Exhibit 99.1 |
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 SECOND QUARTER FINANCIAL RESULTS
Lenexa, Kansas (December 12, 2005) - Elecsys Corporation (AMEX: ASY), today
announced its financial results for the three months and six months ended
October 31, 2005.
Results for the second quarter ended October 31, 2005:
Sales for the quarter ended October 31, 2005 were approximately $3,546,000,
an increase of $374,000 or 12% from $3,172,000 for the comparable period of
fiscal 2005. Sales at DCI increased approximately $354,000, or 11%, from the
prior year period. The increase was primarily the result of an increase in new
and existing customer orders at DCI, specifically in the electronic assembly
product line. Sales also increased, although at a slower pace, in the LCD
product line. The current period sales in the hybrids product line were slightly
lower than sales in the prior year period. Sales volumes at NTG, which was
acquired in November 2004, were $284,000 for the current period. Sales at NTG
increased $80,000, or 39%, from the previous three-month period ended July 31,
2005 and also contributed to the overall increase in sales shown in the
consolidated financial results. Total backlog at October 31, 2005 was
approximately $10,456,000, an increase of approximately $4,693,000, or 81%, from
a total backlog of $5,763,000 on October 31, 2004 and an increase of $3,423,000
from a total backlog of $7,033,000 on July 31, 2005. Backlog represents purchase
orders in place from our customers that are scheduled for shipment in future
periods. As a result of the timing of shipments from orders in our backlog, we
expect DCI sales volumes for the third quarter to be similar or slightly lower
than the sales volumes achieved in the current quarter. We anticipate increases
in sales in the fourth quarter of the current fiscal year and continuing sales
increases in the first two quarters of fiscal 2007. Sales at NTG are expected to
continue at a modest growth rate over the next few quarters as the new products
continue to be marketed and additional marketplace applications for the products
are explored.
Gross margin was approximately 33% of sales, or $1,167,000, for the quarter
ended October 31, 2005 as compared to 30% of sales, or $945,000, for the quarter
ended October 31, 2004. The increase in gross margin is primarily the result of
overall product mix, increased sales volumes in the electronic assembly and LCD
product lines at DCI, and the addition of NTG's
products. We expect that gross margins over the next few quarters will continue
at or near our historical margins of 27% - 30%.
Selling, general and administrative ("SG&A") expenses were $870,000, an
increase of $184,000, or 27% from the same period a year ago. The increase was
mainly due to the acquisition of NTG during the third fiscal quarter of the
prior year, the SG&A expenses of which were approximately $161,000 for the
period. Corporate expenses and DCI's SG&A expenses were also slightly higher
than the comparable period in fiscal 2005. We expect that our SG&A expenses will
continue at or near their current levels for the near term as a result of our
continuing efforts to invest in NTG product development and sales.
Operating income for the three-month period was $297,000, as compared to
operating income of $259,000 in the same three-month period in the prior year.
Interest expense was $41,000 and $36,000 for the three-month periods ended
October 31, 2005 and 2004, respectively. The increase was due to higher
borrowings outstanding on the line of credit as well as increases in the line of
credit interest rate as compared to the previous year.
As a result of the above, net income was $257,000, or $0.08 per diluted
share, for the three-month period ended October 31, 2005 as compared to net
income of $224,000, or $0.07 per diluted share, reported for the three-month
period ended October 31, 2004.
Results for the six-month period ended October 31, 2005:
Sales for the six months ended October 31, 2005 were approximately
$7,026,000, an increase of $938,000, or 15%, from $6,088,000 for the comparable
period of fiscal 2005. Sales at DCI increased $833,000, or approximately 14%,
from the prior year period. The increase was primarily the result of an increase
in new and existing customer orders at DCI, specifically in the electronic
assembly and LCD product lines. The hybrids product line had sales during the
current period that were slightly lower than sales in the prior year period.
Sales volumes at NTG were $488,000 for the six-month period ended October 31,
2005 which also contributed to the overall increase in sales shown in the
consolidated financial results.
Gross margin for the six-month period ended October 31, 2005, was 31%, or
$2,190,000, compared to 28%, or $1,729,000, for the six-month period ended
October 31, 2004. The increase in gross margin was primarily the result of
product mix, increased sales volumes in the electronic assembly and LCD
production product lines and the addition of NTG's products.
Operating expenses increased $459,000 to $1,756,000 in the six-month period
ended October 31, 2005 from $1,297,000 in the six-month period ended October 31,
2004. The increase was mainly due to the acquisition of NTG during the third
fiscal quarter of the prior year. Operating expenses at NTG were approximately
$357,000 for the year to date period which represents a majority of the increase
for the period. Corporate and DCI's operating expenses were also higher than the
comparable period in fiscal 2005, primarily as a result of an increase in the
number of personnel in the sales and engineering departments.
Operating income for the six-month period ended October 31, 2005 was
$434,000 as compared to operating income of $432,000 for the same period in the
prior fiscal year.
Net income for the six-month period ended October 31, 2005 was $371,000, or
$0.11 per fully diluted share as compared to net income of $367,000, or $0.13
per fully diluted share, for the six-month period ended October 31, 2004.
Karl B. Gemperli, Chief Executive Officer, stated, "We are pleased to
report the operating results of another successful quarter with both strong
sales growth and increased gross margins. Our disciplined operating strategy
yielded increased bookings, revenues and profitability while our backlog grew to
over $10 million, an increase of almost 50% from the prior quarter. We are
encouraged that gross margins for the quarter increased due to both continued
operating efficiency and the addition of the proprietary NTG products to our
overall product mix. At DCI, we are building significant additional business
relationships through strategic partnerships with new customers and continue to
pursue fresh growth prospects while adding manufacturing and engineering
capacity to broaden our capabilities and sustain our anticipated long-term
growth. With sales of the initial product line at NTG increasing, we plan to
implement several new expansion initiatives that will help propel NTG into its
next phase of growth."
Elecsys Corporation is a publicly traded holding company with two wholly owned
subsidiaries, DCI, Inc. and NTG, Inc. DCI designs, manufactures, and integrates
custom electronic interface solutions for original equipment manufacturers in
the medical, aerospace, communications, industrial product, and other
industries. DCI has specialized 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. NTG
designs, markets, and provides remote monitoring solutions for the gas and oil
pipeline industry as well as other industries requiring remote monitoring
solutions. For more information, visit our website at www.elecsyscorp.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, 2005. 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 Six Months Ended
October 31, October 31,
2005 2004 2005 2004
---- ---- ---- ----
Sales $3,546 $3,172 $7,026 $6,088
Cost of products sold 2,379 2,227 4,836 4,359
--------- --------- --------- ---------
Gross margin 1,167 945 2,190 1,729
Selling, general and administrative
expenses 870 686 1,756 1,297
--------- --------- --------- ---------
Operating income 297 259 434 432
Financial income (expense):
Interest expense (41) (36) (65) (76)
Interest income 1 1 2 1
--------- --------- --------- ---------
(40) (35) (63) (75)
--------- --------- --------- ---------
Income before income taxes 257 224 371 357
Income tax benefit -- -- -- 10
--------- --------- --------- ---------
Net income $257 $224 $371 $367
========= ========= ========= =========
Net income per share information:
Basic $0.08 $0.08 $0.11 $0.13
Diluted $0.08 $0.07 $0.11 $0.13
Weighted average common shares
outstanding:
Basic 3,240 2,890 3,240 2,842
Diluted 3,391 2,995 3,390 2,927
