Science & Technology
Science and Technology
Science and Technology
Wed, February 25, 2009
Tue, February 24, 2009 Applied Signal Technology, Inc. Announces Strong First Quarter Operating Results
SUNNYVALE, Calif.--([ BUSINESS WIRE ])--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, | February 1, | |||||
| 2009 | 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 provision for 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) | ||||||||
| ASSETS | ||||||||
| January 30, | October 31, | |||||||
| 2009 | 2008 | |||||||
| 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, | February 1, | |||||||
| 2009 | 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 | ||||
