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Thursday October 30 6:49 PM EST
Company Press Release
Microdyne Unaudited Fourth Quarter and Annual
Results Reflect Continuing Operations Profitability
Increases of 190% and 153% Respectively
ALEXANDRIA, Va., Oct. 30 /PRNewswire/ -- Microdyne Corporation (Nasdaq:MCDY),
announced today that its unaudited fourth quarter and annual results from continuing operations
generated strong profitability and sales growth for the Company. According to Michael E. Jalbert,
Microdyne's Chief Executive Officer, ''We have two businesses that offer excellent growth
opportunities and very bright futures and we believe that we are positioned to take full advantage of
these growth opportunities.''
The Aerospace Telemetry Division and the outsourcing Support Services Division increased
revenues by 54% and 20% respectively, for a combined revenue growth rate of 39% in 1997. For
the fourth quarter of 1997, the Company reported net income from continuing operations of $2.1
million or $0.16 per share on revenues of $11.7 million. This compares to net income from
continuing operations of $0.7 million or $0.06 per share on revenues of $8.7 million in the fourth
quarter of 1996. For the year, the Company reported net income from continuing operations of
$5.2 million or $0.40 per share on revenues of $43.6 million compared to net income from
continuing operations of $2.0 million or $0.16 per share on revenues of $31.5 million in 1996 (All
references to quarters and years are for fiscal years ended September 28, 1997 or September 29,
1996, unless otherwise indicated).
The Company also announced that the disposal of assets of the discontinued Networking Products
Division is on plan. During 1997, the Company had a loss from discontinued operations of $33.6
million or $2.61 per share, which includes charges of approximately $4.2 million associated with the
disposal of the division.
1997 Fourth Quarter Results
Revenues from continuing operations of $11.7 million increased $3 million, or 34%, over fourth
quarter 1996 revenues from continuing operations of $8.7 million. These fourth quarter revenues
from continuing operations included Aerospace Telemetry Division sales of $7.0 million and
outsourcing Support Services Division sales of $4.7 million. The Aerospace Telemetry Division
sales of $7.0 million represented a $2.2 million increase, or 43%, over fourth quarter 1996 division
sales of $4.8 million. The outsourcing Support Services Division sales of $4.7 million represented a
$0.9 million increase, or 22%, over fourth quarter 1996 division sales of $3.9 million.
Sales for the Aerospace Telemetry Division increased as a result of the rising demand for the
division's product line and its system integration services. This division is a premiere developer and
manufacturer of telemetry receivers, a specialized high-frequency radio used in aerospace and
satellite communications. In Michael Jalbert's words, ''Our telemetry receiver products were used
by a wide range of customers, government and commercial, domestic and international, during the
last year. We have every reason to expect this division to perform very well during the coming year.
The outsourcing Support Services Division increased sales as a result of the expansion of services it
provides to existing customers. Michael Jalbert added, ''With the opening of Microdyne's new
technical support facility in Torrance, Calif., expansion of the contract with our existing customer
and the addition of Alpine Electronics of America as a new customer during the quarter, our
outsourcing division is well positioned to participate in the $2 billion outsourced telephone technical
support segment of the $159 billion outsourcing market.''
Gross margin as a percentage of sales from continuing operations remained fairly steady at 44% for
the quarter. This compares with 1996 fourth quarter gross margin as a percentage of sales from
continuing operations of 45%. Total fourth quarter 1997 gross margin of $5.1 million from
continuing operations increased $1.2 million, or 31%, over fourth quarter 1996 gross margin from
continuing operations of $3.9 million.
Earnings per share from these operations for the fourth quarter of 1997 increased 190% to $0.16
per share from $0.06 per share in the fourth quarter of 1996.
Full Year Results
Revenues from continuing operations of $43.6 million in 1997 increased $12.2 million, or 39%,
over 1996 revenues from continuing operations of $31.4 million. Revenues from continuing
operations in 1997 included Aerospace Telemetry Division sales of $26.2 million and outsourcing
Support Services Division sales of $17.4 million. The Aerospace Telemetry Division sales of $26.2
million represented a $9.2 million increase, or 54%, over 1996 division sales of $17.0 million. The
outsourcing Support Services Division sales of $17.4 million represented a $3.0 million increase, or
20%, over 1996 division sales of $14.4 million.
Sales for the Aerospace Telemetry Division increased as a result of the improved demand for the
division's product line and its system integration services. The Support Services Division sales
increased as a result of the expansion of services provided to existing customers.
Gross margin as a percentage of sales from continuing operations in the fiscal year remained fairly
steady at 42% of sales. This compares with 1996 gross margin as a percentage of sales from
continuing operations of 44%. The gross margin from continuing operations increased $4.4 million
to $18.2 million, a 32% increase over 1996 gross margin for continuing operations of $13.8 million.
Earnings per share from continuing operations increased 153% to $0.40 per share, from $0.16 per
share in 1996.
Discontinued Operations
During 1997, the Company announced its plans to restructure and subsequently dispose of its
Networking Products Division. As a result of its decision to discontinue its Networking Products
Division, the Company has incurred charges, net of taxes, of $33.6 million. The Company expects
that the disposal plan for the division, will be completed by the first quarter of 1998. At present the
disposal of the remaining assets of the discontinued Networking Products Division is on plan.
Outlook for 1998
The results from continuing operations reflect the potential for growth and profitability for the
Company. According to Michael Jalbert, ''The fourth quarter's results of the new Microdyne have
demonstrated that it is solidly on the path that we have outlined for the Company. Our goal is to
significantly expand our presence in the outsourcing and aerospace telemetry markets through
organic growth and selective acquisitions.''
As 1998 unfolds, the Company expects to expand its operations and customer bases. In particular,
Aerospace Telemetry should continue to expand both its product lines as well as its system
integration services. The outsourcing Support Services Division will seek to expand its customer
base and services to existing customers. Michael Jalbert commented, ''We are providing high-
quality value-added professional services in a market in which the quality of customer support is
what differentiates vendors. We are proud that, for the fourth consecutive year, our major customer
has been ranked #1 in customer service in its product area by the readers of PC Magazine.''
The above information contains forward-looking statements that involve risks and uncertainties.
Important factors that could cause actual results to differ materially include: rapid changes in
products and technology that may displace products sold by Microdyne; the competitive industry
within which Microdyne operates; the Company's success in identifying, acquiring and incorporating
commercially successful technology, products or businesses, and in identifying and taking advantage
of growth opportunities; uncertainty associated with operating the discontinued Networking
Products Division; the likelihood that the discontinued Networking Products Division's assets will
be disposed of in a timely and economic fashion; dependence upon a limited customer base at
outsourcing Support Services Division; limited product lines and service offerings relative to other
suppliers; contractual agreements between Microdyne and other companies; the discontinued
Networking Products Division's reliance upon distributors to continue to sell networking products;
fluctuations in the Company's quarterly results of operations and the timing of orders from
customers; the Company's relationships with sources of external financing, and the risk factors listed
from time to time in the Company's SEC reports and filings, including but not limited to the
Company's registration statement; Reports on Form 10-Q filed during 1997; and Reports on Form
10-K for the fiscal years ended September 29, 1996 and, September 28, 1997 (to be filed in
December 1997).
About Microdyne
Headquartered in Alexandria, Va., and with offices and representatives around the world,
Microdyne Corporation's mission is to become a diversified manufacturing technology, and services
company, attracting the best and the brightest people who are committed to maximizing shareholder
value by achieving consistent, high growth in revenue and profits. Microdyne will strive to achieve
its mission through the efforts of committed People, working with a Focused and consistent
Strategy, operating with Speed and Support under a Culture that rewards success (PFS3C).
The Microdyne Support Services Division is a full-line provider of
value-added, outsourced services. The division provides trained technical
staff and management of telephone technical support centers, in-warranty
and after-warranty repair services, and special project staffing. The
divisions' employees are based in California, Indiana, and Virginia.
The Microdyne Aerospace Telemetry Division, located in Ocala, Fla., is
the global premier developer and manufacturer of telemetry receivers; the
specialized high-frequency radios used in aerospace and satellite
communications. The division has been responsible for technical
innovations in the design and application of telemetry products for nearly
30 years. Today, the division's products serve the needs of the aerospace
industry, satellite communications providers, and other users of high-
precision, high-reliability long-range monitoring and control equipment.
Microdyne's Shares are traded on the Nasdaq Stock Market; Symbol MCDY. For additional
information on the Company, visit Microdyne's Web site at www.microdyne.com.
Microdyne Corporation
Consolidated Statements of Earnings
Three Months Ended
September 28, September 29,
1997 1996
Dollars and shares in thousands,
except per share data, unaudited
Revenue $11,670 $8,700
Cost of product sold and
service provided 6,534 4,778
Gross profit 5,136 3,922
Selling, general and
administrative 2,423 1,930
Research and development 457 401
Income from operations 2,256 1,591
Other (expense) income, net (160) (431)
Income before income taxes 2,096 1,160
Income tax expense - 441
Net income from continuing
operations $2,096 $719
Net income per share from
continuing operations $0.162 $0.056
Discontinued Operations:
Loss from operations, net
of tax effect - (371)
Loss on disposal, net of tax effect - -
Net loss from discontinued operations- (371)
Net income $2,096 $348
Net income per share $0.162 $0.027
Weighted average shares
outstanding 12,901 12,828
Twelve Months Ended
September 28, September 29,
1997 1996
Dollars and shares in thousands,
except per share data unaudited
Revenue $43,621 $31,459
Cost of product sold
and service provided 25,473 17,701
Gross profit 18,148 13,758
Selling, general and
administrative 8,511 7,189
Research and development 1,609 1,466
Income from operations 8,028 5,103
Other (expense) income, net (995) (1,831)
Income before income taxes 7,033 3,272
Income tax expense 1,876 l,243
Net income from continuing
operations $5,157 $2,029
Net income per share from
continuing operations $0.401 $0.158
Loss from operations, net
of tax effect (29,382) (4,973)
Loss on disposal of tax effect(4,222) -
Net loss from discontinued
operations (33,604) (4,973)
Net loss $(28,447) $(2,944)
Net loss per share $(2.210) ($0.230)
Weighted average shares
outstanding 12,873 12,811 |
