Exhibit 99.1
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HERLEY ANNOUNCES 2ND QUARTER RESULTS
Herley 2nd Quarter Revenues Increased 17.6% To $29.4 Million
Quarterly Operating Income Increased 16.3% To $5.2 Million
2nd Quarter Net Income Increased 7.9% To $3.5 million
Diluted Earnings Per Share For The 2nd Quarter Increased 9.1% to $.24
Lancaster, PA March 15, 2004 - Herley Industries, Inc. (Nasdaq: HRLY) reported
today financial results for the second quarter and first half of fiscal year
2004. Select financial results for the second quarter are as follows:
- - Revenues for the second quarter increased 17.6%, from $25.0 million to
$29.4 million.
- - Revenues for the first half of fiscal 2004 increased 10.3%, growing from
$52.3 million to $57.7 million
- - Second quarter operating income increased 16.3% to $5.2 million.
- - Operating income for the first half of fiscal year 2004 increased 19.2%,
from $9.2 million to $11.0 million.
- - Net income in the second quarter increased 7.9% to $3.5 million.
- - For the first half of fiscal 2004 net income increased 12.8%, from $6.6
million to $7.5 million.
- - Second quarter diluted earnings per share increased 9.1% to $0.24; and
increased 16.3% to $0.50 per share for the first half of the fiscal year.
John M. Kelley, President, stated, "We feel very good about Herley's near-term
and long-term prospects. This belief is based, in part, on the strength of the
programs with Herley content and the increasing level of new business
opportunities. Our Defense and Aerospace business remained strong during the
second quarter with Defense and Aerospace revenues growing 19.6%, compared to
the same period last year. A variety of programs contributed to this revenue
growth, including F-16, F-18, AMRAAM and THAAD."
Kelley continued, "Second quarter bookings hit historic levels producing a
book-to-bill ratio of 1.4 to 1. For the first half of fiscal 2004, Herley's
book-to-bill radio was 1.2 to 1. Our strong booking activity is expected to
continue through the year. We are also continuing our efforts to acquire
companies that will extend our product line, assist in Herley's expansion into
complementary military markets, and secure new positions on desired programs."
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 locations and
approximately 700 employees worldwide. 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)
Twenty-six Twenty-seven
Thirteen weeks ended weeks ended weeks ended
-------------------- ----------- -----------
February 1, February 2, February 1, February 2,
2004 2003 2004 2003
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Net sales $ 29,408 $ 25,015 $ 57,675 $ 52,305
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Cost and expenses:
Cost of products sold 19,045 16,342 36,670 34,441
Selling and administrative expenses 5,198 4,232 9,978 8,617
24,243 20,574 46,648 43,058
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Operating Income 5,165 4,441 11,027 9,247
-------------- ------------ ------------- --------------
Other income (expense), net:
Investment income 187 296 363 664
Interest expense (82) (82) (169) (177)
Foreign exchange (loss) (70) - (243) -
-------------- ------------ ------------- --------------
35 214 (49) 487
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Income before income taxes 5,200 4,655 10,978 9,734
Provision for income taxes 1,654 1,368 3,491 3,095
-------------- ------------ ------------- --------------
Net income $ 3,546 $ 3,287 $ 7,487 $ 6,639
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Earnings per common share - Basic $ .25 $ .23 $ .53 $ .45
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Basic weighted average shares 14,073 14,464 14,043 14,665
============== ============ ============= ==============
Earnings per common share - Diluted $ .24 $ .22 $ .50 $ .43
============== ============ ============= ==============
Diluted weighted average shares 14,880 15,124 14,826 15,411
============== ============ ============= ==============
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HERLEY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
February 1, August 3,
2004 2003
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(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents ....................................... $ 78,998 $ 81,523
Accounts receivable ............................................. 17,709 16,525
Costs incurred and income recognized in excess
of billings on uncompleted contracts ......................... 15,479 6,960
Other receivables ............................................... 1,166 827
Inventories, net of allowance of $2,789 in fiscal 2004
and $2,739 in fiscal 2003 ..................................... 40,008 37,545
Deferred taxes and other ........................................ 3,384 3,207
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Total Current Assets .......... 156,744 146,587
Property, Plant and Equipment, net ............................... 23,742 22,406
Goodwill ......................................................... 26,448 25,729
Intangibles, net of accumulated amortization of $541 in fiscal
2004 and $403 in fiscal 2003 .................................... 1,589 1,542
Available-For-Sale Securities .................................... 75 75
Other Investments ................................................ 129 162
Other Assets ..................................................... 945 1,063
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$ 209,672 $ 197,564
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt ............................... $ 801 $ 686
Accounts payable and accrued expenses ........................... 14,600 14,026
Billings in excess of costs incurred and
income recognized on uncompleted contracts .................. 423 -
Income taxes payable ............................................ 2,657 2,670
Reserve for contract losses ..................................... 940 736
Advance payments on contracts ................................... 1,405 856
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Total Current Liabilities ..... 20,826 18,974
Long-term Debt ................................................... 5,940 6,403
Deferred Income Taxes ............................................ 4,919 4,945
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31,685 30,322
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Commitments and Contingencies
Shareholders' Equity:
Common stock, $.10 par value; authorized
20,000,000 shares; issued and outstanding
14,110,449 at February 1, 2004 and 13,969,151 at August 3, 2003 1,411 1,397
Additional paid-in capital ...................................... 106,223 104,551
Retained earnings ............................................... 68,965 61,478
Accumulated other comprehensive income (loss) ................... 1,388 (184)
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Total Shareholders' Equity .... 177,987 167,242
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$ 209,672 $ 197,564
========= =========
For information at Herley contact:
Peg Guzzetti Tel: (717) 735-8117
Investor Relations www.herley.com
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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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