Radyne Reports Third Quarter Earnings of $0.36 Per Share PHOENIX,
Oct. 27 /PRNewswire-FirstCall/ -- Radyne ComStream Inc. (Nasdaq:
RADN; Warrants: RADNW), today reported net earnings of $6.1
million, or $0.36 per fully diluted share, for its third quarter
ended September 30, 2004 compared to earnings of $1.6 million, or
$0.10 per fully diluted share for the same quarter of 2003.
Earnings include a tax benefit of $4.3 million or $ 0.25 per fully
diluted share due primarily to the reduction of a valuation
allowance against deferred tax assets arising from the Company's
net operating loss carryforwards and unused tax credits of $4.1
million. Net sales for third quarter 2004 were $12.7 million
compared to third quarter 2003 net sales of $15.8 million. For the
first nine months of 2004, sales were $39.8 million compared to
$41.5 million for the first nine months of 2003. During the same
period, gross profit increased 18%. Gross margins for the first
nine months of 2004 were 52% compared to gross margins of 42% for
the same period in 2003. The improvement reflects the Company's
continuing development of new products with lower manufacturing
costs and the success of its new products in the broadcast market.
Also, at the end of the quarter, sales backlog was $5.7 million
compared to $5.8 million at the end of the second quarter. Overall,
the Company booked $12.5 million in orders during the third quarter
compared to $13.8 million during the third quarter of 2003. For the
first nine months of 2004, bookings rose to $37.1 million from
$36.3 million during the same period of 2003. The bookings for the
quarter were influenced by a number of key orders that slipped into
the fourth quarter. Since the end of the quarter, the company has
booked an additional $5.1 million in new orders. Sales and bookings
were further impacted by the Company's decision to withdraw from
bidding for large-scale and low-margin system integration jobs.
This decision resulted in a reduction in sales of $1.9 million over
the first nine months of 2004. The Company's balance sheet remains
strong with a cash balance of $35.4 million compared to $30.1
million at the beginning of this year. Accounts receivable declined
to $8.5 million or 60.9 days of sales outstanding compared to $9.8
million and 62 days at the end of 2003. Inventory increased to $8.9
million from $7.8 million at the beginning of 2004 as the Company
made planned components purchases to assure customer delivery
times. During the quarter, Radyne repurchased $2.4 million of its
shares at an average purchase price of $6.89. "Our new products,
particularly for the broadcast market, continue to generate strong
positive market reactions," commented Bob Fitting, CEO. "The
resultant higher margins coupled with continued demand in digital
television bode well for continued high profitability." Radyne will
be holding a conference call on Wednesday, October 27, 2004 at 4:30
p.m. EDT to discuss its third quarter 2004 financial results and
operational highlights. The call is open to the public. The
domestic dial in number is 1-800-901-5241 and the international
dial in number is +1-617-786-2963. The conference will also be
accessible via the Internet at http://www.radn.com/ and
http://www.fulldisclosure.com/. About Radyne ComStream Radyne
ComStream designs, manufactures, sells, integrates and installs
products, systems and software used for the transmission and
reception of data and video over satellite, microwave and cable
communication networks. The Company, through the Tiernan
subsidiary, is a supplier of HDTV and SDTV encoding and
transmission equipment. The Armer subsidiary provides innovative
solutions for the integration and installation of turnkey
communications systems. Radyne ComStream is headquartered in
Phoenix, Arizona, has manufacturing facilities in Phoenix and San
Diego, and sales offices in Singapore, Beijing, Jakarta and London.
The Company also has sales and/or service centers in Sao Paulo,
Bangalore, Shanghai and Moscow. For more information visit our web
site at http://www.radn.com/. Contact: Malcolm Persen, Chief
Financial Officer, 602.437.9620 Safe Harbor Paragraph for
Forward-Looking Statements This press release includes statements
that constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Reform
Act") and Radyne ComStream claims the protection of the safe-harbor
for forward-looking statements contained in the Reform Act.
Forward-looking statements involve risks, uncertainties and other
factors that may cause actual results, performance or achievements
of Radyne ComStream and its subsidiaries to be materially different
from those expressed or implied by such forward-looking statements.
These forward-looking statements are often characterized by the
terms "may," "believes," "projects," "expects," or "anticipates,"
and do not reflect historical facts. Specific forward-looking
statements contained in this press release include, but are not
limited to: (i) expected future high margins on new products, since
there is no guarantee that current sales levels of those products
will continue or, that if they do, that the margins will remain
high; (ii) continued development of new products and, once
developed, if they will be accepted into the marketplace so as to
effect profits; (iii) expected new orders, the demand for digital
television, and improved market conditions may not materialize, and
even if they do, may not result in higher sales/profits; (iv) our
inability to generate profits sufficient to offset the deferred tax
assets recently capitalized on the balance sheet could result in an
asset impairment charge; (v) planned component purchases, and the
resultant increase in inventory levels, may not enhance our ability
to deliver products on a timely basis and, (vi) the stock
repurchase plan may not continue, and even if it does, the desired
effect of enhancing earnings per share may not materialize. Other
factors that may affect forward-looking statements and the
Company's business generally include but are not limited to: *
Prospects of the international markets and global economy given
that Radyne ComStream depends heavily on international sales. * A
downturn in the evolving telecommunications and Internet
industries. * Risk factors and cautionary statements made in Radyne
ComStream's Annual Report on Form 10-K for the period ended
December 31, 2003. * The effect that acts of international
terrorism may have on Radyne ComStream's ability to ship products
abroad. * Other factors that Radyne ComStream is currently unable
to identify or quantify, but may exist in the future.
Forward-looking statements speak only as of the date the statement
was made. Radyne ComStream does not undertake and specifically
declines any obligation to update any forward-looking statements.
Radyne ComStream Inc. Consolidated Balance Sheets (in thousands)
Assets Sept. 30, 2004 Dec. 31, 2003 Unaudited Current assets: Cash
and cash equivalents $35,366 $30,130 Accounts receivable - trade,
net of allowance for doubtful accounts of $232 and $489,
respectively 8,481 9,780 Inventories, net 8,947 7,766 Deferred tax
assets 2,795 -- Prepaid expenses and other assets 683 482 Total
current assets 56,272 48,158 Deferred tax assets 2,945 -- Property
and equipment, net 1,696 2,269 Deposits 182 182 $61,095 $50,609
Liabilities and Stockholders' Equity Current liabilities: Accounts
payable $1,097 $2,181 Accrued expenses 3,981 3,527 Income taxes
payable 160 185 Customer advance payments 466 877 Total current
liabilities 5,704 6,770 Long-term obligations -- 16 Accrued stock
option compensation 146 205 Total liabilities 5,850 6,991
Stockholders' equity: Common stock 16 16 Additional paid-in capital
54,205 53,102 Retained earnings (deficit) 1,024 (9,500) Total
stockholders' equity 55,245 43,618 $61,095 $50,609 Radyne ComStream
Inc. Consolidated Statements of Operations (Unaudited, in thousands
except per share data) Three Months Ended Nine Months Ended
September 30, September 30, 2004 2003 2004 2003 Net sales $12,707
$15,791 $39,800 $41,463 Cost of sales 6,133 8,655 19,197 24,029
Gross profit 6,574 7,136 20,603 17,434 Operating expenses: Selling,
general and administrative 3,523 2,977 10,395 10,130 Research and
development 1,411 1,554 3,964 4,883 Total operating expenses 4,934
4,531 14,359 15,013 Earnings from operations 1,640 2,605 6,244
2,421 Other (income) expense: Interest expense 10 4 15 22 Interest
and other income (133) (55) (305) (182) Earnings before income
taxes 1,763 2,656 6,534 2,581 Income tax (benefit) expense (4,302)
1,032 (3,990) 1,032 Net earnings $6,065 $1,624 $10,524 $1,549
Earnings per share: Basic $0.37 $0.11 $0.64 $0.10 Diluted $0.36
$0.10 $0.61 $0.10 Weighted average number of common shares
outstanding: Basic 16,390 15,452 16,404 15,358 Diluted 16,911
15,721 17,159 15,419 DATASOURCE: Radyne ComStream Inc. CONTACT:
Malcolm Persen, Chief Financial Officer of Radyne ComStream Inc.,
+1-602-437-9620 Web site: http://www.radn.com/
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