ROCKY HILL, Conn., Feb. 19, 2008 (PRIME NEWSWIRE) -- Axsys Technologies, Inc. (Nasdaq:AXYS), a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, today announced financial results for the fourth quarter and full year ended December 31, 2007.
During the fourth quarter, Axsys generated revenues of $47.9 million, compared to $33.8 million in the fourth quarter of 2006. Income from continuing operations was $4.1 million or $0.36 per diluted share, up from $2.4 million or $0.22 per diluted share in the fourth quarter of 2006.
In the fourth quarter of 2007, Axsys realized a $1.7 million after-tax gain on the sale of its Distributed Products business, which had been reclassified to discontinued operations during the previous fiscal quarter. As a result, net income for the quarter was $5.8 million or $0.51 per diluted share, up from $2.6 million or $0.24 per diluted share in 2006.
Fourth Quarter Financial Highlights from Continuing Operations
Period comparisons vs. the fourth quarter of 2006.
* Sales increased 42% to a record $47.9 million; * Gross margin improved to 33.2% from 30.4%; * Operating margin improved to 13.7% from 10.5%; * Income increased 71% to $4.1 million; * Diluted earnings per share increased to $0.36 from $0.22; * Backlog increased to a record $140 million, representing a 21% increase compared to the end of the fourth quarter of 2006.
The quarter's sales increase was driven by strong demand at the recently-acquired gyro-stabilized gimbal business as well as at Axsys' traditional businesses. Margins were favorably impacted by product mix, particularly the addition of the high-margin gimbal business. Compared to the prior year, backlog growth resulted from strong demand for infrared cameras and lenses, gimbal systems and military-grade motion control subsystems.
Segment Sales
During the fourth quarter, Axsys reorganized its business into two new financial reporting segments. The Surveillance Systems segment designs, manufactures and sells military-grade camera systems, which are primarily used for long-range applications such as surveillance, reconnaissance and threat detection. The Imaging Systems segment designs and manufactures custom, high-precision optical and motion control subsystems, which are typically sold to prime defense contractors for use in targeting, navigation and surveillance systems.
(Millions) Three Months Twelve Months
Ended: Ended:
---------------- ----------------
Dec 31, Dec 31, Dec 31, Dec 31,
2007 2006 2007 2006
------- ------- ------- -------
Surveillance Systems Sales $ 15.0 $ 6.0 $ 47.5 $ 23.5
Imaging Systems Sales 32.9 27.8 124.1 106.4
"Axsys' new reporting segments, which reflect our recently-completed company reorganization, will enable us to leverage synergies inherent in the organization and provide investors with better insight into our operations," said Stephen W. Bershad, Chairman and CEO of Axsys Technologies. "The impressive performance of both of these segments throughout 2007 reflects the strong market positions that the company has established."
Fiscal 2007 Results
In 2007, Axsys achieved record sales of $171.6 million, up 32% from fiscal 2006. Fiscal 2007 included approximately eight months of revenue from the acquisition of the assets of Cineflex, LLC that occurred in mid-April 2007. Organic revenue growth for fiscal 2007 was 19%.
Axsys also reported record income from continuing operations of $14.1 million or $1.27 per diluted share in fiscal 2007, up 52% from $9.3 million or $0.85 per diluted share in fiscal 2006. Full year net income, which included the gain from discontinued operations, was $16.8 million or $1.51 per diluted share in 2007, compared to $10.3 million or $0.94 per diluted share in 2006.
Fiscal 2008 Earnings Guidance Increase
Axsys is increasing its full-year 2008 guidance as follows:
* Sales are expected to be in the range of $208 million to $212 million, up from the $193 million to $197 million range previously provided. * Diluted earnings per share are expected to be in the range of $1.70 to $1.75, up from the previous guidance of $1.57 to $1.60.
"Fiscal 2007 was a banner year for Axsys," continued Mr. Bershad. "In addition to delivering strong financial results, we positioned the company for future growth with the acquisition of Cineflex, the sale of the Distributed Products business, and a market-oriented corporate reorganization. These changes, along with record backlog and healthy sales prospects, have led to our increased confidence for fiscal 2008."
Conference Call
Management will conduct a conference call to review the Company's financial results on Wednesday, February 20, 2008 at 10:00 a.m. Eastern Time. Shareholders, institutional investors and equity research analysts are invited to participate in the call by dialing 1-866-510-0676 and providing the operator with the conference ID# 38280767 to enter the call.
The conference call will be webcast live via the Investor Relations section of the Company's web site at www.axsys.com. A replay of the webcast will be available shortly after the conclusion of the call for a period of approximately 90 days.
About Axsys
Axsys Technologies, Inc. is a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, serving the aerospace, defense, and high-performance commercial markets. For more information, visit www.axsys.com.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as "expect," "anticipate," "plan," "may," "will," "estimate" or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, are described in Axsys' reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including without limitation: changes in the U.S. federal government spending priorities; the Company's ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers; the potential for the Company's backlog to be reduced or cancelled; the Company's ability to implement its acquisition strategy and integrate its acquired companies successfully, including the recent acquisition of Cineflex; the Company's ability to manage costs under the Company's fixed-price contracts effectively; and changes in general economic and business conditions. These statements reflect the Company's current beliefs and are based upon information currently available to the Company. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time, and we specifically disclaim any obligation to update these statements.
AXSYS TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share data)
For the Three Months For the Twelve Months
Ended Ended
December 31, December 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Sales $ 47,909 $ 33,758 $ 171,621 $ 129,928
Cost of sales 31,989 23,499 115,899 89,033
----------- ----------- ----------- -----------
Gross profit 15,920 10,259 55,722 40,895
Selling, general and
administrative
expenses 7,445 5,638 26,165 21,904
Research, development
and engineering
expenses 1,910 1,083 6,293 4,463
----------- ----------- ----------- -----------
Operating income 6,565 3,538 23,264 14,528
Interest expense (103) (8) (566) (80)
Interest income 124 65 298 286
Other (expense)
income, net (15) (6) (250) 19
----------- ----------- ----------- -----------
Income from
continuing operations
before income taxes 6,571 3,589 22,746 14,753
Provision for income
taxes 2,504 1,216 8,639 5,462
----------- ----------- ----------- -----------
Income from
continuing operations 4,067 2,373 14,107 9,291
Income from
discontinued
operations, net of
tax 1,742 195 2,671 974
----------- ----------- ----------- -----------
Net Income $ 5,809 $ 2,568 $ 16,778 $ 10,265
=========== =========== =========== ===========
BASIC EARNINGS PER
SHARE:
Continuing
operations $ 0.38 $ 0.22 $ 1.32 $ 0.88
Discontinued
operations 0.16 0.02 0.25 0.09
----------- ----------- ----------- -----------
Total $ 0.54 $ 0.24 $ 1.57 $ 0.97
=========== =========== =========== ===========
Weighted-average
basic common shares
outstanding 10,775,996 10,641,614 10,711,277 10,628,647
DILUTED EARNINGS PER
SHARE:
Continuing
operations $ 0.36 $ 0.22 $ 1.27 $ 0.85
Discontinued
operations 0.15 0.02 0.24 0.09
----------- ----------- ----------- -----------
Total $ 0.51 $ 0.24 $ 1.51 $ 0.94
=========== =========== =========== ===========
Weighted-average
diluted common
shares outstanding 11,293,387 10,923,260 11,097,399 10,888,494
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Dollars in thousands)
December 31,
----------------------
2007 2006
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 15,304 $ 6,044
Accounts receivable, net 14,140 17,298
Inventories, net 52,362 35,853
Assets held-for-sale -- 15,764
Income taxes - deferred 3,923 2,405
Prepaid expenses 1,047 829
Other current assets 491 368
--------- ---------
TOTAL CURRENT ASSETS 87,267 78,561
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, net 17,876 22,393
INTANGIBLE ASSETS, net 12,286 9,507
GOODWILL 85,620 60,791
OTHER ASSETS 1,634 1,093
--------- ---------
TOTAL ASSETS $ 204,683 $ 172,345
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 9,325 $ 7,550
Accrued expenses and other current
liabilities 21,650 18,218
Deferred income 12,742 6,088
Liabilities held-for-sale -- 3,430
--------- ---------
TOTAL CURRENT LIABILITIES 43,717 35,286
OTHER LONG-TERM LIABILITIES 8,836 5,871
SHAREHOLDERS' EQUITY:
Common stock 108 106
Capital in excess of par 104,674 99,111
Accumulated other comprehensive income (81) --
Retained earnings 47,816 31,977
Treasury stock (387) (6)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 152,130 131,188
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 204,683 $ 172,345
========= =========