8-K 1 q304earn.txt FORM 8-K DATED OCTOBER 26, 2004 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 - October 26, 2004 (Date of earliest event reported) METROLOGIC INSTRUMENTS, INC. (Exact name of Registrant as specified in its charter) New Jersey 0-24172 22-1866172 (State of incorporation) (Commission file number) (IRS employer identification number) 90 Coles Road, Blackwood, New Jersey, 08012 (Address of principal executive offices, zip code) Area Code (856) 228-8100 (Telephone number) 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 (see General Instruction A.2. below): __ 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 (17 CFR 240.14d-2(b)) __ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operation and Financial Condition Metrologic Instruments, Inc. (the "Company") is furnishing herewith as Exhibit 99.1 its Press Release dated October 26, 2004 announcing the Company's earnings for the third quarter ended September 30, 2004. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Metrologic Instruments, Inc. press release dated October 26, 2004 announcing the Company's earnings for the third quarter ended September 30, 2004 SIGNATURES Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: October 26, 2004 Metrologic Instruments, Inc. By: /s/ Kevin J. Bratton Kevin J. Bratton Chief Financial Officer METROLOGIC INSTRUMENTS, INC. CURRENT REPORT ON FORM 8-K EXHIBIT INDEX Exhibit No. Page 99.1 Metrologic Instruments, Inc. press release dated 4 October 26, 2004 announcing the Company's earnings for the third quarter ended September 30, 2004. EXHIBIT 99.1 Corporate Headquarters Metrologic Instruments, Inc. 90 Coles Road Blackwood, NJ 08012-4638 [COMPANY LOGO] Tel 856.228.8100 Fax 856.228.6673 (sales) Fax 856.228-0653 (finance/legal) www.metrologic.com Metrologic Announces Financial Results for the Third Quarter; Company Achieves Record Sales Blackwood, New Jersey - October 26, 2004 -- Metrologic Instruments, Inc. (NASDAQ-NMS:MTLG), experts in optical image capture and processing solutions, who design, manufacture and market worldwide sophisticated imaging and bar code scanning solutions for a variety of applications announced today its financial results for the third quarter ended September 30, 2004. Sales increased 35.5% to approximately $44.2 million for the third quarter of 2004 compared with $32.6 million for the same period last year. Net income was approximately $4.7 million, or $0.20 diluted earnings per share, compared with net income of $2.7 million, or $0.14 diluted earnings per share, for the same period last year. The sales for the third quarter benefited from a significant increase in sales throughout all geographic areas in our POS/OEM business segment, growing 32.3% year over year and nearly 7.7% over the second quarter. The company also experienced substantial double-digit revenue growth across all geographic areas, with highest growth throughout Asia. Net income for the three months ended September 30, 2004 benefited by approximately $1.0 million or $0.04 diluted earnings per share due to the difference in the value of the U.S. dollar relative to other foreign currencies, primarily the euro, as compared with the third quarter of 2003. This positive effect on earnings from the euro was offset by an increase in the company's expenses primarily due to a substantial rise in costs related to its ongoing litigation matters and its efforts associated with Sarbanes-Oxley Section 404 compliance. Sales for the nine months ended September 30, 2004 increased 29.6% to approximately $124.8 million compared with approximately $96.3 million for the same period in 2003. Net income for the nine months ended September 30, 2004 was approximately $14.0 million, or $0.61 diluted earnings per share compared with approximately $6.7 million, or $0.37 diluted earnings per share for the same period last year, excluding the one-time gain of $2.2 million resulting from a discount earned on the early repayment of certain subordinated debt and the write-off of certain costs associated with the company's former credit agreements. Including these items, net income for the first nine months of 2003 was $8.6 million, or $0.47 diluted earnings per share. Commenting on the third quarter results, Metrologic's Chief Executive Officer and President, Benny Noens, stated, "Our third quarter has produced another company record for sales results, continuing our double-digit year over year revenue growth. One of the key factors in this growth has been our ability to establish an industry leading position in a number of worldwide markets. We have achieved this growth by executing on a strategy of expanding our markets through the development of new products and the establishment of new sales locations and strategic partnerships with our distribution and end-user customers. We have also continued to experience market share growth. And while we did have an increase in some of our expenses for the third quarter, this was mostly the result of higher than expected costs associated with ongoing litigation and Sarbanes-Oxley compliance efforts. We expect that these costs will continue into the fourth quarter as well. Overall, we are continuing our focus on executing our core strategy of leveraging our broad-based portfolio of scanning and imaging products and our expertise in worldwide distribution to focus on top line revenue growth. We will continue to utilize our extensive base of engineering talent to keep fueling that product pipeline with both new and replacement products that seek to outpace the competition in both technology and lower costs." 2004 Guidance Increased and 2005 Outlook: As the company has completed its transition in leadership, it has decided to resume the practice of holding conference calls in connection with its release of earnings. This release does contain updated guidance for sales and net income for the full year of 2004 and a general statement on the outlook for 2005. For the full year 2004 the company expects sales to be approximately $170 million to $173 million, and net income to be in the range of $18.8 million to $19.8 million, or $0.82 to $0.86 diluted earnings per share, as compared with previously announced sales of approximately $163 million to $168 million, and net income in the range of $18.1 million to $19.5 million, or $0.78 to $0.84 diluted earnings per share. For the full year 2005 the company expects to be able to continue to grow its sales in accordance with its current compound annual growth rate, which over the last ten years has been in the mid to high teens. About Metrologic Metrologic designs, manufactures and markets bar code scanning and high-speed automated data capture systems solutions using laser, holographic and vision-based technologies. Metrologic offers expertise in 1D and 2D bar code reading, portable data collection, optical character recognition, image lift, and parcel dimensioning and singulation detection for customers in retail, commercial, manufacturing, transportation and logistics, and postal and parcel delivery industries. In addition to its extensive line of bar code scanning and vision system equipment, the company also provides laser beam delivery and control systems, as well as a variety of highly sophisticated optical systems used by the commercial, government, and scientific communities. Metrologic products are sold in more than 110 countries worldwide through Metrologic's sales, service and distribution offices located in North and South America, Europe and Asia. For more information please call 1-800-ID-METRO or visit www.metrologic.com. Forward-Looking Statement Forward-looking statements contained in this release are highly dependent upon a variety of important factors which would cause actual results to differ materially from those reflected in such forward looking statements. Specifically, the factors that could cause actual results to differ from expectations include: foreign currency fluctuations with the US dollar; the timing, introduction and market acceptance of Metrologic's new products; pricing pressures; competitive factors; sales cycles of Metrologic's products; Metrologic's ability to control manufacturing and operating costs which affect future profitability; technological changes in the scanner industry, specifically vision-based technologies; availability of patent protection for Metrologic's vision-based technologies, and other products; general economic conditions, and the disposition of legal issues. When used in this release and documents referenced, the words "believes", "expects", "may", "should", "seeks", or "anticipates", and similar expressions as they relate to Metrologic or its management are intended to identify such forward-looking statements. For additional factors, please see Metrologic's reports filed with the Securities and Exchange Commission. Metrologic's Contact for Investor Relations: Dale Fischer - Vice President Phone: 856.228.8100 Email: d.fischer@metrologic.com Contact for News Media: Steve Gary - Marketing Communications Phone: 856.374.5860 Email: s.gary@metrologic.com Metrologic Instruments, Inc. Condensed Consolidated Statements of Operations (amounts in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 ---- ---- ---- ---- (Unaudited) Sales $ 44,156 $ 32,587 $ 124,846 $ 96,309 Cost of sales 24,088 18,803 66,886 56,352 --------- --------- --------- --------- Gross profit 20,068 13,784 57,960 39,957 Selling, general and administrative expenses 10,997 7,547 29,470 22,798 Research and development expenses 1,824 1,686 5,671 5,210 --------- --------- --------- --------- Operating income 7,247 4,551 22,819 11,949 Net interest income (expense) 63 (335) 98 (1,067) Other income (expense) 242 70 (383) (485) Gain on extinguishment of debt - - - 2,200 --------- -------- -------- --------- Income before income taxes 7,552 4,286 22,534 12,597 Provision for income taxes 2,870 1,630 8,563 3,952 --------- -------- --------- --------- Net income $ 4,682 $ 2,656 $ 13,971 $ 8,645 ========= ======== ======== ========= Earnings per share: Basic $ 0.22 $ 0.16 $ 0.65 $ 0.52 Diluted $ 0.20 $ 0.14 $ 0.61 $ 0.47 Weighted average number of common shares outstanding Basic 21,555 16,995 21,403 16,664 Diluted 22,948 19,125 22,956 18,248 Metrologic Instruments, Inc. Condensed Consolidated Balance Sheets (all amounts in thousands) September 30, December 31, 2004 2003 ---- ---- (Unaudited) Cash and cash equivalents $ 44,858 $ 48,817 Accounts receivable, net 31,557 27,369 Inventories, net 24,299 16,972 Other current assets 4,274 5,450 Property, plant and equipment, net 18,315 16,940 Goodwill and other intangibles, net 43,123 24,148 Other assets 120 204 -------- -------- Total assets $166,546 $139,900 ======== ======== Accounts payable and accrued expenses $ 25,977 $ 19,000 Debt 8,870 5,527 Other liabilities 7,646 7,765 Total shareholders' equity 124,053 107,608 -------- -------- Total liabilities and shareholders' equity $166,546 $139,900 ======== ======== Supplemental Sales Data Three Months Ended September 30, % % 2004 2003 total growth ---- ---- ----- ------ By Geography North America: POS/OEM $ 10,254 $ 8,212 23.2% 24.9% AOA 8,939 6,318 20.2% 41.5% EMEA 16,160 12,253 36.6% 31.9% Asia/ROW 6,313 4,032 14.3% 56.6% South America 2,490 1,772 5.7% 40.5% ----------------------- $ 44,156 $ 32,587 100% 35.5% By Business Segment POS/OEM 34,553 26,109 78.3% 32.3% Industrial Scanning 3,763 3,820 8.5% (1.5%) Advanced Optical Systems 5,840 2,658 13.2% 119.7% ----------------------- $ 44,156 $ 32,587 100.0% 35.5% POS/OEM: New Products Introduced since 2003 $ 2,691 $ 315 7.8% N/A Introduced 2000 - 2002 21,362 16,877 61.8% 26.6% Introduced prior to 2000 10,500 8,917 30.4% 17.8% ----------------------- $ 34,553 $ 26,109 100.0% 32.3% Nine Months Ended September 30, % % 2004 2003 total growth ---- ---- ----- ------ By Geography North America: POS/OEM $ 27,562 $ 25,416 22.1% 8.4% AOA 25,897 16,697 20.7% 55.1% EMEA 49,474 39,612 39.6% 24.9% Asia/ROW 14,965 9,695 12.0% 54.4% South America 6,948 4,889 5.6% 42.1% ----------------------- $124,846 $ 96,309 100.% 29.6% By Business Segment POS/OEM 97,742 79,112 78.3% 23.5% Industrial Scanning 12,592 9,844 10.1% 27.9% Advanced Optical Systems 14,512 7,353 11.6% 97.4% ----------------------- $124,846 $ 96,309 100.0% 29.6% POS/OEM: New Products Introduced since 2003 $ 6,020 $ 430 6.2% N/A Introduced 2000 - 2002 61,368 50,406 62.8% 21.7% Introduced prior to 2000 30,354 28,276 31.0% 7.3% ----------------------- $ 97,742 $ 79,112 100.0% 23.5%