EX-99 2 exhibit991100703.txt EX-99-1 EARNINGS RELEASE-FISCAL 2003 Exhibit 99.1 ------------ HERLEY ACHIEVES RECORD RESULTS FOR FOURTH QUARTER AND FISCAL YEAR INCOME FROM OPERATIONS INCREASED 29.2% TO $19.7 MILLION FOR THE YEAR, FOURTH QUARTER REVENUES UP 22.5%, FISCAL YEAR REVENUES UP 18.7% 2003 PER SHARE EARNINGS FROM CONTINUING OPERATIONS INCREASED 12.0% Lancaster, PA: October 7, 2003 - Herley Industries, Inc. (Nasdaq:HRLY) today reported record financial results for the fourth quarter and fiscal year ended August 3, 2003. Results for the fourth quarter of fiscal 2003 are as follows: - Revenues were $31.0 million, a 22.5 percent increase over the same period last year. - Income from continuing operations increased 22.9 percent to $3.9 million, or $0.27 per share on a fully diluted basis on 14.6 million diluted average shares outstanding. Results for the full year 2003 are as follows: - Revenues increased 18.7 percent to $110.2 million - Income from continuing operations was $13.9 million, up 29.9 percent over fiscal 2002, and $0.93 per share on a fully diluted basis, a 12.0 percent increase over the previous fiscal year. John M. Kelley, President, stated, "Fiscal year 2003 was a record breaking year for Herley and also a year of change. We strengthened our management team and increased our commitment to international business markets. International revenues now account for approximately 36% of Herley's total revenues. The extent and success of our activities in foreign markets increases the number of potential revenue sources and clearly differentiates Herley from our peers." Kelley continued, "Our interest and active involvement in acquisitions will continue in fiscal 2004. We will be aggressive, prudent and maintain our focus on target companies complimentary to Herley." Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. Based in Lancaster, PA, Herley has six locations and approximately 675 employees worldwide. Additional information about the company can be found on the Internet at www.herley.com HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data)
(Unaudited) Thirteen weeks ended 53 weeks 52 weeks -------------------- ended ended August 3, July 28, August 3, July 28, 2003 2002 2003 2002 -------- -------- -------- -------- Net sales $ 31,021 $ 25,329 $110,223 $ 92,881 -------- -------- -------- -------- Cost and expenses: Cost of products sold 20,735 17,393 73,222 61,947 Selling and administrative expenses 4,559 2,949 16,187 13,229 Litigation costs 78 1,112 1,147 2,079 Plant closing costs - - - 406 -------- -------- -------- -------- 25,372 21,454 90,556 77,661 -------- -------- -------- -------- Income from operations 5,649 3,875 19,667 15,220 Other income, net 127 331 769 386 -------- -------- -------- -------- Income from continuing operations before income taxes 5,776 4,206 20,436 15,606 Provision for income taxes 1,837 1,000 6,499 4,876 -------- -------- -------- -------- Income from continuing operations 3,939 3,206 13,937 10,730 Loss from discontinued operations (including loss on sale of net assets of $1,166 in 2002) net of income taxes - - - (921) -------- -------- -------- -------- Income before cumulative effect of change in accounting principle 3,939 3,206 13,937 9,809 Cumulative effect of adopting SFAS 142 - - - (4,637) -------- -------- -------- -------- Net income $ 3,939 $ 3,206 $ 13,937 $ 5,172 ======== ======== ======== ======== Earnings (loss) per common share - Basic Income from continuing operations $ .28 $ .22 $ .97 $ .89 Loss from discontinued operations - - - (.08) Cumulative effect of adopting SFAS 142 - - - (.39) -------- -------- -------- -------- Net earnings $ .28 $ .22 $ .97 $ .43 ======== ======== ======== ======== Basic weighted average shares 13,921 14,671 14,317 12,041 ======== ======== ======== ======== Earnings (loss) per common share - Diluted Income from continuing operations $ .27 $ .21 $ .93 $ .83 Loss from discontinued operations - - - (.07) Cumulative effect of adopting SFAS 142 - - - (.36) -------- -------- -------- -------- Net earnings $ .27 $ .21 $ .93 $ .40 ======== ======== ======== ======== Diluted weighted average shares 14,600 15,580 15,031 12,978 ======== ======== ======== ========
2 HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands except share data)
August 3, July 28, 2003 2002 --------- --------- ASSETS Current Assets: Cash and cash equivalents $ 81,523 $ 86,210 Accounts receivable 16,525 14,486 Costs incurred and income recognized in excess of billings on uncompleted contracts 6,960 6,882 Other receivables 827 274 Inventories, net of allowance of $2,737 in 2003 and $2,407 in 2002 37,545 33,371 Prepaid income taxes - 382 Deferred taxes and other 3,207 2,670 --------- --------- Total Current Assets 146,587 144,275 Property, Plant and Equipment, net 22,406 22,231 Goodwill 25,729 21,665 Intangibles, net of accumulated amortization of $403 in 2003 and $145 in 2002 1,542 423 Available-For-Sale Securities 75 46 Other Investments 162 195 Other Assets 1,063 1,367 --------- --------- $ 197,564 $ 190,202 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 686 $ 215 Accounts payable and accrued expenses 14,026 12,857 Income taxes payable 2,670 - Reserve for contract losses 736 820 Advance payments on contracts 856 1,371 --------- --------- Total Current Liabilities 18,974 15,263 Long-term Debt 6,403 5,684 Deferred Income Taxes 4,945 3,897 --------- --------- 30,322 24,844 --------- --------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 20,000,000 shares; issued and outstanding 13,969,151 in 2003 and 14,680,960 in 2002 1,397 1,468 Additional paid-in capital 104,551 116,579 Retained earnings 61,478 47,541 Accumulated other comprehensive loss (184) (230) --------- --------- Total Shareholders' Equity 167,242 165,358 --------- --------- $ 197,564 $ 190,202 ========= =========
3 For information at Herley contact: Peg Guzzetti Investor Relations Tel: (717) 735-8117 Safe Harbor Statement - Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. The Company's results could differ materially based on various factors, including, but not limited to cancellation or deferral of customer orders, difficulties in the timely development of new products, difficulties in manufacturing, increased competitive pressures, and general economic conditions. 4