MEADE INSTRUMENTS CORPORATION
6001 OAK CANYON, IRVINE, CALIFORNIA 92618-5200 U.S.A.
(949) 451-1450 o FAX: (949) 451-1460 o 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
25% INCREASE IN SALES AND
115% INCREASE IN NET INCOME FOR FISCAL 2004
-- Fourth-Quarter Sales Up 40% --
IRVINE, CALIFORNIA - APRIL 22, 2004 - MEADE INSTRUMENTS CORP. (NASDAQ NM: MEAD)
today reported results for the year and for the fourth quarter ended February
29, 2004.
Net sales for the year ended February 29, 2004 were $138.3 million, an increase
of $27.5 million, or 25%, over net sales of $110.8 million in the prior year.
Excluding non-cash charges for the Company's ESOP, net income for the year ended
February 29, 2004 was $2.9 million, or $0.15 per diluted share, compared to $1.7
million, or $0.10 per diluted share, in the prior year. Including ESOP charges,
net income for the year ended February 29, 2004 increased 115% to $2.5 million,
or $0.13 per share, compared to $1.1 million, or $0.07 per share, in the prior
year.
Net sales for the three months ended February 29, 2004 were $31.1 million an
increase of $8.8 million, or 40%, over net sales of $22.2 million in the
comparable period a year ago. Excluding non-cash charges for the Company's ESOP,
net loss for the three months ended February 29, 2004 was $0.1 million, or
($0.01) per share, compared a net loss of $1.3 million, or ($0.07) per share,
for the comparable period a year ago. Including ESOP charges, fourth-quarter
2004 net loss was $0.3 million, or ($0.01) per share, compared to a net loss of
$1.4 million, or ($0.07) per share, in the comparable period a year ago.
"We are pleased with the results of fiscal 2004," said Steven G. Murdock,
President and CEO of Meade. "A full year of Simmons and a strong year at Meade
Europe boosted Company sales to record levels. The Simmons acquisition has met,
and in most cases exceeded, our expectations, having contributed strongly to
both our top and bottom lines."
"Our gross margins dropped to 28.1% of net sales from 30.6% in the prior year,"
said Murdock. "Contributing to that drop were increased sales of riflescopes and
binoculars at our subsidiaries, products that typically carry margins that are
lower than historical Company-wide margins. Meade branded products continued to
experience pricing pressure, which also contributed to the lower margins.
Selling, general and administrative expenses were down as a percentage of net
sales to 22% from 24% in the prior year."
"We are pleased with the results of the fourth quarter as well," continued
Murdock. "Net sales were up 40% from the prior year. Mid-priced smaller-aperture
Meade telescopes, Simmons riflescopes and Bresser and Meade branded products in
Europe contributed to higher sales during the quarter. Sales mix and increased
gross profit on higher sales led to gross margins improving to 27.2% of net
sales compared to 24.2% of net sales in the fourth quarter of last year.
Selling, general and administrative expenses were down as a percentage of net
sales to 25% from 28% in the prior year."
"We look forward to fiscal 2005 with optimism," stated Murdock. "We are
diligently engaged in new-product initiatives in each of the telescope,
binocular and riflescope areas. We expect these new-product offerings to further
differentiate the Company from its competition."
"Having assimilated a full year of sales from our Simmons acquisition, we expect
a more moderate year-over-year growth rate for fiscal 2005," concluded Murdock.
"While we are early in our year, with limited top-line visibility, at this point
we expect fiscal 2005 revenue growth of up to 5%. Having enjoyed meaningful
top-line growth in fiscal 2004, fiscal 2005 will be a year in which we will
focus on margin and profitability improvement, with the expectation that net
income, excluding ESOP charges, will be in the range of $0.15 to $0.22 per
diluted share."
Consolidated cash, accounts receivable and inventories at February 29, 2004 were
approximately $8 million, $22 million, and $40 million, respectively.
Consolidated short-term revolving bank debt was approximately $5 million at
year-end.
The Company will host a teleconference with investment professionals at 7:30
a.m. PDT (10:30 a.m. EDT) on April 22, 2004. A live Web-cast of the
teleconference will be available at www.CompanyBoardroom.com and at
www.meade.com under the "Investor Relations" link, where it will be archived. A
replay will be available for 48 hours, beginning at 10:30 a.m. PDT on April 22;
to access the replay, dial 800-642-1687 or 706-645-9291 and provide conference
ID 6559484.
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, EXCEPTIONS, EVENTS, AND FINANCIAL AND INDUSTRY TRENDS THAT MAY
AFFECT THE COMPANY'S FUTURE OPERATING RESULTS AND FINANCIAL POSITION
EXPECTATIONS, INCLUDING NET SALES AND INCOME FOR FISCAL 2005. 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; THE COMPANY'S INABILITY TO DEVELOP AND BRING TO MARKET NEW
AND INNOVATIVE PRODUCTS; ANY LOSS OF, OR FAILURE TO REPLACE, ANY SIGNIFICANT
PORTION OF THE SALES MADE TO ANY SIGNIFICANT CUSTOMER OF THE COMPANY; THE RISKS
AND UNCERTAINTIES ASSOCIATED WITH INTELLECTUAL PROPERTY 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.
(Financial Data Follow)
MEADE INSTRUMENTS CORP.
INCOME STATEMENT DATA
(Unaudited)
(000s omitted, except per share data)
Three Months Ended Year Ended
February 28/29, February 28/29,
------------------------ -----------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales ...................................... $ 31,058 $ 22,210 $138,281 $110,817
Cost of sales .................................. 22,607 16,846 99,380 76,923
--------- --------- --------- ---------
Gross profit ................................ 8,451 5,364 38,901 33,894
Selling expenses ............................... 3,948 3,060 18,106 14,248
General and administrative expenses ............ 3,701 3,260 12,671 12,628
ESOP expense ................................... 224 174 859 905
Research and development expenses .............. 587 798 2,038 3,008
--------- --------- --------- ---------
Operating income (loss) ..................... (9) (1,928) 5,227 3,105
Interest expense ............................... 285 409 1,046 1,137
--------- --------- --------- ---------
Income before income taxes ..................... (294) (2,337) 4,181 1,968
Income tax provision (benefit) ................. (42) (952) 1,729 830
--------- --------- --------- ---------
Net income (loss) .............................. $ (252) $ (1,385) $ 2,452 $ 1,138
========= ========= ========= =========
Per share information:
Net income (loss)-- basic and diluted .......... $ (0.01) $ (0.07) $ 0.13 $ 0.07
Weighted average common shares
outstanding--basic .......................... 19,197 18,817 18,983 16,410
========= ========= ========= =========
Weighted average common shares
outstanding--diluted ........................ 19,197 18,817 19,174 16,624
========= ========= ========= =========
Reconciliation of Net income (loss), excluding ESOP charges, to Net income
(loss), including ESOP charges (000s omitted, except per share data):
Three Months Ended Year Ended
February 28/29, February 28/29,
------------------------ -----------------------
2003 2003 2003 2003
--------- --------- --------- ---------
Net income (loss) .............................. $ (252) $ (1,385) $ 2,452 $ 1,138
ESOP expense, net of tax ....................... 136 105 492 543
--------- --------- --------- ---------
Net income (loss) excluding ESOP, net of tax ... $ (116) $ (1,280) $ 2,944 $ 1,681
========= ========= ========= =========
Per share information:
Net income (loss)-- diluted .................... $ (0.01) $ (0.07) $ 0.13 $ 0.07
ESOP expense, net of tax ....................... 0.00 0.00 0.02 0.03
--------- --------- --------- ---------
Net income (loss) excluding ESOP-- diluted ..... $ (0.01) $ (0.07) $ 0.15 $ 0.10
========= ========= ========= =========
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.