Sunnyvale, CA. March 2, 2010 - Applied Signal Technology, Inc. (NASDAQ - APSG), a leading provider of advanced intelligence, surveillance and reconnaissance (ISR) products, systems and services, today announced operating results for the first quarter fiscal year 2010, ended January 29, 2010.
Revenues for the first quarter of fiscal 2010 increased by 6% to $48,080,000 compared to $45,384,000 for the first quarter of fiscal 2009. The Company noted that strong growth in its network intelligence business as well as gains in broadband equipment and sensor systems were partially offset by an expected decline in tactical SIGINT products.
William Van Vleet, President and Chief Executive Officer of Applied Signal Technology, Inc., commented “We are generally pleased with the performance of our business in the first quarter. While our pace of growth was undercut specifically by an expected decline in shipments of some tactical products and, more generally, as a result of the shift in timing of the FY 2010 defense budget process, we were pleased with the growth we experienced this quarter. We are especially gratified with the rapid development of our network intelligence business which, aided by our recent acquisition of Pyxis Engineering, is well positioned to capitalize on the urgent demand for enhanced cyber security.”
Earnings per diluted share for the first quarter were $0.23 as compared to $0.27 in the same period of the prior year. The company noted that earnings in the prior year’s quarter included a benefit of $0.02 per share from a change in the method of allocating indirect costs.
The Company’s operating income for the first quarter of fiscal 2010 was $5,194,000 compared to $5,648,000 for the first quarter of fiscal year 2009. Operating income in the year-ago first quarter benefitted from a non-recurring gain of $450,000 related to a change in the Company’s method of allocating indirect costs to contracts. The Company also noted that a $230,000 year-over-year decline in royalty revenues offset operating income growth in other areas during the first quarter of fiscal 2010. The year-over-year comparison in operating income was also affected by a $175,000 increase in non-cash expenses associated with the amortization of intangible assets which accompanied the acquisition of Pyxis Engineering.
Mr. Van Vleet continued, “We continue to search for strategic acquisitions and intend to reinvest a portion of our earnings into this long-term growth initiative. We are enhancing our ability to compete for a wider range of contracts in our core businesses, to expand tangentially into new categories and markets, and we plan to continue to utilize our balance sheet to accelerate our strategic development.”
New orders received during the first quarter of fiscal year 2010 were $30,022,000 compared to $33,121,000 of new orders received during the first quarter of fiscal year 2009. The Company noted that while demand for broadband and cyber security development efforts remained strong, the delay in the authorization of the FY10 defense budget caused some delays in new orders.
Mr. Van Vleet concluded, “Applied Signal is uniquely positioned to help our customers solve an expanding range of difficult and urgent national security challenges. We have set ourselves firmly on a path to enhance our usefulness to our customers and to leverage the strength of our financial and strategic position to create value for our shareholders. We regard the first quarter as a good start to fiscal 2010.”
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 2010 ended January 29, 2010.
Conference Call
The Company will host a conference call on March 2, 2010 to discuss first quarter fiscal 2010 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 March 2, 2010 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; order delays caused by the delay in the authorization of the FY10 defense budget; our belief that we are well positioned to capitalize on the demand for cyber security; our continued search for strategic acquisitions; our ability to compete for a wider range of contracts in our core businesses and to expand tangentially into new categories and markets; our plans to utilize our balance sheet to accelerate our strategic development; our ability to enhance our usefulness to our customers; and our ability to leverage the strength of our financial and strategic position to create value for our shareholders 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; whether any acquisitions will be successful 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, 2009. The Company assumes no obligation to update the information provided in this news release.
Applied Signal Technology, Inc.
Condensed Consolidated Statements of Income
(in thousands except per share data)
|
Three Months Ended |
| |
January 29, 2010 |
January 30, 2009 |
| Revenues from contracts |
$46,613 |
$43,687 |
| Revenues from royalties |
1,467
--------- |
1,697
--------- |
| Total revenues |
48,080 |
45,384 |
| Operating expenses: |
|
|
| Contract costs |
34,000 |
31,531 |
| Research and development |
3,047 |
3,075 |
| General and administrative |
5,839
--------- |
5,130
--------- |
| Total operating expenses |
42,886
--------- |
39,736
--------- |
| Operating income |
5,194 |
5,648 |
| Interest income/(expense), net |
(3)
--------- |
112
--------- |
| Income before provision for income taxes |
5,191 |
5,760 |
| Provision for income taxes |
2,052
--------- |
2,245
--------- |
| Net income |
$3,139
======= |
$3,515
======= |
| Net income per share - basic |
$0.24 |
$0.27 |
| Average shares - basic |
13,068 |
12,754 |
| Net income per share - diluted |
$0.23 |
$0.27 |
| Average shares - diluted |
13,216 |
12,932 |
Applied Signal Technology, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
|
January 29, 2010 |
October 31, 2009 |
| ASSETS |
| Current assets: |
|
|
| Cash and cash equivalents |
$5,558 |
$4,102 |
| Short term investments |
38,390
--------- |
43,454
--------- |
Cash, cash equivalents, and short
term investments |
43,948 |
47,556 |
| Accounts receivable |
44,199 |
47,063 |
| Inventory |
12,992 |
8,378 |
| Other current assets |
11,274
--------- |
10,517
--------- |
| Total current assets |
112,413 |
113,514 |
| Property and equipment, at cost |
71,445 |
70,400 |
| Accumulated depreciation and amortization |
(56,456)
--------- |
(55,405)
--------- |
| Net property and equipment |
14,989 |
14,995 |
| Goodwill |
33,208 |
33,158 |
| Intangible assets, net |
1,712 |
1,904 |
| Long-term deferred tax asset, net |
4,241 |
4,196 |
| Long term investment |
1,074 |
2,129 |
| Other assets |
1,682
--------- |
1,104
--------- |
| Total assets |
$169,319
======= |
$171,000
======= |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
| Current liabilities: |
|
|
Accounts payable, accrued payroll
and benefits |
$17,027 |
$22,158 |
| Notes payable |
1,429 |
1,429 |
| Income taxes payable |
1,636 |
444 |
| Other accrued liabilities |
2,381
--------- |
2,298
--------- |
| Total current liabilities |
22,473 |
26,329 |
| Long-term liabilities: |
|
|
| Long-term notes payable |
2,143 |
2,500 |
| Other long-term liabilities |
3,096
--------- |
3,146
--------- |
| Total long-term liabilities |
$5,239 |
$5,646 |
| Shareholders' equity |
141,607
--------- |
139,025
--------- |
| Total liabilities and shareholders' equity |
$169,319
======= |
$171,000
======= |
Applied Signal Technology, Inc.
Condensed Statements of Cash Flows
Increase (decrease) in Cash
(in thousands)
|
YTD Jan 10 |
YTD Jan 09 |
| Operating activities: |
|
|
| Net Income |
$3,139 |
$3,515 |
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities: |
|
|
| Depreciation and amortization |
1,799 |
1,500 |
| Stock-based compensation |
547 |
617 |
Excess tax benefits from stock-based
payment arrangements |
(55) |
(35) |
Adjustments to reconcile net income to
net cash provided |
|
|
| Accounts receivable |
2,864 |
(2,041) |
Inventory, prepaid expenses, and
other assets |
(7,087) |
(1,947) |
Accounts payable, taxes payable and
accrued liabilities |
(3,463)
--------- |
(2,529)
--------- |
| Net cash (used in) operating activities |
(2,256) |
(920) |
| Investing activities: |
|
|
Cash received from Pyxis' escrow
account, net |
693 |
― |
| Purchase of available-for-sale securities |
(15,625) |
(12,694) |
| Maturity of available-for-sale securities |
21,460 |
18,350 |
| Additions to property and equipment |
(1,375)
--------- |
(1,041)
--------- |
| Net cash provided by investing activities |
5,153 |
4,615 |
| Financing Activities: |
|
|
| Issuance of Common Stock |
663 |
1,683 |
Shares repurchased for tax withholding
of vested restricted stock awards |
(151) |
(101) |
Excess Tax Benefits From Stock-based
Payment Arrangements |
55 |
35 |
| Term Loans |
(357) |
(358) |
| Dividends Paid |
(1,651)
--------- |
(1,603)
--------- |
| Net cash (used in) financing activities |
(1,441) |
(344) |
| Net increase (decrease) in cash |
1,456 |
3,351 |
| Cash, beginning of period |
4,102
--------- |
4,668
--------- |
| Cash, end of period |
$5,558
======= |
$8,019
======= |
Supplemental disclosure of cash flow
information: |
|
|
| Interest paid |
57 |
79 |
| Income taxes paid |
825 |
659 |
|
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