EX-99.1 2 a06-16942_1ex99d1.htm EX-99

Exhibit 99.1

 

Corporate Headquarters

Metrologic Instruments, Inc.

90 Coles Road

Blackwood, NJ 08012-4638

Tel    856.228.8100

Fax   856.228.6673 (sales)

Fax   856.228-0653 (finance/legal)

www.metrologic.com

 

 

Metrologic Announces Financial Results for the

Second Quarter 2006

 

Revenue Increases 28.7% to Record $62.6 Million

Confirms Guidance for Full Year 2006

 

Teleconference 8:30 a.m. Wednesday, July 26, 2006

 

Blackwood, New Jersey – July 25, 2006 — Metrologic Instruments, Inc. (NASDAQ-NMS:MTLG) today announced financial results for the quarter ended June 30, 2006 with total revenue of $62.6 million and net income of $4.4 million or $0.19 per fully diluted share. Beginning January 1, 2006, the Company adopted SFAS No. 123(R), Share-Based Payments. Excluding the effects of SFAS No. 123(R), which for the second quarter 2006 totaled approximately $0.7 million net of income taxes or $0.03 per fully diluted share, net income was $5.1 million or $0.22 per fully diluted share.

 

Financial Results and Second Quarter Highlights

•                  Revenue for the second quarter of 2006 increased by 28.7% to a record $62.6 million as compared to $48.6 million in the second quarter of 2005. This is the highest quarterly revenue in the Company’s history.

 

•                  For the quarter, gross margin was 40.3% versus 44.4% for the second quarter 2005. On a sequential basis, gross margin improved 0.7% as compared to the first quarter’s gross margin of 39.6%. Gross margin for the second quarter 2006 was primarily impacted by continued sales to Tier 1 retailers, product mix, business segment mix, and royalty costs. Excluding the effects of SFAS No. 123(R), gross margin for the second quarter of 2006 would have been 40.7%, an increase of 0.4%.

 

•                  Operating expense as a percentage of revenue was 30.0% for the second quarter 2006 compared to 29.5% in the second quarter 2005. This increase is primarily caused by higher selling, general and administrative expenses related to increased legal spending for ongoing litigation. It is anticipated that an elevated level of legal expense will continue for the remainder of 2006. Excluding the effects of SFAS No. 123(R), operating expense would have been $17.9 million versus $18.8 million, a decrease of $0.9 million or 4.9%.

 

•                  Net income for the second quarter 2006 was $4.4 million, or $0.19 per fully diluted share, as compared to $4.7 million or $0.20 per fully diluted share in the second quarter 2005. Excluding the effects of SFAS No. 123(R), net income for the second quarter of 2006 would have been approximately $5.1 million or $0.22 per fully diluted share, an increase of $0.7 million or $0.03 per fully diluted share.

 


 

•                  The Data Capture and Collection business segment grew 30.5% to approximately $51.1 million as compared to the second quarter of 2005, reflecting continued strength in the Channel and in reverse vending applications. The Optical Systems business was also quite strong, with growth of 47.2% as compared to the second quarter of 2005.

 

•                  On a geographic basis, sales in the EMEA (Europe, Middle East, Africa) region increased by 53.3% to approximately $29.7 million, fueled by new and follow-on orders received from Tier 1 retailers and for reverse vending applications. The Asia/Pacific region grew at 19.3% to approximately $7.2 million. The Americas region experienced continued growth in sales, up 10.6% to approximately $25.6 million, reflecting solid strength in the Optical Systems business.

 

First Half 2006 Results

Revenue for the first six months of 2006 was approximately $122.8 million, an increase of 28.6% as compared to revenue of $95.5 million in the first half of 2005. Net income for the first half of 2006 increased 2.5% to approximately $8.8 million, or $0.38 per fully diluted share, as compared to $8.6 million or $0.37 per fully diluted share in the first half of 2005. Excluding the effects of SFAS No. 123(R), which was not in effect during the comparable period in 2005, net income for the first half of 2006 would have been approximately $10.5 million or $0.45 per fully diluted share.

 

Please refer to the reconciliation of GAAP results to non-GAAP results included with the financial statements in this release. The non-GAAP data is intended to provide investors with a more complete understanding of our financial results but must be used in conjunction with our GAAP results and not on a stand-alone basis.

 

2006 Full Year Outlook Confirmed

Metrologic also confirmed its prior guidance for the full year 2006. Revenue is expected within a range of $245.0 million to $255.0 million. The Company expects gross margin to be in the range of 40.0% to 42.0% for the year, with the expectation that wide variances may occur quarter to quarter due to product mix, business segment contribution and other factors. Net income for 2006 will be impacted by discretionary spending associated with our previously announced strategic initiatives and is expected to be $19.0 million to $21.0 million, or $0.82 to $0.91 per fully diluted share, including the estimated annual compensation expense for options issued and outstanding as of June 30, 2006 in accordance with SFAS No. 123(R). Excluding the effects of SFAS No. 123(R), net income is expected to be $22.0 million to $24.0 million, or $0.95 to $1.03 per fully diluted share. SFAS No. 123(R) became effective for Metrologic as of January 1, 2006. Other factors to consider include an assumed rate for the Euro of $1.20 to $1.25 to the US Dollar and an effective annual tax rate of 36%. These statements do not consider the effect of any acquisitions, dispositions, the future results of litigation or other significant Company events that may take place during the year.

 

Conference Call Information

The Company will host a conference call for investors on Wednesday, July 26 at 8:30 AM ET. The dial-in numbers for the teleconference are: (800) 946-0705 (Domestic/Canada) or (719) 457-2637 (International). Those interested in participating in the conference call should dial in at least 10 minutes prior to commencement of the call. The audio for the conference call will also be available as an audio web cast that can be accessed through the Metrologic web site at www.metrologic.com by clicking on the banner and following the instructions. Also available through our web site will be a graphical presentation that will be referred to throughout the conference call. The graphical presentation will be available for download and printing approximately 30 minutes before the start of the conference call.

 

About Metrologic

Metrologic Instruments, Inc. (“Metrologic” or the “Company”) is a global supplier of choice for data capture and collection hardware, optical solutions, and image processing software. Metrologic has been delivering innovative, quality products that are cost effective, reliable and supported by a superior level of personal service for nearly 40 years. Metrologic products are sold worldwide through Metrologic’s sales, service and distribution offices located in The Americas, EMEA and Asia/Pacific. Metrologic provides its customers not only with a great deal, but a great deal more. For more information please call 1-800-667-8400 or visit www.metrologic.com.

 


 

Forward Looking Statements

Forward-looking statements contained in this release are highly dependent upon a variety of important factors which could 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: the timing, introduction and market acceptance of Metrologic’s new products; foreign currency fluctuations with the US dollar; pricing pressures; competitive factors; sales cycles of Metrologic’s products; Metrologic’s ability to control manufacturing and operating costs as well as product and revenue mix which affect future profitability; the effect of current and pending legislation on the Company’s effective annual tax rate; technological changes in the data capture industry, including the adoption of imaging-based and RFID technologies; availability of patent protection for Metrologic’s vision-based technologies, and other products; the results of litigation; general economic conditions; and the potential impact of terrorism, international hostilities and natural disasters. 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. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. For additional factors, please see Metrologic’s reports filed with the Securities and Exchange Commission.

 

For more information contact:

Ann Anthony – Director, Investor Relations

856.228.8100    X5507

Email:  a.anthony@metrologic.com

 


 

Metrologic Instruments, Inc.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

(Unaudited)

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

62,551

 

$

48,604

 

$

122,786

 

$

95,455

 

Cost of sales

 

37,337

 

27,044

 

73,746

 

53,777

 

Gross profit

 

25,214

 

21,560

 

49,040

 

41,678

 

Selling, general and administrative expenses

 

16,032

 

12,139

 

30,819

 

23,534

 

Research and development expenses

 

2,763

 

2,218

 

5,249

 

4,170

 

Operating income

 

6,419

 

7,203

 

12,972

 

13,974

 

Net interest income

 

377

 

112

 

246

 

134

 

Other income/(expense)

 

95

 

(45

)

485

 

(742

)

Income before income tax expense

 

6,891

 

7,270

 

13,703

 

13,366

 

Income tax expense

 

2,481

 

2,617

 

4,933

 

4,812

 

Net income

 

$

4,410

 

$

4,653

 

$

8,770

 

$

8,554

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.19

 

$

0.21

 

$

0.39

 

$

0.39

 

Diluted

 

$

0.19

 

$

0.20

 

$

0.38

 

$

0.37

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

22,669

 

22,136

 

22,550

 

22,022

 

Diluted

 

23,237

 

23,076

 

23,221

 

23,100

 

 

Metrologic Instruments, Inc.

Condensed Consolidated Balance Sheets

(all amounts in thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2006

 

2005*

 

 

 

(Unaudited)

 

Cash and cash equivalents

 

$

40,138

 

$

49,463

 

Marketable securities

 

25,599

 

24,475

 

Accounts receivable, net

 

49,583

 

48,462

 

Inventories, net

 

35,682

 

29,364

 

Other current assets

 

5,344

 

6,400

 

Total current assets

 

156,346

 

158,164

 

Property, plant and equipment, net

 

20,873

 

20,402

 

Goodwill and other intangibles, net

 

43,253

 

43,103

 

Other assets

 

1,634

 

4,513

 

Total assets

 

$

222,106

 

$

226,182

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

26,096

 

$

46,709

 

Current portion of debt

 

16,572

 

18,433

 

Deferred contract revenue

 

981

 

739

 

Total current liabilities

 

43,569

 

65,881

 

Debt

 

4

 

3

 

Other liabilities

 

2,502

 

8

 

Total shareholders’ equity

 

175,951

 

160,290

 

Total liabilities and shareholders’ equity

 

$

222,106

 

$

226,182

 

 

*Certain prior period amounts have been reclassified to conform to the current period presentation

 


 

Supplemental Sales Data

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

%

 

%

 

 

 

 

 

%

 

%

 

 

 

2006

 

2005

 

Total

 

Growth

 

2006

 

2005

 

Total

 

Growth

 

By Geography

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Americas

 

$

25,596

 

$

23,149

 

40.9

%

10.6

%

$

53,541

 

$

45,766

 

43.6

%

17.0

%

EMEA

 

29,713

 

19,387

 

47.5

%

53.3

%

56,825

 

38,253

 

46.3

%

48.6

%

Asia/Pacific

 

7,242

 

6,068

 

11.6

%

19.3

%

12,420

 

11,436

 

10.1

%

8.6

%

 

 

$

62,551

 

$

48,604

 

100.0

%

28.7

%

$

122,786

 

$

95,455

 

100.0

%

28.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By Business Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data Capture and Collection

 

$

51,059

 

$

39,128

 

81.6

%

30.5

%

$

101,329

 

$

75,656

 

82.5

%

33.9

%

Industrial Automation/Optical Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Automation

 

2,639

 

3,461

 

4.2

%

-23.8

%

5,122

 

8,015

 

4.2

%

-36.1

%

Optical Systems

 

8,853

 

6,015

 

14.2

%

47.2

%

16,335

 

11,784

 

13.3

%

38.6

%

 

 

$

62,551

 

$

48,604

 

100.0

%

28.7

%

$

122,786

 

$

95,455

 

100.0

%

28.6

%

 

Metrologic Instruments, Inc.

Condensed Consolidated Statements of Operations
Non-GAAP Financial Measures

(amounts in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 2006

 

June 30, 2006

 

 

 

Actual
Before
SFAS
123(R)

 

Effect of
SFAS
123(R)

 

Actual as
Reported

 

Actual
Before
SFAS
123(R)

 

Effect of
SFAS
123(R)

 

Actual as
Reported

 

 

 

(Unaudited)

 

Sales

 

62,551

 

0

 

62,551

 

122,786

 

0

 

122,786

 

Cost of sales

 

37,120

 

217

 

37,337

 

73,208

 

538

 

73,746

 

Gross profit

 

25,431

 

(217

)

25,214

 

49,578

 

(538

)

49,040

 

Selling, general and administrative expenses

 

15,370

 

662

 

16,032

 

29,226

 

1,593

 

30,819

 

Research and development expenses

 

2,545

 

218

 

2,763

 

4,739

 

510

 

5,249

 

Operating income

 

7,516

 

(1,097

)

6,419

 

15,613

 

(2,641

)

12,972

 

Net interest income

 

377

 

0

 

377

 

246

 

0

 

246

 

Other income

 

95

 

0

 

95

 

485

 

0

 

485

 

Income before income tax expense

 

7,988

 

(1,097

)

6,891

 

16,344

 

(2,641

)

13,703

 

Income tax expense/(benefit)

 

2,876

 

(395

)

2,481

 

5,884

 

(951

)

4,933

 

Net income

 

5,112

 

(702

)

4,410

 

10,460

 

(1,690

)

8,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.23

 

(0.04

)

0.19

 

0.46

 

(0.07

)

0.39

 

Diluted

 

0.22

 

(0.03

)

0.19

 

0.45

 

(0.07

)

0.38

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

22,669

 

 

 

22,669

 

22,550

 

 

 

22,550

 

Diluted

 

23,237

 

 

 

23,237

 

23,221

 

 

 

23,221