"We are seeing solid increases in core component business and, to an even greater extent, in our Multi-Mix(R) Microtechnology. The increase in Multi- Mix(R) business is a confirmation that we are advancing the market's need for integration of RF Microwave technology for our military and space markets. The growth we are seeing, in our opinion, is long term. Many of these new orders are the beginning of multi-year projects, which will bring follow on business for years to come, setting our "base level" higher. The projects include new Satellite systems, Electronic Systems for Advanced Navy Ships, and Electronic Countermeasures for Military Aircraft.
"Our R&D efforts, to enter into the commercial market with multilayer power amplifier technology, are progressing in parallel with our on-going success in establishing our integration technology for the military and space markets. As our efforts in this area come to fruition, we are confident that the broad base of applications and markets we envisioned for Multi-Mix(R) technology will be realized.
"The potential divestiture of Filtran will benefit Merrimac Industries, Inc. by allowing us to concentrate our resources on RF Microwave and Multi- Mix(R) Microtechnology product lines to generate sustainable, profitable growth."
Mr. Carter continued, "Our financial highlights include: -- Record orders booked of $10.0 million for the second quarter and $16.5 million for the first six months of 2007. -- Multi-Mix(R) represents about 20% of the total six months bookings ... a record. -- Highest quarter-end backlog ever of $17.2 million. -- Book-to-bill ratio of 1.41 to 1 for the first six months of 2007. -- Working capital of $9.9 million and current ratio of 3.6 to 1."
Investors are invited to participate in the financial results conference call on Tuesday, August 14, 2007 at 4:15 p.m. (Eastern) by dialing 1-800-311- 0799 (for International callers: 1-719-457-2695) ten minutes prior to the scheduled start time, and reference the Merrimac Industries second quarter 2007 conference call. For those unable to participate, a replay will be available for seven days by dialing 1-888-203-1112, or 1-719-457-0820 for international callers, passcode number 5074821.
This conference call will also be broadcast live over the internet by logging on to the web at this address: http://www.videonewswire.com/event.asp?id=41847
If you are unable to participate during the live webcast, a link to the archived webcast will be listed on the Merrimac Industries, Inc. website http://www.merrimacind.com .
Merrimac Industries, Inc. is a leader in the design and manufacture of RF Microwave signal processing components, subsystem assemblies, and Multi-Mix(R) micro-multifunction modules (MMFM(R)), for the worldwide Defense, Satellite Communications (Satcom), Commercial Wireless and Homeland Security market segments. Merrimac is focused on providing Total Integrated Packaging Solutions(R) with Multi-Mix(R) Microtechnology, a leading edge competency providing value to our customers through miniaturization and integration. Multi-Mix(R) MMFM(R) provides a patented and novel packaging technology that employs a platform modular architecture strategy that incorporates embedded semiconductor devices, MMICs, etched resistors, passive circuit elements and plated-through via holes to form a three-dimensional integrated module applicable to High Power, High Frequency and High Performance mission-critical applications. Merrimac Industries facilities are registered under ISO 9001:2000, an internationally developed set of quality criteria for manufacturing operations.
Merrimac Industries, Inc. has facilities located in West Caldwell, NJ, San Jose, Costa Rica and Ottawa, Ontario, Canada, and has approximately 220 co-workers dedicated to the design and manufacture of signal processing components, gold plating of high-frequency microstrip, bonded stripline and thick metal-backed Teflon (PTFE) micro-circuitry and subsystems providing Total Integrated Packaging Solutions(R) for wireless applications. Merrimac (MRM) is listed on the American Stock Exchange. Multi-Mix(R), Multi-Mix PICO(R), MMFM(R) and Total Integrated Packaging Solutions(R) are trademarks of Merrimac Industries, Inc. For more information about Merrimac Industries, Inc. and its Canadian subsidiary Filtran Microcircuits Inc., please visit http://www.merrimacind.com and http://www.filtranmicro.com.
This press release contains statements relating to future results of the Company (including certain projections and business trends) that are "forward- looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: risks associated with demand for and market acceptance of existing and newly developed products as to which the Company has made significant investments, particularly its Multi-Mix(R) products; the possibilities of impairment charges to the carrying value of our Multi-Mix(R) assets, thereby resulting in charges to our earnings; risks associated with adequate capacity to obtain raw materials and reduced control over delivery schedules and costs due to reliance on sole source or limited suppliers; slower than anticipated penetration into the satellite communications, defense and wireless markets; failure of our Original Equipment Manufacturer or OEM customers to successfully incorporate our products into their systems; changes in product mix resulting in unexpected engineering and research and development costs; delays and increased costs in product development, engineering and production; reliance on a small number of significant customers; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of our or our OEM customers' new or enhanced products; general economic and industry conditions; the risk that the benefits expected from the Company's acquisition of Filtran Microcircuits Inc. are not realized; the ability to protect proprietary information and technology; competitive products and pricing pressures; our ability and the ability of our OEM customers to keep pace with the rapid technological changes and short product life cycles in our industry and gain market acceptance for new products and technologies; foreign currency fluctuations between the U.S. and Canadian dollars; risks relating to governmental regulatory actions in communications and defense programs; and inventory risks due to technological innovation and product obsolescence, as well as other risks and uncertainties as are detailed from time to time in the Company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Merrimac Industries, Inc. Summary of Consolidated Statements of Operations (Unaudited) Quarter Ended June 30, July 1, 2007 2006 Net sales $6,225,000 $8,251,000 Gross profit 2,382,000 3,710,000 Selling, general and administrative expenses 2,284,000 2,645,000 Research and development 360,000 516,000 Goodwill impairment charge 2,630,000 - Operating income (loss) (2,892,000) 549,000 Interest and other expense, net (71,000) (33,000) Income (loss) before income taxes (2,963,000) 516,000 Provision (benefit) for income taxes 506,000 (13,000) Net income (loss) (3,469,000) 529,000 Net income (loss) per common share-basic and diluted $(1.19) $.17 Weighted average number of shares outstanding - basic 2,911,000 3,144,000 Weighted average number of shares outstanding - diluted 2,911,000 3,183,000 Six Months Ended June 30, July 1, 2007 2006 Net sales $11,649,000 $14,482,000 Gross profit 4,164,000 6,112,000 Selling, general and administrative expenses 4,775,000 5,131,000 Research and development 872,000 888,000 Goodwill impairment charge 2,630,000 - Operating income (loss) (4,113,000) 93,000 Interest and other expense, net (114,000) (52,000) Income (loss) before income taxes (4,227,000) 41,000 Provision (benefit) for income taxes 506,000 (48,000) Net income (loss) (4,733,000) 89,000 Net income (loss) per common share-basic and diluted $(1.58) $.03 Weighted average number of shares outstanding - basic 3,004,000 3,146,000 Weighted average number of shares outstanding - diluted 3,004,000 3,166,000 Merrimac Industries, Inc. Condensed Consolidated Balance Sheets June 30, December 30, 2007 2006 (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $2,817,000 $5,961,000 Accounts receivable, net 5,230,000 5,852,000 Income tax refunds receivable 103,000 99,000 Inventories 4,784,000 3,917,000 Other current assets 727,000 882,000 Deferred tax assets - 10,000 Total current assets 13,661,000 16,721,000 Property, plant and equipment, net 12,738,000 12,985,000 Other assets 538,000 493,000 Deferred tax assets 100,000 552,000 Goodwill 1,063,000 3,503,000 Total Assets $ 28,100,000 $ 34,254,000 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Current portion of long-term debt $621,000 $649,000 Deferred tax liabilities 100,000 100,000 Other current liabilities 3,066,000 2,618,000 Total current liabilities 3,787,000 3,367,000 Long-term debt, net of current portion 4,277,000 4,564,000 Deferred liabilities 50,000 38,000 Total liabilities 8,114,000 7,969,000 Stockholders' equity Common stock 33,000 33,000 Additional paid-in capital 19,450,000 19,237,000 Retained earnings 1,867,000 6,600,000 Accumulated other comprehensive income 1,758,000 1,389,000 Treasury stock (3,122,000) (974,000) Stockholders' equity 19,986,000 26,285,000 Total Liabilities and Stockholders' Equity $ 28,100,000 $ 34,254,000 Merrimac Industries, Inc. Condensed Consolidated Statements of Cash Flows Six Months Ended (Unaudited) June 30, July 1, 2007 2006 Cash flows from operating activities: Net income (loss) $ (4,733,000) $89,000 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,292,000 1,318,000 Amortization of deferred financing costs 15,000 25,000 Goodwill impairment charge 2,630,000 - Deferred income taxes 506,000 - Share-based compensation 132,000 82,000 Changes in operating assets and liabilities: Accounts receivable 686,000 (174,000) Inventories (846,000) (287,000) Other current assets 166,000 62,000 Other assets (62,000) (21,000) Other current liabilities 379,000 (736,000) Deferred liabilities 12,000 8,000 Net cash provided by operating activities 177,000 366,000 Cash flows from investing activities: Purchases of capital assets (927,000) (979,000) Net cash used in investing activities (927,000) (979,000) Cash flows from financing activities: Borrowings under revolving lease line - 160,000 Repurchase of stock for the treasury (2,148,000) - Repayment of borrowings (343,000) (464,000) Proceeds from stock sales 81,000 186,000 Net cash used in financing activities (2,410,000) (118,000) Effect of exchange rate changes 16,000 33,000 Net decrease in cash and cash equivalents (3,144,000) (698,000) Cash and cash equivalents at beginning of year 5,961,000 4,081,000 Cash and cash equivalents at end of period $ 2,817,000 $ 3,383,000 Contact: Mason N. Carter, Chairman & CEO 973-575-1300, ext. 1202 Email Contact
Web site: http://www.merrimacind.com//