Exhibit 99.1
Key Technology Reports Fiscal 2004 Second-Quarter Results
WALLA WALLA, Wash.--(BUSINESS WIRE)--April 22, 2004--Key
Technology, Inc. (Nasdaq:KTEC) today announced sales and operating
results for the second-quarter and six-month periods ended March 31,
2004.
Operating Results
Sales for the three-month period ended March 31, 2004, totaled
$20.8 million, compared with $20.9 million in the same quarter last
year. Net earnings for the second quarter were $1.1 million, or $0.22
per diluted share, compared with net earnings of $1.2 million, or
$0.23 per diluted share, in the same period a year ago.
Sales for the six months ended March 31, 2004, were $39.5 million,
compared with $36.3 million for the comparable period in fiscal 2003.
The Company reported net earnings for the fiscal 2004 six-month period
of $1.6 million, or $0.31 per diluted share, compared with $1.4
million, or $0.28 per diluted share, for the six-month period in
fiscal 2003.
Gross profit for the second quarter of fiscal 2004 was $8.9
million, compared to $8.1 million in the corresponding period last
year. As a percentage of sales, gross profit was 42.8%, compared to
38.8% in the second quarter of fiscal 2003. Product mix, which
included strong sales in the parts and upgrades product lines,
contributed to the increase in gross profit percentage in the second
quarter compared to the prior-year period. For the 2004 six-month
period, gross profit was $15.9 million, compared to $14.4 million for
the same period of fiscal 2003, or 40.4% and 39.7% as a percentage of
sales, respectively.
Operating expenses for the quarter ended March 31, 2004, were $7.2
million, or 34.7% of sales, compared to $6.3 million, or 30.2% of
sales, in the same quarter last year. Operating expenses for the six
months ended March 31, 2004, were $13.6 million, or 34.3% of sales,
compared to $12.1 million, or 33.4% of sales, for the corresponding
period of fiscal 2003. Operating expenses for the second quarter
included increased selling and marketing expenses and $220,000 for the
implementation of Sarbanes-Oxley internal controls compliance.
Additionally, the Company continues to invest in developing new
products and markets.
Kirk Morton, President and Chief Executive Officer, commented, "We
are pleased with the quarter's margins and net earnings and are very
pleased with the year-to-date results. The aftermarket portion of our
business is very robust with revenues running 30% ahead of last year's
year-to-date results, with improved margins over last year. We expect
the aftermarket business to continue to be strong in the second half
of the year."
New orders received during the second quarter were $19.8 million,
compared to $29.4 million in the same period last year. At the close
of the March 2004 quarter, the Company's backlog was $18.7 million,
compared to $27.2 million at the close of the corresponding period one
year ago.
"Despite the year-over-year decline in orders for the second
quarter, we do not believe that this indicates a fundamental
degradation in our markets or our competitive position. During the
quarter, we experienced a sizable increase in quote volumes compared
to last year. The quote volume is encouraging, and we believe the
delayed order placements reflect our customers becoming more
conservative as the year has progressed," said Morton.
"We have customer commitments for a number of trial installations
this summer that will allow us to prove the performance of
newly developed products or of current products in new applications.
Some of these placements could become orders this fiscal year pending
successful performance and are important tests of future prospects for
new revenues. In addition, the Company is finalizing plans to add
sales and service offices in certain international markets, including
China. We continue to believe that a local presence is critical to
capitalizing on international opportunities, which are an important
part of our growth strategy."
Conference Call
The Company's conference call for the March quarter can be heard
live on the Internet at 1:30 p.m. Pacific Time on Thursday, April
22nd. To access the call, go to www.key.net/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, 2003.
Note: News releases and other information on Key Technology, Inc.
can be accessed at www.key.net on the Internet.
Key Technology, Inc. and Subsidiaries
Statement of Selected Operating Information
(Unaudited, in thousands, except per-share data)
Three Months Six Months
Ended March 31, Ended March 31,
--------------- ---------------
2004 2003 2004 2003
---- ---- ---- ----
Net sales $20,761 $20,927 $39,504 $36,322
Gross profit 8,892 8,115 15,947 14,420
Operating expenses
Selling and marketing 3,333 2,986 6,654 5,667
Research and development 1,497 1,203 2,635 2,412
General and administrative 2,042 1,796 3,613 3,382
Amortization of intangibles 331 330 661 661
-------- -------- -------- --------
Total operating expenses 7,203 6,315 13,563 12,122
Earnings from operations 1,695 1,802 2,390 2,300
Earnings before income taxes 1,656 1,747 2,427 2,082
Net earnings 1,138 1,153 1,642 1,374
Net earnings per common share
- basic $0.23 $0.24 $0.34 $0.29
- diluted $0.22 $0.23 $0.31 $0.28
Weighted average common
and common equivalent
shares outstanding
- basic 4,897 4,770 4,858 4,769
- diluted 5,285 4,964 5,227 4,973
Key Technology, Inc. and Subsidiaries
Selected Balance Sheet Information
(Unaudited, in thousands)
March 31, Sept. 30,
2004 2003
--------- ---------
(in thousands)
Cash and cash equivalents $8,313 $6,442
Trade accounts receivable, net 10,361 9,479
Inventories 13,961 13,968
Total current assets 35,813 32,886
Property, plant and equipment, net 5,482 5,503
Goodwill and other intangibles, net 10,577 11,239
Total assets 52,741 51,215
Current portion of long-term debt and short-term
borrowings 1,198 1,066
Total current liabilities 14,490 15,660
Long-term debt, less current portion 2,845 3,249
Mandatorily redeemable preferred stock and warrants 1,693 1,882
Shareholders' equity 33,533 30,219
CONTACT: Key Technology, Inc., Walla Walla
Phyllis Best, 509-529-2161