Exhibit 99.1
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HERLEY REPORTS EXCELLENT 1ST QUARTER RESULTS
HERLEY 1ST QUARTER OPERATING INCOME
INCREASED 22.0% TO $5.9 MILLION
1ST QUARTER EARNINGS PER DILUTED SHARE INCREASED 22.7%, TO $0.27
FUNDED BACKLOG REACHED $91.7 MILLION, AN INCREASE OF $1.8 MILLION FROM
FISCAL 2003 YEAR END
Lancaster, PA December 11, 2003. Herley Industries, Inc. (Nasdaq:HRLY)
today reported results for the first quarter ended November 2, 2003. Select
financial results for the first quarter are as follows:
- - Revenues increased 3.6% to $28.3 million.
- - Vertical integration efforts generated $2.0 of inter-company sales.
- - Operating Income was $5.9 million, an increase of 22.0%
- - Net Income grew 17.6% to $3.9 million.
- - Book to Bill was 1.06:1 for the first quarter.
John Kelley, President said, "Our first quarter results gave Herley an excellent
start to the year. For the period, record results were achieved in revenues and
profitability, and new orders increased funded backlog $1.8 million to $91.7
million. The combination of international sales, domestic product mix, and
increased inter-company sales generated very good margins for the quarter.
Operating Margin for the first quarter was 20.7% of revenue compared to 17.6%
for the same period last year. Net Income as a percentage of revenue was 13.9%
compared to 12.3% for the first quarter of last year."
Kelley continued, "We reiterate our previous comments that Herley's strategic
objective is to grow our defense electronics business organically and by making
accretive acquisitions of complimentary companies, business units, and product
lines. We continue to be optimistic that we will be able to successfully invest
some, most, or all of our existing cash into a domestic or international
acquisition."
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 five manufacturing
locations and approximately 675 employees. Additional information about the
company can be found on the Internet at www.herley.com
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
13 weeks ended 14 weeks ended
November 2, November 3,
2003 2002
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Net sales ...................................... $ 28,267 $ 27,290
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Cost and expenses:
Cost of products sold ................... 17,625 18,099
Selling and administrative expenses ..... 4,743 3,735
Litigation costs ........................ 37 650
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22,405 22,484
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Operating Income ........................ 5,862 4,806
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Other (expense) income, net:
Investment income ....................... 176 368
Interest expense ........................ (87) (95)
Foreign exchange (loss) ................. (173) --
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(84) 273
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Income before income taxes .............. 5,778 5,079
Provision for income taxes ..................... 1,837 1,727
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Net income .............................. $ 3,941 $ 3,352
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Earnings per common share - Basic .............. $ .28 $ .23
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Basic weighted average shares ........... 14,013 14,668
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Earnings per common share - Diluted ............ $ .27 $ .22
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Diluted weighted average shares ......... 14,782 15,506
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HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
November 2, August 3,
2003 2003
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(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and cash equivalents ......................$ 82,538 $ 81,523
Accounts receivable ............................ 14,251 16,525
Costs incurred and income recognized in excess
of billings on uncompleted contracts ........ 12,389 6,960
Other receivables .............................. 735 827
Inventories, net of allowance of $2,815
at November 2003 and $2,739 at August 2003 .. 39,280 37,545
Deferred taxes and other ....................... 3,450 3,207
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Total Current Assets ...... 152,643 146,587
Property, Plant and Equipment, net ....................... 22,720 22,406
Goodwill ................................................. 25,729 25,729
Intangibles, net of accumulated amortization of $472
at November 2003 and $403 at August 2003 ....... 1,473 1,542
Available-For-Sale Securities ............................ 75 75
Other Investments ........................................ 142 162
Other Assets ............................................. 1,009 1,063
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$ 203,791 $ 197,564
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt ..............$ 758 $ 686
Accounts payable and accrued expenses .......... 13,699 14,026
Billings in excess of costs incurred and
income recognized on uncompleted contracts . 1,294 --
Income taxes payable ........................... 3,322 2,670
Reserve for contract losses .................... 977 736
Advance payments on contracts .................. 585 856
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Total Current Liabilities ....... 20,635 18,974
Long-term Debt ........................................... 5,892 6,403
Deferred Income Taxes .................................... 4,928 4,945
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31,455 30,322
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Commitments and Contingencies
Shareholders' Equity:
Common stock, $.10 par value; authorized
20,000,000 shares; issued and outstanding
14,052,801 at November 2003 and 13,969,151
at August 2003 1,405 1,397
Additional paid-in capital ..................... 105,486 104,551
Retained earnings .............................. 65,419 61,478
Accumulated other comprehensive income (loss) .. 26 (184)
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Total Shareholders' Equity ...... 172,336 167,242
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$ 203,791 $ 197,564
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For information at Herley contact:
Peg Guzzetti, Investor Relations
Tel: (717) 735-8117
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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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