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Applied Signal Technology, Inc.
Announces Second Quarter Operating Results
Sunnyvale, CA. May 29, 2007 - Applied Signal Technology, Inc.
(NASDAQ - APSG) announced its operating results for the second
quarter of fiscal year 2007 ended May 4, 2007.
New orders received during the second quarter of fiscal year 2007
were $37,631,000 representing a 55% increase when compared to new
orders received during the second quarter of fiscal year 2006 of
$24,332,000. New orders for the first six months of fiscal year
2007 were $76,780,000 representing a 34% increase when compared
to new orders of $57,238,000 for the same period of fiscal year
2006.
Revenues for the second quarter of fiscal year 2007 were $41,054,000
compared to revenues of $43,525,000 for the second quarter of fiscal
year 2006. Revenues for the first six months of fiscal year 2007
were $84,598,000 compared to revenues of $77,078,000 for the first
six months of fiscal year 2006.
Operating income for the second quarter and first six months of
fiscal year 2007 was $2,476,000 and $5,616,000, respectively, compared
with operating income of $2,740,000 and $5,266,000 for the second
quarter and first six months of fiscal year 2006, respectively.
Second quarter fiscal 2007 operating income was reduced by approximately
$869,000 due to our inability to recover approximately $569,000
of pre-contract costs; and due to recording a profit reserve of
$300,000 for the estimated amount of indirect costs that will not
be recovered through contract activities during the remainder of
fiscal year 2007. Net income for the second quarter and first six
months of fiscal year 2007 was $1,580,000 or $0.13 per diluted
share and $3,443,000 or $0.28 per diluted share, respectively,
compared to net income for the second quarter and first six months
of fiscal year 2006 of $1,523,000 or $0.13 per diluted share and
$2,835,000 or $0.24 per diluted share, respectively. Our effective
tax rate for fiscal year 2007 is estimated to be 44.2%, compared
to an effective tax rate at the end of fiscal 2006 of 52.9%. The
anticipated decline in our fiscal 2007 effective tax rate is due
to a projected decrease in our fiscal 2007 non-deductible stock-based
compensation expense as a percentage of our taxable income; and
due to projected increases in our tax-exempt interest related to
certain short-term and long-term investments.
Regarding the operating results, Mr. Gary
Yancey, President and Chief Executive Officer commented, “Even
though we experienced some delays in orders with respect to what
we had planned, we were still able to achieve our planned revenues
for the first six months.”
“We experienced a high level of bid
and proposal activity for the first six months of this fiscal
year. Some of these proposals are competitive and may not be
awarded to us. However, we believe it is a good sign that this
bid and proposal activity is high.”
Attached to this news release are unaudited condensed statements
of operations and balance sheets.
The Company will host a conference call
on May 29, 2007 to discuss second quarter results. If you wish
to participate in the conference call, please dial 1-877-407-8035
for domestic callers or 1-201-689-8035 for international callers
on May 29, 2007 at 5:00 p.m. eastern time/2:00 p.m. pacific time.
There is no pass code required. This call may be listened to
simultaneously over the Internet through World Investor Links’ Vcall
Website, located at www.vcall.com.
A rebroadcast of the call will be available upon its completion
and will remain available for a limited time.
Applied Signal Technology, Inc. provides
advanced digital signal processing products, systems and services
in support of intelligence, surveillance, and reconnaissance
for global security. For further information about Applied Signal
Technology’s products and
services visit our website at www.appsig.com.
Except for historical information contained
herein, matters discussed in this news release may contain forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially. Statements as to the Company’s bid
and proposal activity and the potential for future orders as well
as the U.S. Government’s demand for our equipment are forward-looking
statements. The risks and uncertainties associated with these statements
include whether orders will be issued by procurers, including the
U. S. Government; the timing of any orders placed by procurers;
whether we will be successful in obtaining contracts for these
orders if they are forthcoming; whether any contracts obtained
by us will be profitable and whether any such contracts might be
terminated prior to completion; whether we will be able to hire
qualified staff as needed; and other risks detailed from time to
time in our SEC reports including our latest Form 10-K filed for
the fiscal year ended October 31, 2006. The Company assumes no
obligation to update the information provided in this news release.
Applied Signal
Technology, Inc.
Condensed Statements of Income
for the Periods Ending May 4, 2007, and April 28, 2006
(in thousands except per share data)
|
— Three Months Ended —
|
—— Six Months Ended ——
|
|
|
May 4,
2007
|
April 28,
2006
|
May 4,
2007
|
April 28,
2006
|
|
|
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|
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| Revenues from contracts |
$41,054 |
$43,525 |
$84,598 |
$77,078 |
| Operating expenses: |
|
|
|
|
| Contract costs |
28,583 |
29,253 |
57,443 |
51,321 |
| Research and development |
3,410 |
4,698 |
6,995 |
8,287 |
| General and administrative |
6,585
--------- |
6,834
--------- |
14,544
--------- |
12,204
--------- |
| Total operating expenses |
38,578
--------- |
40,785
--------- |
78,982
--------- |
71,812
--------- |
| Operating income |
2,476 |
2,740 |
5,616 |
5,266 |
| Interest income/(expense), net |
105
--------- |
49
--------- |
265
--------- |
71
--------- |
Income before provision for
income taxes |
2,581 |
2,789 |
5,881 |
5,337 |
| Provision for income taxes |
1,001
--------- |
1,266
--------- |
2,438
--------- |
2,502
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| Net income |
$1,580
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|
$1,523
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$3,443
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$2,835
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| Net income per share — basic |
$0.13 |
$0.13 |
$0.29 |
$0.24 |
| Average shares — basic |
12,039 |
11,712 |
12,006 |
11,665 |
| Net income per share — diluted |
$0.13 |
$0.13 |
$0.28 |
$0.24 |
| Average shares — diluted |
12,285 |
12,012 |
12,228 |
11,974 |
Applied Signal Technology, Inc.
Condensed Balance Sheets
(in thousands)
|
|
|
|
May 4,
2007
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October 31,
2006
|
|
|
|
| Assets |
|
|
| Current assets: |
|
|
| Cash, cash equivalents, and short term investments |
28,151 |
29,845 |
| Accounts receivable |
38,656 |
40,579 |
| Inventory |
12,111 |
6,078 |
| Refundable income tax |
647 |
647 |
| Other current assets |
8,587
------- |
12,306
------- |
| Total current assets |
88,152 |
89,455 |
| Property and equipment, at cost |
59,297 |
58,311 |
| Accumulated depreciation and amortization |
(43,794)
------- |
(41,496)
------- |
| Net property and equipment |
15,503 |
16,815 |
| Goodwill |
19,964 |
19,964 |
| Intangible assets |
2,270 |
2,270 |
| Less accumulated amortization |
(1,332)
------- |
(1,010)
------- |
| Intangible assets, net |
938 |
1,260 |
| Long-Term Deferred Tax Asset, net |
5,875 |
5,455 |
| Long Term Investment |
5,134 |
2,802 |
| Other assets |
850
------- |
781
------- |
| Total assets |
$136,416
======= |
$136,532
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Liabilities and Shareholders' Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable, accrued payroll and benefits |
$14,754 |
$19,097 |
| Notes payable |
1,429 |
1,429 |
| Income taxes payable |
— |
— |
| Other accrued liabilities |
1,736
------- |
1,741
------- |
| Total current liabilities |
17,919 |
22,267 |
| Long-Term Liabilities: |
|
|
| Long-Term notes payable |
5,952 |
6,786 |
| Other Long-Term liabilities |
1,884
------- |
1,849
------- |
| Total Long-Term liabilities |
$7,836 |
$8,635 |
| Shareholders' equity |
110,661
------- |
105,630
------- |
| Total liabilities and shareholders' equity |
$136,416
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$136,532
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