EX-99.1 2 a07-27285_1ex99d1.htm EX-99.1

Exhibit 99.1

 

AXSYS TECHNOLOGIES ANNOUNCES 34% REVENUE GROWTH
AND 54% NET INCOME GROWTH IN THIRD QUARTER

 

Company Increases 2007 Guidance and Establishes 2008 Guidance

 

ROCKY HILL, CT — October 24, 2007 — Axsys Technologies, Inc. (NASDAQ:AXYS), a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, today announced financial results for the quarter ended September 29, 2007.

 

During the third quarter, Axsys generated revenues of $45.2 million, compared to $33.6 million in the third quarter of 2006. Net income was $4.1 million or $0.37 per diluted share on a consolidated basis, up from $2.7 million or $0.25 per diluted share in the third quarter of 2006.

 

Previously, the company announced its intention to sell the Distributed Products Group, and consequently this business has been reclassified as a discontinued operation in the third quarter and prior periods. The discontinued operations contributed income of $0.4 million, or $0.03 diluted earnings per share in the third quarter, compared to $0.2 million, or $0.02 per share in the third quarter of 2006.

 

Third Quarter Financial Highlights from Continuing Operations

 

Period comparisons reference fiscal third quarter 2006.

 

•                  Sales increased 34% to a record $45.2 million;

 

•                  Gross margin improved to 32.4% from 31.5%;

 

•                  Operating margin improved to 13.5% from 11.7%;

 

•                  Income increased 52% to $3.8 million;

 

•                  Diluted earnings per share increased to $0.34 from $0.23;

 

•                  Backlog increased to a record $138 million, representing a 38% increase compared to the end of the third quarter of 2006, and a 9% increase over the previous quarter.

 

The company continued to experience strong demand for surveillance cameras, lenses, and stabilized gimbal systems. Cineflex Camera Systems, purchased in April 2007, generated revenues of $6.5 million during the third quarter.

 

“Axsys’ impressive growth is an indication of our company’s increasingly enviable market position,” said Stephen W. Bershad, Chairman and CEO of Axsys Technologies. The sales from our newly acquired stabilized camera systems business exceeded expectations, and the rest of our Optical Systems Group achieved 15% revenue growth during the quarter. Importantly, our order backlog also continued a strong upward trend with the addition of $57 million in new bookings during the quarter. With this added visibility, we are comfortable increasing our 2007 financial guidance.”

 

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Fiscal 2007 Earnings Guidance Revision

 

Axsys increased its full-year 2007 guidance for continuing operations as follows:

 

•                  Sales are expected to be in the range of $168 million to $171 million, up from the $159 million to $163 million range previously provided.

 

•                  Income is expected to be in the range of $13.7 million to $13.9 million, up from the previous guidance of $12.5 million to $12.8 million.

 

•                  Diluted earnings per share are expected to be in the range of $1.24 to $1.26, up from the previous guidance of $1.13 to $1.16.

 

Mr. Bershad continued, “We are witnessing an increased demand for our products that we believe will be sustained in the coming year. Our escalating booking and shipment rates, clear indicators of this trend, instill optimism about 2008.”

 

Fiscal 2008 Earnings Guidance

 

The company announced guidance for continuing operations for full-year 2008:

 

•                  Sales are expected to be in the range of $193 million to $197 million.

 

•                  Diluted earnings per share are expected to be between $1.57 and $1.60.

 

Conference Call

 

Management will conduct a conference call reviewing the financial results on Thursday, October 25, 2007 at 11:00 a.m. Eastern Time. Shareholders, institutional investors and equity research analysts are invited to participate in the call by dialing 1-866-872-5036 and providing the operator with the conference ID# 19290080 to enter the call.

 

The conference call will be webcast live via the Investor Relations section of the Company’s web site at www.axsys.com. A replay of the webcast will be available shortly after the conclusion of the call for a period of approximately 90 days.

 

About Axsys

 

Axsys Technologies, Inc. is a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, serving the aerospace, defense, and high performance commercial markets. For more information, visit www.axsys.com.

 

Contacts

 

David A. Almeida

 

Geoffrey Ling

Chief Financial Officer

 

Director of Investor Relations

(860) 257-0200

 

(860) 594-5773

 

 

Invest@axsys.com

 

 

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This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as “expect,” “anticipate,” “plan,” “may,”  “will,” “estimate” or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, are described in Axsys’ reports on Form 10-K and Form 10-Q on file with the Securities and Exchange Commission, including without limitation: changes in the U.S. federal government spending priorities; the Company’s ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers; the potential for the Company’s backlog to be reduced or cancelled; the Company’s ability to implement its acquisition strategy and integrate its acquired companies successfully, including the recent acquisition of Cineflex; the Company’s ability to successfully complete the planned sale of the Distributed Products business; the Company’s ability to manage costs under the Company’s fixed-price contracts effectively; and changes in general economic and business conditions. These statements reflect the Company’s current beliefs and are based upon information currently available to the Company. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time, and we specifically disclaim any obligation to update these statements.

 

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AXSYS TECHNOLOGIES, INC.

Consolidated Statements of Operations

(Dollars in thousands, except share and per share data - Unaudited)

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 29, 2007

 

September 30, 2006

 

September 29, 2007

 

September 30, 2006

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

45,218

 

$

33,640

 

$

123,712

 

$

96,170

 

Cost of sales

 

30,560

 

23,054

 

83,910

 

65,534

 

Gross profit

 

14,658

 

10,586

 

39,802

 

30,636

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

7,131

 

5,399

 

18,720

 

16,266

 

Research, development and engineering expenses

 

1,436

 

1,261

 

4,383

 

3,380

 

Operating income

 

6,091

 

3,926

 

16,699

 

10,990

 

Interest expense

 

(191

)

(10

)

(463

)

(72

)

Interest income

 

55

 

70

 

174

 

221

 

Other income (expense), net

 

17

 

(7

)

(235

)

25

 

 Income from continuing operations before income taxes

 

5,972

 

3,979

 

16,175

 

11,164

 

Provision for income taxes

 

2,216

 

1,510

 

6,135

 

4,235

 

Income from continuing operations

 

3,756

 

2,469

 

10,040

 

6,929

 

Income from discontinued operations, net of tax

 

383

 

225

 

929

 

768

 

Net income

 

$

4,139

 

$

2,694

 

$

10,969

 

$

7,697

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.35

 

$

0.23

 

$

0.94

 

$

0.65

 

Discontinued operations

 

0.04

 

0.02

 

0.09

 

0.07

 

Total

 

$

0.39

 

$

0.25

 

$

1.03

 

$

0.72

 

Weighted-average basic common shares outstanding

 

10,722,393

 

10,630,136

 

10,688,869

 

10,625,153

 

DILUTED EARNINGS PER SHARE:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.34

 

$

0.23

 

$

0.91

 

$

0.64

 

Discontinued operations

 

0.03

 

0.02

 

0.08

 

0.07

 

Total

 

$

0.37

 

$

0.25

 

$

0.99

 

$

0.71

 

Weighted-average diluted common shares outstanding

 

11,140,374

 

10,883,385

 

11,031,234

 

10,877,734

 

 

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AXSYS TECHNOLOGIES, INC.

Consolidated Balance Sheets

(Dollars in thousands)

 

 

 

 

September 29,
2007

 

December 31,
2006

 

 

 

(Unaudited)

 

(Audited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 Cash and cash equivalents

 

$

5,176

 

$

6,044

 

Accounts receivable — net

 

20,270

 

17,298

 

Inventories — net

 

48,718

 

35,853

 

Assets held-for-sale

 

14,416

 

15,764

 

Income taxes — deferred

 

3,556

 

2,405

 

Prepaid expenses

 

941

 

829

 

Other current assets

 

379

 

368

 

TOTAL CURRENT ASSETS

 

93,456

 

78,561

 

PROPERTY, PLANT AND EQUIPMENT — net

 

16,230

 

22,393

 

INTANGIBLE ASSETS — net

 

12,588

 

9,507

 

GOODWILL

 

82,649

 

60,791

 

OTHER ASSETS

 

1,574

 

1,093

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

206,497

 

$

172,345

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Line of credit

 

$

10,000

 

$

—

 

Accounts payable

 

11,307

 

7,550

 

Accrued expenses and other current liabilities

 

20,978

 

18,218

 

Liabilities held-for-sale

 

2,648

 

3,430

 

Deferred income

 

10,064

 

6,088

 

TOTAL CURRENT LIABILITIES

 

54,997

 

35,286

 

 

 

 

 

 

 

OTHER LONG-TERM LIABILITIES

 

8,243

 

5,871

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

Common stock

 

107

 

106

 

Capital in excess of par

 

101,143

 

99,111

 

Retained earnings

 

42,007

 

31,977

 

Treasury stock

 

-

 

(6

)

TOTAL SHAREHOLDERS’ EQUITY

 

143,257

 

131,188

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

206,497

 

$

172,345

 

 

 

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