-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FzCPO4dfpiNgbkxUwqNBz+RCAHY4MCDi+BrZm81UHgLdRIM8txBoUzy8iCGLS7Ag artOGLlW+61owY1VUXPxmA== 0001201800-06-000118.txt : 20060616 0001201800-06-000118.hdr.sgml : 20060616 20060616142010 ACCESSION NUMBER: 0001201800-06-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060614 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060616 DATE AS OF CHANGE: 20060616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERLEY INDUSTRIES INC /NEW CENTRAL INDEX KEY: 0000047035 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 232413500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05411 FILM NUMBER: 06909775 BUSINESS ADDRESS: STREET 1: 101 NORTH POINTE BOULEVARD CITY: LANCASTER STATE: PA ZIP: 17601-4133 BUSINESS PHONE: 7177358117 MAIL ADDRESS: STREET 1: 101 NORTH POINTE BOULEVARD CITY: LANCASTER STATE: PA ZIP: 17601-4133 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY MICROWAVE SYSTEMS INC DATE OF NAME CHANGE: 19900510 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY INDUSTRIES INC DATE OF NAME CHANGE: 19831103 8-K 1 hrly8krelearn6-06.txt 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: June 14, 2006 (Date of earliest event reported) HERLEY INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 0-5411 23-2413500 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) Number) 101 North Pointe Boulevard, Lancaster, Pennsylvania 17601-4133 - -------------------------------------------------------------------------------- Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (717) 735-8117 ------------------- ---------------------------------------------------- (Former name or former address, if changed since last report.) 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: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act [ ] Pre-commencement communications pursuant to Rule 13e-4c under the Exchange Act (17 CFR 240.13e-4c) INFORMATION TO BE INCLUDED IN THE REPORT The information in this Form 8-K Current Report and the exhibit attached hereto is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. Item 2.02 Results of Operations and Financial Condition On June 14, 2006, Herley Industries, Inc. issued an earnings press release announcing its preliminary financial results for the third quarter ended April 30, 2006. A copy of the earnings release is attached as Exhibit 99 to this Current Report on Form 8-K. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99 Earnings Release, dated June 14, 2006, announcing the Registrant's preliminary financial results for the third quarter ended April 30, 2006. Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HERLEY INDUSTRIES, INC. By: /s/ Myron Levy ------------------------------------- Myron Levy Chairman and Chief Executive Officer Dated: June 16, 2006 EX-99 2 hrly8kjun06-ex99.txt PRESS RELEASE Exhibit 99 HERLEY REPORTS 3RD QUARTER RESULTS REVENUES WERE $45.7 MILLION BACKLOG TOTALS $143.3 MILLION Lancaster, PA. June 14, 2006. Herley Industries, Inc. (Nasdaq:HRLY) today announced its financial results for the third quarter ended April 30, 2006. Net sales for the third quarter ended April 30, 2006 were $45.7 million, an increase of $4.4 million or 10.7% compared to the third quarter of fiscal year 2005. Operating income for the third quarter was $2.0 million, or 4.4% of net sales compared to $4.6 million or 11.0% of net sales in the prior year. Provision for income taxes for the third quarter of fiscal 2006 was $662,000, representing an effective tax rate of approximately 28.0%. Net income for the third quarter of fiscal 2006 was $1.7 million or $0.11 per diluted share. This compares to net income of $3.6 million, or $0.24 per share for third quarter of 2005. John M. Kelley, Herley's President, said, "The results from two of our domestic facilities prevented Herley from achieving solid financial results for three consecutive quarters in fiscal 2006." For the nine months ended April 30, 2006, net sales were $133.5 million, compared to $108.6 million in the third quarter of fiscal 2005, an increase of 22.9%. Operating income for the first nine months of fiscal 2006 was $12.8 million or 9.6% of net sales, compared to $12.0 million or 11.1% of net sales in 2005. Our international operations contributed approximately $2.0 million in operating income for the nine months as compared to $1.7 million in fiscal 2005. Provision for income taxes for the first nine months of fiscal 2006 was $3.7 million, an effective tax rate of approximately 28%. Lower effective tax rate on foreign source income, extra territorial income, research and development tax credits, Section 199 manufacturing deduction and tax exempt interest income resulted in the favorable effective tax rate in fiscal 2006. Balance Sheet Cash and cash equivalents at April 30, 2006 were $27.4 million. During the quarter the Company generated $10 million in cash from operations and $5.5 million in free cash flow (cash from operations minus capital expenditures). The Company has approximately $38.5 million (net of outstanding standby letters of credit) available under a $50 million revolving credit loan agreement on an unsecured basis which may be used for general corporate purposes, including business acquisitions. There were no borrowings under the line at April 30, 2006. Herley intends to file its quarterly report or 10-Q this week. The company has been advised by BDO Seidman, LLP, its independent outside auditors that due to the need to complete its review of procedures in connection with the company's recent indictment, it is unable at this time to complete its review of the company's financial statements, which review is required under applicable SEC regulations. Herley will host a conference call on Monday, June 19, 2006, 10:00 A.M. Eastern Time to discuss this news. To join the conference call dial 1 (888) 425-4188, referencing Conference ID1801972. A taped replay of the call will be available through June 19, 2006. To listen to the replay dial: 1 (800) 642 1687 (U.S.) or 1 (706) 645-9291 (International), and Conference ID 1801972. In addition, the conference call will be broadcast live over the Internet and can be accessed through the following URL: http://www.visualwebcaster.com/event. asp?id=34344 To listen to the live call on the Internet, go to the web site 15 minutes early to register, download and install any necessary audio software. 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 nine manufacturing locations and over 1000 employees. Additional information about the company can be found on the Internet at www.herley.com. ...... tables follow 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. When used in this report, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. 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. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments. HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands except per share data)
April 30, July 31, 2006 2005 ----------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 27,364 $ 20,331 Trade accounts receivable 30,148 27,258 Costs incurred and income recognized in excess of billings on uncompleted contracts 18,494 16,058 Other receivables 1,131 1,414 Inventories, net of allowance of $5,168 in fiscal 2006 and $4,492 in fiscal 2005 53,639 53,668 Deferred taxes and other 4,317 3,782 ----------- ----------- Total Current Assets 135,093 122,511 Property, Plant and Equipment, net 30,133 29,461 Goodwill 73,500 70,831 Intangibles, net of accumulated amortization of $3,021 in fiscal 2006 and $1,680 in fiscal 2005 20,525 20,554 Other Assets 650 744 ----------- ----------- $ 259,901 $ 244,101 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 221 $ 797 Accounts payable and accrued expenses 22,877 23,678 Billings in excess of costs incurred and income recognized on uncompleted contracts 410 538 Income taxes payable 2,953 3,760 Accrual for contract losses 3,158 630 Accrual for warranty costs 715 799 Advance payments on contracts 5,109 3,966 ----------- ----------- Total Current Liabilities 35,443 34,168 Long-term Debt 4,756 5,000 Other Long-term Liabilities 1,246 1,042 Deferred Income Taxes 7,182 6,254 ----------- ----------- 48,627 46,464 ----------- ----------- Commitments and Contingencies Shareholders' Equity: Common stock, $.10 par value; authorized 20,000,000 shares; issued and outstanding 14,634,916 in fiscal 2006 and 14,389,625 in fiscal 2005 1,463 1,439 Additional paid-in capital 112,899 109,118 Retained earnings 95,573 85,932 Accumulated other comprehensive income 1,339 1,148 ----------- ----------- Total Shareholders' Equity 211,274 197,637 ----------- ----------- $ 259,901 $ 244,101 =========== ===========
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands except per share data)
Thirteen weeks ended Thirty-nine weeks ended ------------------------------------------------------------- April 30, May 1, April 30, May 1, 2006 2005 2006 2005 ------------- ---------- ------------- ----------- Net sales $ 45,689 $ 41,266 $ 133,466 $ 108,610 ------------- ---------- ------------- ----------- Cost and expenses: Cost of products sold 34,736 27,845 94,900 75,034 Selling and administrative expenses 8,960 8,865 25,785 21,541 ------------- ---------- ------------- ----------- 43,696 36,710 120,685 96,575 ------------- ---------- ------------- ----------- Operating Income 1,993 4,556 12,781 12,035 ------------- ---------- ------------- ----------- Other income (expense), net: Investment income 269 253 578 769 Interest expense (68) (74) (242) (211) Foreign exchange gain 170 79 273 264 ------------- ---------- ------------- ----------- 371 258 609 822 ------------- ---------- ------------- ----------- Income before income taxes 2,364 4,814 13,390 12,857 Provision for income taxes 662 1,187 3,749 3,600 ------------- ---------- ------------- ----------- Net income $ 1,702 $ 3,627 $ 9,641 $ 9,257 ============= ========== ============= =========== Earnings per common share - Basic $ .12 $ .25 $ .67 $ .65 ============= ========== ============= =========== Basic weighted average shares 14,569 14,313 14,497 14,300 ============= ========== ============= =========== Earnings per common share - Diluted $ .11 $ .24 $ .63 $ .62 ============= ========== ============= =========== Diluted weighted average shares 15,398 14,936 15,230 14,972 ------------- ---------- ------------- -----------
HERLEY INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Thirty-nine weeks ended ----------------------- April 30, May 1, 2006 2005 ----------- ----------- Cash flows from operating activities: Net income $ 9,641 $ 9,257 ----------- ----------- Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 5,266 3,825 Stock-based compensation expense 333 - Increase in deferred tax assets (127) - Increase in deferred tax liabilities 913 - Foreign exchange (gain) loss (55) 31 Gain on sale of securities - (22) Equity in income of limited partnership (49) (54) Changes in operating assets and liabilities: (Increase) decrease in trade accounts receivable (2,890) 4,996 (Increase) in costs incurred and income recognized in excess of billings on uncompleted contracts, and claims (2,436) (3,569) Decrease (Increase) in other receivables 283 (269) Decrease (Increase) in inventories 29 (3,341) (Increase) in deferred taxes and other (535) (400) (Decrease) increase in accounts payable and accrued expenses (801) 1,677 (Decrease) in billings in excess of costs incurred and income recognized on uncompleted contracts (128) (1,206) (Decrease) increase in income taxes payable (807) 2,842 Increase (decrease) in accrual for contract losses 24 (377) Increase (decrease) in advance payments on contracts 1,143 (1,410) Other, net 205 293 ----------- ----------- Total adjustments 368 3,016 ----------- ----------- Net cash provided by operating activities 10,009 12,273 ----------- ----------- Cash flows from investing activities: Acquisition of businesses, net of cash acquired - (51,391) Acquisition of technology license (1,256) (2,000) Proceeds from sale of securities - 165 Partial distribution from limited partnership 111 109 Capital expenditures (4,525) (4,948) ----------- ----------- Net cash used in investing activities (5,670) (58,065) ----------- ----------- Cash flows from financing activities: Borrowings under bank line of credit 12,000 - Proceeds from exercise of stock options 2,799 1,803 Payments of long-term debt (779) (780) Purchase of treasury stock - (1,770) Payments under bank line of credit (12,000) - Income tax benefit from exercise of stock options 674 345 ----------- ----------- Net cash provided by (used in) financing activities 2,694 (402) ----------- ----------- Net increase in cash and cash equivalents 7,033 (46,194) Cash and cash equivalents at beginning of period 20,331 66,181 ----------- ----------- Cash and cash equivalents at end of period $ 27,364 $ 19,987 =========== ===========
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