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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact:
Mark J. Bonney
President & COO
Axsys Technologies, Inc.
(860) 257-0200
www.axsys.com
AXSYS TECHNOLOGIES ANNOUNCES SECOND QUARTER RESULTS:
SALES, EARNINGS AND SPECIAL CHARGE IN LINE WITH PREVIOUS GUIDANCE
ROCKY HILL, CT - JULY 31, 2001 - Axsys Technologies, Inc. (Nasdaq: AXYS), a
global leader in the design, manufacture and distribution of precision
components and systems for high-technology markets, today announced second
quarter fiscal 2001 results. Sales amounted to $23.4 million in the quarter
ended June 30, 2001, compared to $23.8 million in the comparable quarter in
fiscal 2000, a decrease of $0.4 million, or 2 percent. For the second quarter,
Axsys reported a net loss of $6.4 million, or ($1.37) per share, which included
a non-recurring charge of $5.7 million after-tax, or ($1.22) per share, compared
to a loss of $270 thousand, or ($0.06) per share in the quarter ended June 30,
2000.
Sales of the Company's Precision Components Group totaled $14.3 million in
the quarter, compared to $13.6 million in the quarter ended June 30, 2000. The
five percent increase was attributable to higher sales of motion control
components and precision-machined products to aerospace and defense customers.
Automation Group sales totaled $3.2 million in the second quarter of 2001,
compared to $2.4 million in 2000, an increase of $0.8 million or 33 percent.
Sales of fiber optic automation systems increased substantially over last year,
and shipments of test equipment to electronic capital equipment markets were
also higher.
Sales of the Distributed Products Group were $5.9 million in the quarter
ended June 30, 2001, compared to $7.8 million in the comparable prior year
period, a decrease of $1.9 million, or 24 percent. Softer orders from
semiconductor capital equipment manufacturers and other commercial and
industrial customers, which reduced sales accordingly, have negatively impacted
our bearings distribution business.
As previously announced, second quarter 2001 results included a
non-recurring earnings charge of $5.7 million after-tax, or ($1.22) per share,
to implement a comprehensive cost reduction program as well as to record certain
asset write-offs. Results from operations, excluding the non-recurring earnings
charge, were a loss of $688 thousand, or ($0.15) per share. Factors contributing
to the increased loss were higher engineering, research & development expenses
and general and administrative costs to support our strategy to develop, market
and sell semi-automated and fully automated production and test equipment to
manufacturers of fiber optic and photonics components. In addition, corporate
administrative expenses rose in the quarter, a factor that was addressed within
the comprehensive cost reduction program.
The cost reduction plan resulted in the elimination of 59 positions or 9
percent of Axsys' total workforce. The non-recurring earnings charge consisted
of the following components, all in pre-tax amounts:
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|_| $4.4 million charged to cost of sales for increases in reserves for
potentially obsolete and excess inventory
|_| $2.9 million charged to cost of sales for loss contract accruals on two
defense programs
|_| $1.4 million in restructuring charges for severance costs and costs to
exit two facilities
|_| $0.4 million charged to cost of sales for disposal or writedown of tooling
assets
Commenting on the quarter, Stephen W. Bershad, Chairman and Chief
Executive Officer stated, "The expected second quarter loss, coupled with the
generally weak macroeconomic outlook, prompted us to implement the major cost
reductions and asset write-offs. These actions were necessary in order to
continue our investment in the exciting growth platforms being developed by the
Automation Group. We believe that capital spending in photonics and electronic
capital equipment will begin to increase early next year. We are working to
position ourselves to be able to provide market leading solutions to our
customers when business improves."
Mark J. Bonney, President and Chief Operating Officer commented, "After
the implementation of our comprehensive cost reduction programs, we believe we
will have lowered our quarterly break-even point to $24 million of sales and
reduced our costs by over $1 million per quarter."
For the six-month period ended June 30, 2001, sales amounted to $47.6
million, compared to $43.5 million in 2000, an increase of $4.1 million, or 9
percent. Excluding non-recurring gains and restructuring charges, the loss from
continuing operations for the first half of fiscal 2001 was $1.0 million or
($0.22) per share, compared to a loss of $1.3 million, or ($0.28) per share in
the first half of fiscal 2000. The Company recorded new orders of $18.6 million
in the second quarter of 2001, compared to orders of $28.8 million in the second
quarter of 2000. We also removed approximately $3.1 million of orders from our
backlog, reflecting the belief that there is sufficient risk that products
covered by these orders may not be required by customers within the next twelve
months. Axsys ended the second quarter with a backlog of $52.7 million, compared
to a backlog of $52.4 million at June 30, 2000, an increase of $0.3 million, or
1 percent. Our backlog was $64.9 million at December 31, 2000.
Axsys' management invites you to listen to a conference call regarding
second quarter 2001 results to be held on Wednesday, August 1, 2001 at 10:00
a.m. (Eastern Daylight Time). The domestic dial-in number is 800-633-8298 and
the international dial-in number is 212-346-6501, and the access number is
19362827. A replay of the conference call will begin on Wednesday, August 1,
2001 at 12:00 p.m. (Eastern Daylight Time) and will be available until August 3,
2001 at 12:00 p.m. The replay can be accessed by dialing 800-633-8284
(858-812-6440 if outside the United States).
Axsys Technologies, Inc. is a vertically integrated supplier of precision
system solutions for high-technology markets, including fiber optics, data
storage and semiconductor, as well as providing aerospace guidance and
electronic capital equipment. Axsys has created its precision systems
capabilities by leveraging its success with unique component capabilities. For
more information, contact Axsys Technologies, Inc. at www.Axsys.com.
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This news release contains certain forward-looking statements. These
include: Axsys' statements as to the steps we plan to take to restructure our
operations, reduce costs, write-off assets, dispose of excess and potentially
obsolete inventory and close facilities; our expectations as to the costs and
expenses involved in our cost reduction program; our expectations as to the
benefits we may generate; our views as to the operational benefits to be
received from the steps we plan to take to restructure our operations; our plan
to continue to fund our growth initiatives, including our Automation Group; and
our views as to future demand for our products. Our business is subject to
various risks and uncertainties. As a result, actual future results and
developments may be materially different from those expressed or implied in any
forward-looking statements. Disclosure regarding factors affecting Axsys' future
results and developments is contained in our public filings with the Securities
and Exchange Commission, including our Annual Report on Form 10-K for the fiscal
year ended December 31, 2000.
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AXSYS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
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(Unaudited)
JUNE 30, DECEMBER 31,
2001 2000
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,087 $ 14,850
Accounts receivable - net 12,565 13,937
Inventories - net 23,625 25,435
Other current assets 6,868 3,293
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TOTAL CURRENT ASSETS 52,145 57,515
PROPERTY, PLANT AND EQUIPMENT - net 14,168 12,816
EXCESS OF COST OVER NET ASSETS ACQUIRED - net 3,064 3,062
OTHER ASSETS 166 199
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TOTAL ASSETS $ 69,543 $ 73,592
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,218 $ 7,009
Accrued expenses and other liabilities 12,213 8,172
Current portion of capital lease obligations 697 814
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TOTAL CURRENT LIABILITIES 19,128 15,995
CAPITAL LEASES, less current portion 1,146 1,485
OTHER LONG-TERM LIABILITIES 2,480 2,691
SHAREHOLDERS' EQUITY:
Common stock, authorized 30,000,000 shares, issued 4,792,674 shares
at June 30, 2001 and December 31, 2000 47 47
Capital in excess of par 39,680 39,675
Retained earnings 8,203 14,965
Treasury stock, at cost, 106,244 shares at June 30, 2001 and
108,553 at December 31, 2000 (1,141) (1,266)
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TOTAL SHAREHOLDERS' EQUITY 46,789 53,421
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 69,543 $ 73,592
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AXSYS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATE STATEMENT OF OPERATIONS
(Unaudited, dollars in thousands, except per share data)
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<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2001 2000 2001 2000
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NET SALES $ 23,404 $ 23,841 $ 47,606 $ 43,527
Cost of sales 25,278 18,302 43,399 37,096
Selling, general and administrative expenses 5,904 5,024 11,386 10,476
Research and development expenses 1,077 923 2,338 1,693
Restructuring charge 1,360 296 1,360 1,655
Amortization of intangible assets -- 35 (1) 70
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OPERATING (LOSS) (10,215) (739) (10,876) (7,463)
Interest income, net 22 234 109 129
Other income 14 61 34 105
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(LOSS) FROM CONTINUING OPERATIONS
BEFORE TAXES (10,179) (444) (10,733) (7,229)
Benefit from income taxes 3,754 174 3,971 2,827
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NET (LOSS) FROM CONTINUING OPERATIONS (6,425) (270) (6,762) (4,402)
DISCONTINUED OPERATIONS:
Income from operations, net of taxes -- -- -- 513
Gain on disposal, net of taxes -- -- -- 13,776
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NET (LOSS) INCOME $ (6,425) $ (270) $ (6,762) $ 9,887
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE:
(Loss) from continuing operations (1.37) (0.06) (1.44) (0.95)
Income from discontinued operations -- -- -- 3.08
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TOTAL BASIC (LOSS)/EARNINGS PER SHARE (1.37) (0.06) (1.44) 2.13
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Weighted average basic common shares outstanding (1) 4,685,546 4,650,762 4,685,040 4,646,697
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DILUTED EARNINGS PER SHARE:
(Loss) from continuing operations (1.37) (0.06) (1.44) (0.95)
Income from discontinued operations -- -- -- 3.08
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TOTAL DILUTED (LOSS)/EARNINGS PER SHARE (1.37) (0.06) (1.44) 2.13
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Weighted average diluted common shares outstanding (1) 4,685,546 4,650,762 4,685,040 4,646,697
=========== =========== =========== ===========
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(1) As per generally accepted accounting principles, the computation of the net
loss per share is based on the weighted average basic shares outstanding when
there is an operating loss from continuing operations.
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