BETHEL, Conn., Sept. 7 /PRNewswire-FirstCall/ -- Memry Corporation reported today revenues of $52,588,000 for the year ended June 30, 2006, up 17% from $45,008,000 in fiscal year 2005. Net income was $2,673,000, or $0.09 per diluted share, compared with net income of $2,725,000, or $0.10 per diluted share in the comparable period last year.
For the fourth fiscal quarter ended June 30, 2006, revenue was $13,279,000, compared with $13,345,000 in the fourth fiscal quarter of 2005. Fourth quarter net income was $887,000, or $0.03 per diluted share, compared with net income of $881,000, or $0.03 per diluted share, in the comparable period of fiscal year 2005.
Memry CEO Robert Belcher said, "This was a major transition year for Memry. We crossed the $50 million revenue mark for the first time. Shifts in top management and a significant boost from our polymer business underscored substantial developments that will positively affect our company in the years ahead.
"Our polymer segment, created by the acquisition of Putnam Plastics in November 2004, drove strong top-line growth of 17% in FY 2006. The polymer segment represented 30% of consolidated revenue for the year, up from 18% in FY 2005. Polymer segment revenue for FY 2006 was $15.8 million, compared to $8.1 million in FY 2005. This growth was driven by guidewire products sold to a major customer and increased shipments of catheters to a number of customers. Gross margin in the polymer segment increased to 44.4% in FY 2006, versus 43.9% in FY 2005.
"The Nitinol segment, our original business, was adversely affected by increased competition and reduced order flow during the year. Fortunately, this was offset by contributions from our polymer operations. Nitinol segment revenue was flat at $37.0 million in FY 2006 and FY 2005. Shipments of components used in surgical applications and superelastic tube increased, as did components used in prototype development and R&D activities. However, shipments of Nitinol laser cut tube-based stent components sold to our largest customer decreased, reflecting an overall decline in the sales of its products and a desire to secure a second source of supply. These trends will continue to impact us in FY 2007. Early this fiscal year, we were also adversely affected by supplier shortages in acceptable raw materials for wire-based stent components, an issue we have since addressed. These issues plus changes in product mix resulted in a decrease in gross margin in the Nitinol segment to 36.1% from 38.8% in the prior year. We will work to stabilize margins in the Nitinol segment in the year ahead."
FY 2006 results were impacted by a non-recurring operating expense of $1.13 million in the second quarter in connection with the retirement of CEO Jim Binch. Excluding the impact of that charge, Memry's pre-tax income for FY 2006 would have been up 24% from the prior year. Memry also continued to produce strong cash flow from operations of $5.8 million during FY 2006, and its balance sheet reflected a $6.0 million increase in working capital over the prior year.
"Our new management team is optimistic about the future of Memry," said Belcher. "After Jim Binch's retirement, the board asked me to become CEO. Dean Tulumaris was named president and chief operating officer, and Rick Sowerby was hired to replace me as chief financial officer. We feel positive about our long-term prospects in the polymer division and anticipate significant growth in that segment. Though we do not anticipate meaningful short-term growth opportunities in the Nitinol segment we continue to work on many new product initiatives, several of which will begin generating revenue in the year ahead. We also will continue to pursue attractive business development opportunities this fiscal year."
The company will host a conference call with Belcher and senior members of the management team on Friday, September 8 at 11 a.m. Eastern. The call will cover Memry's FY 2006 financial results. Belcher will open the conference call, followed by a question-and-answer session. To participate in this call, dial (877) 407-8031 any time after 10:55 a.m. Eastern. International callers should dial (201) 689-8031.
A copy of the financial statements follows.
About Memry Corporation
Memry Corporation provides design, engineering, development and manufacturing services to the medical device and other industries using the company's proprietary shape memory alloy and polymer extrusion technologies. Medical device products include stent components, catheter components, guidewires, laparoscopic surgical sub-assemblies and orthopedic instruments as well as complex, multi-lumen, multi-layer polymer extrusions used for guidewires, catheters, delivery systems and various other high-end interventional medical devices.
An investment profile on Memry may be found at http://www.hawkassociates.com/mryprofile.aspx.
For more information, contact CEO Robert P. Belcher at (203) 739-1100, e-mail:
This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission.
Memry Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Year Three Month Period
Ended June 30, Ended June 30,
2006 2005 2006 2005
Revenues $52,588,000 $45,008,000 $13,279,000 $13,345,000
Cost of Revenues 32,215,000 27,095,000 8,487,000 7,830,000
Gross profit 20,373,000 17,913,000 4,792,000 5,515,000
Operating Expenses
Research and
development 2,286,000 2,401,000 528,000 866,000
General, selling
and admin,
including
separation charges
of $1,130,000 in
2006 12,345,000 9,571,000 2,497,000 2,632,000
Amortization of
intangible assets 504,000 379,000 126,000 125,000
15,135,000 12,351,000 3,151,000 3,623,000
Operating income 5,238,000 5,562,000 1,641,000 1,892,000
Loss on extinguishment
of debt 0 (182,000) 0 (182,000)
Other income 141,000 60,000 63,000 60,000
Interest
Expense (1,258,000) (1,189,000) (317,000) (435,000)
Income 195,000 157,000 60,000 48,000
(1,063,000) (1,032,000) (257,000) (387,000)
Income before
income taxes 4,316,000 4,408,000 1,447,000 1,383,000
Provision for income
taxes 1,643,000 1,683,000 560,000 502,000
Net income $2,673,000 $2,725,000 $887,000 $881,000
Basic earnings per
share $0.09 $0.10 $0.03 $0.03
Diluted earnings per
share $0.09 $0.10 $0.03 $0.03
Memry Corporation and Subsidiaries
Consolidated Balance Sheets
June 30, 2006 and 2005
(Unaudited)
2006 2005
ASSETS
Current Assets
Cash and cash equivalents $6,965,000 $4,141,000
Accounts receivable, net 8,156,000 5,846,000
Inventories 5,418,000 4,948,000
Deferred tax assets 1,664,000 1,391,000
Prepaid expenses and other current assets 40,000 288,000
Total current assets 22,243,000 16,614,000
Property, Plant and Equipment, net 8,996,000 8,370,000
Other Assets
Intangible assets, net 7,171,000 7,842,000
Goodwill 14,146,000 13,946,000
Cash collateral deposits - 1,500,000
Deferred financing costs, net 355,000 465,000
Deferred tax assets 1,822,000 3,508,000
Note receivable - 407,000
Investment 409,000 -
Deposits and other assets 158,000 148,000
Total other assets 24,061,000 27,816,000
TOTAL ASSETS $55,300,000 $52,800,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $5,478,000 $5,453,000
Notes payable 2,173,000 2,615,000
Income tax payable 215,000 204,000
Total current liabilities 7,866,000 8,272,000
Notes Payable, less current maturities 7,818,000 8,759,000
Other Non-current Liabilities 116,000 -
Stockholders' Equity
Common stock 291,000 286,000
Additional paid-in capital 54,946,000 53,893,000
Accumulated deficit (15,737,000) (18,410,000)
Total stockholders' equity 39,500,000 35,769,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $55,300,000 $52,800,000
