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Applied Signal Technology, Inc.
Announces Third Quarter Operating Results
Sunnyvale, CA. August 26, 2008 - Applied Signal Technology, Inc.
(NASDAQ - APSG) announced its operating results for the third quarter
and first nine months of fiscal year 2008 showing double-digit
growth in revenues over the same periods in fiscal 2007.
Revenues for the third quarter of fiscal year 2008 were $49,948,000
representing a 26% increase when compared to revenues of $39,542,000
for the third quarter of fiscal year 2007. Third quarter 2008 revenues
increased primarily due to increased sales related to engineering
development programs, standard products, and recognized revenues
on approximately $1.9 million of pre-contract costs. Revenues for
the first nine months of fiscal year 2008 were $137,957,000 representing
an 11% increase when compared to revenues of $124,140,000 for the
first nine months of fiscal year 2007.
Operating income for the third quarter of fiscal year 2008 was
$3,218,000 compared to operating income of $1,623,000 for the third
quarter of fiscal year 2007. Operating income increased for the
third quarter of fiscal 2008 due to increased royalties associated
with the licensing of our intellectual property into commercial
satellite communications markets and as a result of improvements
in company operations. Operating income for the first nine months
of fiscal 2008 was $8,433,000 compared to operating income of $7,239,000
for the same period in fiscal 2007 due to increased royalties.
Net income for the third quarter and first nine months of fiscal
year 2008 was $1,965,000 or $0.15 per diluted share and $5,468,000
or $0.43 per diluted share, respectively, compared to net income
for the third quarter and first nine months of fiscal year 2007
of $977,000 or $0.08 per diluted share and $4,420,000 or $0.36
per diluted share, respectively. This represents a 24% increase
in year-to-date net income compared to fiscal 2007. The effective
tax rate for fiscal year 2008 is estimated to be 45.9%, compared
to an effective tax rate of 43.2% for fiscal 2007.
New orders received during the third quarter of fiscal year 2008
were slightly lower at $70,275,000 compared to new orders of $74,081,000
received during the third quarter of fiscal year 2007. New orders
for the first nine months of fiscal year 2008 were $145,314,000
compared to new orders of $150,861,000 for the same period of fiscal
year 2007. New orders and backlog could be reduced by $2 to $4
million following the settlement of a notice to terminate several
delivery orders for the convenience of the customer.
“We are pleased with the year-over-year
increase in revenues and income,” said Mr. William Van Vleet,
President and Chief Executive Officer. “We will continue
to enhance our operational efficiency and improve our financial
performance as our internal initiatives are fully implemented over
the course of the next year. We are optimistic about the outlook
for future business growth, as we have recently completed a high
volume of proposals for new programs providing intelligence, surveillance
and reconnaissance solutions for the defense and intelligence markets.”
Attached to this news release are unaudited condensed statements
of operations and balance sheets.
The Company will host a conference call
on August 26, 2008 to discuss third 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 August 26, 2008 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.InvestorCalendar.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
expected continued improvement in financial performance as operational
improvements become fully implemented; the estimated impact of
the terminated delivery orders on new orders and backlog; and the
outlook for future business growth are forward-looking statements.
The risks and uncertainties associated with these statements include
whether such operational improvements will be successful in improving
financial performance; to what extent the backlog will be reduced
after settlement of the terminated efforts; whether new 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, 2007. The
Company assumes no obligation to update the information provided
in this news release.
Applied Signal Technology, Inc.
Condensed Consolidated Statements of Income
for the Periods Ended August 1, 2008 and August 3, 2007
(in thousands, except per share data)
|
Three
Months Ended
|
Nine
Months Ended
|
|
August 1,
2008
|
August 3,
2007
|
August 1,
2008
|
August 3,
2007
|
|
|
|
|
|
| Revenues from contracts |
$49,948 |
$39,542 |
$137,957 |
$124,140 |
| Operating expenses: |
|
|
|
|
| Contract costs |
34,572 |
27,062 |
95,435 |
84,505 |
| Research and development |
3,953 |
3,756 |
10,486 |
10,751 |
| General and administrative |
8,205
---------- |
7,101
---------- |
23,603
---------- |
21,645
---------- |
|
|
|
|
|
| Total operating expenses |
46,730
---------- |
37,919
---------- |
129,524
---------- |
116,901
---------- |
|
|
|
|
|
| Operating income |
3,218 |
1,623 |
8,433 |
7,239 |
| Interest income/(expense), net |
158
---------- |
189
---------- |
538
---------- |
454
---------- |
|
|
|
|
|
| Income before
provision for income taxes |
3,376 |
1,812 |
8,971 |
7,693 |
| Provision for income taxes |
1,411
---------- |
835
---------- |
3,503
---------- |
3,273
---------- |
|
|
|
|
|
| Net income |
$1,965
======== |
$977
======== |
$5,468
======== |
$4,420
======== |
|
|
|
|
|
| Net income per
share – basic |
$0.16 |
$0.08 |
$0.44 |
$0.37 |
| Average shares – basic |
12,538 |
12,171 |
12,427 |
12,062 |
|
|
|
|
|
| Net income per share – diluted |
$0.15 |
$0.08 |
$0.43 |
$0.36 |
| Average shares – diluted |
12,741 |
12,381 |
12,616 |
12,283 |
Applied Signal Technology, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
|
|
|
|
August 1,
2008
|
October 31,
2007
|
| Assets |
|
|
| Current assets: |
|
|
| Cash, cash equivalents, and short term investments |
$41,094 |
$34,933 |
| Accounts receivable |
42,287 |
44,476 |
| Inventory |
8,251 |
5,944 |
| Refundable income tax |
— |
647 |
| Other current assets |
8,267
---------- |
9,760
---------- |
| Total current assets |
99,899 |
95,760 |
| |
|
|
| Property and equipment, at cost |
64,980 |
62,565 |
| Accumulated depreciation and amortization |
(49,247)
---------- |
(46,096)
---------- |
| Net property and equipment |
15,733 |
16,469 |
| |
|
|
| Goodwill |
19,964 |
19,964 |
| |
|
|
| Intangible assets, net |
180 |
616 |
| |
|
|
| Long-term deferred tax asset, net |
5,788 |
5,021 |
| Long term investment |
11,729 |
4,114 |
| Other assets |
828
---------- |
789
---------- |
| |
|
|
| Total assets |
$154,121
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$142,733
======== |
| |
|
|
| Liabilities and Shareholders' Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable, accrued payroll and benefits |
$19,402 |
$16,983 |
| Notes payable |
1,429 |
1,429 |
| Income taxes payable |
— |
14 |
| Other accrued liabilities |
2,297
---------- |
1,997
---------- |
| Total current liabilities |
23,128 |
20,423 |
| |
|
|
| Long-term liabilities: |
|
|
| Long-term notes payable |
4,167 |
5,357 |
| Other long-term liabilities |
4,090
---------- |
2,117
---------- |
| Total long-term liabilities |
$8,257 |
$7,474 |
| |
|
|
| Shareholders' equity |
122,736
---------- |
114,836
---------- |
| |
|
|
| Total liabilities and shareholders' equity |
$154,121
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$142,733
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