OLATHE, Kan., Sept. 9 /PRNewswire-FirstCall/ -- Elecsys Corporation , a leading provider of electronic design and manufacturing services and innovative product solutions, today announced its financial results for the first fiscal quarter ended July 31, 2008.
Sales for the quarter were $5,564,000, an increase of 16%, or $777,000, from the first quarter of Fiscal 2008. The increase was primarily due to sales generated by its Radix subsidiary's ultra-rugged handheld computer business, which Elecsys acquired in September 2007, and strong revenue growth from its NTG subsidiary's remote monitoring business.
Sales of Radix rugged handheld computer hardware and peripherals, as well as maintenance contract and service revenues, totaled $1,464,000 for the quarter. NTG sales were $781,000, an increase of 123% from the first quarter of Fiscal 2008, as the subsidiary continued to experience strong demand for its WatchdogCP products and initiated international marketing efforts for its remote monitoring solutions. Sales of DCI electronic design and manufacturing services were $4,589,000 for the first quarter of fiscal 2009, virtually unchanged compared with the prior year.
Looking forward over the next few quarters, the Company expects both Radix revenues and NTG revenues to increase over the current period. With additional sales and marketing initiatives now in place, the Company also anticipates revenue growth at DCI during the second half of this fiscal year.
Total consolidated backlog at July 31, 2008, increased $2,803,000 to $7,969,000, compared to total backlog of $5,166,000 on April 30, 2008. This was largely due to a $2.6 million Radix order for handheld computers to be deployed throughout the South African railroad network. This order is the initial phase of a larger infrastructure project that the Company believes may generate similar orders over the next few years.
Gross margin was approximately 35% of sales, or $1,951,000, for the first quarter ended July 31, 2008, compared to 32% of sales, or $1,515,000, for the prior year period. The product mix during the first quarter was a large contributor to our improvement in consolidated gross margin for the period.
Selling, general and administrative expenses grew by approximately $494,000 during the first quarter compared to the prior year's quarter, primarily from the addition of Radix. Corporate expenses for professional fees related to compliance with the Sarbanes-Oxley Act also contributed to the increase.
As a result, operating income for the first quarter was $296,000, compared to $354,000 for the same quarter in the prior year.
Net income was $109,000, or $0.03 per diluted share, for the quarter ended July 31, 2008. For the quarter ended July 31, 2007, net income was $174,000, or $0.05 per diluted share. With customer orders currently scheduled for shipment, the Company anticipates an increase in net income during the second fiscal quarter.
"We are pleased to start the new fiscal year with strong revenue growth in the first quarter," said Karl Gemperli, chief executive officer. "Sales at DCI, the company's largest subsidiary, remained stable even in the current economy, while results for Radix and NTG were strong."
Gemperli added, "We are very encouraged by the growing interest in NTG's WatchdogCP products. We are also excited by the potential for NTG's products in the global market and are pleased by our first international sale made during this quarter. Also, the investments we continue to make in Radix are beginning to pay off and we anticipate long-term growth for rugged handheld computing solutions at that subsidiary."
Gemperli concluded, "With an increase in sales of 16% over the comparable period in Fiscal 2008 and continued interest in our diverse products, high-quality design services and manufacturing capabilities, we anticipate growth in sales and profits in the months ahead."
About Elecsys Corporation
Elecsys Corporation operates three wholly owned subsidiaries, DCI, Inc., NTG, Inc., and Radix Corporation. DCI provides electronic design and manufacturing services for original equipment manufacturers in the aerospace, transportation, communications, safety, security and other industrial product industries. DCI has specialized expertise and capabilities to integrate custom electronic assemblies with a variety of innovative display and interface technologies. NTG designs, markets, and provides remote monitoring solutions for the gas and oil pipeline industry as well as other industries that require remote monitoring. Radix develops, designs and markets ultra-rugged handheld computers, peripherals and portable printers. The markets served by its products include utilities, transportation logistics, traffic and parking enforcement, route accounting/deliveries, and inspection and maintenance. For more information, visit our website, http://www.elecsyscorp.com/.
Safe-Harbor Statement
The discussions set forth in this press release may contain forward-looking comments based on current expectations that involve a number of risks and uncertainties. Actual results could differ materially from those projected or suggested in the forward-looking comments. The difference could be caused by a number of factors, including, but not limited to the factors and conditions that are described in Elecsys Corporation's SEC filings, including the Form 10-KSB for the year ended April 30, 2008. The reader is cautioned that Elecsys Corporation does not have a policy of updating or revising forward-looking statements and thus he or she should not assume that silence by management of Elecsys Corporation over time means that actual events are bearing out as estimated in such forward-looking statements.
Investor Relations Contact: Todd A. Daniels
Elecsys Corporation
(913) 647-0158, Phone
(913) 647-0132, Fax
