PHOENIX, Feb. 12, 2007 (PRIME NEWSWIRE) -- Radyne Corporation (Nasdaq:RADN), today reported its second consecutive year of record sales of $134.2 million for the year ended December 31, 2006, up 30% compared to 2005 sales of $103.3 million. Earnings from operations also set a new record of $16.9 million for the full year of 2006, a 10% increase from $15.4 million for 2005. Earnings per diluted share ("EPS") for the year were $0.63 per share compared to $0.60 for 2005. Reported 2006 earnings included equity compensation expense of $2.4 million which had the effect of reducing EPS by $0.08.
The growth in sales was led by the inclusion of a full year of the Xicom Technology business which sold $63.9 million in high power amplifiers and related equipment during 2006 compared to $32.7 million during the last seven months of 2005. On a pro forma basis, Xicom sales grew 30% during 2006 compared to the previous equivalent period.
For the fourth quarter, sales were $36.3 million compared to $36.8 million for the same period in 2005, EPS was $0.19 compared to $0.24 for the fourth quarter of 2005. Earnings during the fourth quarter of 2006 included $335,000 of equity compensation expense which had the effect of reducing the EPS by $0.01.
Bookings during the fourth quarter of 2006 were $28.8 million compared to $35.0 million during the fourth quarter of 2005. At the end of the year, Radyne's backlog was $25.7 million compared to $32.2 million at the end of 2005.
"We are pleased with our overall performance for 2006 and particularly with the impressive results turned in by Xicom," commented Myron Wagner, CEO. "Looking forward to 2007, January has already provided a strong bookings start. Our newest product introduction, the DMD 1050 modem card has generated strong customer interest as a smaller lighter solution targeting the 'on the move' military market. This, coupled with other product and market initiatives under way, should position us well for sales growth this year."
At the end of the year, Radyne's cash balance was $27.5 million compared to $16.9 million at the end of 2005. The company had no debt at year end compared to $4.8 million in a bank loan a year earlier. The retirement of this debt and the increase in cash balances combined represent a net cash increase of $15.4 million during 2006. Consolidated Accounts Receivable increased to $27.8 million compared to $20.3 million at the beginning of the year. Consolidated Inventory was $21.1 million compared to $18.1 million at the end of 2005.
Radyne will be holding a conference call today, Monday, February 12, 2007 at 4:30 p.m. EDT to discuss its annual and fourth quarter 2006 financial results and operational highlights. The call is open to the public. The domestic dial in number is 1-800-299-7928 and the international dial in number is +1-617-614-3926. The conference will also be accessible via the Internet at http://investors.radn.com and www.earnings.com.
About Radyne Corporation
Radyne Corporation designs, manufactures, sells, integrates and installs products, systems and software used for the transmission and reception of data and video over satellite, troposcatter, microwave and cable communication networks. The Company, through its Tiernan subsidiary, is a supplier of HDTV and SDTV encoding and transmission equipment. The Xicom Technology subsidiary is a producer of high power amplifiers for communications applications. Radyne is headquartered in Phoenix, Arizona, has manufacturing facilities in Phoenix, San Diego, and Santa Clara, California, and sales offices in Singapore, Beijing, Jakarta and the United Kingdom. The Company also has sales and/or service centers in Sao Paulo, Bangalore, Shanghai and Moscow. For more information, visit our web site at www.radn.com.
Safe Harbor Paragraph for Forward-Looking Statements
This press release includes statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and Radyne Corporation claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of Radyne Corporation and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements. These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," "intends" or "anticipates," and do not reflect historical facts. Specific forward-looking statements contained in this press release include expectations for future revenues, orders and backlog, cash flow and earnings per share and indications that the Company will benefit from strong market demand for its new products. There is no assurance that Xicom sales will continue to grow or that new product and market initiatives will meet sales expectations in the future. We cannot guarantee that the Company will continue to generate cash and asset fluctuations may be seasonal in nature and not an indication of future results. There can be no assurance that the indicators that the Company relies on to gauge future business prospects, such as backlog and bookings, will accurately forecast future results.
Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, constraints on supplies of critical raw materials, excess or shortage of production capacity, and other risks discussed from time to time in the Company's SEC filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions.
Forward-looking statements speak only as of the date the statement was made. Radyne Corporation does not undertake and specifically declines any obligation to update any forward-looking statements. In addition, the Company does not endorse any projections regarding future performance that may be made by third parties.
Condensed Consolidated Balance Sheets
(in thousands)
Unaudited
December 31,
2006 2005
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 27,540 $ 16,928
Accounts receivable - trade, net of
allowance for doubtful accounts of $266
and $804, respectively 27,828 20,337
Inventories 21,106 18,057
Deferred tax assets 2,593 3,010
Prepaid expenses and other assets 1,196 864
-------- --------
Total current assets 80,263 59,196
Goodwill 29,950 30,333
Intangibles 5,567 6,706
Deferred tax assets, net 190 --
Property and equipment, net 3,822 4,098
Other assets 212 295
-------- --------
Total Assets $120,004 $100,628
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,959 $ 5,054
Accrued expenses 9,994 9,045
Customer advance payments 1,057 2,319
Current portion of long-term debt -- 1,000
Income taxes payable 981 609
-------- --------
Total current liabilities 17,991 18,027
Long-term debt, less current portion -- 3,750
Deferred tax liability -- 752
Other long-term liabilities 148 459
-------- --------
Total liabilities 18,139 22,988
-------- --------
Stockholders' equity:
Common stock; $.001 par value -
authorized,50,000,000 shares; issued
and outstanding, 18,351,576 shares
and 17,334,467 shares, respectively 18 17
Additional paid-in capital 75,500 63,171
Retained earnings 26,315 14,450
Other comprehensive income 32 2
--------
Total stockholders' equity 101,865 77,640
-------- --------
Total Liabilities and Stockholders' Equity $120,004 $100,628
======== ========
Radyne Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Unaudited
Three Months ended Year ended
December 31, December 31,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Net sales $ 36,310 $ 36,795 $134,209 $103,263
Cost of sales 21,366 20,914 77,738 57,251
-------- -------- -------- --------
Gross profit 14,944 15,881 56,471 46,012
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 7,368 7,121 28,626 21,777
Research and development 2,727 2,766 10,947 8,824
-------- -------- -------- --------
Total operating expenses 10,095 9,887 39,573 30,601
-------- -------- -------- --------
Earnings from operations 4,849 5,994 16,898 15,411
Other (income) expense:
Interest expense 30 85 241 252
Interest and other income (407) (120) (1,359) (665)
-------- -------- -------- --------
Earnings before income taxes 5,226 6,029 18,016 15,824
-------- -------- -------- --------
Income tax expense 1,663 1,739 6,150 5,138
-------- -------- -------- --------
Net earnings $ 3,563 $ 4,290 $ 11,866 $ 10,686
======== ======== ======== ========
Earnings per share:
Basic $ 0.19 $ 0.25 $ 0.66 $ 0.63
======== ======== ======== ========
Diluted $ 0.19 $ 0.24 $ 0.63 $ 0.60
======== ======== ======== ========
Weighted average number of
common shares outstanding:
Basic 18,285 17,147 18,026 16,838
======== ======== ======== ========
Diluted 18,889 18,199 18,845 17,700
-------- -------- -------- --------
Radyne Corporation
Condensed Consolidated Statements of Cash Flows
(in thousands)
Unaudited
Years ended
December 31,
--------------------
2006 2005
-------- --------
Cash flows from operating activities:
Net earnings $ 11,866 $ 10,686
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Provision for bad debt 374 (331)
Deferred income taxes 187 3,070
Gain on disposal of assets (264) (53)
Depreciation and amortization 3,441 2,378
Tax benefit from disqualifying dispositions 1,430 836
Stock compensation expense 2,387 365
Increase (decrease) in cash resulting from
changes in:
Accounts receivable (7,865) (4,787)
Inventories (3,049) 542
Prepaid expenses and other current assets (334) 324
Other assets 66 (44)
Accounts payable 682 (2,262)
Accrued expenses 949 1,971
Income taxes payable 372 286
Customer advance payments (1,262) 347
Long-term obligations (265) (399)
Accrued stock option compensation (45) (100)
-------- --------
Net cash provided by operating activities 8,670 12,829
-------- --------
Cash flows from investing activities:
Acquisition, net of cash (104) (43,538)
Capital expenditures (2,134) (2,053)
Proceeds from sales of property and
equipment 388 104
-------- --------
Net cash used in investing activities (1,850) (45,487)
-------- --------
Cash flows from financing activities:
Borrowing from notes payable -- 5,000
Payments under notes payable (4,750) (250)
Net proceeds from sale of common stock to
employees 1,190 768
Exercise of stock options 6,265 2,054
Exercise of redeemable warrants -- 2,717
Tax benefit from disqualifying dispositions 1,057 --
Principal payments on capital lease
obligations -- (5)
-------- --------
Net cash provided by financing activities 3,762 10,284
-------- --------
Net (decrease) increase in cash and cash
equivalents 10,582 (22,374)
Effects of exchange rate changes on cash and
cash equivalents 30 2
Cash and cash equivalents, beginning of year $ 16,928 39,300
-------- --------
Cash and cash equivalents, end of year $ 27,540 $ 16,928
======== ========
Supplemental disclosures of cash flow
information:
Cash paid for interest $ 275 $ 176
======== ========
Cash paid for taxes $ 3,104 $ 623
======== ========
Non-cash investing activities:
Issuance of 219,709 shares of common stock in
acquisition $ -- $ 2,018
======== ========
Adjustments for Xicom Acquisition Accounting $ 488 $ --
-------- --------
Radyne Corporation
Segment Reporting
Unaudited
Year ended December 31, 2006
(in thousands)
Satellite
electronics
and broadcast
equipment Amplifiers Corporate Total
-------------------------------------------------------
Net sales $ 72,156 $ 62,053 $ -- $134,209
Operating
income
(expense) $ 26,659 $ 6,485 $(16,246) $ 16,898
=======================================================
Depreciation
and
amortization $ 1,056 $ 2,385 $ -- $ 3,441
=======================================================
Total
assets $ 57,126 $ 62,878 $ -- $120,004
-------------------------------------------------------
Year ended December 31, 2005
(in thousands)
Satellite
electronics
and broadcast
equipment Amplifiers Corporate Total
-------------------------------------------------------
Net sales $ 70,848 $ 32,415 $ -- $103,263
Operating
income
(expense) $ 27,423 $ 1,656 $(13,668) $ 15,411
=======================================================
Depreciation
and
amortization $ 973 $ 1,405 $ -- $ 2,378
=======================================================
Total
assets $ 42,136 $ 58,492 $ -- $100,628
-------------------------------------------------------
RADN-PR