Exhibit 99.1
METROLOGIC ANNOUNCES RECORD FINANCIAL RESULTS FOR THIRD QUARTER 2005
UPDATES GUIDANCE FOR 2005
Teleconference 8:30 a.m. Wednesday, October 26, 2005
BLACKWOOD, N.J., Oct. 25 /PRNewswire-FirstCall/ -- Metrologic Instruments,
Inc. (Nasdaq: MTLG) today announced financial results for the quarter and nine
months ended September 30, 2005.
-- Sales for the quarter ended September 30, 2005 increased by 22.3% to a
record $54.0 million as compared with sales of $44.2 million for the
same period last year.
-- Gross margin for the third quarter was 43.8% versus 45.4% for the third
quarter 2004.
-- Net income for the third quarter increased by 64.5% to $7.7 million, or
$0.33 earnings per diluted share, compared with net income of $4.7
million, or $0.20 earnings per diluted share, for the same period last
year.
Gross margin was compressed by some large Tier 1 retailer deals that
deployed in the third quarter in addition to higher Optical Systems revenues
which generally carry smaller margins. This effect was partially offset by
favorable product mix in the Data Capture and Collection business segment.
Selling, general and administrative (SG&A) expenses were relatively flat as
compared to the same period of 2004 as the cost reduction efforts that were
announced in the second quarter of 2005 have taken effect; however, we
anticipate that legal expenses will again escalate as a result of the continuing
litigation with one of our competitors. As a result of our ability to contain
SG&A expense, operating margin increased by almost 2% to 18.3% as a percentage
of revenue as compared to 16.4% in the third quarter of 2004. Other Income
(Expense) was positively impacted by the $2.25 million cash component of the
previously announced settlement with PSC Inc. which resulted in an after-tax
benefit of $1.44 million to net income. Excluding the benefit of the PSC Inc.
settlement, net income was $6.3 million or $0.27 per fully diluted share.
Benny Noens, Metrologic's Chief Executive Officer and President, commented,
"Our third quarter results exceeded our expectations. We achieved record
revenues of $54.0 million, amounting to growth of 22.3% as compared to the same
period in 2004. Our strategic efforts with Tier 1 retailers continued to gain
momentum as we successfully delivered on the deals we announced earlier in the
year while continuing to win new Tier 1 business. Conditions in Europe remain
challenging; however, we remain focused on our customers and believe we are well
positioned to take advantage of the anticipated recovery in this significant
region."
Continued Success in Achieving Announced Strategic Initiatives
Building on earlier successes achieved in 2005, the Company continued to
progress on its announced strategic initiatives:
-- The Company won an initial order for 8,000 QuantumT(TM) laser bar-code
scanners from a major international food and beverage outlet.
-- The Company received an initial order for VoyagerCG(R) hand-held
scanners from a North American department store chain, a new customer
added in Q3.
-- In partnership with one of our key Canadian channel distributors,
Metrologic is supplying 3,000 Eclipse(TM) hand-held laser scanners to
facilitate the Canadian electoral process in the coming 2005 elections.
-- Continuing to penetrate the in-counter bi-optic scanner market, the
Company received an initial order from a major European grocery retailer
for the StratosS(TM), a more compact version of Stratos(R) designed for
the European and Asian markets.
-- The Company settled ongoing litigation with PSC Inc. for $2.25 million
in cash in addition to other terms.
"We successfully continued to execute against our plan in the third quarter
of 2005 in all geographies and markets. Our Data Capture and Collection segment
grew at 27.2% for the third quarter. Robust growth in our Optical Systems
business of 20.3% offset the expected softness in our Industrial Automation
business as we continue to develop our new business model. From a regional
perspective, The Americas led the way with revenue growth of 27.7% for the third
quarter of 2005 based upon strength not only in Tier 1 retail accounts but also
in the channel and in increasingly important verticals like healthcare and
government. For the year, our revenue in the Asia/Pacific region is up 24.1%
over the first nine months of 2004, a testament to our philosophy of maintaining
a 'globally local' presence and our expanded sales coverage in that increasingly
important region," continued Mr. Noens.
Nine Months 2005 Results
Revenue for the nine months ended September 30, 2005 increased 19.7% to
$149.5 million, compared with $124.8 million for the same period in 2004. Net
income for the nine months ended September 30, 2005 increased 16.3% to $16.3
million, or $0.70 per diluted share, compared with $14.0 million, or $0.61 per
diluted share, for the first nine months of 2004. Net of the PSC Inc.
settlement, net income for the nine months of 2005 was $14.8 million or $0.64
per fully diluted share.
2005 Guidance Updated and 2006 Outlook
As a result of the strength of the third quarter 2005 results, Metrologic is
raising its full year 2005 guidance. The Company now expects revenues in the
range of $205.0 million to $208.0 million with net income in the range of $22.2
million to $22.8 million, or $0.96 to $0.99 per fully diluted share. This
compares to the guidance previously announced on June 16, 2005 of revenue of
$195 million to $205 million and net income of $18.5 million to $19.7 million or
$0.80 to $0.85 per fully diluted share. Gross margins are still expected to be
in the range of 43% to 45% for the full year 2005. In addition, the value of the
euro against the dollar is expected to average between 1.20 and 1.25 for the
year and an effective annual tax rate of 36% is assumed. This tax rate does not
include any benefit from the potential dividend repatriation under the American
Jobs Creation Act of 2004.
For the full year 2006, the Company expects to be able to achieve revenue
growth inline with its historic compound annual growth rate. This compound
annual growth rate has historically been in the mid to high teens.
Conference Call Information
The Company will host a conference call for investors on Wednesday, October
26, 2005 at 8:30 AM ET. The dial-in numbers for the teleconference are: (800)
946-0712 (Domestic/Canada) or (719) 457-2641 (International). Those interested
in participating in the conference call should dial in at least 10 minutes prior
to commencement of the call. The audio for the conference call will also be
available as an audio web cast that can be accessed through the Metrologic web
site at http://www.metrologic.com by clicking on the banner at the bottom of our
home page and following the instructions. Also available through our web site
will be a graphical presentation that will be referred to throughout the
conference call. The graphical presentation will be available for download and
printing 30 minutes before the start of the conference call.
About Metrologic
Metrologic Instruments, Inc. ("Metrologic" or the "Company") is a global
supplier of choice for data capture and collection hardware, optical solutions,
and image processing software. Metrologic has been delivering innovative,
quality products that are cost effective, reliable and supported by a superior
level of personal service for nearly 40 years. Metrologic products are sold
worldwide through Metrologic's sales, service and distribution offices located
in The Americas, EMEA and Asia/Pacific. Metrologic provides its customers not
only with a great deal, but a great deal more. For more information please call
1-800-667-8400 or visit http://www.metrologic.com.
Forward-Looking Statements
Forward-looking statements contained in this release are highly dependent
upon a variety of important factors which could cause actual results to differ
materially from those reflected in such forward-looking statements.
Specifically, the factors that could cause actual results to differ from
expectations include: the timing, introduction and market acceptance of
Metrologic's new products; foreign currency fluctuations with the US dollar;
pricing pressures; competitive factors; sales cycles of Metrologic's products;
Metrologic's ability to control manufacturing and operating costs as well as
product and revenue mix which affect future profitability; the effect of current
and pending legislation on the Company's effective annual tax rate;
technological changes in the data capture industry, including the adoption of
imaging-based and RFID technologies; availability of patent protection for
Metrologic's vision-based technologies, and other products; the resolution of
litigation; general economic conditions; and the potential impact of terrorism,
international hostilities and natural disasters. When used in this release and
documents referenced, the words "believes," "expects," "may," "should," "seeks,"
or "anticipates," and similar expressions as they relate to Metrologic or its
management are intended to identify such forward-looking statements. For
additional factors, please see Metrologic's reports filed with the Securities
and Exchange Commission.
For more information contact:
Ann Anthony, Investor Relations
856.228.8100
Email: a.anthony@metrologic.com
Metrologic Instruments, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited)
Sales $ 54,005 $ 44,156 $ 149,460 $ 124,846
Cost of sales 30,341 24,088 84,118 66,886
------------ ------------ ------------ ------------
Gross profit 23,664 20,068 65,342 57,960
Selling, general and
administrative expenses 11,423 10,997 34,957 29,470
Research and
development expenses 2,354 1,824 6,524 5,671
------------ ------------ ------------ ------------
Operating income 9,887 7,247 23,861 22,819
Net interest income 123 63 257 98
Other income (expense) 2,021 242 1,279 (383)
------------ ------------ ------------ ------------
Income before
income tax expense 12,031 7,552 25,397 22,534
Income tax expense 4,331 2,870 9,143 8,563
------------ ------------ ------------ ------------
Net income $ 7,700 $ 4,682 $ 16,254 $ 13,971
============ ============ ============ ============
Earnings per share:
Basic $ 0.35 $ 0.22 $ 0.74 $ 0.65
Diluted $ 0.33 $ 0.20 $ 0.70 $ 0.61
Weighted average number of
common shares outstanding:
Basic 22,201 21,555 22,082 21,403
Diluted 23,102 22,948 23,101 22,956
Metrologic Instruments, Inc.
Condensed Consolidated Balance Sheets
(all amounts in thousands)
September 30, December 31,
2005 2004
------------ ------------
(Unaudited)
Cash and cash equivalents $ 72,168 $ 64,715
Accounts receivable, net 43,556 35,153
Inventories, net 24,260 23,865
Other current assets 6,106 4,369
------------ ------------
Total current assets 146,090 128,102
Property, plant and equipment, net 19,951 19,468
Goodwill and other intangibles, net 43,154 43,462
Other assets 1,561 1,495
------------ ------------
Total assets $ 210,756 $ 192,527
============ ============
Accounts payable and accrued expenses $ 28,136 $ 27,012
Current portion of debt 19,781 16,265
Deferred contract revenue 565 1,507
------------ ------------
Total current liabilities 48,482 44,784
Long Term Debt 7 2,015
Other liabilities 7,129 7,712
Total shareholders' equity 155,138 138,016
------------ ------------
Total liabilities and shareholders' equity $ 210,756 $ 192,527
============ ============
Supplemental Sales Data
Three Months Ended
September 30,
---------------------------------------------------
% %
2005 2004 Total Growth
---------- ---------- ---------- ----------
By Geography(1)
The Americas $ 27,686 $ 21,683 51.3% 27.7%
EMEA 19,185 16,160 35.5% 18.7%
Asia/Pacific 7,134 6,313 13.2% 13.0%
---------- ---------- ----------
$ 54,005 $ 44,156 100.0% 22.3%
By Business Segment(2)
Data Capture and Collection $ 43,962 $ 34,553 81.4% 27.2%
Industrial Automation/
Optical Systems
Industrial Automation 3,017 3,763 5.6% -19.8%
Optical Systems 7,026 5,840 13.0% 20.3%
---------- ---------- ----------
$ 54,005 $ 44,156 100.0% 22.3%
Nine Months Ended
September 30,
---------------------------------------------------
% %
2005 2004 Total Growth
---------- ---------- ---------- ----------
By Geography(1)
The Americas $ 73,452 $ 60,407 49.2% 21.6%
EMEA 57,438 49,474 38.4% 16.1%
Asia/Pacific 18,570 14,965 12.4% 24.1%
---------- ---------- ----------
$ 149,460 $ 124,846 100.0% 19.7%
By Business Segment(2)
Data Capture and Collection $ 119,618 $ 97,742 80.0% 22.4%
Industrial Automation/
Optical Systems
Industrial Automation 11,031 12,592 7.4% -12.4%
Optical Systems 18,811 14,512 12.6% 29.6%
---------- ---------- ----------
$ 149,460 $ 124,846 100.0% 19.7%
(1) The Company has changed its geographic categories from North America,
previously comprised of POS/OEM and AOA, EMEA, Asia/ROW and South America,
to The Americas, EMEA and Asia/Pacific which is more consistent with how the
Company looks at its business.
(2) As previously noted in our Annual Report on Form 10-K filed with the SEC on
March 15, 2005, the Company has changed its business segment titles from
"POS/OEM" to "Data Capture and Collection," and from "Industrial/Optical
Systems" to "Industrial Automation/Optical Systems."
SOURCE Metrologic Instruments, Inc.
-0- 10/25/2005
/CONTACT: Ann Anthony, Investor Relations, Metrologic Instruments,
+1-856-228-8100 or a.anthony@metrologic.com/
/Web site: http://www.metrologic.com/