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 report): February 9, 2005

ARGON ST, INC.

(Exact Name of Registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

000-08193	38-1873250
(Commission File No.)	(I.R.S. Employer
	Identification No.)

12701 Fair Lakes Circle, Suite 800, Fairfax, Virginia 22033

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (703)322-0881

ARGON ST, INC. AND SUBSIDIARIES

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On February 9, 2005, Argon ST, Inc. (the ‘Company’) reported its results for the quarter ended January 2, 2005. The Company’s press release, dated February 9, 2005, is attached as Exhibit 99.1

ITEM 9.01 Financial Statements and Exhibits

(c)   Exhibits

Exhibit Number	Description
99.1	Press Release, dated February 9, 2005, issued by Argon ST, Inc.

SIGNATURES

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

	ARGON ST, INC.
February 9, 2005	By:	/s/ Donald F. Fultz
		Donald F. Fultz
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated February 9, 2005, issued by Argon ST, Inc

EX-99.1

EXHIBIT 99.1

12701 Fair Lakes Circle, Suite 800, Fairfax, VA 22033
703.322.0881 Fax 703.322.0885
www.argonst.com

	NEWS RELEASE
For Immediate Release

Argon ST, Inc. Announces Q1 Results

Fairfax, VA, February 9, 2005 / Business Wire / — Argon ST, Inc. (NASDAQ: STST), today announced revenues and earnings for its first quarter ended January 2, 2005.

HISTORICAL RESULTS OF OPERATIONS

Revenues for the first quarter ended January 2, 2005 increased $29,217,000 to $56,510,000 up 107%, compared to $27,293,000 for the prior year quarter.

Net income for the first quarter ended January 2, 2005 was $4,920,000, or $0.24 per diluted share, an increase of 238% compared to $1,457,000 or $0.11 per diluted share for the prior year quarter.

Terry Collins, President and CEO of Argon ST stated, “We are pleased with our first quarter financial results and they leave us on track for making our fiscal year financial objectives. The company also made significant progress in the integration of our processes and systems during the first quarter so that we can properly manage our expected growth.”

Financial Highlights

•   Revenue for the first quarter increased 107% over the prior year quarter to $56,510,000

•   Net Income for the first quarter of $4,920,000 or $0.24 per diluted share up 238% from the prior year quarter

•   Funded and Unfunded Backlog for the first quarter was $219,864,000 an increase of 23% from the prior year quarter funded and unfunded backlog of $179,383,000

ARGON ST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	January 2, 2005		September 30, 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	42,429,000	$	29,732,000
Accounts receivable, net		66,463,000		59,716,000
Inventory		1,922,000		1,574,000
Deferred income tax asset		4,937,000		4,822,000
Prepaids and other		1,469,000		1,288,000

TOTAL CURRENT ASSETS		117,220,000			97,132,000
Property, equipment and software, net		14,461,000			13,949,000
Goodwill		107,776,000			107,776,000
Intangibles, net		1,947,000			2,190,000
Other assets		654,000			694,000
TOTAL ASSETS	$	242,058,000		$	221,741,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		13,897,000		$	12,727,000
Accrued salaries and related expenses		8,413,000			10,606,000
Deferred revenue		45,295,000			28,336,000
Notes payable — current portion		226,000			226,000
Income taxes payable		705,000			5,810,000
Deferred rent		200,000			200,000
TOTAL CURRENT LIABILITIES		68,736,000			57,905,000
Deferred income tax liability, long term		1,805,000			1,901,000
Notes payable, net of current portion		—			56,000
Deferred rent		954,000			954,000
Commitments and contingencies		—			—
STOCKHOLDERS’ EQUITY
Common Stock:
$.01 Par Value, 25,000,000 shares authorized
19,765,934 and 19,468,734 share issued at
January 2, 2005 and September 30, 2004		198,000			195,000
Additional paid-in capital		153,758,000			149,043,000
Treasury stock at cost, 126,245 shares		(534,000	)		(534,000	)
Retained earnings		17,141,000			12,221,000
TOTAL STOCKHOLDERS’ EQUITY	$	170,563,000		$	160,925,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	242,058,000		$	221,741,000

ARGON ST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)

	For the Fiscal Quarter Ended
	January 2, 2005		December 28, 2003
CONTRACT REVENUES	$	56,510,000	$	27,293,000
COST OF REVENUES		45,338,000		23,259,000
GENERAL AND ADMINISTRATIVE EXPENSES		3,335,000		1,734,000
INCOME FROM OPERATIONS		7,837,000		2,300,000
OTHER INCOME (EXPENSE)

Interest income		140,000			8,000
Interest expense		(2,000	)		—
		138,000			8,000
INCOME BEFORE INCOME TAXES		7,975,000			2,308,000
PROVISION FOR INCOME TAXES		3,055,000			851,000
NET INCOME	$	4,920,000		$	1,457,000
PER SHARE AMOUNT
Basic earnings per share	$	0.25		$	0.12
Diluted earnings per share	$	0.24		$	0.11
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic average shares outstanding		19,423,000			12,267,000
Diluted average shares outstanding		20,415,000			13,316,000

On September 29, 2004, a wholly-owned subsidiary of Sensytech, Inc. (“Sensytech”) merged with and into Argon Engineering Associates, Inc. (“Argon Engineering”) in a merger whereby each outstanding share of Argon Engineering common stock was exchanged for two shares of Sensytech common stock. As a result of the merger, the former Argon Engineering stockholders acquired approximately 65.6% of the issued and outstanding shares of Sensytech common stock. In accordance with Statement of Financial Accounting Standards No. 141 “Business Combinations”, the merger was accounted for as a reverse acquisition, whereby Argon Engineering was deemed to have acquired Sensytech for financial reporting purposes. Consistent with the reverse acquisition accounting treatment, the historical financial statements presented for periods prior to the acquisition date are the statements of Argon Engineering except for stockholders’ equity which has been retroactively restated for the equivalent number of shares of the legal acquirer.

The following unaudited condensed pro forma results of operations reflect the pro forma combination of Argon Engineering and Sensytech as if the combination had occurred at the beginning of the period presented, compared with the actual results of operations of Argon Engineering for the same period.

	Fiscal quarter ended
	December 28, 2003
	Historical		Pro forma
Revenue	$	27,293,000		39,958,000
Income from operations		2,300,000		3,400,000
Net income		1,457,000		2,109,000
Basic earnings per share	$	0.12	$	0.11
Diluted earnings per share	$	0.11	$	0.11
Basic wt average shares		12,267,000		18,766,000
Diluted wt average shares		13,316,000		19,992,000

Pro forma revenues attributable to Sensytech were $12,665,000 for the fiscal quarter ended December 28, 2003. Pro forma income from operations and net income attributable to Sensytech was $1,458,000 and $873,000, respectively for the fiscal quarter ended December 28, 2003. Pro forma depreciation and amortization on the write up of tangible and intangible assets, in accordance with SFAS 141, was $115,000 and $243,000 respectively for the fiscal quarter ended and December 28, 2003 and the after tax effect was $221,000.

About Argon ST, Inc.

Argon ST designs, develops, and manufacturers systems and sensors for the Command and Control Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) markets including SIGINT (Signals Intelligence), ESM (Electronic Support Measures), EW (Electronic Warfare), imaging, and acoustic systems serving domestic and worldwide markets.

Statements in this press release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. The Company wishes to caution readers that certain factors can cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. The Company undertakes no obligation and does not intend to update, revise or otherwise publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances.

CONTACT:	Donald F. Fultz, Chief Financial Officer
	don.fultz@argonst.com
	URL: www.argonst.com