Exhibit 99.1
Key Technology Sales Rise 18% for FY2003 and 21% for Q4;
Full Year Diluted EPS hits $1.15, Backlog up 33%
WALLA WALLA, Wash.--(BUSINESS WIRE)--Nov. 6, 2003--Key Technology,
Inc. (Nasdaq:KTEC) today announced sales and operating results for the
fourth quarter and year ended September 30, 2003.
Sales for the three-month period ended September 30, 2003 totaled
$21.3 million, up 21% from the $17.6 million recorded in the same
quarter last year. Net earnings for the quarter were $1.4 million, or
$0.27 per diluted share compared with net earnings of $0.4 million, or
$0.08 per diluted share in the same period a year ago.
Sales for the year ended September 30, 2003 increased 18% to $82.6
million compared with $70.2 million for fiscal 2002. The Company
reported net earnings for the year of $5.8 million, or $1.15 per
diluted share compared with a net loss of $2.0 million, or $0.53 per
diluted share for fiscal 2002. Fiscal 2002 results included a $4.3
million charge for the impairment of goodwill resulting from the
Company's implementation of SFAS No. 142. Excluding this charge, net
earnings from continuing operations for fiscal 2002 were $2.3 million,
or $0.36 per diluted share.
"Our fourth quarter results are gratifying and contributed to
solid performance for fiscal 2003. We are pleased that our continued
focus on customers, execution, and operational efficiencies resulted
in both revenue growth and a strong bottom line," commented Kirk
Morton, President and Chief Executive Officer.
Gross profit for the fourth quarter of fiscal 2003 was $8.6
million compared to $6.6 million in the corresponding period last
year. As a percentage of sales, gross profit was 40.4% compared to
37.8% in the fourth quarter of fiscal 2002. For the twelve-month
period, gross profit was $34.0 million compared to $27.9 million for
the same period of fiscal 2002, or 41.1% and 39.7% as a percentage of
sales, respectively. Margins for the year were favorably impacted by
an increased mix of higher-margin equipment and parts, manufacturing
efficiencies attributable to volume, lower warranty costs, and cost
reductions due to global sourcing of certain high-use components and
sub-assemblies.
Operating expenses for the quarter ended September 30, 2003 were
$6.4 million, or 30.2% of sales compared to $5.6 million, or 32.0% of
sales in the same quarter last year. Operating expenses for the year
ended September 30, 2003 were $25.2 million, or 30.5% of sales
compared to $23.5 million, or 33.4% of sales for fiscal 2002.
New orders received during the fourth quarter were $23.2 million,
compared to $13.6 million in the same period last year. The Company's
$20.1 million backlog at September 30, 2003 reflects a 33% increase
compared with the $15.1 million backlog at the close of fiscal 2002.
The Company previously announced on October 2, 2003 that it had
received orders totaling more than $6.0 million from two major
customers in the food processing industry. Those orders are included
in both the bookings for the fourth quarter and the 2003 year-end
backlog figures and will ship in the first half of Key's fiscal year
2004.
Morton commented, "The order volume in the fourth quarter was the
highest recorded in the Company's history for that period and reflects
what we believe is an improving capital investment environment among
our customers. We are particularly pleased that we are winning orders
for multiple systems from our larger customers, as this bodes well for
future business. While we anticipate some normal seasonal effects
during the first quarter of the new fiscal year, we are encouraged
with our healthy year-end backlog and are optimistic about our
prospects in fiscal year 2004."
For the fiscal year, cash flow from operating activities increased
30% to $14.5 million from $11.2 million in fiscal 2002 reflecting
stronger earnings and focused balance sheet management. During the
fiscal year, interest-bearing debt was reduced from $12.0 million to
$4.3 million.
Commenting on the outlook for the new fiscal year, Morton said,
"We are monitoring investment patterns in the global French fry
market, given the declining consumer consumption in North America, and
do not expect revenue growth from this segment in 2004. However, we do
expect to see increased revenues in the North American and Western
European processed vegetables segment, in the food processing sector
in Asia -- particularly in China, and from our optical inspection
product lines in Europe. We also expect another good year from the
tobacco market segment.
"We have reorganized our operations to add considerable resources
in marketing and product management, consistent with our renewed focus
on revenue growth following our recent emphasis on debt reduction and
asset management. In addition, we continue to invest in research and
development and anticipate the completion of several new product
developments in late 2004 and early 2005 which will allow us to enter
new market segments and meet specific needs of certain of our largest
customers."
Conference Call
The Company's conference call for the September quarter can be
heard live on the Internet at 1:30 p.m. Pacific Time on Thursday,
November 6th. To access the call, go to www.keyww.com/investor.cfm at
least fifteen minutes prior to the call to download and install any
necessary audio software.
About Key Technology
Key Technology, Inc., headquartered in Walla Walla, Washington, is
a worldwide leader in the design and manufacture of process automation
systems for the food processing and industrial markets. The Company's
products integrate electro-optical inspection and sorting, specialized
conveying and product preparation equipment, which allow processors to
improve quality, increase yield and reduce cost. Key has manufacturing
facilities in Washington, Oregon and the Netherlands, and worldwide
sales and service coverage.
This release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on
management's current expectations or beliefs and are subject to a
number of factors and uncertainties that could cause actual results to
differ materially from those described in the forward-looking
statements. The forward-looking statements in this release address
future financial and operating results.
The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking
statements:
-- the effect of adverse economic conditions in markets served by
the Company and the financial capacity of customers to
purchase capital equipment;
-- the ability to successfully complete and introduce new
products to the market;
-- the ability of new products to compete successfully in either
existing or new markets;
-- the effect of increased competition and advances in technology
on our product pricing and customer capital spending;
-- risks involved in expanding international operations and
sales; and
-- risks associated with adverse fluctuations in foreign currency
exchange rates.
For a detailed discussion of these and other cautionary
statements, please refer to the Company's filings with the Securities
and Exchange Commission, particularly Exhibit 99.1 "Forward-Looking
Statement Risk and Uncertainty Factors" to the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 2002 and the Risk
Factors section of the Company's Registration Statement on Form S-4,
Post-Effective Amendment No. 3, filed August 17, 2001.
Note: News releases and other information on Key Technology, Inc.
can be accessed at www.keyww.com on the Internet.
-TABLES FOLLOW-
Key Technology, Inc. and Subsidiaries
Statement of Selected Operating Information
(Unaudited, in thousands, except per share data)
Three Months Ended Year Ended
September 30, September 30,
------------------ ----------------
2003 2002 2003 2002
------- ------- ------- -------
Net sales $21,287 $17,550 $82,622 $70,234
Gross profit 8,593 6,642 33,996 27,882
Operating expenses
Selling and marketing 3,121 2,489 11,694 10,733
Research and development 1,142 1,102 4,874 4,467
General and administrative 1,842 1,688 7,329 6,963
Amortization of intangibles 331 331 1,323 1,323
------- ------- ------- -------
Total operating expenses 6,436 5,610 25,221 23,486
Earnings from operations 2,159 984 8,779 5,279
Earnings from continuing
operations before income taxes 2,070 653 8,452 3,546
Net earnings from continuing
operations 1,383 418 5,759 2,308
Net earnings from discontinued
operation, net of tax --- --- --- 39
Net earnings before change in
accounting principle 1,383 418 5,759 2,347
Change in accounting principle,
net of tax --- --- --- (4,302)
Net earnings (loss) 1,383 418 5,759 (1,955)
Accretion of mandatorily
redeemable preferred stock --- 0 --- (582)
Net earnings (loss) available to
common shareholders(1) 1,383 418 5,759 (2,537)
Net earnings from continuing
operations per common share
- basic $ 0.29 $ 0.09 $ 1.21 $ 0.36
- diluted(1) $ 0.27 $ 0.08 $ 1.15 $ 0.36
Net earnings from discontinued
operations per common share
- basic $ 0.00 $ 0.00 $ 0.00 $ 0.01
- diluted(1) $ 0.00 $ 0.00 $ 0.00 $ 0.01
Net earnings before change in
accounting principle per
common share
- basic $ 0.29 $ 0.09 $ 1.21 $ 0.37
- diluted(1) $ 0.27 $ 0.08 $ 1.15 $ 0.37
Net earnings (loss) from change in
accounting principle per common
share
- basic $ 0.00 $ 0.00 $ 0.00 $ (0.90)
- diluted(1) $ 0.00 $ 0.00 $ 0.00 $ (0.90)
Net earnings (loss) per common
share
- basic $ 0.29 $ 0.09 $ 1.21 $ (0.53)
- diluted(1) $ 0.27 $ 0.08 $ 1.15 $ (0.53)
Weighted average common and
common equivalent shares
outstanding
- basic 4,782 4,765 4,774 4,759
- diluted(1) 5,112 5,323 4,996 4,759
(1) The weighted average diluted shares for the three-month and
twelve-month periods ended September 30, 2003 includes only common
stock equivalents that are not anti-dilutive to reported EPS.
Options to purchase 261,200 of common stock and 35,553 common
shares from assumed conversion of warrants for the quarter ended
September 30, 2003,and 714,125 and 35,553, respectively, for the
twelve month period ended September 30, 2003, were not included in
the computation of diluted EPS because the options were
anti-dilutive under the treasury-stock method.
Key Technology, Inc. and Subsidiaries
Selected Balance Sheet Information
(Unaudited, in thousands)
September 30, September 30,
2003 2002
------------- -------------
(in thousands)
Cash and cash equivalents $ 6,442 $ 1,707
Trade accounts receivable, net 9,479 7,556
Inventories 13,968 13,969
Total current assets 32,886 26,439
Property, plant and equipment, net 5,503 6,407
Goodwill and other intangibles, net 11,239 12,562
Total assets 51,215 49,820
Current portion of long-term debt and
short-term borrowings 1,066 8,264
Total current liabilities 15,660 18,766
Long-term debt, less current portion 3,249 3,747
Mandatorily redeemable preferred stock and
warrants 1,882 3,467
Shareholders' equity 30,219 23,602
CONTACT: Key Technology, Inc.
Phyllis Best, 509-529-2161