Exhibit 99.1

 

Second Quarter Earnings Call July 26, 2006

 

During the course of this presentation, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. Such statements are just estimates and actual events or results may differ materially from these forward-looking statements. Please refer to the documents that the company files with the SEC from time to time and the company’s second quarter earnings press release for a detailed discussion of the factors, risks and uncertainties that could cause actual results to differ materially from those contained in our projections or forward-looking statements. During this presentation, we will refer to certain non-GAAP measures as defined by the SEC. As required, we have provided a reconciliation of those measures to the most comparable GAAP measures.Copies of our SEC filings are available upon request or by accessing our company website at www.metrologic.com. Forward-Looking Statements Private Securities Litigation Reform Act of 1995 Safe Harbor Provision Page 2

 

C. Harry Knowles Chairman of the Board Interim CEO

 

Q206 Revenue Growth Q206 1H06 Page 4 $48.6 $62.6 $95.5 $122.8 US$ millions Up 28.7% Up 28.6% $-$15$30$45$60$75$90$105$120Q205Q206$-$15$30$45$60$75$90$105$12020052006

 

Q206 Highlights Page 5 Sales growth: 28+% Strong operating cash flow: $2.7M /mo Strong balance sheet: $66M in cash & mkt securities So why tinker with success?

 

Strategy INCREASE MARKET SHARE 21+% CAGR is our Goal HOW? WW Sales New Products Cost Reductions Patent offense and defense NEED ENGINEERS Page 6

 

To Sustain Growth?ENGINEERS! Numbers and quality Tightly coupled to STRATEGIC PRODUCTS Well motivated; recognition & pay Generate NEW PRODUCTS Generate COST REDUCTIONS Generate PATENTS Generate CAN DO SPIRIT Need a PRODUCTION MACHINE TO FEED Page 7

 

So What? We’ve GOT: Resources WW Sales Marketing Engineering Production Page 8

 

Mark C. Schmidt Executive Vice President, Strategic Initiatives

 

Sales by Market Q206 1H06 Data Capture & Collection: 81.6% Up 30% Y/Y Worldwide growthIndustrial Automation: 4.2% Focused on migrating to new strategy International traction Optical Systems: 14.2% Record Quarter - up 47% Y/Y New contracts announced Page 10 $48.6 $62.6 $95.5 $122.8 Sales Up 28.7% Y/Y $-$15$30$45$60$75$90$105$12020052006$-$15$30$45$60$75$90$105$120Q205Q206

 

The Americas Q206 Highlights Sales up 10.6% Q206 $45.8 $53.5 1H06 $23.1 $25.6 Conscious management of channel inventory – strong sell-through Price reductions to end promos Robust growth in Brazil & ROSA US$ millions Page 11 $-$5$10$15$20$25$30$35$40$45$50$55Q205Q206$-$5$10$15$20$25$30$35$40$45$50$5520052006

 

Europe, Middle East, Africa Q206 Highlights Sales up 53.3% Second highest revenue quarter ever Tesco & Systeme U rollouts continue Reverse vending in Germany Channel sales remain strong RoHS compliance successfully implemented Q206 $38.3 $56.8 1H06 $19.4 $29.7 US$ millions Page 12 $-$10$20$30$40$50$60Q205Q206$-$10$20$30$40$50$6020052006

 

Asia Pacific Q206 Highlights Sales up 19.3% Q206 1H06 $6.1 $7.2 US$ millions $11.4 $12.4 Strong engine sales to OEM’s Strength in the Channel Continued execution – strong sales team in place Page 13 $-$5$10$15$20Q205Q206$-$5$10$15$2020052006

 

Kevin Bratton Chief Financial Officer

 

Q206 Non-GAAP Measures Reconciliation Page 15 Actual Effect Actual Before Of As(US $mm)SFAS 123( R)SFAS 123( R)ReportedSales62,551062,551Cost of Goods Sold37,12021737,337Gross Profit25,431(217)25,214SG&A15,37066216,032Research & Development2,5452182,763EBIT7,516(1,097)6,419EBITDA9,306(1,097)8,209Net Income5,112(702)4,410FD EPS0.22(0.03)0.19Growth and Margin Analysis (%)Gross Profit Margin40.7%40.3%SG&A as a % of Sales24.6%25.6%R&D as a % of Sales4.1%4.4%EBIT Margin12.0%10.3%EBITDA Margin14.9%13.1%

 

Comparative Quarterly Income Statement * Excludes the effects of SFAS No. 123 (R) Page 16 (US $mm)Q2 2006*Q2 2005ChangeSales62,55148,60428.7%Cost of Goods Sold37,12027,04437.3%Gross Profit25,43121,56018.0%SG&A15,37012,13926.6%Research & Development2,5452,21814.7%EBIT7,5167,2034.3%EBITDA9,3068,9164.4%Net Income5,1124,6539.9%EPS (Fully Diluted)0.220.2010.0%Growth and Margin Analysis (%)Gross Profit Margin40.7%44.4%(370.0)bpSG&A as a % of Sales24.6%25.0%(40.0)bpR&D as a % of Sales4.1%4.6%(50.0)bpEBIT Margin12.0%14.8%(280.0)bpEBITDA Margin14.9%18.3%(340.0)bp

 

Gross Margin $41.4 $25.4 $21.6 $90.8 $81.7 $58.4 35.8% 42.3% 45.9% 43.2% 44.4% 40.7% *Excludes the effects of SFAS No. 123(R) Page 17 $0$20$40$60$80$1002002200320042005Q2 05Q2 06*

 

Operating Income by Quarter $1.6 $3.1 $3.6 $3.8 $4.6 $8.2 $8.6 $7.0 $7.2 $8.9 $6.8 $7.2 $9.9 $9.7 $8.1 * Excludes the $12.6M charge for the Symbol litigation ** Excludes the effects of SFAS No. 123(R) $7.5 Page 18 $0$2$4$6$8$10Q302Q402Q103Q203Q303 Q403Q104Q204Q304Q404Q105Q205Q305Q405*Q106**Q206**US $ (in millions)

 

Net Income by Quarter *Includes one time or non-recurring items aggregating income of approximately $1.9M. **Excludes the $2.25M legal settlement with PSC ***Excludes $12.6M litigation charge with Symbol Technologies ****Excludes the effects of SFAS No. 123 (R) $1.7 $3.8 $2.2 $2.7 $5.2 $5.1 $4.2 $4.7 $8.7 $3.9 $0.3 $4.7 $6.3 $9.0 $5.3 $5.1 Page 19 $0$2$4$6$8$10Q302Q402*Q103Q203Q303Q403Q104Q204Q304Q404Q105Q205**Q305***Q405****Q106****Q206US$ (in millions)

 

Balance Sheet Page 20 (US$mm)June 30, 2006Dec 31, 2005Cash& Marketable Securities$65.7$73.9Current assets (non-cash)90.684.2Net PPE20.920.4Other assets44.947.7Total Assets$222.1$226.2Current liabilities(excluding short-term debt)27.047.4Total Debt (long-term and short-term)16.618.4Other liabilities2.50.1Stockholders’ Equity176.0160.3Total Liabilities and Stockholders’ Equity$222.1$226.2TotalWorking Capital$112.7$92.3

 

FY 2006 Guidance2005 * Euro Assumptions $1.20 to $1.25 * Gross Margin 40% to 42% * Effective full year tax rate 36% * Effect of SFAS No. 123(R) Est. $3M or $.13 per fully diluted share $210.5M $245M - $255M $19M – $21M $0.82 - $0.91 $17.8M $0.77 FD EPS Net Income Revenue 2006 * Earnings Guidance was effective as of the date given and will not be revised until the Company publicly announces updated guidance. Page 21

 

C. Harry Knowles Chairman of the Board Interim CEO

 

A Strong Growth Company *Based upon the midpoint of the Company’s FY 2006 guidance. *Earnings Guidance was effective as of the date given and will not be revised until the Company publicly announces updated guidance. Page 23 $36$42$47$53$66$80$92$112$116$138$178$211$250$0$50$100$150$200$250$3001994199519961997199819992000200120022003200420052006*Sales US$ (in millions)