EX-99.1 2 rc3826ex991.txt EXHIBIT 99.1 Exhibit 99.1 [LOGO OF RADYNE CORPORATION] PRESS RELEASE RADYNE REPORTS 153% INCREASE IN 3RD QUARTER SALES PHOENIX, AZ - October 24, 2005 - Radyne Corporation (Nasdaq: RADN), today reported record sales for the third quarter of 2005 of $32.1 million compared to third quarter 2004 sales of $12.7 million. The increase resulted from both continued growth in sales of the Company's core satellite and broadcast business and the addition of sales from recently acquired Xicom Technology, Inc. The consolidated results announced today reflect Xicom's first full quarter as part of Radyne. Net sales for Radyne, excluding Xicom, increased by 47% to $18.7 million during the third quarter compared to the same period one year ago. Earnings from operations increased 175% to $4.4 million during the quarter from $1.6 million for the third quarter of 2004. Net earnings, after taxes and interest, for the third quarter of 2005 were $2.9 million, or $0.16 per fully diluted share compared to earnings of $6.1 million, or $0.36 per fully diluted share for the same quarter of 2004. Earnings during the third quarter of 2004 included a tax benefit of $4.3 million or $0.25 per diluted share due primarily to the reduction of a valuation allowance against deferred tax assets. For the first nine months of 2005, sales rose 67% to $66.5 million compared to $39.8 million for the first nine months of 2004. Net sales for Radyne, excluding Xicom, for the first nine months of 2005 were $48.1 million or a 21% increase over 2004. Earnings from operations for the first nine months of 2005 increased to $9.4 million compared to $6.2 million during the first nine months of 2004. Bookings during the quarter were $36.3 million, also a new company record, and a 190% increase over bookings of $12.5 million in the third quarter of 2004. At the end of the third quarter of 2005, Radyne's backlog was $34.0 million compared to $5.5 million at the end of the third quarter of 2004. "Our products continue to win in the marketplace," commented Bob Fitting, CEO. "Our investments in new products coupled with the investment in Xicom have resulted in dramatically improved results to our shareholders. The Xicom acquisition is already contributing to our bottom line both as result of their unique products and our improved ability to compete for larger orders." Bob Fitting continued, "Our satellite and broadcast products continue to gain acceptance in the market as well and we are excited that our new 20 megabit/second over-the-horizon modem performs better than any other on the market. In fact, we have already shipped our first customer demonstration units." At the end of the quarter, Radyne's cash balance was $9.0 million with $4.8 million in total debt compared to $39.3 million in cash and no debt at year-end 2004. Cash balances increased by $3.1 million during the quarter. Compared to year-end 2004, cash was reduced by the consideration for the Xicom acquisition. Consolidated Accounts Receivable increased to $18.9 million compared to $9.7 million at the beginning of the year. Consolidated Inventory increased to $18.3 million from $8.1 million at the beginning of 2005. Radyne will be holding a conference call on Monday, October 24, 2005 at 4:30 p.m. EDT to discuss its third quarter 2005 financial results and operational highlights. The call is open to the public. The domestic dial in number is 1-866-362-4820 and the international dial in number is +1-617-597-5345. The conference will also be accessible via the Internet at www.radn.com and www.earnings.com. ABOUT RADYNE CORPORATION Radyne Corporation 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 its Tiernan subsidiary, is a supplier of HDTV and SDTV encoding and transmission equipment. The Xicom Technology subsidiary is a producer of high power amplifiers for communications applications. Radyne is headquartered in Phoenix, Arizona, has manufacturing facilities in Phoenix, Arizona; and San Diego, and Santa Clara, California and sales offices in Singapore, Beijing, Jakarta and the United Kingdom. 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. Additional information on Xicom is available at www.xicomtech.com . Contact: Malcolm Persen, Chief Financial Officer, 602.437.9620 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 Corporation claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of Radyne Corporation and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements. These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," "intends" or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this press release include expectations for future revenues, orders and backlog, cash flow and earnings per share and indications that the Company will benefit from strong market demand for its new products. There is no assurance that the Xicom acquisition will continue to provide desirable financial or strategic results for the Company. We cannot guarantee that the Company will continue to generate cash and asset and sales fluctuations may be seasonal in nature and not an indication of future results. There can be no assurance that the indicators that the Company relies on to gauge future business prospects, such as backlog and bookings, will accurately forecast future results. Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, constraints on supplies of critical raw materials, excess or shortage of production capacity, and other risks discussed from time to time in the Company's SEC filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Forward-looking statements speak only as of the date the statement was made. Radyne Corporation does not undertake and specifically declines any obligation to update any forward-looking statements. In addition, the Company does not endorse any projections regarding future performance that may be made by third parties. Financial Statements follow. RADYNE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
SEPTEMBER 30, DECEMBER 31, 2005 2004 -------------- -------------- UNAUDITED ASSETS CURRENT ASSETS: Cash and cash equivalents $ 9,006 $ 39,300 Accounts receivable - trade, net of allowance for doubtful accounts of $861 and $350, respectively 18,940 9,728 Inventories 18,296 8,132 Deferred tax assets 3,465 2,218 Prepaid expenses and other assets 889 846 -------------- -------------- Total current assets 50,596 60,224 Goodwill 29,060 - Intangibles 6,990 - Deferred tax assets, net 949 3,445 Property and equipment, net 3,956 1,593 Other assets 305 154 -------------- -------------- Total Assets $ 91,856 $ 65,416 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 5,579 $ 1,566 Accrued expenses 7,492 4,835 Customer advance payments 1,862 149 Bank loan 1,000 - Income taxes payable 130 242 -------------- -------------- Total current liabilities 16,063 6,792 Bank loan, less current portion 3,750 - Long-term obligations 922 284 Accrued stock option compensation 59 146 -------------- -------------- Total liabilities 20,794 7,222 -------------- -------------- STOCKHOLDERS' EQUITY: Common stock; $.001 par value - authorized, 50,000,000 shares; issued and outstanding, 17,053,181 shares and 16,232,999 shares, respectively 17 16 Additional paid-in capital 60,884 54,414 Retained earnings 10,160 3,764 Other comprehensive income 1 - -------------- -------------- Total stockholders' equity 71,062 58,194 -------------- -------------- Total Liabilities and Stockholders' Equity $ 91,856 $ 65,416 ============== ==============
RADYNE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share data) unaudited
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, --------------------- --------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Net sales $ 32,146 $ 12,707 $ 66,468 $ 39,800 Cost of sales 18,780 6,133 36,337 19,197 --------- --------- --------- --------- Gross profit 13,366 6,574 30,131 20,603 --------- --------- --------- --------- OPERATING EXPENSES: Selling, general and administrative 6,265 3,523 14,656 10,395 Research and development 2,728 1,411 6,058 3,964 --------- --------- --------- --------- Total operating expenses 8,993 4,934 20,714 14,359 --------- --------- --------- --------- Earnings from operations 4,373 1,640 9,417 6,244 OTHER (INCOME) EXPENSE: Interest expense 87 10 167 15 Interest and other income (57) (133) (545) (305) --------- --------- --------- --------- Earnings before income taxes 4,343 1,763 9,795 6,534 Income tax expense 1,464 (4,302) 3,399 (3,990) --------- --------- --------- --------- Net earnings $ 2,879 $ 6,065 $ 6,396 $ 10,524 ========= ========= ========= ========= EARNINGS PER SHARE: Basic $ 0.17 $ 0.37 $ 0.38 $ 0.64 ========= ========= ========= ========= Diluted $ 0.16 $ 0.36 $ 0.36 $ 0.61 ========= ========= ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic 16,995 16,390 16,734 16,404 ========= ========= ========= ========= Diluted 17,927 16,911 17,533 17,159 ========= ========= ========= =========