LANCASTER, Pa., Oct. 21 /PRNewswire-FirstCall/ -- Herley Industries, Inc. today reported financial results for the Fourth Quarter and Fiscal Year ended August 3, 2008.
Myron Levy, Herley's Chairman and CEO, commented, "A long, dark period in this Company's history is now over. The legal proceedings and subsequent settlements that cost the Company approximately $21 million in fiscal year 2008 are behind us, and we are not looking back. This is the time for us to look forward."
Mr. Levy continued, "We enter fiscal year 2009 with determination and momentum. We have taken some significant steps to improve the Company's operations. Before the end of the calendar year, the Farmingdale manufacturing operation will be scaled down to a small sales office; its backlog has already been transitioned to our other, stronger businesses. We believe that this action will improve overall profitability. In addition, we have completed the acquisition of Eyal Microwave ("Eyal"), our largest competitor in Israel. By combining Eyal with Herley General Microwave Israel, we gain strength and key markets for our most profitable business area. Our newest acquisition has already booked at least one significant contract, and we look forward to continued support from both Herley General Microwave Israel and Eyal, as we expand in the Israeli and international market. We began the new fiscal year with a backlog of $157 million, up from $137 million at the end of last year. Herley benefits from a strong defense market, where our products are recognized around the world. First quarter bookings have been very strong, which is evidence of our return to normal business dealings with our loyal customer base."
Mr. Levy will host a conference call on October 22, 2008 at 9:00 a.m. Eastern time to discuss financial results for the Fourth Quarter and Fiscal Year ended August 3, 2008. To join the conference call dial 1 (888) 425-4188, referencing Conference ID #67648284.
A taped replay of the call will be available on October 22, 2008 at 11:00 a.m. through October 29, 2008 at 11:59 p.m. Eastern time. To listen to the replay dial: 1 (800) 642-1687 (U.S.) or 1 (706) 645-9291 (International), and Conference ID #67648284.
In addition, the conference call will be broadcast live over the Internet and can be accessed through the following URL: http://www.videonewswire.com/event.asp?id=52584. To listen to the live call on the Internet, go to the web site at least 15 minutes early to register, download and install any necessary audio software.
Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. Based in Lancaster, PA, Herley has eight manufacturing locations and approximately 1000 employees. Additional information about the company can be found on the Internet at http://www.herley.com/
Safe Harbor Statement - Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. When used in this report, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. The Company's results could differ materially based on various factors, including, but not limited to, cancellation or deferral of customer orders, difficulties in the timely development of new products, difficulties in manufacturing, increased competitive pressures, and general economic conditions. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.
For information at Herley contact: Peg Guzzetti Tel: (717) 735-8117 Investor Relations http://www.herley.com/ HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) Fifty- Fifty- three two weeks weeks Thirteen weeks ended ended ended -------------------- August 3, July 29, August 3, July 29, 2008 2007 2008 2007 --------- -------- --------- --------- Net sales $44,168 $40,626 $152,511 $163,140 --------- -------- --------- --------- Cost and expenses: Cost of products sold 33,521 29,306 118,311 118,834 Selling and administrative expenses 8,127 8,427 33,835 32,516 Litigation costs 3,289 448 5,550 1,674 Litigation settlement - - 15,442 - Employment contract settlement costs - - - 8,914 --------- -------- --------- --------- 44,937 38,181 173,138 161,938 --------- -------- --------- --------- (Loss) income from operations (769) 2,445 (20,627) 1,202 --------- -------- --------- --------- Other (expense) income, net: Investment income 106 332 1,061 1,186 Interest expense (234) (212) (661) (790) Foreign exchange transaction (losses) gains (116) 23 (122) 501 --------- -------- --------- --------- (244) 143 278 897 --------- -------- --------- --------- (Loss) income before income taxes (1,013) 2,588 (20,349) 2,099 Income taxes benefit (690) (990) (10,003) (1,019) --------- -------- --------- --------- Net (loss) income $(323) $3,578 $(10,346) $3,118 ========= ======== ========= ========= (Loss) earnings per common share - Basic $(.02) $.26 $(.76) $.22 ========= ======== ========= ========= Basic weighted average shares 13,518 13,977 13,652 13,927 ========= ======== ========= ========= (Loss) earnings per common share - Diluted $(.02) $.25 $(.76) $.22 ========= ======== ========= ========= Diluted weighted average shares 13,518 14,480 13,652 14,395 ========= ======== ========= ========= HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) August 3, July 29, 2008 2007 --------- ---------- ASSETS Current Assets: Cash and cash equivalents $14,347 $35,181 Trade accounts receivable, net 27,003 28,058 Income Taxes Receivable 2,056 819 Costs incurred and income recognized in excess of billings on uncompleted contracts and claims 19,490 14,448 Other receivables 1,286 2,816 Inventories, net 61,559 51,815 Deferred income taxes 11,263 4,254 Other current assets 1,276 1,069 --------- ---------- Total Current Assets 138,280 138,460 Property, Plant and Equipment, net 30,552 29,996 Goodwill 73,900 74,044 Intangibles, net of accumulated amortization of $7,505 in 2008 and $5,256 in 2007 16,145 18,431 Other Assets 541 1,662 --------- ---------- Total Assets $259,418 $262,593 ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $1,394 $1,346 Current portion of employment settlement agreement - (net of imputed interest of $238 in 2008 and $245 in 2007) 1,119 1,113 Current portion of litigation settlements - (net of imputed interest of $46) 954 - Accounts payable and accrued expenses 27,546 19,453 Billings in excess of costs incurred and income recognized on uncompleted contracts 613 99 Income taxes payable 43 3,518 Accrual for contract losses 2,994 1,160 Accrual for warranty costs 1,142 1,106 Advance payments on contracts 8,120 7,163 --------- ---------- Total Current Liabilities 43,925 34,958 Long-term Debt, net of current portion 7,092 5,951 Long-term Portion of Employment Settlement Agreement - (net of imputed interest of $287 in 2008 and $580 in 2007) 3,074 4,117 Long-term Portion of litigation settlement - (net of imputed interest of $108) 892 - Other Long-term Liabilities 1,652 1,311 Deferred Income Taxes 8,839 6,615 509 - --------- ---------- Total Liabilities 65,983 52,952 --------- ---------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 20,000,000 shares; issued and outstanding 13,521,902 in 2008, and 13,977,115 in 2007 1,352 1,398 Additional paid-in capital 101,403 107,094 Retained earnings 89,058 99,404 Accumulated other comprehensive income 1,622 1,745 --------- ---------- Total Shareholders' Equity 193,435 209,641 --------- ---------- Total Liabilities and Shareholders' Equity $259,418 $262,593 ========= ========== HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Fifty-three weeks ended Fifty-two weeks ended ---------------------- August 3, July 29, July 30, 2008 2007 2006 --------- -------- --------- Cash flows from operating activities: Net (loss) income $(10,346) $3,118 $10,354 --------- -------- --------- Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 7,266 7,177 7,096 Stock-based compensation costs 990 1,007 453 Excess tax benefit from exercises of stock options (91) (256) (703) Litigation settlements 15,442 - - Employment contract settlement costs (includes $196 of stock option modification costs) - 8,914 - Imputed interest on employment and litigation settlement liabilities 446 283 - Foreign exchange transaction losses (gains) 122 (501) (431) Inventory valuation reserve charges 1,515 1,283 1,475 Reduction in accrual for contract losses (826) (1,144) - Warranty reserve charges 1,260 1,304 726 Deferred tax provision (4,275) (1,310) 218 Changes in operating assets and liabilities: Trade accounts receivable 961 2,542 (3,342) Income Taxes Receivable (1,237) (819) - Costs incurred and income recognized in excess of billings on uncompleted contracts and claims (5,042) (522) 2,132 Other receivables 1,530 (2,047) 645 Inventories, net (11,342) (189) (2,794) Other current assets (207) 118 157 Accounts payable and accrued expenses 6,869 (3,246) (2,357) Billings in excess of costs incurred and income recognized on uncompleted contracts 514 (456) 17 Income taxes payable (3,384) 379 338 Accrual for contract losses 2,660 (251) (175) Litigation settlements (13,500) - - Employment settlement agreement (1,336) (3,771) - Advance payments on contracts 957 3,840 1,435 Other, net 438 222 84 --------- -------- --------- Total adjustments (270) 12,557 4,974 --------- -------- --------- Net cash (used in) provided by operating activities (10,616) 15,675 15,328 --------- -------- --------- Cash flows from investing activities: Acquisition of technology license - (179) (1,256) Other 3 204 111 Capital expenditures (4,637) (4,972) (6,227) --------- -------- --------- Net cash used in investing activities (4,634) (4,947) (7,372) --------- -------- --------- Cash flows from financing activities: Borrowings under bank line of credit 20,400 17,900 16,500 Borrowings - other - 1,746 - Proceeds from exercise of stock options 321 1,219 3,171 Excess tax benefit from exercises of stock options 91 256 703 Payments of long-term debt (1,357) (1,038) (805) Payments under bank line of credit (17,900) (17,900) (16,500) Purchase of treasury stock (7,139) (26) (9,044) --------- -------- --------- Net cash (used in) provided by financing activities (5,584) 2,157 (5,975) --------- -------- --------- Effect of exchange rate changes on cash - (7) (9) --------- -------- --------- Net (decrease) increase in cash and cash equivalents (20,834) 12,878 1,972 Cash and cash equivalents at beginning of period 35,181 22,303 20,331 --------- -------- --------- Cash and cash equivalents at end of period $14,347 $35,181 $22,303 ========= ======== ========= Supplemental cash flow information: Financing of computer software and maintenance $1,627 ========= Retirement of 493,938 (800,231 in 2007) shares of treasury stock $7,139 $9,070 ========= ========
