Exhibit 99
CompuDyne Reports GAAP Earnings Per Share of $0.10 for 2006 First Quarter
- Adjusted Earnings Per Share, Excluding Stock Option Expense, Was $0.13
- Company's Recovery is Taking Hold
ANNAPOLIS, Md.--(BUSINESS WIRE)--April 27, 2006--CompuDyne
Corporation (Nasdaq:CDCY), an industry leader in sophisticated
security products, integration and technology for the public security
markets, today reported net income of $0.10 per share for the first
quarter of 2006, compared to a loss of $0.04 per share reported in the
first quarter of 2005. Revenues in the first quarter of 2006 were
$40.5 million, up from $36.3 million in the first quarter of 2005.
Expenses in the first quarter of 2006 included $255 thousand in
non-cash stock option expense. Earnings per share before this non-cash
charge was $0.13.
Institutional Security Systems revenue was $13.4 million in the
first quarter of 2006 compared to $15.7 million in the first quarter
of 2005. Pre-tax income declined from $1.2 million in the 2005 first
quarter to $0.1 million in the 2006 first quarter. First quarter 2006
revenues and earnings were negatively impacted by delays in the start
of some projects. Legal costs remained high at $138 thousand for the
quarter as we continue to pursue recoveries on prior year contract
losses.
Attack Protection revenue was $11.7 million in the first quarter
of 2006, up 69.4% compared to $6.9 million in the first quarter of
2005. Pre-tax income improved from $499 thousand in the 2005 first
quarter to a pre-tax income of $1.2 million in the 2006 first quarter.
The Norshield brand business, which supplies bullet, blast and attack
resistant windows and doors as well as vehicle barrier systems,
benefited from sharply increased backlogs as well as from significant
progress made during 2005 in reducing costs and improving quality. The
Fiber SenSys ("FSI") brand business, which is one of the world's
largest supplier of fiber optic based perimeter alarm systems,
continued to be negatively impacted by delays in military tests of
important new products. This process is now substantially behind us
and FSI is expected to have much improved results during the balance
of the year.
Public Safety & Justice ("PS&J") revenues increased to $11.8
million in the first quarter of 2006 compared to $11.7 million in the
first quarter of 2005. Pre-tax results for PS&J in the first quarter
of 2006 were breakeven compared to a loss of $482 thousand in the
first quarter of 2005. While PS&J started the year with improved
backlogs, they are still not at levels necessary for adequate
profitability, although the pipeline of prospective new business is
sharply higher. In addition, the decision was made in 2005 to
significantly accelerate the research and development effort to
migrate to a full Service Oriented Architecture and .NET based product
suite, a commitment which is expected to negatively impact PS&J income
in 2006 by $2.5 million but which will materially improve future
revenues and margins. The late 2005 acquisition of Xanalys, with one
of the country's foremost suites of investigative and case management
software, is being introduced to PS&J's client base, and had an
important sale to the Australian Department of Defense in the first
quarter of 2006. During the first quarter of 2006 PS&J moved its
headquarters to Pleasanton, California, a move that should both
increase the efficiency and effectiveness of its headquarters
operations.
Integrated Electronic Systems revenue was $3.6 million in the
first quarter of 2006 compared to $2.0 million in the first quarter of
2005 and resulted in pre-tax income of $184 thousand for the first
quarter of 2006 compared to breakeven results for the first quarter of
2005. The re-bid of the Bureau of Engraving & Printing contract,
occasioned by a protest filed by the previous incumbent, remains
unresolved.
For the first quarter of 2006, our corporate pre-tax loss totaled
$0.9 million. Full year audit and costs related to compliance with
Section 404 of Sarbanes-Oxley are expected to be far below 2005
levels.
While backlogs declined during the first quarter of 2006, by $19.7
million to $128.5 million, quoting and bidding activity levels
continue much higher than in recent years.
While the Company does not provide estimates of future results, we
do expect the second quarter of 2006 to generate positive results.
Certain statements made in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including those statements
concerning the Company's expectations with respect to future operating
results and other events. Although the Company believes it has a
reasonable basis for these forward-looking statements, these
statements involve risks and uncertainties that cannot be predicted or
quantified and consequently, actual results may differ materially from
those expressed or implied by such forward-looking statements. Factors
which could cause actual results to differ from expectations include,
among others, capital spending patterns of the security market and the
demand for the Company's products, competitive factors and pricing
pressures, changes in legislation, regulatory requirements, government
budget problems, the Company's ability to secure new contracts, the
ability to remain in compliance with its bank covenants, delays in
government procurement processes, inability to obtain bid, payment and
performance bonds on various of the Company's projects, technological
change or difficulties, the ability to refinance debt when it becomes
due, product development risks, commercialization difficulties,
adverse results in litigation, the level of product returns, the
amount of remedial work needed to be performed, costs of compliance
with Sarbanes-Oxley requirements and the impact of the failure to
comply with such requirements, risks associated with internal control
weaknesses identified in complying with Section 404 of Sarbanes-Oxley,
the Company's ability to realize anticipated cost savings, the
Company's ability to simplify its structure and modify its strategic
objectives, and general economic conditions. Risks inherent in the
Company's business and with respect to future uncertainties are
further described in its other filings with the Securities Exchange
Commission, such as the Company's Form 10-K, Form 10-Q, and Form 8-K
reports.
COMPUDYNE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31, December 31,
ASSETS 2006 2005
---------- ------------
(dollars in
thousands)
Current Assets
Cash and cash equivalents $ 9,647 $ 6,938
Marketable securities 6,522 11,429
Cash and marketable securities - pledged 440 -
Accounts receivable, net 32,741 39,625
Contract costs in excess of billings 11,994 13,764
Inventories 6,556 6,195
Prepaid expenses and other 2,318 2,809
---------- ------------
Total Current Assets 70,218 80,760
Cash and marketable securities - pledged 6,004 -
Property, plant and equipment, net 9,548 9,962
Goodwill 26,846 26,846
Other intangible assets, net 8,157 8,221
Other 807 903
---------- ------------
Total Assets $ 121,580 $ 126,692
========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 19,039 $ 23,030
Billings in excess of contract costs
incurred 11,315 13,847
Deferred revenue 8,688 8,094
Current portion of notes payable 440 440
---------- ------------
Total Current Liabilities 39,482 45,411
Notes payable 3,125 3,125
Convertible subordinated notes payable, net 39,352 39,305
Deferred tax liabilities 2,060 2,060
Other 328 369
---------- ------------
Total Liabilities 84,347 90,270
----------
Commitments and Contingencies
Shareholders' Equity 37,233 36,422
---------- ------------
Total Liabilities and Shareholders'
Equity $ 121,580 $ 126,692
========== ============
COMPUDYNE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
2006 2005
----------- ----------
(in thousands, except
per share data)
Revenues $ 40,470 $ 36,306
Cost of sales 27,961 23,923
----------- ----------
Gross profit 12,509 12,383
Selling, general and administrative expenses 9,736 10,027
Research and development 1,767 2,111
----------- ----------
Income from operations 1,006 245
----------- ----------
Total other expense, net 383 564
----------- ----------
Income (loss) before income taxes 623 (319)
Income tax benefit (184) -
----------- ----------
Net income (loss) $ 807 $ (319)
=========== ==========
Income (loss) per share:
- ------------------------
Basic income (loss) per common share $ .10 $ (.04)
=========== ==========
Weighted average number of common
shares outstanding 8,119 8,163
=========== ==========
Diluted income (loss) per common share $ .10 $ (.04)
=========== ==========
Weighted average number of common
shares and equivalents 8,159 8,163
=========== ==========
COMPUDYNE CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL DATA
(in thousands, unaudited)
Three Months Ended
March 31,
2006 2005
---------- ---------
Revenues
Institutional Security Systems $ 13,355 $ 15,732
Attack Protection 11,684 6,898
Integrated Electronic Systems 3,587 2,019
Public Safety and Justice 11,844 11,657
---------- ---------
$ 40,470 $ 36,306
========== =========
Three Months Ended
March 31,
2006 2005
---------- ---------
Pre-tax income (loss)
Institutional Security Systems $ 136 $ 1,230
Attack Protection 1,205 499
Integrated Electronic Systems 184 (8)
Public Safety and Justice 7 (482)
Corporate (909) (1,558)
---------- ---------
$ 623 $ (319)
========== =========
March 31, December March 31,
2006 31, 2005 2005
--------- --------- ---------
Backlog
Institutional Security Systems $ 57,030 $ 58,128 $ 42,700
Attack Protection 20,961 28,802 20,139
Integrated Electronic Systems 6,590 7,503 8,395
Public Safety and Justice 43,874 53,705 44,488
--------- --------- ---------
$128,455 $148,138 $115,722
========= ========= =========
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
Three Months Ended
March 31,
2006 2005
---------- ----------
Net income (loss) $ 807 $ (319)
Interest expense 815 803
Income tax benefit (184) -
Depreciation and amortization 795 877
Non-cash stock option expense 255 -
---------- ----------
EBITDA adjusted for non-cash stock option
expense
(EBITDAS) $ 2,488 $ 1,361
========== ==========
This press release contains unaudited financial information that
is not prepared in accordance with generally accepted accounting
principals (GAAP). Investors are cautioned that the non-GAAP financial
measures are not to be construed as an alternative to GAAP. The
Company's management uses earnings before interest, taxes,
depreciation and amortization, as adjusted for non-cash stock option
expense (EBITDAS), in its internal analysis of results of operations
and monitors EBITDAS to evaluate the Company's compliance with certain
of its bank covenants. Management believes that EBITDAS is useful to
investors as a meaningful comparison between periods and as an
analysis of the critical components of the Company's results of
operations. Management also believes that EBITDAS is useful to
investors because it allows them to evaluate the Company's compliance
with certain of its bank covenants.
CONTACT: CompuDyne Corporation
Investor Relations
Geoffrey F. Feidelberg, 410-224-4415 ext.313
investors.relations@compudyne.com