EX-99.1 2 w11808exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
(ARGON LOGO)
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 Record Breaking Q3 Results
FAIRFAX, VA, August 11, 2005 / Business Wire / — Argon ST, Inc. (NASDAQ: STST), today announced revenues and earnings for its third quarter ended July 3, 2005.
HISTORICAL RESULTS OF OPERATIONS
Revenues for the three months ended July 3, 2005 increased $36,561,000 to $75,611,000 up 94%, compared to $39,050,000 for the prior year quarter. Revenues for the nine months ended July 3, 2005 increased $99,047,000 to $188,073,000 up 111%, compared to $89,026,000 for the prior year period.
Net income for the three months ended July 3, 2005 was $5,855,000 or $0.28 per diluted share, an increase of 71% compared to $3,427,000 or $0.26 per diluted share for the prior year quarter. For the nine months ended July 3, 2005 net income was $15,719,000 or $0.76 per diluted share, an increase of 130% compared to the prior year period of $6,833,000 or $0.51 per diluted share.
Terry Collins, President and CEO of Argon ST stated, “We are very pleased with our third quarter and nine months performance levels. Both periods reflect record sales, profit, and earnings per share. Additionally, strong new orders resulted in record bookings and backlog which lay the foundation for future growth.”
Financial Highlights
  n   Revenue for the third quarter increased 94% over the prior year quarter to $75,611,000
 
  n   Revenue for the nine months period increased 111% over the prior year period to $188,073,000
 
  n   Net Income for the third quarter of $5,855,000 or $0.28 per diluted share up 71% from the prior year quarter
 
  n   Net Income for the nine month period of $15,719,000 or $0.76 per diluted share up 130% from the prior year period
 
  n   Funded and unfunded backlog for the third quarter was $268,388,000 an increase of 58% from the prior year third quarter funded and unfunded backlog of $169,420,000

 

 

ARGON ST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
                 
    July 3, 2005     September 30, 2004  
ASSETS
                
CURRENT ASSETS
                
Cash and cash equivalents
   $ 25,652,000     $ 29,732,000  
Accounts receivable, net
     74,096,000       59,716,000  
Inventory
     1,861,000       1,574,000  
Deferred income tax asset
     5,155,000       4,822,000  
Prepaids and other
     1,541,000       1,288,000  
 
            
 
TOTAL CURRENT ASSETS
     108,305,000       97,132,000  
 
Property, equipment and software, net
     15,101,000       13,949,000  
Goodwill
     107,776,000       107,776,000  
Intangibles, net
     1,462,000       2,190,000  
Other assets
     1,163,000       694,000  
 
            
 
TOTAL ASSETS
   $ 233,807,000     $ 221,741,000  
 
            
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
                
Accounts payable and accrued expenses
   $ 26,769,000     $ 12,727,000  
Accrued salaries and related expenses
     5,838,000       10,606,000  
Deferred revenue
     11,342,000       28,336,000  
Notes payable – current portion
     113,000       226,000  
Income taxes payable
     1,761,000       5,810,000  
Deferred rent
     61,000       200,000  
 
            
 
TOTAL CURRENT LIABILITIES
     45,884,000       57,905,000  
 
Deferred income tax liability, long term
     1,701,000       1,901,000  
Notes payable, net of current portion
     —       56,000  
Deferred rent
     1,426,000       954,000  
Commitments and contingencies
     —       —  
 
STOCKHOLDERS’ EQUITY
                
Common Stock:
                
$.01 Par Value, 100,000,000 shares authorized, 20,034,213 and 19,468,734 share issued at July 3, 2005 and September 30, 2004
     200,000       195,000  
Additional paid-in capital
     157,190,000       149,043,000  
Treasury stock at cost, 126,245 shares
     (534,000 )     (534,000 )
Retained earnings
     27,940,000       12,221,000  
 
            
 
TOTAL STOCKHOLDERS’ EQUITY
   $ 184,796,000     $ 160,925,000  
 
            
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 233,807,000     $ 221,741,000  
 
            

 

 

ARGON ST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
                                 
    Third Quarter Ended     Nine Months Ended  
    July 3, 2005     June 27, 2004     July 3, 2005     June 27, 2004  
CONTRACT REVENUES
   $ 75,611,000     $ 39,050,000     $ 188,073,000     $ 89,026,000  
 
COST OF REVENUES
     62,555,000       32,382,000       151,534,000       73,528,000  
 
GENERAL AND ADMINISTRATIVE EXPENSES
     3,474,000       1,271,000       11,305,000       4,749,000  
 
                        
 
INCOME FROM OPERATIONS
     9,582,000       5,397,000       25,234,000       10,749,000  
OTHER INCOME (EXPENSE)
                                
Interest income
     193,000       40,000       538,000       90,000  
Interest expense
     (1,000 )     (6,000 )     (10,000 )     (10,000 )
 
                        
 
     192,000       34,000       528,000       80,000  
INCOME BEFORE INCOME TAXES
     9,774,000       5,431,000       25,762,000       10,829,000  
PROVISION FOR INCOME TAXES
     3,919,000       2,004,000       10,043,000       3,996,000  
 
                        
NET INCOME
   $ 5,855,000     $ 3,427,000     $ 15,719,000     $ 6,833,000  
 
 
                        
PER SHARE AMOUNT
                                
Basic earnings per share
   $ 0.30     $ 0.28     $ 0.80     $ 0.56  
 
                        
Diluted earnings per share
   $ 0.28     $ 0.26     $ 0.76     $ 0.51  
 
                        
 
WEIGHTED AVERAGE SHARES OUTSTANDING
                                
Basic average shares outstanding
     19,830,000       12,226,000       19,665,000       12,236,000  
 
                        
Diluted average shares outstanding
     20,694,000       13,305,000       20,563,000       13,308,000  
 
                        
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.
                                 
    Third Quarter Ended     Nine Months Ended  
    June 27, 2004     June 27, 2004  
    Historical     Pro forma     Historical     Pro forma  
Revenue
   $ 39,050,000     $ 56,330,000     $ 89,026,000     $ 132,990,000  
Income from operations
     5,397,000       7,554,000       10,749,000       15,295,000  
Net income
     3,427,000       4,765,000       6,833,000       9,633,000  
 
                                
Basic earnings per share
   $ 0.28     $ 0.25     $ 0.56       0.51  
Diluted earnings per share
   $ 0.26     $ 0.24     $ 0.51       0.48  

 

 

                                 
    Third Quarter Ended     Nine Months Ended  
    June 27, 2004     June 27, 2004  
    Historical     Pro forma     Historical     Pro forma  
Basic wt average shares
     12,226,000       18,841,000       12,236,000       18,785,000  
Diluted wt average shares
     13,305,000       20,110,000       13,308,000       20,030,000  
     Pro forma revenues attributable to Sensytech were $17,280,000 and $43,964,000 for the third quarter and nine months ended June 27, 2004, respectively. Pro forma income from operations attributable to Sensytech was $2,436,000 and $5,541,000 for the third quarter and nine months ended June 27, 2004, respectively. Pro forma net income attributable to Sensytech was $1,510,000 and $3,414,000, for the third quarter and nine months ended June 27, 2004, respectively. Pro forma depreciation and amortization on the write up of tangible and intangible assets, in accordance with SFAS 141, was $279,000 and $995,000 for the third quarter and nine months ended June 27, 2004, respectively, and the after tax effect was $172,000 and $614,000, respectively.
     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:
  Victor F. Sellier, Chief Financial Officer
 
  vic.sellier@argonst.com
 
  URL: www.argonst.com
 
  703.995.4219