EXHIBIT 99.1
12701 Fair Lakes Circle, Suite 800, Fairfax, VA 22033
703.322.0881 Fax 703.322.0885
www.argonst.com
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| | NEWS RELEASE |
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For Immediate Release | | |
Argon ST, Inc. Announces Q1 Results
Fairfax, VA, February 9, 2005 / Business Wire / — Argon ST, Inc. (NASDAQ: STST), today announced revenues and earnings for its first quarter ended January 2, 2005.
HISTORICAL RESULTS OF OPERATIONS
Revenues for the first quarter ended January 2, 2005 increased $29,217,000 to $56,510,000 up 107%, compared to $27,293,000 for the prior year quarter.
Net income for the first quarter ended January 2, 2005 was $4,920,000, or $0.24 per diluted share, an increase of 238% compared to $1,457,000 or $0.11 per diluted share for the prior year quarter.
Terry Collins, President and CEO of Argon ST stated, “We are pleased with our first quarter financial results and they leave us on track for making our fiscal year financial objectives. The company also made significant progress in the integration of our processes and systems during the first quarter so that we can properly manage our expected growth.”
Financial Highlights
| • | Revenue for the first quarter increased 107% over the prior year quarter to $56,510,000 |
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| • | Net Income for the first quarter of $4,920,000 or $0.24 per diluted share up 238% from the prior year quarter |
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| • | Funded and Unfunded Backlog for the first quarter was $219,864,000 an increase of 23% from the prior year quarter funded and unfunded backlog of $179,383,000 |
ARGON ST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
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| | | January 2, 2005 | | | September 30, 2004 | |
| ASSETS | | | | | | | | |
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 42,429,000 | | | $ | 29,732,000 | |
| Accounts receivable, net | | | 66,463,000 | | | | 59,716,000 | |
| Inventory | | | 1,922,000 | | | | 1,574,000 | |
| Deferred income tax asset | | | 4,937,000 | | | | 4,822,000 | |
| Prepaids and other | | | 1,469,000 | | | | 1,288,000 | |
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| TOTAL CURRENT ASSETS | | | 117,220,000 | | | | 97,132,000 | |
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| Property, equipment and software, net | | | 14,461,000 | | | | 13,949,000 | |
| Goodwill | | | 107,776,000 | | | | 107,776,000 | |
| Intangibles, net | | | 1,947,000 | | | | 2,190,000 | |
| Other assets | | | 654,000 | | | | 694,000 | |
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| TOTAL ASSETS | | $ | 242,058,000 | | | $ | 221,741,000 | |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable and accrued expenses | | | 13,897,000 | | | $ | 12,727,000 | |
| Accrued salaries and related expenses | | | 8,413,000 | | | | 10,606,000 | |
| Deferred revenue | | | 45,295,000 | | | | 28,336,000 | |
| Notes payable — current portion | | | 226,000 | | | | 226,000 | |
| Income taxes payable | | | 705,000 | | | | 5,810,000 | |
| Deferred rent | | | 200,000 | | | | 200,000 | |
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| TOTAL CURRENT LIABILITIES | | | 68,736,000 | | | | 57,905,000 | |
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| Deferred income tax liability, long term | | | 1,805,000 | | | | 1,901,000 | |
| Notes payable, net of current portion | | | — | | | | 56,000 | |
| Deferred rent | | | 954,000 | | | | 954,000 | |
| Commitments and contingencies | | | — | | | | — | |
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| STOCKHOLDERS’ EQUITY | | | | | | | | |
| Common Stock: | | | | | | | | |
| $.01 Par Value, 25,000,000 shares authorized | | | | | | | | |
| 19,765,934 and 19,468,734 share issued at | | | | | | | | |
| January 2, 2005 and September 30, 2004 | | | 198,000 | | | | 195,000 | |
| Additional paid-in capital | | | 153,758,000 | | | | 149,043,000 | |
| Treasury stock at cost, 126,245 shares | | | (534,000 | ) | | | (534,000 | ) |
| Retained earnings | | | 17,141,000 | | | | 12,221,000 | |
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| TOTAL STOCKHOLDERS’ EQUITY | | $ | 170,563,000 | | | $ | 160,925,000 | |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 242,058,000 | | | $ | 221,741,000 | |
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ARGON ST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
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| | | For the Fiscal Quarter Ended | |
| | | January 2, 2005 | | | December 28, 2003 | |
| CONTRACT REVENUES | | $ | 56,510,000 | | | $ | 27,293,000 | |
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| COST OF REVENUES | | | 45,338,000 | | | | 23,259,000 | |
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| GENERAL AND ADMINISTRATIVE EXPENSES | | | 3,335,000 | | | | 1,734,000 | |
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| INCOME FROM OPERATIONS | | | 7,837,000 | | | | 2,300,000 | |
| OTHER INCOME (EXPENSE) | | | | | | | | |
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| Interest income | | | 140,000 | | | | 8,000 | |
| Interest expense | | | (2,000 | ) | | | — | |
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| | | | 138,000 | | | | 8,000 | |
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| INCOME BEFORE INCOME TAXES | | | 7,975,000 | | | | 2,308,000 | |
| PROVISION FOR INCOME TAXES | | | 3,055,000 | | | | 851,000 | |
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| NET INCOME | | $ | 4,920,000 | | | $ | 1,457,000 | |
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| PER SHARE AMOUNT | | | | | | | | |
| Basic earnings per share | | $ | 0.25 | | | $ | 0.12 | |
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| Diluted earnings per share | | $ | 0.24 | | | $ | 0.11 | |
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| WEIGHTED AVERAGE SHARES OUTSTANDING | | | | | | | | |
| Basic average shares outstanding | | | 19,423,000 | | | | 12,267,000 | |
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| Diluted average shares outstanding | | | 20,415,000 | | | | 13,316,000 | |
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On September 29, 2004, a wholly-owned subsidiary of Sensytech, Inc. (“Sensytech”) merged with and into Argon Engineering Associates, Inc. (“Argon Engineering”) in a merger whereby each outstanding share of Argon Engineering common stock was exchanged for two shares of Sensytech common stock. As a result of the merger, the former Argon Engineering stockholders acquired approximately 65.6% of the issued and outstanding shares of Sensytech common stock. In accordance with Statement of Financial Accounting Standards No. 141 “Business Combinations”, the merger was accounted for as a reverse acquisition, whereby Argon Engineering was deemed to have acquired Sensytech for financial reporting purposes. Consistent with the reverse acquisition accounting treatment, the historical financial statements presented for periods prior to the acquisition date are the statements of Argon Engineering except for stockholders’ equity which has been retroactively restated for the equivalent number of shares of the legal acquirer.
The following unaudited condensed pro forma results of operations reflect the pro forma combination of Argon Engineering and Sensytech as if the combination had occurred at the beginning of the period presented, compared with the actual results of operations of Argon Engineering for the same period.
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| | | Fiscal quarter ended
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| | | December 28, 2003 | |
| | | Historical | | | Pro forma | |
| Revenue | | $ | 27,293,000 | | | | 39,958,000 | |
| Income from operations | | | 2,300,000 | | | | 3,400,000 | |
| Net income | | | 1,457,000 | | | | 2,109,000 | |
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| Basic earnings per share | | $ | 0.12 | | | $ | 0.11 | |
| Diluted earnings per share | | $ | 0.11 | | | $ | 0.11 | |
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| Basic wt average shares | | | 12,267,000 | | | | 18,766,000 | |
| Diluted wt average shares | | | 13,316,000 | | | | 19,992,000 | |
Pro forma revenues attributable to Sensytech were $12,665,000 for the fiscal quarter ended December 28, 2003. Pro forma income from operations and net income attributable to Sensytech was $1,458,000 and $873,000, respectively for the fiscal quarter ended December 28, 2003. Pro forma depreciation and amortization on the write up of tangible and intangible assets, in accordance with SFAS 141, was $115,000 and $243,000 respectively for the fiscal quarter ended and December 28, 2003 and the after tax effect was $221,000.
About Argon ST, Inc.
Argon ST designs, develops, and manufacturers systems and sensors for the Command and Control Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) markets including SIGINT (Signals Intelligence), ESM (Electronic Support Measures), EW (Electronic Warfare), imaging, and acoustic systems serving domestic and worldwide markets.
Statements in this press release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. The Company wishes to caution readers that certain factors can cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. The Company undertakes no obligation and does not intend to update, revise or otherwise publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances.
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| CONTACT: | | Donald F. Fultz, Chief Financial Officer |
| | don.fultz@argonst.com |
| | URL: www.argonst.com |
