|
Applied Signal Technology,
Inc.
Announces Strong First Quarter Operating Results
— Operating Income
Increases 137% to $5.6 Million —
— Diluted EPS Increases 125% to $0.27 versus
Year-ago Level of $0.12 —
— New Orders Increase 23.2% to $33.1 Million —
Sunnyvale, CA. February 24, 2009 - Applied Signal Technology,
Inc. (NASDAQ - APSG) today announced operating results for the
first quarter fiscal year 2009, ended January 30, 2009. Revenues
for the first quarter increased 6.2% to $45.4 million versus $42.7
million in the year-ago period. Net income for the first quarter
of fiscal 2009 grew by 133% to $3.5 million versus $1.5 million
in the year-ago period. Earnings per diluted share for the period
were $0.27 as compared to $0.12 in the same period of the prior
year, an increase of 125%.
William Van Vleet, President and Chief Executive
Officer of Applied Signal Technology, Inc., commented “Our
strong first quarter financial performance was driven by both
continued increases in sales and by a more efficient operating
structure. With respect to revenue growth, we continued to see
good levels of demand for our core suite of SIGINT products and
an excellent adoption rate for our new tactical wireless product,
the Model 680 Raider. This product was also a significant factor
in new orders. We also made progress in our strategy to generate
operating profitability improvement by reducing stock compensation
expense.”
Mr. Van Vleet further commented, “We
remain focused on capturing organic growth opportunities across
several categories of existing products and those in development,
and on lowering our cost structure to reinforce our competitiveness
on a broader range of programs. Additionally, we will continue
to look for ways to utilize the strategic advantages provided
to us by our strong capital position to execute new, complementary
growth opportunities.”
The Company’s operating income for the first quarter of
fiscal 2009 increased by 137% to $5,648,000 as compared to $2,380,000
for the first quarter of fiscal year 2008. This improvement was
driven by several factors. The Company noted that in addition to
growth in operating income due to the revenue increase it had:
reduced stock-based compensation expense by approximately $1 million;
program profitability improved by approximately $0.9 million; and
royalties associated with the licensing of intellectual property
into commercial satellite communications markets increased by $0.6
million. The Company also noted that firm fixed price contracts
contributed approximately $0.5 million to operating income due
to the one-time effect of a change in the Company’s method
of allocating indirect costs to contracts to better reflect the
nature of its work particularly on certain programs that utilize
off-the-shelf hardware solutions. The impact of this change in
the method of allocation is expected to be reflected only in the
first quarter of 2009.
The Company also noted that its effective
tax rate for fiscal year 2009 is estimated to be approximately
39.0% compared to the Company’s fiscal year 2008 effective tax rate of 40.8%. This
improvement is primarily due to a change in the terms of the Company’s
employee stock purchase plan that decreased the stock-based compensation
expense incurred.
New orders received during the first quarter
of fiscal year 2009 increased by 23.2% to $33,121,000 as compared
to new orders of $26,889,000 received during the first quarter
of fiscal year 2008. New orders increased primarily because of
the demand for the Company’s
new Raider product.
Mr. Van Vleet concluded, “Our first
quarter results provide a firm foundation for fiscal 2009, resulting
from improvements in continuing operations and increased profitability
as a result of one time events. We are intent on providing cutting
edge strategic and tactical solutions to protect the vital interests
of our nation and to deliver the best possible value to our shareholders.”
Attached to this news release are condensed, consolidated statements
of income, balance sheets and statements of cash flows for the
first quarter of fiscal year 2009 ended January 30, 2009.
Conference Call
The Company will host a conference call on February 24, 2009 to
discuss first quarter fiscal 2009 results. If you wish to participate
in the conference call, please dial 1-877-407-8031 for domestic
callers or 1-201-689-8031 for international callers on February
24, 2009 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
at the Web site www.InvestorCalendar.com.
A rebroadcast of the call will be available upon its completion
and will remain available for a limited time.
About Applied Signal Technology
Applied Signal Technology, Inc. provides advanced intelligence,
surveillance and reconnaissance (ISR) products, systems and services
to enhance global security. For further information about Applied
Signal Technology visit our website at www.appsig.com.
Safe Harbor Language
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 future
orders and levels of demand for its core suite of SIGINT products,
the adoption rate on new products, the Company’s ability
to generate operating profitability improvement by reducing expenses,
and the Company’s ability to increase license revenues, our
ability to execute new, complementary growth opportunities, and
our ability to improve our cost structure to become incrementally
competitive 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 performed well and
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, 2008. 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 January 30, 2009, and February 1, 2008
(in thousands except per share data)
| |
January 30,
2009 |
February 1,
2008 |
| Revenues from contracts |
43,687 |
41,610 |
| Revenues from royalty agreements |
1,697
---------- |
1,115
---------- |
| Total revenues |
45,384 |
$42,725 |
| |
|
|
| Operating expenses: |
|
|
| Contract costs |
31,531 |
29,371 |
| Research and development |
3,075 |
2,979 |
| General and administrative |
5,130
---------- |
7,995
---------- |
| |
|
|
| Total operating expenses |
39,736
---------- |
40,345
---------- |
| |
|
|
| Operating income |
5,648 |
2,380 |
| Interest income/(expense), net |
112
---------- |
233
---------- |
| |
|
|
| Income before provisionfor income taxes |
5,760 |
2,613 |
| Provision for income taxes |
2,245
---------- |
1,125
---------- |
| |
|
|
| Net income |
3,515
======== |
$1,488
======== |
| |
|
|
| Net income per share - basic |
$0.28 |
$0.12 |
| Average shares - basic |
12,754 |
12,344 |
| |
|
|
| Net income per share - diluted |
$0.27 |
$0.12 |
| Average shares - diluted |
12,973 |
12,517 |
Applied Signal Technology, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
| |
January 30,
2009 |
October 31,
2008 |
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$8,019 |
$4,668 |
| Short term investments |
39,296
---------- |
45,045
---------- |
Cash, cash equivalents,
and
short term investments |
47,315 |
49,713 |
| Accounts receivable |
42,156 |
40,115 |
| Inventory |
8,880 |
8,141 |
| Refundable income tax |
— |
— |
| Other current assets |
11,364
---------- |
10,155
---------- |
| Total
current assets |
109,715 |
108,124 |
| |
|
|
| Property and equipment, at cost |
66,807 |
65,773 |
Accumulated depreciation and
amortization |
(52,013)
---------- |
(50,660)
---------- |
| Net property and equipment |
14,794 |
15,113 |
| |
|
|
| Goodwill |
19,964 |
19,964 |
| |
|
|
| Intangible assets, net |
144 |
162 |
| |
|
|
| Long-term deferred tax asset, net |
4,425 |
4,410 |
| Long term investment |
9,438 |
9,381 |
| Other assets |
849
---------- |
865
---------- |
| |
|
|
| Total assets |
$159,329
======== |
$158,019
======== |
| |
|
|
| Liabilities
and Shareholders' Equity |
|
|
| Current liabilities: |
|
|
Accounts payable, accrued
payroll and benefits |
$16,204 |
$20,070 |
| Notes payable |
1,429 |
1,429 |
| Income taxes payable |
2,099 |
498 |
| Other accrued liabilities |
3,464
---------- |
3,513
---------- |
| Total
current liabilities |
23,196 |
25,510 |
| |
|
|
| Long-term liabilities: |
|
|
| Long-term notes payable |
3,571 |
3,929 |
| Other long-term liabilities |
3,711
---------- |
3,847
---------- |
| Total
long-term liabilities |
7,282 |
7,776 |
| |
|
|
| Shareholders' equity |
128,851
---------- |
124,733
---------- |
| |
|
|
| Total liabilities and shareholders' equity |
$159,329
======== |
$158,019
======== |
Applied Signal Technology, Inc.
Consolidated Statements of Cash Flows
Increase (decrease) in Cash
(in thousands)
|
———Three Months Ended ———
|
|
January 30,
2009 |
February 1,
2008 |
| Operating activities: |
|
|
|
|
|
| Net income |
$3,515 |
1,488 |
|
|
|
| |
|
|
Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |
|
|
| Depreciation and amortization |
1,500 |
1,499 |
| Stock-based compensation |
617 |
1,631 |
Excess tax benefits from stock-based
payment arrangements |
(35) |
(17) |
|
|
|
| |
|
|
| Adjustments to reconcile net income to net cash provided |
|
|
| Accounts receivable |
(2,041) |
1,498 |
| Refundable income taxes |
— |
(75) |
| Inventory, prepaids, and other current assets |
(1,947) |
(1,064) |
| Accrued lease incentives |
— |
877 |
| Accounts payable, taxes payable and accrued liabilities |
(2,529)
---------- |
(232)
---------- |
|
|
|
| Net cash provided by (used in) operating activities |
(920) |
5,605 |
|
|
|
| |
|
|
| Investing activities: |
|
|
|
|
|
| Purchase of available-for-sale securities |
(12,694) |
(22,928) |
| Maturity of available-for-sale securities |
18,350 |
19,450 |
| Additions to property and equipment |
(1,041)
---------- |
(828)
---------- |
|
|
|
| Net cash provided by (used in) investing activities |
4,615 |
(4,306) |
|
|
|
| Financing Activities: |
|
|
|
|
|
| Issuance of Common Stock |
1,683 |
1,707 |
Shares repurchased for tax withholding of
vested restricted stock awards |
(101) |
(52) |
Excess tax benefits from stock-based
payment arrangements |
35 |
17 |
| Term loan |
(358) |
(476) |
| Dividends Paid |
(1,603)
---------- |
(1,549)
---------- |
|
|
|
| Net cash (used in) financing activities |
(344) |
(353) |
|
|
|
| |
|
|
| Net increase (decrease) in cash |
3,351 |
946 |
| Cash, beginning of period |
4,668
---------- |
5,250
---------- |
| Cash, end of period |
$8,019
======== |
6,196
======== |
|
|
|
| |
|
|
| Supplemental disclosure of cash flow information: |
|
|
| Interest paid |
79 |
110 |
| Income taxes paid |
659 |
744 |
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