EX-99.1 2 a4940092ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Valpey-Fisher Corporation Reports Second Quarter Results HOPKINTON, Mass.--(BUSINESS WIRE)--July 27, 2005--Valpey-Fisher Corporation (AMEX:VPF), a provider of frequency control devices, including quartz crystals and oscillators, reported today its financial results for the second quarter and six months ended July 3, 2005. Michael J. Ferrantino, President and Chief Executive Officer said, "For the most part, we are very pleased with our performance for the 2nd quarter of 2005." Second Quarter 2005 Highlights -- New orders and sales were $3,028,000 and $3,015,000, respectively, just about flat with the first quarter, but the result of the Company's strategy to move to more value-added, high-rel products with higher overall average selling prices and higher margins. -- Gross margin was $1,056,000, amounted to 35% of sales and was the best of any quarter in the last several years. -- Operating profit was $115,000 due to excellent factory execution, as well as a favorable sales mix. -- Net earnings from continuing operations amounted to $96,000 or $.02 per share versus a $23,000 net loss or ($.01) per share in the 2nd quarter of 2004. -- Cash increased $451,000 to $6,835,000. For the six months ended July 3, 2005, net sales amounted to $6,037,000 compared to $5,918,000 for the same period last year. Net earnings from continuing operations for the six months ended July 3, 2005 amounted to $141,000 or $.03 per share versus a net loss of $160,000 or $(.04) per share during the same period in 2004. Mr. Ferrantino, continued, "In addition to our continuing improvement in the financial area, we are pleased to report two new hires during the quarter: Walt Oliwa as VP of R&D and Greg Arthur as Applications Engineer." Mr. Ferrantino added, "In June, we received word from one of the largest microwave telecommunications companies that we qualified a frequency modulator, our first major Integrated Sub System win. We expect low volume shipments to start in Q3 2005 and production quantities to start in Q4 2005. This account next year has the potential to be one of our largest customers." Mr. Ferrantino concluded, "While we experienced some market softness in the latter part of this quarter and expect continued softness into the 3rd quarter, our backlog remains strong, which will help us sustain some market deterioration. We are confident that our focus in increasing market share in the value added higher technology area is and will continue to pay-off." Forward-Looking Statements Certain statements made herein contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Words such as "expects", "believes", "estimates", "plans" or similar expressions are intended to identify such forward-looking statements. The forward-looking statements are based on the Company's current views and assumptions and involve risks and uncertainties that include, but not limited to: the Company's ability to achieve profitability, the current production over-capacity within the suppliers of frequency control devices, the ability to develop, market and manufacture new innovative products competitively, the fluctuations in product demand of the telecommunications industry, the ability of the Company and its suppliers to produce and deliver materials and products competitively, and the ability to limit the amount of the negative effect on operating results caused by pricing pressure and the Company's ability to comply with Section 404 of the Sarbanes-Oxley Act. Valpey-Fisher Corporation Condensed Consolidated Statements of Operations Unaudited ( in thousands, except per share data) Quarter Ended Six Months Ended ------------------ ------------------ 7/3/2005 6/27/04 7/3/2005 6/27/04 ------------------ ------------------ Net sales $3,015 $3,151 $6,037 $ 5,918 Cost of sales 1,959 2,229 4,016 4,209 ------------------ ------------------ Gross profit 1,056 922 2,021 1,709 Selling and advertising expenses 385 401 756 797 General and administrative expenses 479 515 940 988 Research and development expenses 77 50 164 111 ------------------ ------------------ 941 966 1,860 1,896 ------------------ ------------------ Operating profit (loss) 115 (44) 161 (187) Other income, net 30 21 53 27 ------------------ ------------------ Earnings (loss) from continuing operations before income taxes 145 (23) 214 (160) Income tax (expense) benefit (49) 0 (73) 0 ------------------ ------------------ Earnings (loss) from continuing operations 96 (23) 141 (160) (Loss) from discontinued operations 0 (110) 0 (110) ------------------ ------------------ Net earnings (loss) $96 $(133) $141 $(270) ================== ================== Basic and diluted earnings (loss) per share: Continuing operations $0.02 $(0.01) $0.03 $(0.04) Discontinued operations 0.00 (0.02) 0.00 (0.02) ------------------ ------------------ $0.02 $(0.03) $0.03 $(0.06) ================== ================== Basic weighted average shares 4,243 4,216 4,233 4,205 Diluted weighted average shares 4,276 4,216 4,356 4,205 Valpey-Fisher Corporation Condensed Consolidated Balance Sheets ( in thousands) (Unaudited)(Audited) 7/3/05 12/31/04 --------------------- ASSETS Current assets: Cash and cash equivalents $6,835 $6,455 Receivables, net 1,808 1,137 Inventories, net 1,278 1,501 Deferred income taxes and other current assets 654 629 --------------------- Total current assets 10,575 9,722 --------------------- Property, plant and equipment, at cost 10,889 10,807 Less accumulated depreciation 8,188 7,808 --------------------- 2,701 2,999 --------------------- Other assets 153 143 --------------------- $13,429 $ 12,864 ===================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $2,079 $ 1,655 Deferred income taxes 516 578 Stockholders' equity 10,834 10,631 --------------------- $13,429 $12,864 ===================== CONTACT: Valpey-Fisher Corporation Michael J. Kroll, 508-435-6831 ext. 600 Vice President, Treasurer and Chief Financial Officer