LANCASTER, Pa., Oct. 15 /PRNewswire-FirstCall/ -- Herley Industries, Inc. (Nasdaq: HRLY) today reported financial results for the Fourth Quarter and Fiscal Year ended August 2, 2009.
Fourth Quarter of Fiscal 2009
Net sales for the fourth quarter of fiscal 2009 were $43.0 million compared to $37.9 million in the fourth quarter of fiscal 2008. In the fourth quarter of fiscal 2009, the Company recorded several significant charges (see below) aggregating $66.9 million, including a non-cash impairment charge for goodwill and other intangible assets of $44.2 million. As a result, the loss from continuing operations for that quarter was $44.4 million, or $3.26 per diluted share, compared to a loss from continuing operations of $1.5 million, or $.11 per diluted share, last year. Income from discontinued operations that resulted from the sale of the ICI business in November 2008 was $1.2 million, or $ .09 per diluted share, last year. Net loss for the quarter was $44.4 million, or $3.26 per diluted share, compared to a net loss of $.3 million, or $.02 per diluted share, last year.
In the fourth quarter of fiscal 2009, the Company reported a revenue increase of $5.1 million compared to last year, which primarily resulted from the inclusion of revenues from Eyal that was acquired early in fiscal 2009. Operating results for the fourth quarter of fiscal 2009 were impacted by several significant charges, as follows: (a) approximately $44.2 million related to the impairment of goodwill and other intangible assets; (b) approximately $10.6 million related to employment agreement settlements with two former officers of the Company; (c) approximately $4.3 million to cost of products sold related to the settlement of litigation with a customer; (d) approximately $2.8 million to net sales and $.3 million to cost of products sold related to the settlement of a claim for equitable adjustment for unpriced change orders; (e) approximately $3.1 million to cost of products sold related to the transition of the Farmingdale, NY manufacturing operation, including contract losses of approximately $1.1 million and inventory write-offs of approximately $2.0 million; (f) approximately $1.3 million to cost of products sold for additional inventory adjustments and obsolescence reserves; and (g) approximately $.3 million to selling and administrative expenses related to the abandonment of fixed assets. The non-cash impairment of goodwill and other intangible assets does not affect the Company’s cash position, cash flow from operating activities, credit availability or liquidity and none of these charges will have any adverse effect on its future operations.
Of further significance, in July 2009, the Company’s Board of Directors appointed new senior management. New management was successful in resolving two litigation/claim matters, resulting in a net cash outflow of $.5 million to the Company and, more importantly, restoring a favorable relationship with these customers.
Richard Poirier, Chief Executive Officer and President, commented, “This has certainly been a very busy and exciting period since David Lieberman and I were appointed. We are pleased with the progress we have made in the resolution of past matters, most of which are ancillary to our operational activities going forward. David and I are committed to reporting substantial profitability in fiscal year 2010, and remain focused on strengthening our management team, improving our sales and production processes and reducing costs. We ended the year with a backlog of $182 million, and bookings have been strong in the first quarter. We believe that we are now well positioned for success in fiscal 2010."
Fiscal Year 2009
Net sales for fiscal 2009 were $160.1 million compared to $136.1 million in fiscal 2008. Fiscal 2009 results were significantly impacted by the fourth quarter charges described above. The loss from continuing operations for fiscal 2009 was $40.7 million, or $3.00 per diluted share, compared to a loss from continuing operations of $10.7 million, or $.78 per diluted share, last year. Loss from discontinued operations that resulted from the sale of the ICI business in November 2008 was $.5 million, or $.03 per diluted share, in fiscal 2009 compared to income of $.3 million, or $.02 per diluted share, last year. Net loss for fiscal 2009 was $41.2 million, or $3.03 per diluted share, compared to a net loss of $10.3 million, or $.76 per diluted share, last year.
Balance Sheet and Capital Expenditures
At August 2, 2009, the Company’s total cash and cash equivalents balance was $14.8 million and its long-term debt, exclusive of settlement commitments, was $12.2 million. Capital expenditures were $.9 million for the fourth quarter of fiscal 2009 and were $5.4 million for fiscal 2009.
Richard Poirier, Chief Executive Officer and President, will host a conference call on October 16, 2009 at 9:00 a.m. Eastern Time to discuss financial results for the Fourth Quarter and Fiscal Year ended August 2, 2009. To join the conference call, dial 1 (888) 425-4188 and reference Conference ID #33627285.
A taped replay of the call will be available on October 16, 2009 approximately one hour after the conclusion of the call through October 23, 2009 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 reference Conference ID #33627285.
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=62624. 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 and approximately 1,000 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, commercialization and trade difficulties and current economic conditions, including the potential for significant changes in US defense spending under the new Administration which could affect future funding of programs and allocations within the budget to various programs, as well as the factors set forth in this release and in our public filings with the Securities and Exchange Commission.
SOURCE Herley Industries, Inc.
