EX-99 3 exhibit911031504.txt EX-99.1 EARNINGS RELEASE MARCH 15, 2004 Exhibit 99.1 ------------ HERLEY ANNOUNCES 2ND QUARTER RESULTS Herley 2nd Quarter Revenues Increased 17.6% To $29.4 Million Quarterly Operating Income Increased 16.3% To $5.2 Million 2nd Quarter Net Income Increased 7.9% To $3.5 million Diluted Earnings Per Share For The 2nd Quarter Increased 9.1% to $.24 Lancaster, PA March 15, 2004 - Herley Industries, Inc. (Nasdaq: HRLY) reported today financial results for the second quarter and first half of fiscal year 2004. Select financial results for the second quarter are as follows: - Revenues for the second quarter increased 17.6%, from $25.0 million to $29.4 million. - Revenues for the first half of fiscal 2004 increased 10.3%, growing from $52.3 million to $57.7 million - Second quarter operating income increased 16.3% to $5.2 million. - Operating income for the first half of fiscal year 2004 increased 19.2%, from $9.2 million to $11.0 million. - Net income in the second quarter increased 7.9% to $3.5 million. - For the first half of fiscal 2004 net income increased 12.8%, from $6.6 million to $7.5 million. - Second quarter diluted earnings per share increased 9.1% to $0.24; and increased 16.3% to $0.50 per share for the first half of the fiscal year. John M. Kelley, President, stated, "We feel very good about Herley's near-term and long-term prospects. This belief is based, in part, on the strength of the programs with Herley content and the increasing level of new business opportunities. Our Defense and Aerospace business remained strong during the second quarter with Defense and Aerospace revenues growing 19.6%, compared to the same period last year. A variety of programs contributed to this revenue growth, including F-16, F-18, AMRAAM and THAAD." Kelley continued, "Second quarter bookings hit historic levels producing a book-to-bill ratio of 1.4 to 1. For the first half of fiscal 2004, Herley's book-to-bill radio was 1.2 to 1. Our strong booking activity is expected to continue through the year. We are also continuing our efforts to acquire companies that will extend our product line, assist in Herley's expansion into complementary military markets, and secure new positions on desired programs." 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 five locations and approximately 700 employees worldwide. Additional information about the company can be found on the Internet at www.herley.com.
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data) Twenty-six Twenty-seven Thirteen weeks ended weeks ended weeks ended -------------------- ----------- ----------- February 1, February 2, February 1, February 2, 2004 2003 2004 2003 -------------- ------------ ------------- -------------- Net sales $ 29,408 $ 25,015 $ 57,675 $ 52,305 -------------- ------------ ------------- -------------- Cost and expenses: Cost of products sold 19,045 16,342 36,670 34,441 Selling and administrative expenses 5,198 4,232 9,978 8,617 24,243 20,574 46,648 43,058 -------------- ------------ ------------- -------------- Operating Income 5,165 4,441 11,027 9,247 -------------- ------------ ------------- -------------- Other income (expense), net: Investment income 187 296 363 664 Interest expense (82) (82) (169) (177) Foreign exchange (loss) (70) - (243) - -------------- ------------ ------------- -------------- 35 214 (49) 487 -------------- ------------ ------------- -------------- Income before income taxes 5,200 4,655 10,978 9,734 Provision for income taxes 1,654 1,368 3,491 3,095 -------------- ------------ ------------- -------------- Net income $ 3,546 $ 3,287 $ 7,487 $ 6,639 -------------- ------------ ------------- -------------- Earnings per common share - Basic $ .25 $ .23 $ .53 $ .45 ============== ============ ============= ============== Basic weighted average shares 14,073 14,464 14,043 14,665 ============== ============ ============= ============== Earnings per common share - Diluted $ .24 $ .22 $ .50 $ .43 ============== ============ ============= ============== Diluted weighted average shares 14,880 15,124 14,826 15,411 ============== ============ ============= ============== 2
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data)
February 1, August 3, 2004 2003 ----------- --------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents ....................................... $ 78,998 $ 81,523 Accounts receivable ............................................. 17,709 16,525 Costs incurred and income recognized in excess of billings on uncompleted contracts ......................... 15,479 6,960 Other receivables ............................................... 1,166 827 Inventories, net of allowance of $2,789 in fiscal 2004 and $2,739 in fiscal 2003 ..................................... 40,008 37,545 Deferred taxes and other ........................................ 3,384 3,207 --------- --------- Total Current Assets .......... 156,744 146,587 Property, Plant and Equipment, net ............................... 23,742 22,406 Goodwill ......................................................... 26,448 25,729 Intangibles, net of accumulated amortization of $541 in fiscal 2004 and $403 in fiscal 2003 .................................... 1,589 1,542 Available-For-Sale Securities .................................... 75 75 Other Investments ................................................ 129 162 Other Assets ..................................................... 945 1,063 --------- --------- $ 209,672 $ 197,564 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt ............................... $ 801 $ 686 Accounts payable and accrued expenses ........................... 14,600 14,026 Billings in excess of costs incurred and income recognized on uncompleted contracts .................. 423 - Income taxes payable ............................................ 2,657 2,670 Reserve for contract losses ..................................... 940 736 Advance payments on contracts ................................... 1,405 856 --------- --------- Total Current Liabilities ..... 20,826 18,974 Long-term Debt ................................................... 5,940 6,403 Deferred Income Taxes ............................................ 4,919 4,945 --------- --------- 31,685 30,322 --------- --------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 20,000,000 shares; issued and outstanding 14,110,449 at February 1, 2004 and 13,969,151 at August 3, 2003 1,411 1,397 Additional paid-in capital ...................................... 106,223 104,551 Retained earnings ............................................... 68,965 61,478 Accumulated other comprehensive income (loss) ................... 1,388 (184) --------- --------- Total Shareholders' Equity .... 177,987 167,242 --------- --------- $ 209,672 $ 197,564 ========= =========
For information at Herley contact: Peg Guzzetti Tel: (717) 735-8117 Investor Relations www.herley.com -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 3