Radyne ComStream Reports Third Quarter Pre-Tax Earnings of $2.7
Million Bookings, Sales and Earnings Increase for Third Consecutive
Quarter PHOENIX, Oct. 30 /PRNewswire-FirstCall/ -- Radyne ComStream
Inc. (Nasdaq: RADN; Warrants: RADNW), today reported net earnings
of $1.6 million, or $0.10 per share on a diluted basis, for its
fiscal third quarter ended September 30, 2003 compared to a net
loss of $2.9 million, or $0.19 per share, for the third quarter of
2002. Earnings before income taxes were $2.7 million for the third
quarter of 2003 compared to a loss of $2.9 million for the same
quarter of 2002. Net sales of $15.8 million for third quarter 2003
were up 23% compared to third quarter 2002 net sales of $12.8
million. Earnings for third quarter 2003 benefited from gross
profits of $7.1 million, 78% greater than the same quarter of 2002
due primarily to increased sales and new, lower cost products
introduced during second quarter 2003. Gross profits increased to
45% of net sales compared to 31% for the same quarter of 2002.
Gross margins for third quarter 2003 also benefited from cost
reductions resulting in lower operating overhead compared to third
quarter 2002. Operating expenses continue to decline, with third
quarter 2003 R&D expenses down $0.4 million or 20% compared to
the same quarter of 2002 due primarily to staff and cost reductions
as part of more focused new product development efforts. "Our
bookings, sales and earnings have increased for the third
consecutive quarter and new products continue to increase our gross
margins and market share," commented Bob Fitting, CEO. "Our new
higher-margin satellite communications products continue to find
acceptance with our customers, and we expect our new video encoder
products that are anticipated to come on line next month to
increase margins on our video product line." Net earnings were $1.5
million, or $0.10 per share on a diluted basis, for the nine months
ended September 30, 2003 compared to a net loss of $9.4 million, or
$0.62 per share, (including a $4.3 million, or $0.28 per share,
charge for cumulative effect of change in accounting principle) for
the same period in 2002. Net sales for the nine months ended
September 30, 2003 were $41.5 million, down 6% compared to net
sales of $43.9 million for the same period in 2002. New lower cost
products introduced in second quarter 2003 improved gross margins
to 42% of sales for the first nine months of 2003 compared to 31%
for the same period in 2002. The Company has no debt, and cash has
increased $8 million since the beginning of fiscal year 2003 to $24
million at September 30, 2003. Radyne ComStream will be conducting
a conference call and webcast today at 2:00 p.m. EST to comment on
and answer any questions related to its third quarter 2003
financial results. The call is open to the public. The domestic
dial in number is 1-877-407-9205 and the international dial in
number is 201-689-8054. It will also be accessible via the Internet
at http://www.radn.com/ and http://www.vcall.com/ . Those unable to
participate at the designated time may visit either website to
listen to a recording of the conference call. 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 ( http://www.tiernan.com/ ), is a supplier
of HDTV and SDTV encoding and transmission equipment. The Armer
subsidiary ( http://www.armercom.com/ ) 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: Rich Johnson, Chief
Financial Officer, Radyne ComStream, 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. 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 the Company's expectation that its
new video encoder products anticipated to come on line next month
will result in increased margins on its video product line.
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.
Factors that could affect Radyne ComStream's results and cause them
to materially differ from those contained in the forward-looking
statements contained herein include, without limitation the
Company's failure or delay in bringing its new video encoder
products online in the anticipated time frame or the failure of the
Company's customers to receive this product as expected by the
Company. 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, 2002. -- 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. Condensed Consolidated Balance Sheets
September 30, December 31, 2003 2002 Assets Unaudited Current
assets: Cash and cash equivalents $24,375,545 $16,229,558 Accounts
receivable, net 10,707,165 10,517,340 Inventories 7,392,390
10,654,601 Prepaid expenses and other assets 267,875 567,352
Deferred tax assets 1,520,309 2,552,549 Total current assets
44,263,284 40,521,400 Property and equipment, net 2,597,055
3,692,842 Deposits and other intangibles 205,051 192,530
$47,065,390 $44,406,772 Liabilities and Stockholders' Equity
Current liabilities: Current installments of obligations under
capital leases $17,147 $37,808 Accounts payable, trade 2,271,435
1,880,207 Accrued liabilities 4,181,052 3,899,676 Customer advance
payments 834,036 707,398 Total current liabilities 7,303,670
6,525,089 Deferred rent 26,777 72,264 Obligations under capital
leases, excluding current installments 7,692 19,861 Accrued stock
option compensation 477,656 501,073 Total liabilities 7,815,795
7,118,287 Commitments and contingent liabilities Stockholders'
equity: Common stock; $.001 par value - authorized, 50,000,000
shares 15,504 15,309 Additional paid-in capital 51,311,216
50,921,603 Accumulated deficit (12,077,125) (13,625,485)
Accumulated other comprehensive loss -- (22,942) Total
stockholders' equity 40,281,835 37,288,485 $47,065,390 $44,406,772
Radyne ComStream Inc. Condensed Consolidated Statements of
Operations Unaudited Three Months Ended Nine Months Ended September
30, September 30, 2003 2002 2003 2002 Net sales $15,790,825
$12,841,172 $41,462,604 $43,943,711 Cost of sales 8,654,509
8,407,846 24,028,884 29,887,714 Restructuring charge -- 430,826 --
430,826 Gross profit 7,136,316 4,002,500 17,433,720 13,625,171
Operating expenses: Selling, general and administrative 2,976,611
2,867,389 10,129,861 9,947,761 Research and development 1,554,561
1,946,917 4,883,462 6,766,673 Asset impairment charges -- 995,000
-- 995,000 Restructuring charge -- 1,101,889 -- 1,101,889 Total
operating expenses 4,531,172 6,911,195 15,013,323 18,811,323
Earnings (loss) from operations 2,605,144 (2,908,695) 2,420,397
(5,186,152) Other (income) expense: Interest expense 4,046 12,843
21,633 34,329 Interest and other income (55,350) (56,908) (181,836)
(146,511) Earnings (loss) before income taxes and cumulative effect
of change in accounting principle 2,656,448 (2,864,630) 2,580,600
(5,073,970) Income taxes (benefit) 1,032,240 -- 1,032,240 -- Net
earnings (loss) before cumulative effect of change in accounting
principle 1,624,208 (2,864,630) 1,548,360 (5,073,970) Cumulative
effect of change in accounting principle -- -- -- (4,281,205) Net
earnings (loss) $1,624,208 $(2,864,630) $1,548,360 $(9,355,175)
Earnings (loss) per share: Basic $0.11 $(0.19) $0.10 $(0.62)
Diluted $0.10 $(0.19) $0.10 $(0.62) Weighted average common shares
outstanding: Basic 15,452,238 15,234,693 15,357,610 15,161,804
Diluted 15,721,470 15,234,693 15,419,281 15,161,804 DATASOURCE:
Radyne ComStream Inc. CONTACT: Rich Johnson, Chief Financial
Officer of Radyne ComStream Inc., +1-602-437-9620 Web site:
http://www.armercom.com/ Web site: http://www.tiernan.com/ Web
site: http://www.vcall.com/ Web site: http://www.radn.com/
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