8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2011

AEROFLEX HOLDING CORP.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-34974	01-0899019
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

AEROFLEX INCORPORATED

(Exact Name of Registrant as Specified in Charter)

Delaware	033-88878	11-1974412
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

	35 South Service Road, P.O. Box 6022
	Plainview, New York	11803
(Address of Principal Executive Offices)		(Zip Code)

(516) 694-6700

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.       Results of Operations and Financial Condition.

On May 10, 2011, Aeroflex Holding Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2011.  A copy of the press release is attached hereto as Exhibit 99.1.

Item 8.01.       Other Events

Prior to and in connection with the Company’s initial public offering of its common stock in November 2010, all of the Company’s executive officers and directors and its majority stockholder entered into lock-up agreements with the underwriters of the initial public offering pursuant to which they agreed not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of common stock of the Company, or any options or warrants to purchase any shares of common stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of common stock of the Company, whether then beneficially owned or thereafter acquired, for a period of 180 days after the public offering date, November 18, 2010 (the “Lock-Up Period”), subject to extension under certain circumstances (the “Lock-Up Agreements”).  The Lock-Up Agreements provide that if, during the last 17 days of the initial Lock-Up Period, the Company releases earnings results, the Lock-Up Period will be automatically extended until the expiration of the 18-day period beginning on the date of release of such earnings results.  As a result of the announcement today by the Company of its financial results for the three months ended March 31, 2011, the Lock-Up Period under the Lock-Up Agreements has automatically been extended through the close of business on May 27, 2011, and the stockholders subject to the Lock-Up Agreements will be able to sell their shares starting on May 28, 2011.

Item 9.01.       Financial Statements and Exhibits.

(d)           Exhibits.

99.1         Press Release, dated May 10, 2011

The information filed as an exhibit to this Form 8-K is being furnished in accordance with Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AEROFLEX HOLDING CORP.
By:	/s/ John Adamovich, Jr..
	John Adamovich, Jr.
	Senior Vice President, Chief
	Financial Officer and Secretary
AEROFLEX INCORPORATED
By:	/s/ John Adamovich, Jr.
	John Adamovich, Jr.
	Senior Vice President, Chief
	Financial Officer and Secretary

Date:  May 10, 2011

EX-99.1

AEROFLEX  ANNOUNCES FISCAL THIRD QUARTER RESULTS

Record Third Quarter Revenue, Non-GAAP Operating Income and Adjusted EBITDA

PLAINVIEW, New York — May 10, 2011 — Aeroflex Holding Corp. ("Aeroflex") (NYSE: ARX), a leading global provider of microelectronic components and test and measurement equipment, today announced its financial results for the fiscal third quarter and nine months ended March 31, 2011.

Net sales increased 14.7% from the third quarter of fiscal 2010 to a new third quarter record of $193.2 million.  Both segments contributed to the growth this quarter, as did sales from acquired businesses, which accounted for approximately 5% of revenue.  Non-GAAP operating income increased 15.1% from the third quarter of fiscal 2010 to $46.0 million, also a new third quarter record.  Adjusted EBITDA also reached a new third quarter record of $50.7 million which is a 13.6% increase from the third quarter of fiscal 2010.

“I am very pleased with our record third quarter results,” said Len Borow, Chief Executive Officer. “Our strong gross margins this quarter were derived from a favorable product mix, primarily related to Hi-Rel Radhard integrated circuits and wireless products, and demonstrate the value proposition of our products in the market.  Our partnership with our customers and our ability to commercialize our intellectual property continues to drive our strong financial performance.”

The following tables present selected financial information for the three and nine months ended March 31, 2011 and 2010 prepared in accordance with generally accepted accounting principles (“GAAP”) and on a basis other than GAAP (“Non-GAAP”). The full fiscal year 2011 non-GAAP effective tax rate expected from Aeroflex’s current geographic mix of non-GAAP pre-tax income is 31%.  This rate was applied to its non-GAAP pre-tax income for the three and nine month periods ended March 31, 2011 and 2010.  A reconciliation between GAAP and Non-GAAP amounts is presented at the end of this press release.

	Selected GAAP Results
	(in thousands, except per share data)
	Three Months						Nine Months
	Ended March 31,						Ended March 31,
	2011			2010			2011			2010
Net sales	$	193,219		$	168,435		$	530,729		$	465,290
Gross profit		106,358			90,300			281,024			242,031
Gross margin		55.0	%		53.6	%		53.0	%		52.0	%
Operating income		24,832			22,658			22,684			39,178
Net income (loss)	$	4,127		$	2,856		$	(13,093	)	$	(28,301	)
Net income (loss) per common share - basic	$	0.05		$	0.04		$	(0.18	)	$	(0.44	)
Weighted average number of common shares outstanding  - basic		84,789			65,000			74,608			65,000

	Selected Non-GAAP Results
	(in thousands, except per share data)
	Three Months						Nine Months
	Ended March 31,						Ended March 31,
	2011			2010			2011			2010
Net sales	$	193,240		$	168,466		$	530,798		$	465,385
Gross profit		106,369			90,618			282,212			243,465
Gross margin		55.0	%		53.8	%		53.2	%		52.3	%
Operating income		45,952			39,915			109,628			99,466
Net income	$	22,851		$	14,153		$	39,994		$	27,982
Net income per common share - basic	$	0.27		$	0.22		$	0.54		$	0.43
Weighted average number of common shares outstanding  - basic		84,789			65,000			74,608			65,000
Adjusted EBITDA	$	50,661		$	44,581		$	123,827		$	113,779

Business Outlook

For the fiscal fourth quarter ending June 30, 2011, Aeroflex expects net sales to be between $220 million and $228 million, Adjusted EBITDA to be between $64 million and $69 million, and non-GAAP net income per share to be between $.40 and $.44.  The range of expected non-GAAP net income per share reflects interest expense savings from the debt refinancing completed on May 9, 2011 and was calculated using a non-GAAP effective tax rate of 31%.

Non-GAAP Presentation

This press release contains non-GAAP financial measures that are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures: (i) are not based on any comprehensive set of accounting rules or principles; and (ii) have limitations in that they do not reflect all of the amounts associated with Aeroflex's results of operations as determined in accordance with GAAP. As such, these measures should only be used to evaluate Aeroflex's results of operations in conjunction with the corresponding GAAP measures.

Aeroflex believes that the presentation of non-GAAP financial measures, when shown in conjunction with the corresponding GAAP measures, provides useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations because they exclude certain non-cash charges or items that management does not believe are reflective of its ongoing operating results when assessing the performance of its business.

Aeroflex believes that these non-GAAP financial measures also facilitate the comparison by management and investors of results between periods and among its peer companies. However, its peer companies may calculate similar non-GAAP financial measures differently than Aeroflex, limiting the information’s usefulness as comparative measures.

Webcast and Conference Call Information

Aeroflex will host a live webcast and conference call at 8:15 a.m. eastern standard time on Tuesday, May 10th during which management will discuss the financial results.  To participate in the live webcast, please visit the events page of the website located at http://ir.aeroflex.com. Please plan to join five to ten minutes before the start of the webcast to facilitate a timely connection. If you are unable to participate and would like to hear a replay of the call, an audio replay of the webcast will be available on the Aeroflex website for approximately 90 days or can be accessed telephonically for domestic callers at (888) 286-8010 or internationally at (617) 801-6888 with pass code 55414775.

About Aeroflex

Aeroflex Holding Corp. is a leading global provider of microelectronic components and test and measurement equipment used by companies in the space, avionics, defense, commercial wireless communications, medical and other markets. 

Forward-looking Statements

All statements other than statements of historical fact included in this press release regarding Aeroflex’s business strategy and plans and objectives of its management for future operations are forward-looking statements.  When used in this press release, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to Aeroflex or its management, identify forward-looking statements.  Such forward-looking statements are based on the current beliefs of Aeroflex’s management, as well as assumptions made by and information currently available to its management.  Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, adverse developments in the global economy; dependence on growth in customers’ businesses; the ability to remain competitive in the markets Aeroflex serves; the inability to continue to develop, manufacture and market innovative, customized products and services that meet customer requirements for performance and reliability; any failure of suppliers to provide raw materials and/or properly functioning component parts; the  termination of key contracts, including technology license agreements, or loss of key customers; the inability to protect intellectual property; the failure to comply with regulations such as International Traffic in Arms Regulations and any changes in regulations; the failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or restructurings could adversely affect Aeroflex; the loss of key employees; exposure to foreign currency exchange rate risks; and terrorist acts or acts of war.   Such statements reflect the current views of management with respect to the future and are subject to these and other risks, uncertainties and assumptions. Aeroflex does not undertake any obligation to update such forward-looking statements.  Any projections in this release are based on limited information currently available to Aeroflex, which is subject to change.  Although any such projections and the factors influencing them will likely change, Aeroflex will not necessarily update the information, since Aeroflex will only provide guidance at certain points during the year.

Contact:

Andrew Kaminsky

Vice President – Corporate Development & Investor Relations

Aeroflex Holding Corp.

(516) 752-6401

andrew.kaminsky@aeroflex.com

Aeroflex Holding Corp. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data )

	March 31,			June 30,
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	67,152		$	100,663
Accounts receivable, less allowance for doubtful accounts of $1,213 and $1,821		158,382			141,595
Inventories		171,212			126,568
Deferred income taxes		25,903			28,018
Prepaid expenses and other current assets		13,212			10,983
Total current assets		435,861			407,827
Property, plant and equipment, net of accumulated  depreciation of $71,672 and $60,755		101,776			101,662
Non-current marketable securities, net		-			9,769
Deferred financing costs, net		16,298			20,983
Other assets		28,516			21,818
Intangible assets with definite lives, net		199,449			238,313
Intangible assets with indefinite lives		114,689			109,894
Goodwill		460,664			445,874
Total assets	$	1,357,253		$	1,356,140
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	360		$	21,817
Accounts payable		47,240			28,803
Advance payments by customers and deferred revenue		31,519			30,741
Income taxes payable		1,323			4,615
Accrued payroll expenses		22,717			23,082
Accrued expenses and other current liabilities		43,616			58,817
Total current liabilities		146,775			167,875
Long-term debt		695,908			880,030
Deferred income taxes		92,511			138,849
Defined benefit plan obligations		5,526			5,763
Other long-term liabilities		12,830			12,639
Total liabilities		953,550			1,205,156
Stockholders' equity:
Preferred stock $.01 par value; 50,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, par value $.01 per share;  300,000,000 shares authorized;  84,789,180 and 65,000,000 shares issued and outstanding		848			650
Additional paid-in capital		643,600			398,291
Accumulated other comprehensive income (loss)		(33,270	)		(53,575	)
Accumulated deficit		(207,475	)		(194,382	)
Total stockholders' equity		403,703			150,984
Total liabilities and stockholders' equity	$	1,357,253		$	1,356,140

Aeroflex Holding Corp. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)

	Three Months Ended March 31,
	2011			2010
Net sales	$	193,219		$	168,435
Cost of sales		86,861			78,135
Gross profit		106,358			90,300
Selling, general and administrative costs		38,265			31,285
Research and development costs		24,663			20,844
Amortization of acquired intangibles		15,900			15,408
Restructuring charges		2,698			105
		81,526			67,642
Operating income		24,832			22,658
Other income (expense):
Interest expense		(13,852	)		(20,815	)
Other income (expense), net		(119	)		222
Total other income (expense)		(13,971	)		(20,593	)
Income before income taxes		10,861			2,065
Provision (benefit) for income taxes		6,734			(791	)
Net income	$	4,127		$	2,856
Net income per common share - Basic	$	0.05		$	0.04
Weighted average number of common shares outstanding - Basic		84,789			65,000

Aeroflex Holding Corp. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)

	Nine Months Ended March 31,
	2011			2010
Net sales	$	530,729		$	465,290
Cost of sales		249,705			223,259
Gross profit		281,024			242,031
Selling, general and administrative costs		113,234			92,988
Research and development costs		68,477			55,286
Amortization of acquired intangibles		47,706			46,527
Termination of Sponsor Advisory Agreement		18,133			-
Restructuring charges		10,790			356
Loss on liquidation of foreign subsidiary		-			7,696
		258,340			202,853
Operating income		22,684			39,178
Other income (expense):
Interest expense		(55,803	)		(63,272	)
Loss on extinguishment of debt		(25,178	)		-
Gain from a bargain purchase of a business		173			-
Other income (expense), net		(526	)		701
Total other income (expense)		(81,334	)		(62,571	)
Income (loss) before income taxes		(58,650	)		(23,393	)
Provision (benefit) for income taxes		(45,557	)		4,908
Net income (loss)	$	(13,093	)	$	(28,301	)
Net income (loss) per common share - Basic	$	(0.18	)	$	(0.44	)
Weighted average number of common shares outstanding - Basic		74,608			65,000

Aeroflex Holding Corp. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Nine Months Ended March 31,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	(13,093	)	$	(28,301	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		62,426			62,178
Gain from a bargain purchase of a business		(173	)		-
Acquisition related adjustment to cost of sales		998			246
Loss on liquidation of foreign subsidiary		-			7,696
Loss on extinguishment of debt		25,178			-
Deferred income taxes		(52,317	)		(1,286	)
Share-based compensation		1,655			1,563
Non - cash restructuring charges		4,860			-
Amortization of deferred financing costs		3,976			3,579
Paid in kind interest		2,434			13,377
Other, net		496			758
Change in operating assets and liabilities, net of effects from purchases of businesses:
Decrease (increase) in accounts receivable		(10,890	)		10,754
Decrease (increase) in inventories		(39,936	)		4,450
Decrease (increase) in prepaid expenses and other assets		(8,142	)		(2,711	)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		4,430			(20,053	)
Net cash provided by (used in) operating activities		(18,098	)		52,250
Cash flows from investing activities:
Payments for purchase of businesses, net of cash acquired		(23,593	)		(4,000	)
Capital expenditures		(17,132	)		(13,176	)
Proceeds from sale of marketable securities		10,357			8,580
Proceeds from the sale of property, plant and equipment		819			1,021
Other, net		-			(12	)
Net cash provided by (used in) investing activities		(29,549	)		(7,587	)
Cash flows from financing activities:
Net proceeds from issuance of common stock		244,021			-
Repurchase of senior unsecured notes and senior subordinated unsecured term loans, including premiums and fees		(207,690	)		-
Debt repayments		(21,458	)		(4,012	)
Debt financing costs		(3,332	)		-
Net cash provided by (used in) financing activities		11,541			(4,012	)
Effect of exchange rate changes on cash and cash equivalents		2,595			(2,051	)
Net increase (decrease) in cash and cash equivalents		(33,511	)		38,600
Cash and cash equivalents at beginning of period		100,663			57,748
Cash and cash equivalents at end of period	$	67,152		$	96,348

	Reconciliation of GAAP Operating Income
	to Non-GAAP Operating Income
	(in thousands)
	Three Months				Nine Months
	Ended March 31,				Ended March 31,
	2011		2010		2011		2010
Operating income - GAAP	$	24,832	$	22,658	$	22,684	$	39,178
Amortization of acquired intangibles		15,900		15,408		47,706		46,527
Impact of purchase accounting adjustments		91		509		1,488		2,287
Financial sponsor fees		-		647		1,222		2,111
Restructuring costs and related pro forma savings (a)		3,747		105		13,821		356
Share-based compensation		629		518		1,655		1,563
Termination of financial sponsor advisory agreement		-		-		18,133		-
Non-cash loss on liquidation of foreign subsidiary		-		-		-		7,696
Other adjustments		753		70		2,919		(252	)
Operating income - Non-GAAP	$	45,952	$	39,915	$	109,628	$	99,466

	Reconciliation of GAAP Net Income (Loss)
	to Non-GAAP Net Income
	(in thousands)
	Three Months						Nine Months
	Ended March 31,						Ended March 31,
	2011			2010			2011			2010
Net income (loss) - GAAP	$	4,127		$	2,856		$	(13,093	)	$	(28,301	)
Amortization of acquired intangibles		15,900			15,408			47,706			46,527
Impact of purchase accounting adjustments		91			509			1,488			2,287
Financial sponsor fees		-			647			1,222			2,111
Restructuring costs and related pro forma savings (a)		3,747			105			13,821			356
Share-based compensation		629			518			1,655			1,563
Termination of sponsor advisory agreement		-			-			18,133			-
Loss on extinguishment of debt		-			-			25,178			-
Amortization of deferred finance fees		1,137			1,193			3,976			3,579
Non-cash loss on liquidation of foreign subsidiary		-			-			-			7,696
Other adjustments		753			66			3,434			(173	)
Tax impact of adjustments		(3,533	)		(7,149	)		(63,526	)		(7,663	)
Net income - Non-GAAP	$	22,851		$	14,153		$	39,994		$	27,982

	Calculation of Adjusted EBITDA
	(in thousands)
	Three Months					Nine Months
	Ended March 31,					Ended March 31,
	2011		2010			2011			2010
Net income (loss) - GAAP	$	4,127	$	2,856		$	(13,093	)	$	(28,301	)
Interest expense		13,852		20,815			55,803			63,272
Provision (benefit) for income taxes		6,734		(791	)		(45,557	)		4,908
Depreciation and amortization		20,892		20,404			62,426			62,178
EBITDA		45,605		43,284			59,579			102,057
Non-cash purchase accounting adjustments		21		31			1,067			342
Financial sponser fees		-		647			1,222			2,111
Restructuring costs and related pro forma savings (a)		3,747		105			13,821			356
Share-based compensation		629		518			1,655			1,563
Termination of sponsor advisory agreement		-		-			18,133			-
Loss on extinguishment of debt		-		-			25,178			-
Non-cash loss on liquidation of foreign subsidiary		-		-			-			7,696
Other defined items (b)		659		(4	)		3,172			(346	)
Adjusted EBITDA	$	50,661	$	44,581		$	123,827		$	113,779

(a) Primarily reflects costs associated with the reorganization of our European operations and consolidation of certain of our U.S. components facilities. Pro forma savings reflect the amount of costs that we estimate would have been eliminated during the fiscal year in which a restructuring occurred had the restructuring occurred as of the first day of that fiscal year.  Pro forma savings were estimated to be $3.0 million for the nine months ended March 31, 2011, $1.0 million of which is applicable for the three months ended March 31, 2011, $1.2 million applicable to the three months ended December 31, 2010 and $800,000 applicable to the three months ended September 30, 2011.

(b) Reflects other adjustments required in calculating our debt covenant compliance.  These other defined items include pro forma EBITDA for periods prior to the acquisition dates for companies acquired during the periods presented.