EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Contact:
David Almeida
Chief Financial Officer
Axsys Technologies, Inc.
(860) 257-0200
WWW.AXSYS.COM
AXSYS TECHNOLOGIES ANNOUNCES REVISION IN 2002 RESULTS
ROCKY HILL, CONN. - MARCH 28, 2003 - Axsys Technologies, Inc. (Nasdaq: AXYS), a
global leader in the design, manufacture and distribution of precision
opto-mechanical components and assemblies found in high performance aerospace,
defense and commercial equipment for high-technology markets, today announced,
concurrent with the filing of its Annual Report on Form 10-K, a revision in its
2002 results to reflect the establishment of a valuation allowance recorded for
its net deferred tax asset.
Upon final review of our year-end financial results with Ernst & Young and
in light of the significant tax benefits generated during 2002 related to the
sale of our Automation businesses and Teletrac Inc., we have reassessed the
timing of the utilization of the $6.0 million net deferred tax asset reported at
the time of our earnings release on February 13, 2003. As a result of this
reassessment, we have elected to establish a valuation allowance, resulting in a
$4.6 million tax charge within 2002 (see Exhibit I and II). Although this
non-cash valuation allowance results in a reduction of net deferred taxes as a
balance sheet asset, Axsys will still be able to utilize these amounts to reduce
future tax obligations in profitable periods. In accordance with Financial
Accounting Standard No. 109 "Accounting for Income Taxes", this deferred tax
asset valuation allowance will be reduced and the future tax benefits will be
recognized as taxable income is generated in 2003 and beyond.
Although the pre-tax operating results remain unchanged, as a result of
the establishment of the valuation allowance, the net after-tax results
previously announced for 2002 will be adjusted. The net loss of $2.4 million, or
($0.52) per diluted share for the year ended December 31, 2002 will be adjusted
to a net loss of $7.1 million, or ($1.50) per diluted share. Each of the
quarters of 2002 will be adjusted to reflect the establishment of the valuation
allowance as set forth in Exhibit III. This change will have no impact on our
cash flow.
During 2002, Axsys has focused on improving our resource allocation,
expense management, and execution within our core operations. Axsys' management
believes that we are well positioned for the future, both financially and from a
product offerings standpoint. As announced in our February 13, 2003 earnings
release, we reported income before taxes from continuing operations in the
fourth quarter of 2002 of $1.4 million. These financial results include a
reversal of $235,000 for restructuring and special charges originally recorded
earlier in the year. We believe that Axsys will remain profitable during 2003.
In the event that future
profits are recognized, the related taxes would reduce the valuation allowance
until it is exhausted as opposed to being reported as an expense, which would
have the effect of increasing future reported earnings per share.
Axsys Technologies, Inc. is a vertically integrated supplier of precision
optical and motion control components and assemblies for high-technology
applications, serving the aerospace, defense, semiconductor and graphic arts
markets. For more information, contact Axsys Technologies Inc, at www.axsys.com.
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One
can identify these forward-looking statements by the use of the words such as
"expect," "anticipate," "plan," "may," "will," "estimate" or other similar
expressions. Because such statements apply to future events, they are subject to
risks and uncertainties that could cause the actual results to differ
materially. Important factors, which could cause actual results to differ
materially, are described in Axsys' reports on Form 10-K and 10-Q on file with
the Securities and Exchange Commission.
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EXHIBIT I
AXSYS TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
As of December 31, 2002
-------------------------------
Originally
Reported
Revised (Unaudited)
-------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,920 $ 9,920
Accounts receivable - net 10,068 10,068
Inventories - net 22,080 22,080
Income tax - deferred and current 4,077 7,398
Other current assets 1,046 1,046
---------- ----------
TOTAL CURRENT ASSETS 47,191 50,512
PROPERTY, PLANT AND EQUIPMENT - net 11,263 11,263
EXCESS OF COST OVER NET ASSETS ACQUIRED - net 3,600 3,600
OTHER ASSETS 318 318
---------- ----------
TOTAL ASSETS $ 62,372 65,693
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,108 3,108
Accrued expenses and other liabilities 9,285 9,285
Deferred income 3,115 3,115
Current portion of capital lease obligation 1,055 1,055
---------- ----------
TOTAL CURRENT LIABILITIES 16,563 16,563
CAPITAL LEASES, less current portion 1,191 1,191
OTHER LONG-TERM LIABILITIES 5,525 4,215
SHAREHOLDERS' EQUITY:
Common stock, authorized 30,000,000 shares, issued
4,792,674 shares at December 31, 2002 and 2001 47 47
Capital in excess of par 39,587 39,581
Retained earnings 752 5,383
Treasury stock, at cost, 138,988 shares and 96,876 shares at
December 31, 2002 and 2001, respectively (1,293) (1,287)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 39,093 43,724
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 62,372 $ 65,693
========== ==========
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EXHIBIT II
AXSYS TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA - UNAUDITED)
For the Twelve Months Ended
December 31, 2002
---------------------------------
Originally
Reported
Revised (Unaudited)
----------- ------------
Net sales $ 79,586 $ 79,586
Cost of sales 60,500 60,500
---------- -----------
Gross margin 19,086 19,086
Selling, general and administrative expenses 16,262 16,262
Research and development expenses 1,003 1,003
Restructuring and special charges 1,854 1,854
---------- -----------
Operating loss (33) (33)
---------- -----------
Interest expense - net (22) (22)
Other income 10 10
---------- -----------
Loss from continuing operations before taxes and
cumulative effect of change in accounting principle (45) (45)
(Provision for) benefit from income taxes (2,969) 1,662
---------- -----------
(Loss) income from continuing operations before cumulative
effect of change in accounting principle (3,014) 1,617
Loss from discontinued operations (4,582) (4,582)
Cumulative effect of change in accounting principle 535 535
---------- -----------
Net loss $ (7,061) $ (2,430)
========== ===========
BASIC AND DILUTED (LOSS) INCOME PER SHARE:
(Loss) income from continuing operations before
cumulative effect of change in accounting principle $ (0.64) $ 0.34
Loss from discontinued operations (0.97) (0.97)
Cumulative effect of change in accounting principle 0.11 0.11
---------- -----------
Total $ (1.50) $ (0.52)
========== ===========
Weighted average basic and diluted common shares outstanding 4,692 4,692
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EXHIBIT III
AXSYS TECHNOLOGIES, INC,
RECONCILIATION OF QUARTERLY STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended Three Months Ended
March 30, 2002 June 29, 2002
----------------------------------------- -------------------------------------
Originally Adjustment Revised Originally Adjustment Revised
Reported Reported
------------- -------------- ------------ ------------- -------------- ---------
Net sales $ 19,092 -- $ 19,092 $ 20,586 -- $ 20,586
Cost of sales 14,978 14,978 15,623 15,623
------------- -------------- ------------ ------------- -------------- ---------
Gross margin 4,114 -- 4,114 4,963 -- 4,963
Selling, general and administrative expenses 4,006 -- 4,006 4,494 4,494
Research and development expenses 307 -- 307 180 -- 180
Restructuring and special charges 1,281 -- 1,281 794 -- 794
------------- -------------- ------------ ------------- -------------- ---------
Operating loss (1,480) -- (1,480) (505) -- (505)
Other income (expenses) 61 -- 61 (192) -- (192)
------------- -------------- ------------ ------------- -------------- ---------
Loss from continuing operations before taxes
and cumulative effect of change in accounting
principle (1,419) -- (1,419) (697) -- (697)
Benefit from (provision for) income taxes
1,533 (1,975) (442) 413 (950) (537)
------------- -------------- ------------ ------------- -------------- ---------
Income (loss) from continuing operations
before cumulative effect of change in
accounting principle 114 (1,975) (1,861) (284) (950) (1,234)
Loss from discontinued operations (899) -- (899) (859) -- 859)
Cumulative effect of change in accounting
principle 535 -- 535 -- -- --
------------- -------------- ------------ ------------- -------------- ---------
Net loss $ (250) $ (1,975) $ (2,225) $ (1,143) $ (950) $ (2,093)
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Three Months Ended Three Months Ended
September 28, 2002 December 31, 2002
----------------------------------------- --------------------------------------
Originally Adjustment Revised Originally Adjustment Revised
Reported Reported
------------- -------------- ------------ ------------- -------------- ---------
Net sales $ 19,086 -- $ 19,086 $ 20,822 -- $ 20,822
Cost of sales 14,346 -- 14,346 15,553 -- 15,553
------------- -------------- ------------ ------------- -------------- ---------
Gross margin 4,740 -- 4,740 5,269 -- 5,269
Selling, general and administrative expenses 3,906 -- 3,906 3,856 -- 3,856
Research and development expenses 242 -- 242 274 -- 274
Restructuring and special charges -- -- -- (221) -- (221)
------------- -------------- ------------ ------------- -------------- ---------
Operating income 592 -- 592 1,360 -- 1,360
Other income 42 -- 42 77 -- 77
------------- -------------- ------------ ------------- -------------- ---------
Income from continuing operations before taxes
and cumulative effect of change in accounting
principle 634 -- 634 1,437 -- 1,437
Provision for income taxes (204) (1,221) (1,425) (80) (485) (565)
------------- -------------- ------------ ------------- -------------- ---------
Income (loss) from continuing operations
before cumulative effect of change in
accounting principle 430 (1,221) (791) 1,357 (485) 872
Loss from discontinued operations (2,508) -- (2,508) (316) -- (316)
Cumulative effect of change in accounting
principle -- -- -- -- -- --
------------- -------------- ------------ ------------- -------------- ---------
Net (loss) income $ (2,078) $ (1,221) $ (3,299) $ 1,041 $ (485) $ 556
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