ROCKY HILL, Conn., Oct. 22, 2008 (GLOBE 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 third quarter ended September 27, 2008.
During the third quarter of 2008, Axsys generated sales of $64.8 million, compared to $45.2 million in the third quarter of 2007. Net income was $8.0 million or $0.69 per diluted share, up from $4.1 million or $0.37 per diluted share in the third quarter of 2007.
A $199 thousand loss from our discontinued AST Bearings business adversely impacted net income in the third quarter of 2008 compared to $383 thousand of net income from discontinued operations in the third quarter of 2007. Excluding this activity, our income from continuing operations was $8.2 million or $0.71 per diluted share, up from $3.8 million or $0.34 per diluted share in the prior year period. Our results for the third quarter of 2008 were favorably impacted by a below average tax rate of 31.6%.
Third Quarter Financial Highlights from Continuing Operations
Period comparisons vs. the third quarter of 2007.
* Sales increased 43% to a record $64.8 million; * Gross margin improved to 34.9% from 32.4%; * Operating margin improved to 18.2% from 13.5%; * Net income increased 118% to $8.2 million; * Diluted earnings per share increased 109% to $0.71; * Backlog increased to a record $184.5 million.
Sales growth in the third quarter of 2008 was mainly driven by continued strong demand for infrared cameras and lenses. Our Nashua facility also made a concentrated effort to increase shipments during the third quarter in order to mitigate the anticipated disruption associated with the Surveillance Systems Group's move to a second Nashua facility in the fourth quarter. The growth in sales resulted in improved leverage in both business segments. The Imaging Systems Group's margins were also positively impacted by a favorable product mix during the quarter. Backlog growth was mainly attributable to strong demand for thermal camera systems.
Segment Sales
(Millions) Three Months Nine Months
Ended: Ended
---------------- ----------------
Sep 27, Sep 29, Sep 27, Sep 29,
2008 2007 2008 2007
---------------- ----------------
Surveillance Systems Group $ 17.4 $ 12.5 $ 56.1 $ 32.5
Imaging Systems Group 47.4 32.7 125.4 91.2
Compared to the same period in the prior year, the Surveillance Systems Group increased sales by 39%. This segment's growth was due to continued strong demand for a variety of camera systems, particularly for use in land-based perimeter security and border protection applications.
The Imaging Systems Group's sales grew 45% year over year. Increased throughput in our motion control and infrared lens businesses drove the growth in this segment.
"Both of our business segments performed impressively during the third quarter," said Stephen W. Bershad, Chairman and CEO of Axsys Technologies. "All year, we have challenged our business presidents to increase throughput and improve on-time deliveries. Due to their efforts, our sales growth in the third quarter outpaced our ability to scale our operating expenses proportionately, which resulted in our unusually high operating margin."
Fiscal 2008 Earnings Guidance Increase
Axsys is increasing its full-year 2008 guidance as follows:
* Sales are expected to be in the range of $242 million to $244 million, up from the $237 million to $241 million range previously provided. * Diluted earnings per share are expected to be in the range of $2.28 to $2.30, up from the previous guidance of $2.09 to $2.15.
"As of today, our new Nashua facility is fully operational, giving both business segments the space that they need for continued growth," continued Mr. Bershad. "While we expect to finish the year strongly and exceed our previously released full-year financial guidance, fourth quarter results will be impacted by increased spending, holiday shutdowns and the one-time costs and production disruptions associated with the Nashua facility relocation."
Fiscal 2009 Earnings Guidance
Axsys announces guidance for full-year 2009 continuing operations as follows:
* Sales are expected to be in the range of $278 million to $282 million. * Diluted earnings per share are expected to be between $2.66 and $2.72.
"In these uncertain economic times, we are fortunate that our products are largely sold into markets that are not directly affected by the general economy," continued Mr. Bershad. "In addition, since our technologies provide our soldiers with potentially life-saving tactical advantages at relatively low cost, we believe that we are well positioned for continued growth regardless of the outcome of the upcoming presidential election. This dynamic, combined with our record backlog, gives us confidence that we can achieve 15% sales growth next year, even on top of this year's substantial growth."
Conference Call
Management will conduct a conference call to review the Company's financial results on Thursday, October 23, 2008 at 10:00 a.m. Eastern Time. Shareholders, institutional investors and equity research analysts are invited to participate in the call by dialing 1-888-713-4218 and providing the operator with the conference ID# 64390040 to enter the call. Callers are advised to dial into the call at least ten minutes prior to the call to register. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PCE8CGRRJ. Pre-registrants will be issued a pin number to use when dialing into the live call. The pin will enable participants to bypass the operator for quicker access to 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; 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 - Unaudited)
For the Three Months For the Nine Months
Ended Ended
---------------------- ----------------------
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Sales $ 64,793 $ 45,218 $ 181,540 $ 123,712
Cost of sales 42,173 30,560 118,988 83,910
---------- ---------- ---------- ----------
Gross profit 22,620 14,658 62,552 39,802
Selling, general and
administrative
expenses 8,602 7,131 26,715 18,720
Research, development
and engineering
expenses 2,201 1,436 6,255 4,383
---------- ---------- ---------- ----------
Operating income 11,817 6,091 29,582 16,699
Interest expense (12) (191) (37) (463)
Interest income 49 55 237 174
Other income (expense),
net 110 17 231 (235)
---------- ---------- ---------- ----------
Income from continuing
operations before
income taxes 11,964 5,972 30,013 16,175
Provision for income
taxes 3,777 2,216 10,489 6,135
---------- ---------- ---------- ----------
Income from continuing
operations
8,187 3,756 19,524 10,040
(Loss) income from
discontinued
operations, net of
income taxes (199) 383 (325) 929
---------- ---------- ---------- ----------
Net income $ 7,988 $ 4,139 $ 19,199 $ 10,969
========== ========== ========== ==========
BASIC EARNINGS (LOSS)
PER SHARE:
Continuing operations $ 0.73 $ 0.35 $ 1.77 $ 0.94
Discontinued
operations (0.02) 0.04 (0.03) 0.09
---------- ---------- ---------- ----------
Total $ 0.71 $ 0.39 $ 1.74 $ 1.03
========== ========== ========== ==========
Weighted average basic
common shares
outstanding 11,153,957 10,722,393 11,029,054 10,688,869
DILUTED EARNINGS (LOSS)
PER SHARE:
Continuing operations $ 0.71 $ 0.34 $ 1.71 $ 0.91
Discontinued operations (0.02) 0.03 (0.03) 0.08
---------- ---------- ---------- ----------
Total $ 0.69 $ 0.37 $ 1.68 $ 0.99
========== ========== ========== ==========
Weighted average
diluted common shares
outstanding 11,522,287 11,140,374 11,437,555 11,031,234
AXSYS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share data)
Sept. 27, Dec. 31,
2008 2007
(Unaudited)
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,016 $ 15,304
Accounts receivable - net 34,409 14,140
Inventories - net 63,627 52,362
Income taxes - deferred 6,033 3,923
Prepaid expenses 1,545 1,047
Other current assets 614 491
---------- ----------
TOTAL CURRENT ASSETS 114,244 87,267
PROPERTY, PLANT AND EQUIPMENT - net 22,671 17,876
INTANGIBLE ASSETS - net 11,468 12,286
GOODWILL 85,620 85,620
OTHER ASSETS 1,395 1,634
---------- ----------
TOTAL ASSETS $ 235,398 $ 204,683
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 19,002 $ 8,594
Accrued expenses and other current
liabilities 18,145 22,381
Deferred income 7,245 12,742
---------- ----------
TOTAL CURRENT LIABILITIES 44,392 43,717
OTHER LONG-TERM LIABILITIES 10,221 8,836
SHAREHOLDERS' EQUITY:
Common stock 112 108
Capital in excess of par 113,778 104,674
Accumulated other comprehensive income (120) (81)
Retained earnings 67,015 47,816
Treasury stock -- (387)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 180,785 152,130
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 235,398 $ 204,683
========== ==========