Exhibit 99.1
[LOGO OF RADYNE]
PRESS RELEASE
RADYNE REPORTS RECORD SALES AND EARNINGS
PHOENIX, AZ - February 13, 2006 - Radyne Corporation (Nasdaq: RADN), today
reported record sales for the year and the fourth quarter ending December 31,
2005 of $103.3 million and $36.8 million respectively. Sales for the full year
of 2005 grew 83% compared to 2004 sales of $56.6 million while during the fourth
quarter sales increased 119% from the fourth quarter of 2004 when sales were
$16.8 million.
The increase resulted from sales from recently acquired Xicom Technology, Inc.
and continued growth in sales of the Company's pre-acquisition satellite
electronics and broadcast equipment business. For the full year, excluding
Xicom, sales related to the pre-acquisition businesses grew to $70.8 million or
25%. During the fourth quarter, the pre-acquisition satellite electronics and
broadcast equipment sales were $22.7 million, an increase of 36%.
Xicom sales for the seven months and three months ended December 31, 2005
respectively were $32.8 million and $14.2 million.
Earnings from operations also set new records at $15.4 million for the full year
of 2005, a 64% increase from $9.4 million for 2004 and, for the fourth quarter,
$6.0 million compared to $3.2 million during the same period of 2004, an
increase of 88%.
For the fourth quarter, earnings per fully diluted share ("EPS") were $0.24
compared to $0.18 for the fourth quarter of 2004. Earnings during the fourth
quarter of 2005 included a charge of $365,000 resulting from the Company's
decision to accelerate vesting of stock options previously awarded to employees.
The quarter also included a tax benefit of $317,000 due to the recognition of
deferred tax assets resulting from previously earned and unused R&D tax credits.
EPS for the full year was $0.60 for 2005 compared to $0.79 for 2004. Earnings
during 2004 included a net tax benefit of $3.6 million which, in turn, included
$4.1 million or $0.24 per diluted share due primarily to the reduction of a
valuation allowance against deferred tax assets.
Bookings during the fourth quarter of 2005 were $35.0 million, a 68% increase
over bookings of $20.8 million in the fourth quarter of 2004. At the end of the
year, Radyne's backlog was $32.2 million compared to $9.6 million at the end of
2004. Bookings for the entire year were $107.2 million compared to $57.9 million
for 2004. On a segment basis, for the fourth quarter, the Company's
pre-acquisition satellite electronics and broadcast equipment segment booked
$19.2 million and ended the period with a backlog of $12.2 million. Xicom booked
$16.3 million and had an ending backlog of $20.4 million for the fourth quarter.
"2005 has been the best year ever for Radyne," commented Bob Fitting, CEO. "Our
merger with Xicom and the strength of our products in worldwide markets have
resulted in record sales and profitability. Signs point to even better
performance in 2006".
At the end of the year, Radyne's cash balance was $16.9 million with $4.8
million in total debt compared to $39.3 million in cash and no debt at year-end
2004. Cash balances increased by $7.9 million during the quarter. Compared to
year-end 2004, cash was reduced by the consideration for the Xicom acquisition.
Consolidated Accounts Receivable increased to $20.3 million compared to $9.7
million at the beginning of the year. Consolidated Inventory was $18.1 million
compared to $8.1 million at the beginning of 2005. Compared to the end of the
third quarter, inventory dropped by $239,000. During the second half of 2005,
the period including Xicom Technology, the Company's inventory levels dropped
4.6% or $880,000.
Radyne will be holding a conference call today, Monday, February 13, 2006 at
4:30 p.m. EDT to discuss its third quarter 2005 financial results and
operational highlights. The call is open to the public. The domestic dial in
number is 1-800-573-4754 and the international dial in number is
+1-617-224-4325. The conference will also be accessible via the Internet at
www.radn.com and www.earnings.com.
ABOUT RADYNE CORPORATION
Radyne Corporation designs, manufactures, sells, integrates and installs
products, systems and software used for the transmission and reception of data
and video over satellite, microwave and cable communication networks. The
Company, through its Tiernan subsidiary, is a supplier of HDTV and SDTV encoding
and transmission equipment. The Xicom Technology subsidiary is a producer of
high power amplifiers for communications applications. Radyne is headquartered
in Phoenix, Arizona, has manufacturing facilities in Phoenix, Arizona; and San
Diego, and Santa Clara, California and sales offices in Singapore, Beijing,
Jakarta and the United Kingdom. The Company also has sales and/or service
centers in Sao Paulo, Bangalore, Shanghai and Moscow. For more information,
visit our web site at www.radn.com. Additional information on Xicom is available
at www.xicomtech.com.
Contact: Malcolm Persen, Chief Financial Officer, 602.437.9620
SAFE HARBOR PARAGRAPH FOR FORWARD-LOOKING STATEMENTS
This press release includes statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act") and Radyne Corporation claims the protection of the
safe-harbor for forward-looking statements contained in the Reform Act.
Forward-looking statements involve risks, uncertainties and other factors that
may cause actual results, performance or achievements of Radyne Corporation and
its subsidiaries to be materially different from those expressed or implied by
such forward-looking statements. These forward-looking statements are often
characterized by the terms "may," "believes," "projects," "expects," "intends"
or "anticipates," and do not reflect historical facts. Specific forward-looking
statements contained in this press release include expectations for future
revenues, orders and backlog, cash flow and earnings per share and indications
that the Company will benefit from strong market demand for its new products.
There is no assurance that the Xicom acquisition will continue to provide
desirable financial or strategic results for the Company nor that the Company's
sales and profits will continue to grow. We cannot guarantee that the Company
will continue to generate cash and asset and sales fluctuations may be seasonal
in nature and not an indication of future results. There can be no assurance
that the indicators that the Company relies on to gauge future business
prospects, such as backlog and bookings, will accurately forecast future
results.
Factors that may affect forward-looking statements and the Company's business
generally include but are not limited to the following: changes in demand for
the Company's products, product mix, the timing of customer orders and
deliveries, the impact of competitive products and pricing, constraints on
supplies of critical raw materials, excess or shortage of production capacity,
and other risks discussed from time to time in the Company's SEC filings and
reports. In addition, such statements could be affected by general industry and
market conditions and growth rates, and general domestic and international
economic conditions.
Forward-looking statements speak only as of the date the statement was made.
Radyne Corporation does not undertake and specifically declines any obligation
to update any forward-looking statements. In addition, the Company does not
endorse any projections regarding future performance that may be made by third
parties.
Financial Statements follow.
RADYNE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
UNAUDITED
DECEMBER 31, DECEMBER 31,
2005 2004
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,928 $ 39,300
Accounts receivable - trade, net of allowance for
doubtful accounts of $841 and $350, respectively 20,337 9,728
Inventories 18,057 8,132
Deferred tax assets 3,010 2,218
Prepaid expenses and other assets 862 846
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Total current assets 59,194 60,224
Goodwill 30,333 -
Intangibles 6,706 -
Deferred tax assets, net - 3,445
Property and equipment, net 4,098 1,593
Other assets 295 154
------------- -------------
Total Assets $ 100,626 $ 65,416
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,054 $ 1,566
Accrued expenses 9,045 4,835
Customer advance payments 2,319 149
Current portion of long-term debt 1,000 -
Income taxes payable 609 242
------------- -------------
Total current liabilities 18,027 6,792
Long-term debt, less current portion 3,750 -
Deferred tax liability 752 -
Deferred rent 413 284
Accrued stock option compensation 46 146
------------- -------------
Total liabilities 22,988 7,222
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STOCKHOLDERS' EQUITY:
Common stock; $.001 par value - authorized,
50,000,000 shares; issued and outstanding,
17,334,467 shares and 16,232,999 shares,
respectively 17 16
Additional paid-in capital 63,171 54,414
Retained earnings 14,448 3,764
Other comprehensive income 2 -
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Total stockholders' equity 77,638 58,194
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Total Liabilities and Stockholders' Equity $ 100,626 $ 65,416
============= =============
RADYNE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
UNAUDITED
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net sales $ 36,795 $ 16,778 $ 103,263 $ 56,578
Cost of sales 20,914 7,238 57,251 26,435
---------- ---------- ---------- ----------
Gross profit 15,881 9,540 46,012 30,143
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Selling, general and administrative 7,121 5,025 21,777 15,420
Research and development 2,766 1,365 8,824 5,330
---------- ---------- ---------- ----------
Total operating expenses 9,887 6,390 30,601 20,750
---------- ---------- ---------- ----------
Earnings from operations 5,994 3,150 15,411 9,393
OTHER (INCOME) EXPENSE:
Interest expense 85 15 252 29
Interest and other income (120) (187) (665) (492)
---------- ---------- ---------- ----------
Earnings before income taxes 6,029 3,322 15,824 9,856
Income tax expense (benefit) 1,739 346 5,138 (3,644)
---------- ---------- ---------- ----------
Net earnings $ 4,290 $ 2,976 $ 10,686 $ 13,500
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EARNINGS PER SHARE:
Basic $ 0.25 $ 0.18 $ 0.63 $ 0.83
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Diluted $ 0.24 $ 0.18 $ 0.60 $ 0.79
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic 17,147 16,222 16,838 16,357
========== ========== ========== ==========
Diluted 18,199 16,855 17,707 17,136
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