EX-99.1 2 rc4803ex991.txt EXHIBIT 99.1 Exhibit 99.1 [LOGO OF RADYNE] PRESS RELEASE RADYNE REPORTS RECORD SALES AND EARNINGS PHOENIX, AZ - February 13, 2006 - Radyne Corporation (Nasdaq: RADN), today reported record sales for the year and the fourth quarter ending December 31, 2005 of $103.3 million and $36.8 million respectively. Sales for the full year of 2005 grew 83% compared to 2004 sales of $56.6 million while during the fourth quarter sales increased 119% from the fourth quarter of 2004 when sales were $16.8 million. The increase resulted from sales from recently acquired Xicom Technology, Inc. and continued growth in sales of the Company's pre-acquisition satellite electronics and broadcast equipment business. For the full year, excluding Xicom, sales related to the pre-acquisition businesses grew to $70.8 million or 25%. During the fourth quarter, the pre-acquisition satellite electronics and broadcast equipment sales were $22.7 million, an increase of 36%. Xicom sales for the seven months and three months ended December 31, 2005 respectively were $32.8 million and $14.2 million. Earnings from operations also set new records at $15.4 million for the full year of 2005, a 64% increase from $9.4 million for 2004 and, for the fourth quarter, $6.0 million compared to $3.2 million during the same period of 2004, an increase of 88%. For the fourth quarter, earnings per fully diluted share ("EPS") were $0.24 compared to $0.18 for the fourth quarter of 2004. Earnings during the fourth quarter of 2005 included a charge of $365,000 resulting from the Company's decision to accelerate vesting of stock options previously awarded to employees. The quarter also included a tax benefit of $317,000 due to the recognition of deferred tax assets resulting from previously earned and unused R&D tax credits. EPS for the full year was $0.60 for 2005 compared to $0.79 for 2004. Earnings during 2004 included a net tax benefit of $3.6 million which, in turn, included $4.1 million or $0.24 per diluted share due primarily to the reduction of a valuation allowance against deferred tax assets. Bookings during the fourth quarter of 2005 were $35.0 million, a 68% increase over bookings of $20.8 million in the fourth quarter of 2004. At the end of the year, Radyne's backlog was $32.2 million compared to $9.6 million at the end of 2004. Bookings for the entire year were $107.2 million compared to $57.9 million for 2004. On a segment basis, for the fourth quarter, the Company's pre-acquisition satellite electronics and broadcast equipment segment booked $19.2 million and ended the period with a backlog of $12.2 million. Xicom booked $16.3 million and had an ending backlog of $20.4 million for the fourth quarter. "2005 has been the best year ever for Radyne," commented Bob Fitting, CEO. "Our merger with Xicom and the strength of our products in worldwide markets have resulted in record sales and profitability. Signs point to even better performance in 2006". At the end of the year, Radyne's cash balance was $16.9 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 $7.9 million during the quarter. Compared to year-end 2004, cash was reduced by the consideration for the Xicom acquisition. Consolidated Accounts Receivable increased to $20.3 million compared to $9.7 million at the beginning of the year. Consolidated Inventory was $18.1 million compared to $8.1 million at the beginning of 2005. Compared to the end of the third quarter, inventory dropped by $239,000. During the second half of 2005, the period including Xicom Technology, the Company's inventory levels dropped 4.6% or $880,000. Radyne will be holding a conference call today, Monday, February 13, 2006 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 1-800-573-4754 and the international dial in number is +1-617-224-4325. 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 nor that the Company's sales and profits will continue to grow. 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) UNAUDITED
DECEMBER 31, DECEMBER 31, 2005 2004 ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 16,928 $ 39,300 Accounts receivable - trade, net of allowance for doubtful accounts of $841 and $350, respectively 20,337 9,728 Inventories 18,057 8,132 Deferred tax assets 3,010 2,218 Prepaid expenses and other assets 862 846 ------------- ------------- Total current assets 59,194 60,224 Goodwill 30,333 - Intangibles 6,706 - Deferred tax assets, net - 3,445 Property and equipment, net 4,098 1,593 Other assets 295 154 ------------- ------------- Total Assets $ 100,626 $ 65,416 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 5,054 $ 1,566 Accrued expenses 9,045 4,835 Customer advance payments 2,319 149 Current portion of long-term debt 1,000 - Income taxes payable 609 242 ------------- ------------- Total current liabilities 18,027 6,792 Long-term debt, less current portion 3,750 - Deferred tax liability 752 - Deferred rent 413 284 Accrued stock option compensation 46 146 ------------- ------------- Total liabilities 22,988 7,222 ------------- ------------- STOCKHOLDERS' EQUITY: Common stock; $.001 par value - authorized, 50,000,000 shares; issued and outstanding, 17,334,467 shares and 16,232,999 shares, respectively 17 16 Additional paid-in capital 63,171 54,414 Retained earnings 14,448 3,764 Other comprehensive income 2 - ------------- ------------- Total stockholders' equity 77,638 58,194 ------------- ------------- Total Liabilities and Stockholders' Equity $ 100,626 $ 65,416 ============= =============
RADYNE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) UNAUDITED
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ------------------------ ------------------------ 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Net sales $ 36,795 $ 16,778 $ 103,263 $ 56,578 Cost of sales 20,914 7,238 57,251 26,435 ---------- ---------- ---------- ---------- Gross profit 15,881 9,540 46,012 30,143 ---------- ---------- ---------- ---------- OPERATING EXPENSES: Selling, general and administrative 7,121 5,025 21,777 15,420 Research and development 2,766 1,365 8,824 5,330 ---------- ---------- ---------- ---------- Total operating expenses 9,887 6,390 30,601 20,750 ---------- ---------- ---------- ---------- Earnings from operations 5,994 3,150 15,411 9,393 OTHER (INCOME) EXPENSE: Interest expense 85 15 252 29 Interest and other income (120) (187) (665) (492) ---------- ---------- ---------- ---------- Earnings before income taxes 6,029 3,322 15,824 9,856 Income tax expense (benefit) 1,739 346 5,138 (3,644) ---------- ---------- ---------- ---------- Net earnings $ 4,290 $ 2,976 $ 10,686 $ 13,500 ========== ========== ========== ========== EARNINGS PER SHARE: Basic $ 0.25 $ 0.18 $ 0.63 $ 0.83 ========== ========== ========== ========== Diluted $ 0.24 $ 0.18 $ 0.60 $ 0.79 ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Basic 17,147 16,222 16,838 16,357 ========== ========== ========== ========== Diluted 18,199 16,855 17,707 17,136 ========== ========== ========== ==========