EX-99.1 2 a5267153ex99_1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Valpey-Fisher Corporation Reports Third Quarter Results HOPKINTON, Mass.--(BUSINESS WIRE)--Nov. 6, 2006--Valpey-Fisher Corporation (VPF: AMEX), a provider of frequency control devices, including quartz crystals and oscillators, reported today its financial results for the 3rd quarter ended October 1, 2006. Michael J. Ferrantino, President and Chief Executive Officer said, "In our last press release, we spoke of our confidence level as it related to 3rd quarter financial performance. It gives us a great deal of pleasure to report excellent results for the 3rd quarter versus the same quarter last year. New orders of $3.2 million versus $2.7 million last year represented a substantial increase of 18.5%. Sales in the current quarter increased 3.4% over last year, but more importantly, our gross margin continued to improve. Gross margin as a percentage of sales was 37% this quarter compared to 35% in the same quarter last year. The current quarter's operating income before the $43,000 effect of SFAS 123R employee stock option expense was $159,000 versus $102,000 last year. The additional $57,000 of operating income comes after our planned investment increase of approximately $75,000 over last year in both marketing and R&D." Mr. Ferrantino continued, "Our current outlook for the 4th quarter indicates a strong finish to 2006 given our current backlog of over $2 million; the majority of which is scheduled for 4th quarter shipment." In closing, Mr. Ferrantino said, "As we look beyond 2006, we continue to be encouraged by the amount of interest and sampling activity of our new products. We do expect to continue to land new design-ins with our customers. As our customers introduce new products we expect to see low rate production orders for our new products in the 1st half of 2007." 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 continue 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, 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 Quarter Ended Nine Months Ended data) ------------------ ------------------ 10/1/06 10/2/05 10/1/06 10/2/05 ------------------ ------------------ Net sales $ 2,875 $ 2,780 $ 8,674 $ 8,817 Cost of sales 1,813 1,813 5,529 5,829 ------------------ ------------------ Gross profit 1,062 967 3,145 2,988 Selling and advertising expenses 391 366 1,223 1,121 General and administrative expenses 418 416 1,348 1,356 Research and development expenses 137 83 380 248 ------------------ ------------------ 946 865 2,951 2,725 ------------------ ------------------ Operating profit 116 102 194 263 Other income (expense), net 63 44 180 97 ------------------ ------------------ Earnings before income taxes 179 146 374 360 Income tax (expense) (81) (50) (181) (123) ------------------ ------------------ Net earnings $ 98 $ 96 $ 193 $ 237 ================== ================== Basic and diluted earnings per share $ 0.02 $ 0.02 $ 0.05 $ 0.06 ================== ================== Basic weighted average shares 4,257 4,247 4,252 4,237 Diluted weighted average shares 4,264 4,343 4,257 4,310 Valpey-Fisher Corporation Condensed Consolidated Balance Sheets (in thousands) (Unaudited) (Audited) 10/1/06 12/31/05 ---------------------- ASSETS Current assets: Cash and cash equivalents $ 8,139 $ 7,920 Receivables, net 1,783 1,495 Inventories, net 787 1,028 Deferred income taxes and other current assets 675 653 ---------------------- Total current assets 11,384 11,096 ---------------------- Property, plant and equipment, at cost 11,091 10,927 Less accumulated depreciation 8,981 8,559 ---------------------- 2,110 2,368 ---------------------- Other assets 161 153 ---------------------- $ 13,655 $ 13,617 ====================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 1,958 $ 2,205 Deferred income taxes 360 448 Stockholders' equity 11,337 10,964 ---------------------- $ 13,655 $ 13,617 ====================== CONTACT: Valpey-Fisher Corporation Michael J. Kroll, 508-435-6831 ext. 600 Vice President, Treasurer and Chief Financial Officer