Exhibit 99.1 |
NEWS RELEASE
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846 N. Mart-Way Court, Olathe, Kansas 66061 Phone: 913-647-0158 Fax: 913-647-0132
investorrelations@elecsyscorp.com
FOR IMMEDIATE RELEASE:
Contact: Todd A. Daniels
(913) 647-0158, Phone
(913) 647-0132, Fax
investorrelations@elecsyscorp.com
ELECSYS CORPORATION REPORTS SECOND QUARTER FINANCIAL RESULTS
Olathe, Kansas (December 17, 2007) - Elecsys Corporation (AMEX: ASY), today
announced its financial results for its second fiscal quarter ended October 31,
2007, which included the results from its new Radix Corporation subsidiary and
the associated costs of that acquisition. Elecsys Corporation also announced
today that its Form 10-Q for its second fiscal quarter ended October 31, 2007
will not be filed today, but is currently expected to be filed within the next
five business days. The company is deferring filing the 10-Q until it is able to
finalize certain pro-forma financial information for the period prior to its
acquisition of the assets and assumption of certain of the liabilities of Radix.
Elecsys Corporation also announced the filing today of an amended Form 8-K to
reflect its conclusion that the acquisition of the Radix assets constitutes an
acquisition of a "significant amount" of assets. The company expects to further
amend that Form 8-K upon completion of certain financial statements and exhibits
relating to the Radix acquisition.
Sales for the quarter were $5,602,000, an increase of $6,000 from the comparable
period of fiscal 2007. The increase in sales for the quarter was due to
substantial sales growth at NTG. Sales at NTG were $821,000, an increase of 349%
from the second quarter of the previous fiscal year. Accelerating demand for new
WatchdogCP products and for communication technology upgrades for existing
products were the main factors in the surge in NTG sales. Total sales reported
at DCI decreased approximately $1,217,000 from the prior year period. The prior
period included sales of $1,564,000 to the former Radix International
Corporation. Sales reported at DCI no longer include sales made to our new Radix
subsidiary. Excluding the Radix products from the comparable periods, sales at
DCI increased by approximately 9% over the prior year quarter. Sales at the
Company's newest subsidiary, Radix Corporation, were $584,000 during the six
week period between the acquisition and the end of the quarter. For the six
months ended October 31, 2007, sales were $10,389,000, an increase of $931,000,
or 9.8%, from the six months ended October 31, 2006. Sales to Radix during the
six month period of the prior fiscal year were $1,893,000.
Gross margin was approximately 32% of sales, or $1,796,000, for the quarter as
compared to 30% of sales, or $1,660,000, for the quarter ended October 31, 2006.
Our improvement in consolidated gross margin resulted from the increase in sales
volumes of higher margin products at NTG as well as the additional gross margin
generated at Radix with its mix of proprietary equipment sales and service
contract revenues. For the six-month period ended October 31,
2007, gross margin was 32%, or $3,311,000, compared to 31%, or $2,974,000, for
the six-month period ended October 31, 2006.
During the quarter, we undertook the strategic initiative to grow our business
by expanding into the specialized niche of rugged mobile computing. The
acquisition of the Radix business, products, and technology involved certain
one-time expenditures to complete the transaction and ensure a successful
integration of the business into Elecsys. As a result, operating income for the
quarter was $140,000, a decrease of $350,000 as compared to $490,000 of
operating income for the same quarter in the prior year. For the six-month
period ended October 31, 2007, operating income was $494,000 as compared to
$823,000 for the same period in the prior fiscal year.
As a result of the above, net income was $10,000, or $0.00 per diluted share,
for the quarter ended October 31, 2007 as compared to net income of $241,000, or
$0.07 per diluted share for the quarter ended October 31, 2006. For the
six-month period ended October 31, 2007, net income was $184,000, or $0.05 per
fully diluted share as compared to $410,000, or $0.12 per fully diluted share
for the six-month period ended October 31, 2006.
Karl B. Gemperli, Chief Executive Officer, stated, "We are extremely pleased
with the continuing sales growth and financial success at NTG. We believe our
diligent efforts and committed investment in new product development have
resulted in a market leading product family with solid prospects for continued
growth in the expanding energy infrastructure industries. We believe DCI will
continue to exhibit healthy growth as we build further upon our stable
foundation of profitable business." Gemperli continued, "We are excited about
our expansion into the rugged mobile computing market with the acquisition of
Radix. The intimate knowledge of the Radix product family gained while
manufacturing the products at DCI over several years, as well as their quality
and service driven customer base, made Radix an ideal fit for Elecsys. Although
there were significant transaction expenses related to this initiative incurred
during this quarter, we are confident that the future benefit of this
acquisition justifies these investments. The timing of shipments from our
consolidated backlog, anticipated future bookings, anticipated continued growth
in the demand for NTG's new products, and the addition of Radix Corporation,
lead us to expect continued increases in our total consolidated sales over the
coming quarters. We are proud of all the dedicated people at Elecsys who make
our success possible."
Elecsys Corporation is a publicly traded holding company with three wholly owned
subsidiaries, DCI, Inc., NTG, Inc., and Radix Corporation. DCI provides
electronic design and manufacturing services for original equipment
manufacturers in the aerospace, transportation, communications, safety, security
and other industrial product industries. DCI has specialized expertise and
capabilities to integrate custom electronic assemblies with a variety of
innovative display and interface technologies. NTG designs, markets, and
provides remote monitoring solutions for the gas and oil pipeline industry as
well as other industries that require remote monitoring. Radix develops, designs
and markets ultra-rugged handheld computers, peripherals and portable printers.
The markets served by its products include utilities, transportation logistics,
traffic and parking enforcement, route accounting/deliveries, and inspection and
maintenance. 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, 2007. 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,
2007 2006 2007 2006
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Sales $5,602 $5,596 $10,389 $9,458
Cost of products sold 3,806 3,936 7,078 6,484
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Gross margin 1,796 1,660 3,311 2,974
Selling, general and administrative
expenses 1,656 1,170 2,817 2,151
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Operating income 140 490 494 823
Financial income (expense):
Interest expense (127) (89) (229) (120)
Interest income 3 2 17 6
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(124) (87) (212) (114)
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Income before income taxes 16 403 282 709
Income tax expense 6 162 98 299
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Net income $10 $241 $184 $410
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Net income per share information:
Basic $0.00 $0.07 $0.06 $0.13
Diluted $0.00 $0.07 $0.05 $0.12
Weighted average common shares
outstanding:
Basic 3,285 3,240 3,284 3,240
Diluted 3,458 3,417 3,467 3,410
