Exhibit 99.1
AXSYS TECHNOLOGIES ANNOUNCES 45% INCREASE IN
FIRST QUARTER OPERATING INCOME
ROCKY HILL, CT – May 2, 2005 – Axsys Technologies, Inc. (NASDAQ: AXYS), a global leader in the design, manufacture and distribution of precision optical solutions, today announced financial results for the first quarter ended April 2, 2005.
First Quarter Financial Highlights – versus fiscal 2004 first quarter:
• Sales rose 22% to $28.6 million.
• Gross margin increased to 29.5% from 29.0%.
• Operating income was up 45% to $2.6 million; operating margin rose to 9.1% from 7.7%.
• Net income was $1.6 million or $0.22 per diluted share for the first quarters of 2005 and 2004 despite a return to a normalized tax rate of 37.5% in the first quarter of 2005, compared to 10.0% in the 2004 period.
• Total backlog of firm orders at the end of the first quarter of 2005 was a record $93.1 million.
Growth in the quarter was driven primarily by the Optical Systems Group, which continues to benefit from strong military spending on numerous targeting, guidance, and surveillance programs. In addition, growth in the first quarter of 2005 included the results of the Company’s acquisition of Axsys Technologies IR Systems, formerly Telic Optics, Inc., in April 2004. Comparable year-over-year organic revenue growth was 13%.
Segment Sales
| | Three Months Ended: | |
(In millions): | | April 2,
2005 | | April 3,
2004 | |
Optical Systems Group | | $ | 22.2 | | $ | 17.2 | |
Distributed Products Group | | 6.4 | | 6.2 | |
| | | | | | | |
“Axsys has started the year with impressive results, in line with our expectations,” said Stephen W. Bershad, Chairman and Chief Executive Officer of Axsys. “Growth in our core market areas of optical and motion control systems continues to drive the business forward. Success in these markets has led to a $93.1 million backlog at the end of the quarter, a 23% increase from the April 3, 2004 backlog and another new record for Axsys. The management team at Axsys is eager to combine these organic successes with the exciting prospects of our recently announced acquisition.”
Conference Call
Management will conduct a conference call to discuss the financial results on Monday, May 2, 2005 at 10:00 am ET. Interested parties may participate in the call by dialing 706-679-3148 – please call in 10 minutes before the call is scheduled to begin and ask for the Axsys Technologies call. The conference call will be broadcast live over the Internet via the Investors section of the Company’s web site at www.axsys.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company’s web site.
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About Axsys
Axsys Technologies, Inc. is a vertically integrated OEM supplier of precision optical solutions for high technology applications, serving the aerospace, defense and high performance commercial markets. For more information, visit www.axsys.com.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as “expect,” “anticipate,” “plan,” “may,” “will,” “estimate” or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, are described in Axsys’ reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission, including without limitation: changes in the U.S. federal government spending priorities; the Company’s ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers; the potential for the Company’s backlog to be reduced or cancelled; the Company’s ability to implement its acquisition strategy and integrate its acquired companies successfully, including the recent acquisition of Diversified Optical Products; the Company’s ability to manage costs under the Company’s fixed-price contracts effectively; and changes in general economic and business conditions. These statements reflect the Company’s current beliefs and are based upon information currently available to Axsys. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time, and we specifically disclaim any obligation to update these statements. For more information concerning the foregoing risks and uncertainties, see the Securities and Exchange Commission filings for Axsys.
CONTACT: | | -OR- | | INVESTOR RELATIONS COUNSEL: |
Axsys Technologies, Inc. | | | | The Equity Group Inc. |
David A. Almeida, CFO | | | | Lauren Barbera |
(860) 257-0200 | | | | (212) 836-9610, LBarbera@equityny.com |
www.axsys.com | | | | www.theequitygroup.com |
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AXSYS TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Unaudited, in thousands)
| | For the Three Months Ended | |
| | April 2,
2005 | | April 3,
2004 | |
| | | | | |
Sales | | $ | 28,648 | | $ | 23,406 | |
Cost of sales | | 20,192 | | 16,625 | |
Gross profit | | 8,456 | | 6,781 | |
| | | | | |
Selling, general and administrative expenses | | 5,100 | | 4,399 | |
Research, development and engineering expenses | | 744 | | 576 | |
Operating income | | 2,612 | | 1,806 | |
Interest expense, net | | 25 | | 7 | |
Other expense, net | | 15 | | 7 | |
Income from operations before income taxes | | 2,572 | | 1,792 | |
Provision for income taxes | | 965 | | 179 | |
Net income | | $ | 1,607 | | $ | 1,613 | |
| | | | | |
BASIC INCOME PER SHARE | | $ | 0.23 | | $ | 0.23 | |
Weighted-average basic common shares outstanding | | 7,065 | | 6,988 | |
| | | | | |
DILUTED INCOME PER SHARE: | | $ | 0.22 | | $ | 0.22 | |
Weighted-average dilutive common shares outstanding | | 7,450 | | 7,182 | |
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AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Unaudited, in thousands)
| | April 2,
2005 | | December 31,
2004 | |
ASSETS | | | | | |
CURRENT ASSETS: | | | | | |
Cash and cash equivalents | | $ | 7,265 | | $ | 6,000 | |
Accounts receivable – net | | 15,316 | | 15,715 | |
Inventories – net | | 30,468 | | 29,698 | |
Deferred income taxes – current | | 3,224 | | 3,553 | |
Other current assets | | 1,151 | | 1,020 | |
TOTAL CURRENT ASSETS | | 57,424 | | 55,986 | |
| | | | | |
PROPERTY, PLANT AND EQUIPMENT – net | | 13,142 | | 13,337 | |
INTANGIBLE ASSET – net | | 2,102 | | 2,127 | |
EXCESS OF COST OVER NET ASSETS ACQUIRED | | 13,013 | | 13,013 | |
OTHER ASSETS | | 1,395 | | 1,352 | |
TOTAL ASSETS | | $ | 87,076 | | $ | 85,815 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
CURRENT LIABILITIES: | | | | | |
Accounts payable | | $ | 5,868 | | $ | 6,459 | |
Accrued expenses and other liabilities | | 9,367 | | 9,513 | |
Deferred income | | 7,441 | | 7,195 | |
Current portion of capital lease obligation | | 368 | | 368 | |
Current portion of long-term debt | | 1,000 | | 1,000 | |
TOTAL CURRENT LIABILITIES | | 24,044 | | 24,535 | |
| | | | | |
CAPITAL LEASES, less current portion | | 54 | | 150 | |
| | | | | |
LONG-TERM DEBT, less current portion | | 3,083 | | 3,333 | |
| | | | | |
OTHER LONG-TERM LIABILITIES | | 4,550 | | 4,704 | |
| | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | |
| | | | | |
SHAREHOLDERS’ EQUITY: | | | | | |
| | | | | |
Common stock | | 72 | | 72 | |
Capital in excess of par | | 39,955 | | 39,612 | |
Accumulated other comprehensive income (loss) | | 26 | | (97 | ) |
Retained earnings | | 15,996 | | 14,389 | |
Treasury stock | | (704 | ) | (883 | ) |
TOTAL SHAREHOLDERS’ EQUITY | | 55,345 | | 53,093 | |
| | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 87,076 | | $ | 85,815 | |
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