News Release
Merrimac Reports Second Quarter and Six Months 2002 Results
WEST CALDWELL, N.J. August 13, 2002: 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 second quarter and the first six months of 2002. Operating results were impacted by a second quarter personnel restructuring charge.
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, due to the issuance of 528,000 new shares to DuPont Electronic Technologies during the first quarter of 2002.
Chairman and CEO Mason N. Carter commented, "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.
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of Multi-Mix PICO RF Microwave components, assemblies and micro-multifunction modules (MMFM), serving the wireless telecommunications industry worldwide with enabling technologies for space, defense and commercial applications. Merrimac is focused on providing Total Integrated Packaging SolutionsTM with Multi-Mix® Microtechnology, a leading edge competency providing value to our customers through miniaturization and integration. The Multi-Mix process for microwave, multilayer integrated MMFM circuitry is a patented method developed by 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 facilities are registered under ISO 9000, an internationally developed set of quality criteria for manufacturing operations.
Merrimac Industries, Inc. and its subsidiary Filtran Microcircuits Inc., with locations in West Caldwell, NJ, San Jose, Costa Rica and Ottawa, Ontario, Canada, have approximately 220 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 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: 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 currently contemplated 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.
Note: These news releases are also available on the Internet at: http://www.prnewswire.com
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
|
| |
June 29
2002
|
June 30
2001
|
Net sales
|
$6,462,000
|
$6,766,000
|
|
Gross profit
|
2,986,000
|
3,605,000
|
|
Selling, general and administrative expenses
|
2,287,000
|
2,497,000
|
|
Research and development
|
612,000
|
910,000
|
|
Interest and other expense (income), net
|
41,000
|
(13,000)
|
|
Income (loss) before income taxes
|
(a)(194,000)
|
211,000
|
|
Provision (benefit) for income taxes
|
(a)(140,000)
|
75,000
|
|
Net income (loss)
|
(a)(54,000)
|
136,000
|
| |
|
|
|
Basic and diluted net income (loss) per common share:
Net income (loss) per common share
|
(a)($.02)
|
$.05
|
| |
|
|
|
Weighted average number of shares outstanding - basic
|
3,186,000
|
2,619,000
|
|
Weighted average number of shares outstanding - diluted
|
3,186,000
|
2,761,000
|
| |
Six Months Ended
|
| |
June 29
2002
|
June 30
2001
|
Net sales
|
$13,313,000
|
$12,857,000
|
|
Gross profit
|
6,180,000
|
6,751,000
|
|
Selling, general and administrative expenses
|
4,631,000
|
4,807,000
|
|
Research and development
|
1,188,000
|
1,548,000
|
|
Interest and other expense (income), net
|
103,000
|
(50,000)
|
|
Income before income taxes
|
(a) 19,000
|
(b) 116,000
|
|
Provision (benefit) for income taxes
|
(a) (70,000)
|
(b) 10,000
|
|
Net income
|
(a) 89,000
|
(b) 106,000
|
| |
|
|
|
Basic and diluted net income per common share:
Net income per common share
|
(a) $.03
|
(b) $.04
|
| |
|
|
|
Weighted average number of shares outstanding - basic
|
3,011,000
|
2,612,000
|
|
Weighted average number of shares outstanding - diluted
|
3,093,000
|
2,797,000
|
(a) Reflects the effects of the personnel restructuring charge of $240,000 which reduced the after-tax results of operations by $150,000 or $.05 per diluted share for the second quarter and first six months of 2002.
(b) Reflects the effects of the first quarter 2001 reincorporation charge of $330,000 which reduced the after-tax results of operations by $198,000 or $.07 per diluted share for the first six months of 2001.
|
|
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