
973.575.1300, ext. 1202
E-mail: mnc@merrimacind.com
Merrimac Industries, Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
| |
Quarter Ended
|
| |
April
2, 2005
|
April
3, 2004
|
Net sales
|
$7,258,000
|
$7,648,000
|
|
Gross profit
|
3,034,000
|
3,348,000
|
|
Selling, general and administrative expenses
|
2,311,000
|
2,454,000
|
|
Research and development
|
541,000
|
572,000
|
|
Operating income
|
182,000
|
322,000
|
|
Interest and other expense, net
|
52,000
|
81,000
|
|
Loss on disposition of capital assets
|
36,000
|
-
|
|
Income before income taxes
|
94,000
|
241,000
|
|
Provision for income taxes
|
10,000
|
10,000
|
|
Net income
|
84,000
|
231,000
|
| |
|
|
| Net income per common
share - basic and diluted
|
$.03
|
$.07
|
| |
|
|
| Weighted average number
of shares outstanding - basic
|
3,138,000
|
3,121,000
|
| Weighted average number
of shares outstanding - diluted
|
3,175,000
|
3,135,000
|
Merrimac Industries, Inc.
Condensed Consolidated Balance Sheets
| |
|
|
April
2, 2005
(Unaudited)
|
January
1, 2005
|
|
ASSETS |
Current assets: |
|
|
|
|
| Cash
and cash equivalents |
$ 2,294,000 |
$ 2,166,000 |
| Income tax
refunds receivable |
93,000 |
98,000 |
| Accounts
receivable |
6,210,000 |
6,473,000 |
| Inventories |
3,293,000 |
2,931,000 |
| Other
current assets |
964,000 |
583,000 |
| Deferred
tax assets |
675,000 |
676,000 |
| Total current
assets |
13,529,000 |
12,927,000 |
| Property,
plant and equipment, net |
14,721,000 |
15,584,000 |
| Restricted
cash |
1,500,000 |
1,500,000 |
| Other
assets |
705,000 |
747,000 |
| Deferred
tax assets |
435,000 |
439,000 |
| Goodwill |
3,343,000 |
3,378,000 |
| Total
Assets |
$34,233,000 |
34,575,000 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
Liabilities: |
|
|
|
|
| Current
portion of long-term debt |
$919,000 |
$905,000 |
| Other current
liabilities |
3,169,000 |
3,558,000 |
| Total
current liabilities |
4,088,000 |
4,463,000 |
| Long-term
debt, net of current portion |
2,772,000 |
2,778,000 |
| Deferred
liabilities |
70,000 |
88,000 |
| Deferred
tax liabilities |
648,000 |
648,000 |
| Total
liabilities |
7,578,000 |
7,977,000 |
| Stockholders'
equity |
26,655,000 |
26,598,000 |
| Total
Liabilities and Stockholders' Equity |
$34,233,000 |
34,575,000 |
|
|
|
