Another home run...watch and learn as the Ominpotent ones play their (sleight of) hand.
Applied Signal Technology, Inc. Announces Third Quarter Operating Results
SUNNYVALE, Calif., Aug 24, 2004 (BUSINESS WIRE) -- Applied Signal Technology,
Inc. (NASDAQ: APSG) announced its operating results for the third quarter of
fiscal year 2004 ended July 30, 2004.
Revenues for the third quarter of fiscal year 2004 were $38,275,000 representing
a 47% increase compared with revenues of $26,002,000 recorded during the third
quarter of fiscal year 2003. Revenues for the first nine months of fiscal year
2004 were $103,380,000 up 56% from revenues of $66,261,000 recorded during the
first nine months of fiscal year 2003.
Operating income for the third quarter of fiscal year 2004 was $5,602,000
compared with operating income of $1,915,000 recorded during the third quarter
of fiscal year 2003. Operating income increased for the third quarter of fiscal
year 2004 due, in part, to a growth in revenues and, in part, to improved
program profitability that included finalizing all the terms of several of our
larger cost-reimbursable, development contracts. The Company does not recognize
profit on its contracts until all terms are finalized. The operating income for
the first nine months of fiscal year 2004 was $13,490,000 compared with
operating income of $6,435,000 recorded during the first nine months of fiscal
year 2003. The increase in operating income for the first nine months of fiscal
year 2004 is due, in part, to a growth in revenues and, in part, to an increase
in program profitability generated from the sale of certain products.
Net income for the third quarter of fiscal year 2004 was $3,459,000 or $0.29 per
diluted share, an increase of 100% when compared to the third quarter of fiscal
year 2003 net income of $1,730,000 or $0.16 per diluted share. Net income for
the first nine months of fiscal year 2004 was $9,552,000 or $0.83 per diluted
share, an increase of 66% when compared to net income of $5,742,000 or $0.54 per
diluted share for the first nine months of fiscal year 2003. Net income did not
grow proportionately with operating income during the first nine months of
fiscal year 2004 when compared to the same period of fiscal year 2003 because
our tax rate increased significantly. Our tax rate for the first nine months of
fiscal year 2003 was 15%. We estimate that our tax rate for the fourth quarter
of fiscal year 2004 could be approximately 40% or greater resulting in an
estimated annual tax rate between 34% and 35%.
New orders received during the third quarter of fiscal year 2004 were
$35,417,000, down 14% compared to new orders received during the third quarter
of fiscal year 2003 of $41,031,000. The Company believes this decline in new
orders is within the typical fluctuations experienced in the U.S. Government
procurement process. Order levels for the first nine months of fiscal year 2004
were $128,602,000, up 77% when compared to the $72,554,000 reported for the same
period of fiscal year 2003. We believe the increase in new orders during the
first nine months of fiscal year 2004, when compared to the first nine months of
fiscal year 2003, is due to the U.S. Government's emphasis on intelligence.
Regarding the third quarter operating results, Mr. Gary Yancey, President and
Chief Executive Officer of the Company, commented, "The greatly increased level
of orders compared to fiscal 2003 has challenged us to meet aggressive hiring
requirements and to control capital expenditures. I am pleased that we have met
these challenges and have been able to meet our contractual commitments. This
has resulted in our increase in revenue compared to fiscal 2003."
Mr. Yancey went on to say, "The program performance has been sufficiently good
such that we have maintained good program profitability on our
cost-reimbursable, development contracts. We have made decisions on inventory
quantities of our equipment that have afforded good profitability on our
equipment sales. We believe we have good visibility of requirements for
equipments for the remainder of the fiscal year and this allows us to make the
appropriate inventory decisions."
Attached to this news release are unaudited condensed statements of operations
and balance sheets for the third quarter and nine months ended July 30, 2004.
The Company will host a conference call on Tuesday, August 24, 2004 to discuss
third quarter results. If you wish to participate in the conference call, please
dial 1-877-407-8035 for domestic callers or 1-201-689-8035 for international
callers on August 24, 2004 at 5:00 p.m. EST/2:00 p.m. PST. There is no pass code
required. This call may be listened to over PrecisionIR's Investor Distribution
Network, located at www.vcall.com. A rebroadcast of the call will be available
upon its completion and will remain available for a limited time.
Applied Signal Technology, Inc. designs, develops, manufactures and markets
advanced digital signal processing equipment to collect and process a wide range
of telecommunications signals for signal reconnaissance applications. For
additional Company-related information, visit the Company's website at
www.appsig.com.
Except for historical information contained herein, matters discussed in this
news release may contain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially.
Forward-looking statements discussed in this release include statements as to
the Company's continued growth throughout the year and into the foreseeable
future; the future spending by the U.S. Government on intelligence; the
Company's ability to hire qualified personnel and our management of inventory
and sales of equipment from inventory. The risks and uncertainties associated
with these statements include whether orders will be issued by procurers,
including the U. S. Government; the timing of any orders placed by procurers;
whether the Company will be successful in obtaining contracts for these orders
if they are forthcoming; whether any contracts obtained by the Company will be
profitable and whether any such contracts might be terminated prior to
completion; whether the Company will be able to hire additional qualified staff
as needed; the ability to successfully enter new marketplaces; and other risks
detailed from time to time in the Company's SEC reports including its latest
Form 10-K filed for the fiscal year ended October 31, 2003. The Company assumes
no obligation to update the information provided in this news release.
Applied Signal Technology, Inc.
Condensed Consolidated Statements of Income
For the Periods Ending July 30, 2004 and August 1, 2003
(Unaudited)
(In thousands except per share data)
Three Months Ended Nine Months Ended
------------------ -------------------
July 30, August 1, July 30, August 1,
2004 2003 2004 2003
----------------------------------------
Revenues from contracts $ 38,275 $ 26,002 $ 103,380 $ 66,261
Operating expenses:
Contract costs 24,629 17,538 67,075 42,950
Research and development 4,413 2,281 9,969 5,882
General and administrative 3,631 4,268 12,846 10,994
-------- --------- --------- ---------
Total operating expenses 32,673 24,087 89,890 59,826
-------- --------- --------- ---------
Operating income 5,602 1,915 13,490 6,435
Interest income/(expense), net 121 120 399 320
--------------------------------------
Income before provision
for income taxes 5,723 2,035 13,889 6,755
Provision (benefit) for income
taxes 2,264 305 4,337 1,013
-------- --------- -------------------
Net income $ 3,459 $ 1,730 $ 9,552 $ 5,742
========================================
Net income per share - basic $0.31 $0.16 $0.87 $0.55
Average shares - basic 11,120 10,579 10,988 10,367
Net Income per share - diluted $0.29 $0.16 $0.83 $0.54
Average shares - diluted 11,734 11,049 11,578 10,703
Applied Signal Technology
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS
July 30, October 31,
2004 2003
----------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 25,585 $ 5,372
Short term investments 19,743 34,747
Accounts receivable 35,955 26,562
Inventory 6,209 6,875
Prepaids and other current assets 3,532 3,545
----------- ------------
Total current assets 91,024 77,101
Property and equipment, at cost 61,804 59,138
Accumulated depreciation and amortization (49,803) (46,897)
----------- ------------
Net property and equipment 12,001 12,241
Other assets 2,000 605
----------- ------------
Total assets $ 105,025 $ 89,947
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued payroll and
benefits $ 12,225 $ 10,579
Other accrued liabilities 3,546 2,833
Income taxes payable 1,052 134
----------- ------------
Total current liabilities 16,823 13,546
Other liabilities 300 183
Shareholders' equity 87,902 76,218
----------- ------------
Total liabilities and shareholders' equity $ 105,025 $ 89,947
============ ============
SOURCE: Applied Signal Technology, Inc.
CONTACT: Applied Signal Technology, Inc.
James Doyle, 408-749-1888 (Chief Financial Officer) |
