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): May 11, 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

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.

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

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

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

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

ARGON ST, INC. AND SUBSIDIARIES

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On May 11, 2005, Argon ST, Inc. (the ‘Company’) reported its results for the quarter ended April 3, 2005. The Company’s press release, dated May 11, 2005, is attached as Exhibit 99.1

ITEM 9.01 Financial Statements and Exhibits

     (c) Exhibits

Exhibit Number		Description
	99.1	Press Release, dated May 11, 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.
May 11, 2005	By:	/s/ Donald F. Fultz
		Donald F. Fultz
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number		Description
	99.1	Press Release, dated May 11, 2005, issued by Argon ST, Inc

EX-99.1

Exhibit 99.1

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

NEWS RELEASE

For Immediate Release

Argon ST, Inc. Announces Q2 Results

FAIRFAX, VA, May 11, 2005 / Business Wire / — Argon ST, Inc. (NASDAQ: STST), today announced revenues and earnings for its second quarter ended April 3, 2005.

HISTORICAL RESULTS OF OPERATIONS

Revenues for the three months ended April 3, 2005 increased $33,269,000 to $55,952,000 up 147%, compared to $22,683,000 for the prior year quarter. Revenues for the six months ended April 3, 2005 increased $62,486,000 to $112,462,000 up 125%, compared to $49,976,000 for the prior year period.

Net income for the three months ended April 3, 2005 was $4,944,000 or $0.24 per diluted share, an increase of 154% compared to $1,949,000 or $0.14 per diluted share for the prior year quarter. For the six months ended April 3, 2005 net income was $9,864,000 or $0.48 per diluted share, an increase of 190% compared to the prior year period of $3,406,000 or $0.25 per diluted share.

CEO’s comments

Terry Collins, President and CEO of Argon ST stated, “Our second quarter and six month performance levels reflect our strong and growing position in the Intelligence, Surveillance, and Reconnaissance (ISR) markets. New orders in the second quarter afforded a respectable second quarter increase in backlog of approximately $5.4M or a book to bill ratio of 1.1 for the second quarter. The increase in backlog was the result of a significant number of new contractual actions and does not include our recently announced award of the Aerial Common Sensor (ACS) contract for $73.5M as this booking was a third quarter event.”

Financial Highlights

n	Revenue for the second quarter increased 147% over the prior year quarter to $55,952,000
n	Revenue for the six months period increased 125% over the prior year period to $112,462,000
n	Net Income for the second quarter of $4,944,000 or $0.24 per diluted share up 154% from the prior year quarter
n	Net Income for the six month period of $9,864,000 or $0.48 per diluted share up 190% from the prior year period
n	Funded and unfunded backlog for the second quarter was $225,262,000 an increase of 19% from the prior year second quarter funded and unfunded backlog of $188,706,000

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

	April 3, 2005			September 30, 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	32,221,000		$	29,732,000
Accounts receivable, net		64,794,000			59,716,000
Inventory		1,921,000			1,574,000
Deferred income tax asset		5,008,000			4,822,000
Prepaids and other		1,482,000			1,288,000
TOTAL CURRENT ASSETS		105,426,000			97,132,000
Property, equipment and software, net		14,668,000			13,949,000
Goodwill		107,776,000			107,776,000
Intangibles, net		1,704,000			2,190,000
Other assets		686,000			694,000
TOTAL ASSETS	$	230,260,000		$	221,741,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	12,017,000		$	12,727,000
Accrued salaries and related expenses		9,775,000			10,606,000
Deferred revenue		27,326,000			28,336,000
Notes payable – current portion		170,000			226,000
Income taxes payable		839,000			5,810,000
Deferred rent		61,000			200,000
TOTAL CURRENT LIABILITIES		50,188,000			57,905,000
Deferred income tax liability, long term		1,591,000			1,901,000
Notes payable, net of current portion		—			56,000
Deferred rent		1,382,000			954,000
Commitments and contingencies		—			—
STOCKHOLDERS’ EQUITY
Common Stock:
$.01 Par Value, 100,000,000 shares authorized 19,928,214 and 19,468,734 share issued at April 3, 2005 and September 30, 2004		199,000			195,000
Additional paid-in capital		155,349,000			149,043,000
Treasury stock at cost, 126,245 shares		(534,000	)		(534,000	)
Retained earnings		22,085,000			12,221,000
TOTAL STOCKHOLDERS’ EQUITY	$	177,099,000		$	160,925,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	230,260,000		$	221,741,000

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

	Second Quarter Ended						Six Months Ended
	April 3, 2005			March 28, 2004			April 3, 2005			March 28, 2004
CONTRACT REVENUES	$	55,952,000		$	22,683,000		$	112,462,000		$	49,976,000
COST OF REVENUES		43,641,000			17,887,000			88,979,000			41,146,000
GENERAL AND ADMINISTRATIVE EXPENSES		4,496,000			1,744,000			7,831,000			3,478,000
INCOME FROM OPERATIONS		7,815,000			3,052,000			15,652,000			5,352,000
OTHER INCOME (EXPENSE)
Interest income		205,000			42,000			345,000			50,000
Interest expense		(7,000	)		(4,000	)		(9,000	)		(4,000	)
		198,000			38,000			336,000			46,000
INCOME BEFORE INCOME TAXES		8,013,000			3,090,000			15,988,000			5,398,000
PROVISION FOR INCOME TAXES		3,069,000			1,141,000			6,124,000			1,992,000
NET INCOME	$	4,944,000		$	1,949,000		$	9,864,000		$	3,406,000
PER SHARE AMOUNT
Basic earnings per share	$	0.25		$	0.16		$	0.50		$	0.28
Diluted earnings per share	$	0.24		$	0.14		$	0.48		$	0.25
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic average shares outstanding		19,751,000			12,214,000			19,584,000			12,241,000
Diluted average shares outstanding		20,676,000			13,328,000			20,537,000			13,322,000

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.

	Second Quarter Ended				Six Months Ended
	March 28, 2004				March 28, 2004
	Historical		Pro forma		Historical		Pro forma
Revenue	$	22,683,000	$	36,702,000	$	49,976,000	$	76,660,000
Income from operations		3,052,000		4,341,000		5,352,000		7,741,000
Net income		1,949,000		2,759,000		3,406,000		4,868,000
Basic earnings per share	$	0.16	$	0.15	$	0.28	$	0.26
Diluted earnings per share	$	0.14	$	0.14	$	0.25	$	0.24
Basic wt average shares		12,214,000		18,749,000		12,241,000		18,758,000
Diluted wt average shares		13,328,000		20,025,000		13,322,000		20,006,000

Pro forma revenues attributable to Sensytech were $14,019,000 and $26,684,000, respectively for the second quarter and six months ended March 28, 2004. Pro forma income from operations attributable to Sensytech was $1,647,000 and $3,105,000, respectively, for the second quarter and six months ended March 28, 2004. Pro forma net income attributable to Sensytech was $1,031,000 and $1,904,000, respectively, for the second quarter and six months ended March 28, 2004. Pro forma depreciation and amortization on the write up of tangible and intangible assets, in accordance with SFAS 141, was $358,000 and $716,000, respectively, for the second quarter and six months ended March 28, 2004 and the after tax effect was $221,000 and $442,000, respectively.

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
703.995.5695