PRESS RELEASE
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15301 W. 109th Street, Lenexa, KS 66219 Phone: 913-647-0158 Fax: 913-982-5766
investorrelations@elecsyscorp.com
September 5, 2002
FOR IMMEDIATE RELEASE:
Contact: Michael J. Meyer
Chairman
15301 W. 109th Street
Lenexa, Kansas 66219 USA
(913) 647-0158 o FAX (913) 647-0132
ELECSYS CORPORATION REPORTS FIRST QUARTER RESULTS
Lenexa, Kansas. (September 5, 2002) - Elecsys Corporation (AMEX: ASY) today
reported results for the first quarter of its fiscal year.
Results for the quarter ended July 31, 2002 compared to the same period last
year were:
o Sales increased 72%, or $1.186 million to $2.844 million from $1.658
million. The significant increase in sales for the first quarter came
from an increase in sales to existing customers, primarily in
electronic assembly and hybrid electronics, and from a strong order
flow from several new customers.
o Gross margin for the three-month period ended July 31, 2002 was 31%,
or $871,000, compared to $536,000, or 32% for the period ended July
31, 2001. The gross margin for the current period reflected a
favorable product mix and strategic pricing opportunities. The slight
decrease in margin percentage from the same period last year was
partially due to a continuing shift, as a result of our focused sales
activities, to higher volume orders.
o Selling, general and administrative expenses were 26% of sales or
$743,000 as compared to 41% of sales or $678,000 for the prior year
period, reflecting our continuing efforts to control and manage
administrative costs.
o As a result of these efforts, income from continuing operations was
$91,000 compared to a $255,000 loss from continuing operations last
year.
o Cash flow used in continuing operations, excluding the cumulative
effect of an accounting change, was $28,000 for the current period as
compared to cash used in continuing operations of $543,000 in the
prior year period.
o Due to our adoption of Statement of Financial Accounting Standards
("SFAS") No. 142, Goodwill and Other Intangible Assets, in the current
period, the company recorded a full
impairment of its goodwill, which was recorded as a cumulative effect
of an accounting change in the current period. The goodwill was
incurred as a result of the acquisition of DCI, Inc. in February 2000.
The net loss for the period, as shown in the attached financial
information, was $1.527 million of which $1.618 million was the result
of the full impairment of goodwill. SFAS No. 142, requires, among
other things, the discontinuance of amortization of goodwill and the
completion of a two-part goodwill impairment test. If amortization of
goodwill had not been recorded during the first quarter of the prior
fiscal year, the net loss would have been $246,000.
Michael J. Meyer, Chairman, stated "The significant investment we have made to
improve and increase our sales efforts at DCI is paying off with both existing
and new customers, as reflected in our 72% increase in quarter over quarter
sales. The manufacturing process improvements we are implementing resulted in
very favorable margin for the quarter, and our SG&A expenses continue to be
controlled. Although we reflected an impairment of goodwill that negatively
impacted our earnings on a non-cash basis, we are extremely pleased with the
operating results of the first quarter. The achievement of these operating
results, in a difficult economic environment nationally and specifically in our
industry, is a tribute to the hard work and customer focused efforts of all of
our valued employees at DCI. It also confirms our view that we are doing an
excellent job serving the needs of our long time and new OEM customers. Based
upon our continued aggressive sales efforts and control of operating expenses,
we expect the improving trends, reflected in this quarter, to continue into the
next quarter."
Elecsys Corporation, through our DCI subsidiary, provides specialized electronic
design, manufacturing and test services to original equipment manufacturers
(OEM's) and manufactures and imports custom liquid crystal display (LCD)
devices. The electronic assemblies we design and manufacture, including circuit
board assemblies, electronic modules and full turn-key products, along with the
LCD's we manufacture and import, are used in medical, aerospace, industrial and
consumer product applications.
http://www.elecsyscorp.com/
The discussions set forth in this press release may contain forward-looking
comments based on current expectations that involve a number of risks and
uncertainties. Actual results could differ materially from those projected or
suggested in the forward-looking comments. The difference could be caused by a
number of factors, including, but not limited to the factors and conditions that
are described in Elecsys Corporation's SEC filings, including the Form 10-KSB
for the year ended April 30, 2002. The reader is cautioned that Elecsys
Corporation does not have a policy of updating or revising forward-looking
statements and thus he or she should not assume that silence by management of
Elecsys Corporation over time means that actual events are bearing out as
estimated in such forward-looking statements.
Elecsys Corporation and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended July 31,
2002 2001
---- ----
Sales $ 2,844 $ 1,658
Cost of products sold 1,973 1,122
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Gross margin 871 536
Selling, general and administrative
expenses 743 678
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Operating income (loss) 128 (142)
Other income (expense):
Interest expense (38) (113)
Other income, net 1 --
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Income (loss) from continuing operations
and before cumulative effect of
accounting change 91 (255)
Loss from discontinued operations -- (30)
Cumulative effect of accounting change (1,618) --
------- -------
Loss from discontinued operations and
cumulative effect of accounting change (1,618) (30)
------- -------
Net loss $(1,527) $ (285)
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Net income (loss) per share information:
Basic and diluted
Continuing operations $ 0.03 $ (0.10)
Discontinued operations -- (0.01)
Cumulative effect of accounting
change (0.58) --
------- -------
Net loss per share $ (0.55) $ (0.11)
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Weighted average common shares outstanding:
Basic and diluted 2,788 2,693
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Elecsys Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
July 31, 2002 April 30, 2002
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 697 $ 778
Accounts receivable, less allowances of $53
and $43, respectively 1,315 1,099
Inventories 1,747 1,786
Prepaid expenses 65 63
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Total current assets 3,824 3,726
Total property and equipment, net 2,677 2,714
Other assets, net 69 72
Goodwill -- 1,618
------- --------
Total assets $ 6,570 $ 8,130
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 774 $ 974
Accrued expenses 591 427
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Total current liabilities 1,365 1,401
Long-term debt, less current portion 2,318 2,317
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 5,000,000;
Issued and outstanding shares - none -- --
Common stock, $.01 par value:
Authorized shares - 10,000,000;
Issued and outstanding shares - 2,791,331
and 2,786,081 at July 31, 2002 and
April 30, 2002, respectively 28 28
Additional paid-in capital 8,140 8,138
Accumulated deficit (5,281) (3,754)
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Total stockholders' equity 2,887 4,412
------- -------
Total liabilities and stockholders' equity $ 6,570 $ 8,130
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