Exhibit 99.1
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HERLEY ACHIEVES RECORD RESULTS FOR FOURTH QUARTER AND FISCAL YEAR
INCOME FROM OPERATIONS INCREASED 29.2% TO $19.7 MILLION FOR THE YEAR,
FOURTH QUARTER REVENUES UP 22.5%, FISCAL YEAR REVENUES UP 18.7%
2003 PER SHARE EARNINGS FROM CONTINUING OPERATIONS INCREASED 12.0%
Lancaster, PA: October 7, 2003 - Herley Industries, Inc. (Nasdaq:HRLY) today
reported record financial results for the fourth quarter and fiscal year ended
August 3, 2003.
Results for the fourth quarter of fiscal 2003 are as follows:
- Revenues were $31.0 million, a 22.5 percent increase over the same period
last year.
- Income from continuing operations increased 22.9 percent to $3.9 million,
or $0.27 per share on a fully diluted basis on 14.6 million diluted average
shares outstanding.
Results for the full year 2003 are as follows:
- Revenues increased 18.7 percent to $110.2 million
- Income from continuing operations was $13.9 million, up 29.9 percent over
fiscal 2002, and $0.93 per share on a fully diluted basis, a 12.0 percent
increase over the previous fiscal year.
John M. Kelley, President, stated, "Fiscal year 2003 was a record breaking year
for Herley and also a year of change. We strengthened our management team and
increased our commitment to international business markets. International
revenues now account for approximately 36% of Herley's total revenues. The
extent and success of our activities in foreign markets increases the number of
potential revenue sources and clearly differentiates Herley from our peers."
Kelley continued, "Our interest and active involvement in acquisitions will
continue in fiscal 2004. We will be aggressive, prudent and maintain our focus
on target companies complimentary to Herley."
Herley Industries, Inc. is a leader in the design, development and manufacture
of microwave technology solutions for the defense, aerospace and medical
industries worldwide. Based in Lancaster, PA, Herley has six locations and
approximately 675 employees worldwide. Additional information about the company
can be found on the Internet at www.herley.com
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Thirteen weeks ended 53 weeks 52 weeks
-------------------- ended ended
August 3, July 28, August 3, July 28,
2003 2002 2003 2002
-------- -------- -------- --------
Net sales $ 31,021 $ 25,329 $110,223 $ 92,881
-------- -------- -------- --------
Cost and expenses:
Cost of products sold 20,735 17,393 73,222 61,947
Selling and administrative expenses 4,559 2,949 16,187 13,229
Litigation costs 78 1,112 1,147 2,079
Plant closing costs - - - 406
-------- -------- -------- --------
25,372 21,454 90,556 77,661
-------- -------- -------- --------
Income from operations 5,649 3,875 19,667 15,220
Other income, net 127 331 769 386
-------- -------- -------- --------
Income from continuing operations
before income taxes 5,776 4,206 20,436 15,606
Provision for income taxes 1,837 1,000 6,499 4,876
-------- -------- -------- --------
Income from continuing operations 3,939 3,206 13,937 10,730
Loss from discontinued operations
(including loss on sale of net assets
of $1,166 in 2002) net of income taxes - - - (921)
-------- -------- -------- --------
Income before cumulative effect of change
in accounting principle 3,939 3,206 13,937 9,809
Cumulative effect of adopting SFAS 142 - - - (4,637)
-------- -------- -------- --------
Net income $ 3,939 $ 3,206 $ 13,937 $ 5,172
======== ======== ======== ========
Earnings (loss) per common share - Basic
Income from continuing operations $ .28 $ .22 $ .97 $ .89
Loss from discontinued operations - - - (.08)
Cumulative effect of adopting SFAS 142 - - - (.39)
-------- -------- -------- --------
Net earnings $ .28 $ .22 $ .97 $ .43
======== ======== ======== ========
Basic weighted average shares 13,921 14,671 14,317 12,041
======== ======== ======== ========
Earnings (loss) per common share - Diluted
Income from continuing operations $ .27 $ .21 $ .93 $ .83
Loss from discontinued operations - - - (.07)
Cumulative effect of adopting SFAS 142 - - - (.36)
-------- -------- -------- --------
Net earnings $ .27 $ .21 $ .93 $ .40
======== ======== ======== ========
Diluted weighted average shares 14,600 15,580 15,031 12,978
======== ======== ======== ========
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HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
August 3, July 28,
2003 2002
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ASSETS
Current Assets:
Cash and cash equivalents $ 81,523 $ 86,210
Accounts receivable 16,525 14,486
Costs incurred and income recognized in excess
of billings on uncompleted contracts 6,960 6,882
Other receivables 827 274
Inventories, net of allowance of $2,737 in 2003
and $2,407 in 2002 37,545 33,371
Prepaid income taxes - 382
Deferred taxes and other 3,207 2,670
--------- ---------
Total Current Assets 146,587 144,275
Property, Plant and Equipment, net 22,406 22,231
Goodwill 25,729 21,665
Intangibles, net of accumulated amortization of $403 in 2003
and $145 in 2002 1,542 423
Available-For-Sale Securities 75 46
Other Investments 162 195
Other Assets 1,063 1,367
--------- ---------
$ 197,564 $ 190,202
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 686 $ 215
Accounts payable and accrued expenses 14,026 12,857
Income taxes payable 2,670 -
Reserve for contract losses 736 820
Advance payments on contracts 856 1,371
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Total Current Liabilities 18,974 15,263
Long-term Debt 6,403 5,684
Deferred Income Taxes 4,945 3,897
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30,322 24,844
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Commitments and Contingencies
Shareholders' Equity:
Common stock, $.10 par value; authorized
20,000,000 shares; issued and outstanding
13,969,151 in 2003 and 14,680,960 in 2002 1,397 1,468
Additional paid-in capital 104,551 116,579
Retained earnings 61,478 47,541
Accumulated other comprehensive loss (184) (230)
--------- ---------
Total Shareholders' Equity 167,242 165,358
--------- ---------
$ 197,564 $ 190,202
========= =========
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For information at Herley contact: Peg Guzzetti
Investor Relations
Tel: (717) 735-8117
Safe Harbor Statement - Except for the historical information contained herein,
this release may contain forward-looking statements. Such statements are
inherently subject to risks and uncertainties. The Company's results could
differ materially based on various factors, including, but not limited to
cancellation or deferral of customer orders, difficulties in the timely
development of new products, difficulties in manufacturing, increased
competitive pressures, and general economic conditions.
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