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

September 30, 2003 (Date of earliest event reported)

RADYNE COMSTREAM INC.
(Exact Name of Registrant as Specified in its Charter)

DELAWARE	0-11685	11-2569467
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

3138 East Elwood Street, Phoenix, Arizona 85034
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (602) 437-9620

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
	ITEM 9. REGULATION FD DISCLOSURE AND
	ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SIGNATURES
EXHIBIT INDEX
EX-99.1

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)	Exhibits
	99.1	Press Release dated October 30, 2003.

ITEM 9. REGULATION FD DISCLOSURE AND

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     References to “we,” “our” and “us” in this Current Report on Form 8-K refer to Radyne ComStream Inc. and consolidated subsidiaries.

     On October 30, 2003, we announced in a press release information concerning our third quarter earnings for the quarterly period ended September 30, 2003. A copy of this press release, including information concerning forward-looking statements and factors that may affect our future results, is attached hereto as Exhibit 99.1. This press release is being furnished, not filed, under Item 12 in this Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RADYNE COMSTREAM INC.

(Registrant)

/s/ Richard P. Johnson

(Signature)
Richard P. Johnson
Chief Financial Officer

Date: October 30, 2003

EXHIBIT INDEX

EXHIBIT
NUMBER	DESCRIPTION
99.1	Radyne ComStream Inc. Press Release dated October 30, 2003

EX-99.1 3 p68395exv99w1.htm EX-99.1

Exhibit 99.1

PRESS RELEASE

Radyne ComStream Reports Third Quarter Pre-Tax Earnings of $2.7 Million
Bookings, Sales and Earnings Increase for Third Consecutive Quarter

PHOENIX, AZ – October 30, 2003 — Radyne ComStream Inc. (NASDAQ: RADN; Warrants: RADNW), today reported net earnings of $1.6 million, or $0.10 per share on a diluted basis, for its fiscal third quarter ended September 30, 2003 compared to a net loss of $2.9 million, or $0.19 per share, for the third quarter of 2002. Earnings before income taxes were $2.7 million for the third quarter of 2003 compared to a loss of $2.9 million for the same quarter of 2002. Net sales of $15.8 million for third quarter 2003 were up 23% compared to third quarter 2002 net sales of $12.8 million.

Earnings for third quarter 2003 benefited from gross profits of $7.1 million, 78% greater than the same quarter of 2002 due primarily to increased sales and new, lower cost products introduced during second quarter 2003. Gross profits increased to 45% of net sales compared to 31% for the same quarter of 2002. Gross margins for third quarter 2003 also benefited from cost reductions resulting in lower operating overhead compared to third quarter 2002. Operating expenses continue to decline, with third quarter 2003 R&D expenses down $0.4 million or 20% compared to the same quarter of 2002 due primarily to staff and cost reductions as part of more focused new product development efforts.

“Our bookings, sales and earnings have increased for the third consecutive quarter and new products continue to increase our gross margins and market share,” commented Bob Fitting, CEO. “Our new higher-margin satellite communications products continue to find acceptance with our customers, and we expect our new video encoder products that are anticipated to come on line next month to increase margins on our video product line.”

Net earnings were $1.5 million, or $0.10 per share on a diluted basis, for the nine months ended September 30, 2003 compared to a net loss of $9.4 million, or $0.62 per share, (including a $4.3 million, or $0.28 per share, charge for cumulative effect of change in accounting principle) for the same period in 2002. Net sales for the nine months ended September 30, 2003 were $41.5 million, down 6% compared to net sales of $43.9 million for the same period in 2002. New lower cost products introduced in second quarter 2003 improved gross margins to 42% of sales for the first nine months of 2003 compared to 31% for the same period in 2002. The Company has no debt, and cash has increased $8 million since the beginning of fiscal year 2003 to $24 million at September 30, 2003.

Radyne ComStream will be conducting a conference call and webcast today at 2:00 p.m. EST to comment on and answer any questions related to its third quarter 2003 financial results. The call is open to the public. The domestic dial in number is 1-877-407-9205 and the international dial in number is 201-689-8054. It will also be accessible via the Internet at www.radn.com and www.vcall.com. Those unable to participate at the designated time may visit either website to listen to a recording of the conference call.

About Radyne ComStream

Radyne ComStream designs, manufactures, sells, integrates and installs products, systems and software used for the transmission and reception of data and video over satellite, microwave and cable communication networks. The Company, through the Tiernan subsidiary (www.tiernan.com), is a supplier of HDTV and SDTV encoding and transmission equipment. The Armer subsidiary (www.armercom.com) provides innovative solutions for the integration and installation of turnkey communications systems. Radyne ComStream is headquartered in Phoenix, Arizona, has manufacturing facilities in Phoenix and San Diego, and sales offices in Singapore, Beijing, Jakarta and London. The Company also has sales and/or service centers in Sao Paulo, Bangalore, Shanghai and Moscow. For more information visit our web site at www.radn.com.

Contact: Rich Johnson, Chief Financial Officer, Radyne ComStream, 602.437.9620

1

Safe Harbor Paragraph for Forward-Looking Statements

This press release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”) and Radyne ComStream claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” or “anticipates,” and do not reflect historical facts. Specific forward-looking statements contained in this press release include, but are not limited to the Company’s expectation that its new video encoder products anticipated to come on line next month will result in increased margins on its video product line.

Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of Radyne ComStream and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements. Factors that could affect Radyne ComStream’s results and cause them to materially differ from those contained in the forward-looking statements contained herein include, without limitation the Company’s failure or delay in bringing its new video encoder products online in the anticipated time frame or the failure of the Company’s customers to receive this product as expected by the Company.

Other factors that may affect forward-looking statements and the Company’s business generally include but are not limited to:

• Prospects of the international markets and global economy given that Radyne ComStream depends heavily on international sales.

• A downturn in the evolving telecommunications and Internet industries.

• Risk factors and cautionary statements made in Radyne ComStream’s Annual Report on Form 10-K for the period ended December 31, 2002.

• The effect that acts of international terrorism may have on Radyne ComStream’s ability to ship products abroad.

• Other factors that Radyne ComStream is currently unable to identify or quantify, but may exist in the future.

Forward-looking statements speak only as of the date the statement was made. Radyne ComStream does not undertake and specifically declines any obligation to update any forward-looking statements.

Financial Statements follow.

###

2

Radyne ComStream Inc.
Condensed Consolidated Balance Sheets

			September 30,			December 31,
			2003			2002
			Unaudited
Assets
Current assets:
	Cash and cash equivalents		$	24,375,545		$	16,229,558
	Accounts receivable, net			10,707,165			10,517,340
	Inventories			7,392,390			10,654,601
	Prepaid expenses and other assets			267,875			567,352
	Deferred tax assets			1,520,309			2,552,549
		Total current assets		44,263,284			40,521,400
Property and equipment, net				2,597,055			3,692,842
Deposits and other intangibles				205,051			192,530
			$	47,065,390		$	44,406,772
Liabilities and Stockholders’ Equity
Current liabilities:
	Current installments of obligations under capital leases		$	17,147		$	37,808
	Accounts payable, trade			2,271,435			1,880,207
	Accrued liabilities			4,181,052			3,899,676
	Customer advance payments			834,036			707,398
		Total current liabilities		7,303,670			6,525,089
Deferred rent				26,777			72,264
Obligations under capital leases, excluding current installments				7,692			19,861
Accrued stock option compensation				477,656			501,073
		Total liabilities		7,815,795			7,118,287
Commitments and contingent liabilities
Stockholders’ equity:
	Common stock; $.001 par value — authorized, 50,000,000 shares			15,504			15,309
	Additional paid-in capital			51,311,216			50,921,603
	Accumulated deficit			(12,077,125	)		(13,625,485	)
	Accumulated other comprehensive loss			—			(22,942	)
		Total stockholders’ equity		40,281,835			37,288,485
			$	47,065,390		$	44,406,772

3

Radyne ComStream Inc.
Condensed Consolidated Statements of Operations
Unaudited

			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2003			2002			2003			2002
Net sales			$	15,790,825		$	12,841,172		$	41,462,604		$	43,943,711
Cost of sales				8,654,509			8,407,846			24,028,884			29,887,714
Restructuring charge				—			430,826			—			430,826
		Gross profit		7,136,316			4,002,500			17,433,720			13,625,171
Operating expenses:
	Selling, general and administrative			2,976,611			2,867,389			10,129,861			9,947,761
	Research and development			1,554,561			1,946,917			4,883,462			6,766,673
	Asset impairment charges			—			995,000			—			995,000
	Restructuring charge			—			1,101,889			—			1,101,889
		Total operating expenses		4,531,172			6,911,195			15,013,323			18,811,323
Earnings (loss) from operations				2,605,144			(2,908,695	)		2,420,397			(5,186,152	)
Other (income) expense:
	Interest expense			4,046			12,843			21,633			34,329
	Interest and other income			(55,350	)		(56,908	)		(181,836	)		(146,511	)
Earnings (loss) before income taxes and cumulative effect of change in accounting principle				2,656,448			(2,864,630	)		2,580,600			(5,073,970	)
Income taxes (benefit)				1,032,240			—			1,032,240			—
Net earnings (loss) before cumulative effect of change in accounting principle				1,624,208			(2,864,630	)		1,548,360			(5,073,970	)
Cumulative effect of change in accounting principle				—			—			—			(4,281,205	)
Net earnings (loss)			$	1,624,208		$	(2,864,630	)	$	1,548,360		$	(9,355,175	)
Earnings (loss) per share:
		Basic	$	0.11		$	(0.19	)	$	0.10		$	(0.62	)
		Diluted	$	0.10		$	(0.19	)	$	0.10		$	(0.62	)
Weighted average common shares outstanding:
		Basic		15,452,238			15,234,693			15,357,610			15,161,804
		Diluted		15,721,470			15,234,693			15,419,281			15,161,804

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EX-99.1

exv99w1