Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
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CONTACT: Mason N. Carter, Chairman & CEO
973-575-1300, ext. 1202
mnc@merrimacind.com
MERRIMAC REPORTS FIRST QUARTER 2003 RESULTS
WEST CALDWELL, N.J. MAY 13, 2003: Merrimac Industries, Inc. (AMEX: MRM), a
leader in the design and manufacture of RF Microwave components, assemblies and
micro-multifunction modules (MMFM(R)), today announced results for the first
quarter of 2003.
First quarter 2003 sales of $6,512,000 decreased 4.9 percent compared to first
quarter 2002 sales of $6,851,000. The decline in sales was primarily
attributable to a $1.8 million lower backlog at the beginning of 2003 compared
to the beginning of 2002, which reflected continuing significant weakness in
certain communications markets that are served by the Company. An operating loss
in the first quarter of 2003 of $477,000 was incurred compared to operating
income of $275,000 in the first quarter of 2002.
Net loss for the first quarter of 2003 was $455,000 compared to net income of
$143,000 recorded for the first quarter of 2002. Net loss per share was $.15 for
the first quarter of 2003 compared to net income per share of $.05 reported for
the first quarter of 2002.
Chairman and CEO Mason N. Carter commented, "The wireless infrastructure market
and Filtran's printed circuit board market have shown little signs of
rebounding. The market softness and the unpredictability of transition from
legacy systems to new basestation platform designs affected our financial
performance as backlog and profitability decreased. Although backlog has shown
some positive increase, up 16.1 percent compared to year-end 2002, we continue
to react to overall market conditions by continuing to reduce expenses,
right-size our organization and manage our assets in an effective manner."
"In addition, we are maintaining our focus on opportunities for new designs in
wireless infrastructure, and the military and satellite communications markets.
Our Costa Rica operations are providing higher customer value, efficient and
cost-effective manufacturing processes positioning us to take advantage of
market conditions as they improve."
The weighted average number of basic shares outstanding increased by
approximately 285,000 shares or 10 percent for the first quarter of 2003
compared to the first quarter of 2002. The increase in shares outstanding was
primarily due to the issuance of 528,400 shares to DuPont Electronic
Technologies during the first quarter of 2002.
The backlog at the end of the first quarter of 2003 was $11.7 million, an
increase of $1.6 million or 16.1 percent compared to year-end 2002, and an
increase of $800,000 or 7.7 percent when compared to the backlog of $10.8
million at the end of the first quarter of 2002. Orders received during the
first quarter of 2003 totaling $8.1 million exceeded the first quarter of 2003
sales level by approximately 24.9 percent, reflecting recent orders received
near the end of the first quarter of 2003.
Management of the Company is contemplating additional cost and capital
expenditure reductions as a means to improve cash flow. Management also believes
that the potential exists for various financing alternatives, including but not
limited to obtaining secured financing from an asset based lender and/or a sale
and lease-back of certain property. While management believes any one of these
financing alternatives, combined with current liquid resources and the expected
cash flows from operations, should be sufficient to meet the obligations to
Fleet Bank ($5,948,000 and any revolving credit balance due January 31, 2004)
and currently contemplated operations during the next twelve months, there can
be no assurance that any alternative financings can be obtained by the Company.
Investors are invited to participate in the financial results conference call on
Wednesday May 14, 2003 at 4:15 p.m. (Eastern) by dialing 1-800-915-4836 (for
International callers: 1-973-317-5319) ten minutes prior to the scheduled start
time, and reference the Merrimac Industries first quarter 2003 conference call.
For those unable to participate, a replay will be available for seven days by
dialing 1-800-428-6051 or 1-973-709-2089 for international callers, passcode
number 293443.
This conference call will also be broadcast live over the Internet by logging on
to the web at this address:
http://www.firstcallevents.com/service/ajwz381974096gf12.html
If you are unable to participate during the live webcast, the call will be
archived on the Merrimac website http://www.merrimacind.com .
ABOUT MERRIMAC
Merrimac Industries, Inc. is a leader in the design and manufacture of Multi-Mix
PICO RF Microwave components, assemblies and micro-multifunction modules (MMFM),
serving the wireless telecommunications industry worldwide with enabling
technologies for space, defense and commercial applications. Merrimac is focused
on providing Total Integrated Packaging Solutions(TM) with Multi-Mix(R)
Microtechnology, a leading edge
competency providing value to our customers through miniaturization and
integration. The Multi-Mix process for microwave, multilayer integrated MMFM
circuitry is a patented method developed by Merrimac Industries based on
fluoropolymer composite substrates. The fusion bonding of multilayer structures
provides a homogeneous dielectric medium for superior electrical performance at
microwave frequencies. The bonded layers may incorporate embedded semiconductor
devices, MMICs, etched resistors, passive circuit elements and plated-through
via holes to form a three-dimensional subsystem enclosure that requires no
further packaging. Merrimac Industries facilities are registered under ISO 9000,
an internationally developed set of quality criteria for manufacturing
operations.
Merrimac Industries, Inc. and its subsidiary Filtran Microcircuits Inc., are
located in West Caldwell, NJ, San Jose, Costa Rica and Ottawa, Ontario, Canada,
have approximately 220 co-workers dedicated to the design and manufacture of
signal processing components, gold plating of high-frequency microstrip, bonded
stripline and thick metal-backed Teflon (PTFE) micro-circuitry and subsystems
providing Total Integrated Packaging Solutions for wireless applications.
Merrimac (MRM) is listed on the American Stock Exchange. Multi-Mix, Multi-Mix
PICO, MMFM and Total Integrated Packaging Solutions are trademarks of Merrimac
Industries, Inc. For more information about Merrimac Industries, Inc. and
Filtran Microcircuits Inc., please visit http://www.merrimacind.com and
http://www.filtranmicro.com .
This press release contains statements relating to future results of the Company
(including certain projections and business trends) that are "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a result of certain
risks and uncertainties. These risks and uncertainties include, but are not
limited to: general economic and industry conditions; slower than anticipated
penetration into the satellite communications, defense and wireless markets; the
ability to protect proprietary information and technology; competitive products
and pricing pressures; the risk that the Company will not be able to continue to
raise sufficient capital to expand its operations as currently contemplated by
its business strategy; risks relating to governmental regulatory actions in
communications and defense programs; risks associated with demand for and market
acceptance of existing and newly developed products; inventory risks due to
technological innovation and product obsolescence; and the risk that the
benefits expected from the acquisition of Filtran Microcircuits Inc. are not
realized, as well as other risks and uncertainties, including but not limited to
those detailed from time to time in the Company's Securities and Exchange
Commission filings. These forward-looking statements are made only as of the
date hereof, and the Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.
Note: Merrimac news releases are also available on the Internet at:
http://www.prnewswire.com .
MERRIMAC INDUSTRIES, INC.
SUMMARY OF CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended
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March 29 March 30
2003 2002
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Net sales $ 6,512,000 $ 6,851,000
Gross profit 2,452,000 3,194,000
Selling, general and administrative expenses 2,329,000 2,344,000
Research and development 600,000 575,000
Operating income (loss) (477,000) 275,000
Interest and other expense, net 59,000 62,000
Income (loss) before income taxes (536,000) 213,000
Provision (benefit) for income taxes (81,000) 70,000
Net income (loss) (455,000) 143,000
Net income (loss) per common share-basic and diluted $ (.15) $ .05
Weighted average shares outstanding-basic 3,120,000 2,835,000
Weighted average shares outstanding-diluted 3,120,000 2,943,000
MERRIMAC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 29, 2003 December 28, 2002
(Unaudited)
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ASSETS
Current assets:
Cash and cash equivalents $ 2,146,000 $ 3,611,000
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Income tax refunds receivable 302,000 301,000
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Accounts receivable, net 5,536,000 3,801,000
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Inventories 3,803,000 4,015,000
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Other current assets 395,000 318,000
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Deferred tax assets 945,000 945,000
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Total current assets 13,127,000 12,991,000
Property, plant and
equipment, net 19,249,000 19,282,000
Other assets 791,000 818,000
Deferred tax assets, non-current 929,000 905,000
Goodwill, net 2,692,000 2,491,000
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Total Assets $ 36,788,000 $ 36,487,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current portion of long-term debt $ 6,112,000 $ 6,240,000
Other current liabilities 3,617,000 3,134,000
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Total current liabilities 9,729,000 9,374,000
Long-term debt 417,000 429,000
Deferred compensation 115,000 123,000
Deferred liabilities 241,000 156,000
Deferred tax liabilities 1,717,000 1,703,000
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Total liabilities 12,219,000 11,785,000
Stockholders' equity 24,569,000 24,702,000
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Total Liabilities and
Stockholders' Equity $ 36,788,000 $ 36,487,000
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