Reporting Fourth Consecutive Quarter of Strong Profits WEST
CALDWELL, N.J. Aug. 17 /PRNewswire-FirstCall/ -- Merrimac
Industries, Inc. (AMEX:MRM), a leader in the design and manufacture
of RF Microwave components, subsystem assemblies and
micro-multifunction modules (MMFM ), today announced the results
for the second quarter of 2009. Second Quarter and First Six Months
of 2009 Financial Highlights -- Net sales for the second quarter of
fiscal year 2009 increased 8.0% or $599,000 to $8.1 million
compared to $7.5 million in the second quarter of fiscal year 2008.
Net sales for the first six months of 2009 were $15.7 million up
18.5% over the first six months of 2008. -- Second quarter gross
profit increased 20.3% or $568,000 to $3.4 million in 2009 compared
to $2.8 million in the second quarter of 2008. Gross profit for the
first six months of 2009 was up 46.3% or $2.1 million over the
first six months of 2008. -- Gross profit margins increased to
41.6% and 43.0% for the second quarter and first six months of
2009, respectively, compared to 37.4% and 34.8% for the same
periods last year. -- Operating income for the second quarter of
2009 was $937,000 compared to $74,000 for the second quarter of
2008. Operating income for the first six months of 2009 was $1.9
million compared to an operating loss of $730,000 for the first six
months of 2008. Strong second quarter operating income was achieved
despite a high level of non-recurring professional fees expense.
Action has been taken to reduce these expenses in future quarters.
-- Net income for the second quarter and the first six months of
2009 was $719,000 and $1.6 million, respectively, compared to a net
loss of $30,000 and $895,000 in the second quarter and first six
months of 2008, respectively. -- Net income for the second quarter
and first six months of 2009 was $0.24 and $0.53 per share,
respectively, compared to a net loss of $0.01 and $0.30 per share,
respectively, for the second quarter and first six months of 2008,
respectively. Chairman and CEO Mason N. Carter commented, "We are
very excited to see the success of our focused strategy continuing
as reflected in the Financial Highlights. The first half of fiscal
year 2009 was very strong and with new orders meeting or exceeding
our internal targets, we are well positioned to finish the second
half of 2009 with profitable results." Second Quarter and First Six
Months of 2009 Results Net sales. Net sales increased for the
second quarter and the first six months of 2009. Net sales in the
second quarter increased $599,000 or 8.0% to $8,089,000, from the
second quarter of 2008 net sales of $7,490,000. For the first six
months of 2009, net sales increased 18.5% or $2,448,000, to
$15,696,000, compared to net sales of $13,248,000 for the first six
months of 2008. Net sales for the second quarter and the first six
months of 2009 increased due to the higher level of orders received
during 2008 resulting in a larger backlog of orders to fulfill in
fiscal year 2009 including increased sales of Multi-Mix products to
defense industry related customers. Cost of sales and gross profit.
Gross profit and gross profit percentage increased for both the
second quarter and first six months of 2009 compared to the same
periods in 2008. Gross profit for the second quarter of 2009
increased $568,000 or 20.3%, to $3,367,000 compared to $2,799,000
for the second quarter of 2008. Gross profit margin for the second
quarter of 2009 was 41.6% compared to 37.4% for the second quarter
of 2008. Gross profit for the first six months of 2009 increased
46.3% or $2,137,000 to $6,749,000 from $4,612,000 in the first six
months of 2008. Gross profit margin for the first six months of
2009 was 43.0% compared to 34.8% for the first six months of 2008.
The increase in gross profit in the second quarter and first six
months of 2009 compared to the same periods in 2008 was primarily
due to the increase in sales. The increase in sales also had a
favorable impact on our gross profit percentage in the second
quarter and first six months of 2009, allowing us to better absorb
fixed manufacturing costs. Additionally, the improvement in the
gross profit percentage was due in part to improved market
conditions in the first half of 2009 compared to the soft market
and competitive pricing pressure that existed in the first half of
2008. Selling, general and administrative expenses. Selling,
general and administrative expenses were $2,313,000 for the second
quarter of 2009, a slight decrease of $38,000 or 1.6%, compared to
$2,351,000 in the second quarter of 2008. The decrease in such
expenses for the second quarter of 2009 was primarily due to a
decrease in selling and marketing expenses that were largely offset
by higher professional fees. When expressed as a percentage of net
sales, selling, general and administrative expenses decreased from
31.4% of sales in the second quarter of 2008 to 28.6% of sales in
the second quarter of 2009. For the first six months of 2009
selling, general and administrative expenses were $4,672,000
compared to $4,595,000 in the first six months of 2008 an increase
of $77,000 or 1.7%. The increase in such expenses for the first six
months of 2009 was primarily due to higher professional fees that
were largely offset by a decrease in selling and marketing expense.
When expressed as a percentage of net sales, selling, general and
administrative expenses decreased from 34.7% of sales in the first
six months of 2008 to 29.8% of sales in the first six months of
2009. Operating income (loss). Operating income for the second
quarter and first six months of 2009 was $937,000 and $1,901,000,
respectively, compared to an operating income of $74,000 for the
second quarter of 2008 and an operating loss of $730,000 in the
first six months of 2008. The improvement in operating income for
the second quarter and first six months of 2009 was primarily due
to the improved gross profit resulting from increased sales and
gross profit margins as well as the decrease in research and
development costs compared to the first six months of 2008. Income
taxes. Income tax expense was $200,000 and $243,000 in the second
quarter and first six months of 2009 compared to $0 in the second
quarter and first six months of 2008. The provision for income
taxes in the second quarter and first six months of 2009 is based
on the expectation that we will fully utilize our net operating
loss carryforwards in 2009. Discontinued operations. Income from
discontinued operations was $51,000 in the second quarter and first
six months of 2009 compared to a loss from discontinued operations
of $55,000 in the second quarter and first six months of 2008. Net
income (loss). Net income for the second quarter and first six
months of 2009 was $719,000 and $1,575,000, respectively, compared
to a net loss of $30,000 for the second quarter of 2008 and a net
loss of $895,000 in the first six months of 2008. Net income per
share, basic and diluted, for the second quarter and first six
months of 2009 was $0.24 and $0.53, respectively, compared to a net
loss per share, basic and diluted, of $0.01 and $0.30 per share,
respectively, for the second quarter and first six months of 2008.
Investors are invited to participate in the financial results
conference call on Tuesday, August 18, 2009 at 4:15 p.m. (Eastern)
by dialing 1-888-516-2441 (for International callers:
1-719-325-2302) five minutes prior to the scheduled start time, and
reference the Merrimac Industries 2nd Quarter 2009 Financial
Results conference call or passcode number 3818410. 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 3818410. 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=61248 Should you
be unable to participate during the live webcast, a link to the
archived webcast will be posted on the Merrimac Industries, Inc.
website http://www.merrimacind.com/. About Merrimac Merrimac
Industries, Inc. is a leader in the design and manufacture of RF
Microwave signal processing components, subsystem assemblies, and
Multi-Mix micro-multifunction modules (MMFM ), for the worldwide
Defense, Satellite Communications (Satcom), Commercial Wireless and
Homeland Security market segments. Merrimac is focused on providing
Total Integrated Packaging Solutions with Multi-Mix
Microtechnology, a leading edge competency providing value to our
customers through miniaturization and integration. Multi-Mix MMFM
provides a patented and novel packaging technology that employs a
platform modular architecture strategy that incorporates embedded
semiconductor devices, MMICs, resistors, passive circuit elements
and plated-through via holes to form a three-dimensional integrated
module used in 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 and San Jose,
Costa Rica and has approximately 210 co-workers dedicated to the
design and manufacture of signal processing components, gold
plating of high-frequency microstrip and bonded stripline Teflon
(PTFE) circuits and subsystems providing Total Integrated Packaging
Solutions for wireless applications. Merrimac (MRM) is listed on
the American Stock Exchange. Multi-Mix , Multi-Mix PICO , MMFM ,
System In A Package , SIP and Total Integrated Packaging Solutions
are registered trademarks of Merrimac Industries, Inc. For more
information about Merrimac Industries, Inc. please visit our
website http://www.merrimacind.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 products; 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 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; 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. Contact: Mason N. Carter, Chairman & CEO
973-575-1300, ext. 1202 MERRIMAC INDUSTRIES, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Quarters Ended
Six Months Ended ----------------------- --------------------------
July 4, June 28, July 4, June 28, 2009 2008 2009 2008 ----------
---------- ------------ ----------- (Restated) (Restated) Net sales
$8,089,056 $7,490,266 $15,695,588 $13,247,952 ---------- ----------
----------- ----------- Costs and expenses: Cost of sales 4,722,539
4,691,040 8,946,623 8,635,721 Selling, general and administrative
2,313,217 2,350,695 4,671,619 4,595,265 Research and development
157,127 374,581 216,522 747,399 Gain on sale of asset (40,579) -
(40,579) - ---------- ---------- ----------- ----------- 7,152,304
7,416,316 13,794,185 13,978,385 ---------- ---------- -----------
----------- Operating income (loss) 936,752 73,950 1,901,403
(730,433) Interest and other expense, net (68,697) (48,607)
(134,042) (109,180) ---------- ---------- ----------- -----------
Income (loss) from continuing operations before income taxes
868,055 25,343 1,767,361 (839,613) Provision for income taxes
199,909 - 242,735 - ---------- ---------- ----------- -----------
Income (loss) from continuing operations 668,146 25,343 1,524,626
(839,613) Income (loss) from discontinued operations, after income
taxes 50,505 (55,036) 50,505 (55,036) ---------- ----------
----------- ----------- Net income (loss) $718,651 $(29,693)
$1,575,131 $(894,649) ========== ========== =========== ===========
Income (loss) per common share from continuing operations - basic
$.23 $.01 $.52 $(.29) Income (loss) per common share from
discontinued operations - basic $.01 $(.02) $.01 $(.01) ----------
---------- ----------- ----------- Net income (loss) per common
share - basic $.24 $(.01) $.53 $(.30) ========== ==========
=========== =========== Income (loss) per common share from
continuing operations - diluted $.22 $.01 $.51 $(.29) Income (loss)
per common share from discontinued operations - diluted $.02 $(.02)
$.02 $(.01) ---------- ---------- ----------- ----------- Net
income (loss) per common share - diluted $.24 $(.01) $.53 $(.30)
========== ========== =========== =========== Weighted average
number of shares outstanding-basic 2,961,157 2,939,788 2,956,741
2,936,155 Weighted average number of shares outstanding-diluted
3,016,583 2,945,203 2,993,204 2,936,155 MERRIMAC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS July 4, January 3, 2009 2009
----------- ----------- (UNAUDITED) (NOTE 1) ASSETS Current assets:
Cash and cash equivalents $1,643,662 $1,191,768 Accounts
receivable, net 6,766,944 5,765,575 Inventories, net 5,336,447
4,899,706 Other current assets 625,185 542,320 Costs and estimated
earnings in excess of billings on uncompleted contracts 3,009,354
1,880,338 ----------- ----------- Total current assets 17,381,592
14,279,707 ----------- ----------- Property, plant and equipment
37,939,546 37,765,928 Less accumulated depreciation and
amortization 29,791,229 28,556,441 ----------- -----------
Property, plant and equipment, net 8,148,317 9,209,487 Other assets
474,564 543,217 ----------- ----------- Total assets $26,004,473
$24,032,411 =========== =========== LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Current portion of long-term debt
$291,667 $291,667 Accounts payable 539,508 794,351 Accrued
liabilities 1,323,463 1,432,124 Customer deposits 1,150,935 654,133
Income taxes payable 40,286 17,448 ----------- ----------- Total
current liabilities 3,345,859 3,189,723 Long-term debt, net of
current portion 2,408,076 2,611,111 Deferred liabilities 55,773
64,254 ----------- ----------- Total liabilities 5,809,708
5,865,088 ----------- ----------- Commitments and contingencies
Stockholders' equity: Preferred stock, par value $.01 per share:
Authorized: 1,000,000 shares No shares issued - - Common stock, par
value $.01 per share: 20,000,000 shares authorized; 3,346,761 and
3,315,229 shares issued; and 2,983,856 and 2,952,324 shares
outstanding, respectively 33,468 33,153 Additional paid-in capital
20,831,920 20,379,924 Retained earnings 2,451,541 876,410
----------- ----------- 23,316,929 21,289,487 Less treasury stock,
at cost - 362,905 shares at July 4, 2009 and January 3, 2009
(3,122,164) (3,122,164) ----------- ----------- Total stockholders'
equity 20,194,765 18,167,323 ----------- ----------- Total
liabilities and stockholders' equity $26,004,473 $24,032,411
=========== =========== DATASOURCE: Merrimac Industries, Inc.
CONTACT: Mason N. Carter, Chairman & CEO, +1-973-575-1300, ext.
1202, Web Site: http://www.merrimacind.com/
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