Exhibit 99.1
MEADE INSTRUMENTS CORPORATION
6001 OAK CANYON, IRVINE, CALIFORNIA 92618-5200 U.S.A.
(949) 451-1450 |X| FAX: (949) 451-1460 |X| WWW.MEADE.COM
Brent W. Christensen, CFO Philip Bourdillon/Eugene Heller
Meade Instruments Corp. Silverman Heller Associates
(949) 451-1450 (310) 208-2550
MEADE INSTRUMENTS CORP. REPORTS HIGHER NET SALES AND INCOME
FOR THIRD-QUARTER FISCAL 2004
IRVINE, CALIF. - DECEMBER 18, 2003 - MEADE INSTRUMENTS CORP. (NASDAQ NM: MEAD)
today reported results for the third quarter of fiscal year 2004, ended November
30, 2003. The Company's fiscal year 2004 ends on February 29, 2004.
Net sales for the three months ended November 30, 2003 were $54.4 million versus
$44.5 million in the comparable period a year ago, an increase of 22.3%.
Excluding non-cash charges for the Company's ESOP, net income for the three
months ended November 30, 2003 was $3.6 million, or $0.19 per diluted share,
compared to ESOP-adjusted net income of $3.1 million, or $0.18 per diluted
share, for the comparable period a year ago. Including ESOP charges,
third-quarter 2004 net income was $3.4 million, or $0.17 per diluted share,
compared to $2.9 million, or $0.17 per diluted share, in the comparable period a
year ago. Included in net sales for the quarters ended November 30, 2003 and
2002 were approximately $9.7 million and $3.4 million, respectively,
attributable to the Company's Simmons Outdoor Corp. subsidiary ("Simmons"). The
acquisition of Simmons closed on October 25, 2002.
Steven G. Murdock, president and CEO of Meade, said: "The third quarter was
solidly profitable for us again this year. With the Simmons acquisition now just
over a year old, we are very pleased with the integration efforts and results
thus far. Our European operations have also met -- and in many respects exceeded
- -- our expectations so far this year.
"Gross margins were 30.4% of net sales compared to 33.6% in the prior year,"
said Murdock. "We continue to experience competitive pricing pressures across
our product lines. Margins were also negatively affected during the quarter due
to increased sales of lower margin products."
Murdock also noted that at quarter-end consolidated accounts receivable,
inventories and revolving bank debt were approximately $50 million, $47 million
and $31 million, respectively.
Reiterating its guidance for the year, the Company said it expects consolidated
net sales for the year ending February 29, 2004 to be between $130 million and
$140 million, and earnings per diluted share, excluding ESOP charges, to be
between $0.13 and $0.23. For the fiscal year ended February 28, 2003, Meade
reported net sales of $110.8 million and net income per share, excluding ESOP
charges, of $0.10.
Net sales for the nine months ended November 30, 2003 were $107.2 million versus
$88.6 million in the comparable period a year ago, an increase of 21.0%.
Excluding non-cash charges for the Company's ESOP, net income for the nine
months ended November 30, 2003 was $3.1 million, or $0.16 per diluted share,
compared to ESOP-adjusted net income of $3.0 million, or $0.19 per diluted
share, for the comparable period a year ago. Including ESOP charges, net income
for the nine months ended November 30, 2003 was $2.7 million, or $0.14 per
diluted share, compared to net income of $2.5 million, or $0.16 per diluted
share, in the comparable period a year ago. Included in net sales for the nine
months ended November 30, 2003 and 2002 were approximately $26.0 million and
$3.4 million, respectively, attributable to the Company's Simmons subsidiary.
The Company will host a teleconference with investment professionals at 7:30
a.m. PST (10:30 a.m. EST) on December 18, 2003. A live Webcast of the
teleconference will be available at www.meade.com under the "Investor Relations"
link, where it will be archived for the next 30 days. A telephonic replay will
be available for 48 hours, beginning at 10:30 a.m. PST (1:30 p.m. EST) on
December 18; it may be accessed by calling 800-642-1687 or 706-645-9291 and
providing reservation number 4425671.
Meade is a leading designer and manufacturer of optical products including
telescopes and accessories for the beginning to serious amateur astronomer.
Meade offers a complete line of binoculars that address the needs of everyone
from the casual observer to the serious sporting or birding observer, as well as
a complete line of rifle scopes under the Simmons(R), Weaver(R) and Redfield(R)
brand names. The Company distributes its products worldwide through a network of
specialty retailers, mass merchandisers and domestic and foreign distributors.
Additional information on Meade is available at www.meade.com.
"Safe-Harbor" Statement under the Private Securities Litigation Reform Act of
1995: This news release contains comments and forward-looking statements based
on current plans, expectations, events, and financial and industry trends that
may affect the Company's future operating results and financial position
expectations, including net sales and ESOP-adjusted net income per diluted share
for fiscal 2004. Such statements involve risks and uncertainties which cannot be
predicted or quantified and which may cause future activities and results of
operations to differ materially from those discussed above. Such risks and
uncertainties include, without limitation: any significant decline in general
economic conditions or uncertainties affecting consumer spending; any general
decline in demand for the Company's products; any loss of, or failure to
replace, any significant portion of the sales made to any significant customer
of the Company; the occurrence of unanticipated or higher than expected
operating costs; the risks and uncertainties associated with a manufacturing and
distribution company, such as later than expected product introductions or
materials shortages; the inherent risks and liabilities related to the sale of
riflescopes; the risk that riflescope sales could be adversely affected by
existing or further regulation or legislation relating to the use or sale of
such products or related products, such as firearms; the risks and uncertainties
associated with litigation; the inherent risks associated with international
sales, as well as the other risks and uncertainties previously set forth in the
Company's filings with the Securities and Exchange Commission. The historical
results achieved are not necessarily indicative of future prospects of the
Company. For additional information, refer to the Company's filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
MEADE INSTRUMENTS CORP.
INCOME STATEMENT DATA
(Unaudited)
(000s omitted, except per share data)
Three Months Ended Nine Months Ended
November 30, November 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales ............................... $ 54,448 $ 44,519 $ 107,223 $ 88,607
Cost of sales ........................... 37,892 29,558 76,773 60,077
------------ ------------ ------------ ------------
Gross profit ......................... 16,556 14,961 30,450 28,530
Selling expenses ........................ 6,573 5,107 14,158 11,188
General and administrative expenses ..... 3,275 3,645 8,970 9,368
ESOP expense ............................ 341 303 635 731
Research and development expenses ....... 462 730 1,451 2,210
----------- ----------- ----------- -----------
Operating income (loss) .............. 5,905 5,176 5,236 5,033
Interest expense ........................ 325 293 761 728
------------ ------------ ------------ ------------
Income (loss) before income taxes ....... 5,580 4,883 4,475 4,305
Income tax provision (benefit) .......... 2,204 1,987 1,771 1,782
------------ ------------ ------------ ------------
Net income (loss) ....................... $ 3,376 $ 2,896 $ 2,704 $ 2,523
============ ============ ============ ============
Per share information:
Net income (loss)-- basic ............... $ 0.18 $ 0.17 $ 0.14 $ 0.16
============ ============ ============ ============
Net income (loss)-- diluted ............. $ 0.17 $ 0.17 $ 0.14 $ 0.16
============ ============ ============ ============
Weighted average common shares
Outstanding-- basic .................. 19,070,000 16,611,000 18,911,000 15,608,000
============ ============ ============ ============
Weighted average common shares
Outstanding-- diluted ................ 19,335,000 16,755,000 19,068,000 15,852,000
============ ============ ============ ============
Reconciliation of Net income (loss), excluding ESOP charges, to Net income (loss), including ESOP
charges (000s omitted, except per share data):
Three Months Ended Nine Months Ended
November 30, November 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net income............................... $ 3,376 $ 2,896 $ 2,704 $ 2,523
ESOP expense, net of tax................. 209 171 356 446
------------ ------------ ------------ ------------
Net income excluding ESOP, net of tax.... $ 3,585 $ 3,067 $ 3,060 $ 2,969
============ ============ ============ ============
Per share information:
Net income-- diluted..................... $ 0.17 $ 0.17 $ 0.14 $ 0.16
ESOP expense, net of tax................. 0.02 0.01 0.02 0.03
------------ ------------ ------------ ------------
Net income excluding ESOP-- diluted...... $ 0.19 $ 0.18 $ 0.16 $ 0.19
============ ============ ============ ============
Management believes net income, excluding ESOP expense, net of tax is a
supplemental financial measure commonly used by management and industry analysts
to evaluate the Company's financial performance. The ESOP expense is a non-cash
expense related to the allocation of Company stock to participants in its
Employee Stock Ownership Plan. The expense related to the ESOP stock allocation
is based on the market value of the allocated stock. The market value of the
Company's stock has fluctuated significantly over the last several years.
Excluding the ESOP expense, net of tax, eliminates the volatility introduced
into the income statement by the market value expense of the ESOP allocation.
Given the possibility for volatility in the future share price of the Company's
stock, the Company is unable to provide guidance with respect to future net
income including ESOP charges.