NEWS RELEASE
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15301 W. 109th Street, Lenexa, KS 66219 Phone: 913-647-0158 Fax: 913-647-0132
investorrelations@elecsyscorp.com
FOR IMMEDIATE RELEASE:
Contact: Karl B. Gemperli
(913) 647-0158, Phone
(913) 647-0132, Fax
investorrelations@elecsyscorp.com
ELECSYS CORPORATION REPORTS FIRST QUARTER FINANCIAL RESULTS
Lenexa, Kansas (September 8, 2003) - Elecsys Corporation (AMEX: ASY), today
announced its financial results for the first quarter ending July 31, 2003.
Sales for the quarter ended July 31, 2003 were $2,619,000, a decrease
of $225,000 or 8%, from sales of $2,844,000 in the comparable period of the
prior year. The decrease was primarily due to a slowdown in orders from existing
electronics assembly customers and the challenging economic climate. We expect
that the impact of the economy in the aerospace industry as well as overall
economic conditions will result in lower sales in the next quarter as compared
to the comparable quarter in fiscal year 2003.
Gross margin was $695,000 or 27% of sales for the three-month period
ended July 31, 2003, as compared to $871,000 or 31% of sales for the three-month
period ended July 31, 2002. The gross margin achieved in the current period
reflected the change in product mix as well as the effect of lower production
efficiencies due to decreases in sales volume in the first half of the quarter
and fewer strategic pricing opportunities as compared to the same period a year
ago. It is anticipated that in the near term gross margins will rise slightly
over the next few quarters as a result of improved product mix and increases in
sales volumes.
Operating expenses were $787,000, an increase of $44,000, or 6%, from
the same period a year ago. The increase was primarily due to costs associated
with an increase in SG&A personnel as a result of the Crystaloid transaction. We
believe that our continuing operating expenses will be at or near their current
levels for the foreseeable future and we will continue our efforts to minimize
corporate expenditures and manage our operating costs.
Operating loss for the three-month period was $92,000, as compared to
operating income of $128,000 before the cumulative effect of accounting change
in the prior year period.
Interest expense increased to $58,000 for the three-month period ended
July 31, 2003 as compared to $38,000 for the three-month period ended July 31,
2002. The increase of $20,000 was the result of interest expense on borrowings
on the line of credit during the three-month period ended July 31, 2003. These
borrowings were not in place for the corresponding period of the prior year.
In the three-month period ended July 31, 2002, the company recorded a
cumulative effect of account change of $1,618,000 for the full impairment of its
goodwill. The accounting change was due to our adoption of Statement of
Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible
Assets, on May 1, 2002. The goodwill was incurred as a result of the acquisition
of DCI, Inc. in February 2000.
The $36,000 income tax benefit for the three-month period ended July
31, 2003 was due to the filing of amended tax returns claiming refunds of income
taxes paid in prior years as a result of carry backs of net operating losses. No
other income tax provision or benefit was recorded for the three-month periods
ended July 31, 2003 or 2002 due primarily to net operating loss carry forwards
available to the Company.
As a result of the above, net loss was $113,000, or $0.04 per share,
for the quarter, as compared to net loss of $1,527,000, or $0.55 per share for
the comparable period of the prior year.
Karl B. Gemperli, Chief Executive Officer, stated, "We experienced some softness
in sales during the quarter due to the specific timing of customer orders and
the economic climate in the electronics industry, most notably in the aerospace
sector. To ensure the future success of our business, we are continuing to
aggressively pursue new customer opportunities that include the marketing of
electronic manufacturing services to the former Crystaloid customers and
expanding our sales force by adding a Regional Sales Manager for the
Southeastern United States. We are also encouraged by the number of new
customers added and the level of quoting activity during the quarter. We believe
that our unique electronic integration capabilities combined with the number of
new business opportunities we are pursuing represent a strong platform for
future growth."
Elecsys Corporation, through its wholly owned subsidiary DCI, Inc., is a leading
designer, manufacturer, and integrator of custom electronic interface solutions
for original equipment manufacturers in the medical, aerospace, industrial and
consumer product industries. These interface solutions are used by human
operators to view, extract or exchange information with electronic or
electro-mechanical equipment. Through its unique capabilities to design and
efficiently manufacture custom electronic assemblies which integrate a variety
of interface technologies such as custom liquid crystal displays, light emitting
diode displays, and keypads with circuit boards and other electronic components,
the Company becomes an extension of the OEM's organization by providing key
expertise that enables rapid development and manufacture of electronic products
from product conception through volume production. For more information, visit
our websites at www.elecsyscorp.com and www.dciincorporated.com.
Safe-Harbor statement: 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, 2003. 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,
2003 2002
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Sales $2,619 $2,844
Cost of products sold 1,924 1,973
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Gross margin 695 871
Selling, general and administrative expenses 787 743
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Operating income (loss) (92) 128
Other income (expense):
Interest expense (58) (38)
Other income, net 1 1
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Income (loss) before cumulative effect of
accounting change (149) 91
Cumulative effect of accounting change -- (1,618)
Income tax benefit 36 --
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Net loss $(113) $(1,527)
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Income (loss) per share information:
Basic and diluted
Income (loss) per share before cumulative
effect of accounting change ($0.04) $0.03
Cumulative effect of accounting change -- (0.58)
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Net loss per share ($0.04) ($0.55)
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Weighted average common shares
outstanding - basic and diluted 2,791 2,788
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