News Release Merrimac
Reports Third Quarter and Nine Months 2004 Results; Fourth
Consecutive Quarterly Profit WEST
CALDWELL, N.J., November 16, 2004: 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 third quarter
and first nine months of 2004. Sales
for the third quarter of 2004 were $7,620,000, an increase
of 19.9 percent compared to third quarter of 2003 sales of
$6,357,000. Operating income in the third quarter of 2004
was $384,000 compared to an operating loss of $(431,000) in
the third quarter of 2003. Net income for the third quarter
of 2004 was $315,000 or $.10 per diluted share compared to
a net loss of $(484,000) or $(.16) per share for the third
quarter of 2003. For the first nine months
of 2004 sales of $23,164,000 increased 18.9 percent compared
to sales of $19,481,000 for the first nine months of 2003.
Operating income for the first nine months of 2004 was $1,165,000
compared to an operating loss for the first nine months of
2003 of $(1,437,000). Net income for the first nine months
of 2004 was $990,000 or $.31 per diluted share compared to
a net loss for the first nine months of 2003 of $(1,415,000)
or $(.45) per share. Sales for the third
quarter and first nine months of 2004 increased due to an
improvement in orders received during the first quarter and
a higher beginning backlog going into fiscal year 2004. Nine
month operating results of 2003 were impacted by expenses
associated with bank modification agreements entered into
during the second quarter and additional professional fee
expenses incurred totaling approximately $300,000. Orders
of $7,768,000 were received during the third quarter of 2004,
an increase of $1,378,000 or 21.6 percent compared to $6,390,000
in orders received during the third quarter of 2003. Orders
of $23,290,000 were received for the first nine months of
2004, an increase of $1,671,000 or 7.7 percent compared to
$21,619,000 in orders received for the first nine months of
2003. Backlog increased by $126,000 to $12,521,000 at the
end of third quarter 2004 compared to $12,395,000 at year-end
2003. Chairman and CEO Mason N. Carter
commented, “Achieving the record nine months sales of
$23.2 million and consecutive quarterly profits is a significant
accomplishment, particularly when combined with the following
financial results reflecting consistent performance:
- Quarterly gross profit over 40 percent for the fourth consecutive quarter.
- Cash exceeds the total of current and long-term debt.
- Record trailing 12 months sales of $31 million.
- Trailing 12 months earnings of $1,490,000.
Mr. Carter added, “In October, we received
an important patent for Multi-Mix® PICO technology. This
revolutionary breakthrough in microwave solutions provides
huge reductions in size, weight and cost. Multi-Mix® PICO
products provide many types of microwave solutions including
a substantial value contribution for WiMAX applications where
higher frequency, size, weight and cost are important requirements.
This patent further supports our Multi-Mix® strategy and
intellectual property ranging from single function components
through highly integrated Micro-Multifunction (MMFM®)
Modules.”
Investors are invited to participate in the
financial results conference call on Tuesday November 16,
2004 at 4:15 p.m. (Eastern) by dialing 1-800-319-9003 (for
International callers: 1-719-457-2619) ten minutes prior to
the scheduled start time, and reference the Merrimac Industries
third quarter 2004 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
756500.
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=968228
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
Celebrating its 50th anniversary, 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 Solutions®
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., are located in West Caldwell,
NJ, San Jose, Costa Rica and Ottawa, Ontario, Canada, and
have approximately 240 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: 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; 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
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.
Merrimac Industries,
Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
| |
Quarter
Ended |
| |
Oct. 2,
2004
|
Sept.
27,
2003
|
Net sales |
$7,620,000 |
$6,357,000 |
| Gross profit |
3,162,000 |
2,201,000 |
| Selling, general and
administrative expenses |
2,419,000 |
2,262,000 |
| Research and development |
359,000 |
316,000 |
| Restructuring charge
| - |
54,000 |
| Operating income (loss) |
384,000 |
(431,000) |
| Interest and other expense,
net |
54,000 |
52,000 |
| Gain on disposition of
assets |
- |
(33,000) |
| Income (loss) before
income taxes |
330,000 |
(450,000) |
| Provision (benefit) for
income taxes |
15,000 |
34,000 |
| Net income (loss) |
315,000 |
(484,000) |
| |
|
|
| Basic and diluted net
income (loss) per common share |
$.10 |
$(.16) |
| |
|
|
| Weighted average number
of shares outstanding - basic |
3,131,000
|
3,121,000
|
| Weighted average number
of shares outstanding - diluted |
3,155,000
|
3,121,000
|
| |
Nine
Months Ended |
| |
Oct. 2,
2004
|
Sept.
27,
2003
|
Net sales |
$23,164,000 |
$19,481,000 |
| Gross profit |
9,818,000 |
7,207,000 |
| Selling, general and
administrative expenses |
7,327,000 |
7,176,000 |
| Research and development |
1,326,000 |
1,340,000 |
| Restructuring charges |
- |
128,000 |
| Operating income (loss) |
1,165,000 |
(1,437,000) |
| Interest and other expense,
net |
205,000 |
165,000 |
| Gain on disposition of
assets |
- |
(104,000) |
| Income (loss) before
income taxes |
960,000 |
(1,498,000) |
| Benefit for income taxes |
(30,000) |
(83,000) |
| Net income (loss) |
990,000 |
(1,415,000) |
| |
|
|
| Basic net income (loss)
per common share |
$.32 |
$(.45) |
| Diluted net income (loss)
per share |
$.31 |
$(.45) |
| |
|
|
| Weighted average number
of shares outstanding - basic |
3,125,000
|
3,120,000
|
| Weighted average number
of shares outstanding - diluted |
3,151,000
|
3,120,000
|
Merrimac Industries,
Inc.
Condensed Consolidated Balance Sheets
| |
|
| |
Oct. 2
2004
(Unaudited)
|
Jan. 3
2004
|
ASSETS |
| Current Assets: |
| Cash and
cash equivalents |
$2,899,000 |
$453,000 |
| Income tax
refunds receivable |
93,000 |
136,000 |
| Accounts
receivable, net |
5,616,000 |
6,299,000 |
| Inventories |
2,871,000 |
3,188,000 |
| Other current
assets |
816,000 |
482,000 |
| Deferred
tax assets |
936,000
|
611,000
|
| Total current
assets |
13,231,000 |
11,169,000
|
| Property, plant &
equipment, net |
15,663,000 |
17,222,000 |
| Restricted cash |
1,500,000 |
1,500,000 |
| Other assets |
788,000 |
854,000 |
| Deferred tax assets |
- |
221,000 |
| Goodwill, net |
3,199,000 |
3,123,000 |
| Total Assets |
$34,381,000
|
$34,089,000
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
| Liabilities: |
| Current portion of long-term
debt |
$869,000 |
$954,000 |
| Other current liabilities |
3,671,000 |
3,341,000 |
| Total current liabilities |
4,540,000 |
4,295,000 |
| Long-term debt, net of
current portion |
3,021,000 |
4,208,000 |
| Deferred compensation |
63,000 |
89,000 |
| Deferred liabilities |
37,000 |
48,000 |
| Deferred tax liabilities |
630,000 |
611,000 |
| Total liabilities |
8,291,000 |
9,251,000 |
| Stockholders' equity |
26,090,000
|
24,838,000
|
| Total Liabilities &
Stockholders' Equity |
$34,381,000
|
$34,089,000
|
|
|
|
