Herley Reports Earnings for Third Quarter FY 2010

LANCASTER, Pa., June 10 /PRNewswire-FirstCall/ -- Herley Industries, Inc. (Nasdaq: HRLY) today reported financial results for the Third Quarter of Fiscal Year 2010.

Net sales for the third quarter of fiscal 2010 were $45.4 million as compared to $41.8 million for the third quarter of fiscal 2009. Net income for the third quarter was $2.6 million, or $.19 per diluted share, compared to $2.4 million or $.18 per diluted share, last year.

The Company's EBITDA for the third quarter of 2010 was $5.5 million compared to $5.4 million last year. Adjusted for the impact of litigation costs and net settlements in the respective quarters, adjusted EBITDA for the third quarter of 2010 was $7.1 million compared to $6.1 million last year. EBITDA is defined as net income plus net interest, taxes, depreciation and amortization.

The Company reported a revenue increase of $3.6 million in the third quarter of fiscal 2010 compared to the same period in the prior fiscal year. The 8.7% increase was primarily related to increased deliveries under major production programs, including increases attributable to manufacturing process improvements as well as revenue recognized under certain percentage-of-completion contracts.

Gross profit in the quarter was $13.7 million (30.0% gross profit margin) compared to $11.2 million (26.8% gross profit margin) last year, an increase of $2.5 million. The increase in gross profit and gross profit margin during the quarter was principally a result of the sales volume increase and improvements in margins related to manufacturing efficiencies as well as a reduction in the estimated costs to complete a contract nearing completion.  On a comparative basis, the third quarter of fiscal 2009 included a provision of $2.0 million for estimated losses on various contracts due to changes in estimated costs required to complete the contracts.

Selling and administrative ("S&A") expenses for the third quarter were $8.0 million, or 17.6% of net sales, compared to $7.5 million, or 18.0% of net sales, in the prior-year third quarter. The $.5 million increase in S&A expenses is primarily attributable to increased bid and proposal costs of $.3 million essential to future bookings and increased audit fees of $.2 million.

The Company reported operating income during the third quarter of fiscal 2010 of $4.1 million compared to $3.0 million last year.

At May 2, 2010, the Company's balance sheet was strong, with total cash and cash equivalents of $19.4 million, working capital of $92.8 million and long-term debt of $12.5 million. Capital expenditures were $.7 million for the third quarter of fiscal 2010 compared to $1.9 million last year.

John Thonet, Chairman of Herley's Board of Directors, commented, "The Board of Directors is pleased with the third quarter performance and commends CEO Richard Poirier and his division managers for a job well done."

Richard F. Poirier, Chief Executive Officer and President, commented, "In our third quarter, we experienced year-over-year improvement in net sales, net income and gross profit margins.   Strong bookings during the quarter brought us to a backlog of $184.1 million as we entered the fourth quarter of the fiscal year."

We present the non-GAAP (generally accepted accounting principles) measure EBITDA (as defined herein) in this report and anticipate referring to this measure in the conference call referenced below. Presentation of EBITDA is consistent with how we evaluate our performance internally and EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is a non-GAAP operating measure under Regulation G of the Securities and Exchange Commission. We compute EBITDA by adding back net interest, taxes, depreciation and amortization to net income. Each of these GAAP financial measures is included in our financial statements and thus EBITDA can be reconciled to net income attributable to common shareholders, the most comparable GAAP financial measure to it. However, other companies in our industry may calculate EBITDA differently than we do. EBITDA is not a measurement of financial performance under GAAP and should not be considered as a substitute for cash flow from operating activities as a measure of liquidity or a substitute for net income as an indicator of operating performance or any other measure of performance derived in accordance with GAAP. Net income attributable to common shareholders is reconciled to EBITDA for the third fiscal quarter of 2010 and 2009, respectively, in the following table (in thousands):

Mr. Thonet will host a conference call on June 11, 2010 at 10:00 a.m. Eastern time to discuss financial results for the Third Quarter of Fiscal 2010 ended May 2, 2010.   He will be joined on the call by Mr. Richard H. Poirier, Chief Executive Officer and President, and Mr. Anello C. Garefino, Chief Financial Officer.  To join the conference call dial 1 (888) 425-4188, referencing Conference ID #79502871.  

A taped replay of the call will be available one hour after completion of the call through June 18 at 11:59 p.m. Eastern time.  To listen to the replay dial: 1 (800) 642-1687 (U.S.) or 1 (706) 645-9291 (International), and Conference ID #79502871.

In addition, the conference call will be broadcast live over the Internet and can be accessed through the following URL: http://www.videonewswire.com/event.asp?id=69742.  To listen to the live call on the Internet, go to the website at least 15 minutes early to register, download and install any necessary audio software.

Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide.  Based in Lancaster, PA, Herley has seven manufacturing locations worldwide and approximately 1000 employees.  Additional information about the company can be found on the Internet at www.herley.com

Safe Harbor Statement - Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. Forward-looking statements involve various important assumptions, risks, uncertainties and other factors which could cause our actual results to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this discussion can be identified by words such as "anticipate," "believe," "could," "estimate," "expect," "plan," "intend," "may," "should" or the negative of these terms or similar expressions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievement. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors including but not limited to, competitive factors and pricing pressures, changes in legal and regulatory requirements, cancellation or deferral of customer orders, technological change or difficulties, difficulties in the timely development of new products, difficulties in manufacturing, the outcome of pending litigation, commercialization and trade difficulties and current economic conditions, including the potential for significant changes in US defense spending under the current Administration which could affect future funding of programs and allocations within the budget to various programs as well as the factors set forth in our public filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Herley Industries, Inc.

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED