Radyne Reports First Half Earnings of $.26 Per Share PHOENIX, July
28 /PRNewswire-FirstCall/ -- Radyne ComStream Inc. (Nasdaq: RADN;
Warrants: RADNW), today reported net earnings of $1.3 million, or
$0.08 per fully diluted share, for its fiscal second quarter ended
June 30, 2004 compared to earnings of $1.4 million, or $0.09 per
fully diluted share for the same quarter of 2003. Net sales for
second quarter 2004 were $12.0 million compared to second quarter
2003 net sales of $14.8 million. Net earnings as a percentage of
sales increased to 11% during second quarter of 2004 from 9% during
the second quarter of 2003. Earnings during the second quarter of
2003 reflected no income tax liability while the Company incurred
taxes at a 6.5% rate for the second quarter of 2004. The lower
sales for the quarter resulted in part from the previously
announced acceleration, at a customer's request, of a major order
into the first quarter. For the first six months of 2004, however,
sales rose 6% to $27.1 million compared to $25.7 million for the
first six months of 2003. During the same period, gross profit
increased 36%. Gross margins during the second quarter of 2004 were
50% compared to gross margins of 45% for the same period in 2003.
The improvement reflects the Company's continuing development of
new products with lower manufacturing costs. As a result, Radyne's
fully diluted earnings per share for the first six months of 2004
of 26 cents per share equals the earnings per share for all of
2003. The Company incurred a small loss during the first half of
2003. Also, during the quarter, sales backlog rose 26% to $5.8
million from $4.6 million at the end of the first quarter. Overall,
the Company booked $13.3 million in orders during the second
quarter compared to $11.6 million during the second quarter of
2003. The increase in bookings reflects improving strength in the
Company's markets. The Company's balance sheet strengthened with
cash increasing to $36.0 million from $30.1 million at the
beginning of this year. Accounts Receivable declined to $7.7
million or 59 days of sales outstanding compared to $9.8 million
and 62 days at the end of 2003. Inventory increased to $9.5 million
from $7.8 million at the beginning of 2004 as the Company made
planned components purchases to assure customer delivery times.
"Our quote log continues to grow reflecting a return of the
international markets to a more normal level," commented Bob
Fitting, CEO. "With our high margins and new products, we believe
that the improved market conditions will result in growth and
continued high profitability." Radyne will be holding a conference
call on Wednesday, July 28, 2004 at 4:30 p.m. EDT to discuss its
second quarter 2004 financial results and operational highlights.
The call is open to the public. The domestic dial in number is
1-888-396-2384 and the international dial in number is
617-847-8711. 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 improvement in the Company's quote log, or,
even if it does improve, that the improvement will translate to
higher backlog of orders to ship, (iii) expected new orders and,
thus, higher margins and profits, resulting from improved market
conditions and (iv) our ability to utilize net operating loss
carryforward amounts to offset future taxable amounts. 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)
June 30, Dec. 31, Assets 2004 2003 Unaudited Current assets: Cash
and cash equivalents $36,035 $30,130 Accounts receivable - trade,
net of allowance for doubtful accounts of $236 and $489,
respectively 7,745 9,780 Inventories, net 9,513 7,766 Prepaid
expenses and other assets 882 482 Total current assets 54,175
48,158 Property and equipment, net 1,853 2,269 Deposits 198 182
$56,226 $50,609 Liabilities and Stockholders' Equity Current
liabilities: Current installments of obligations under capital
leases $9 $14 Accounts payable, trade 1,664 2,180 Accrued expenses
3,493 3,513 Taxes payable 124 185 Customer advance payments 539 877
Total current liabilities 5,829 6,769 Deferred rent -- 11
Obligations under capital leases, excluding current installments --
6 Accrued stock option compensation 181 205 Total liabilities 6,010
6,991 Stockholders' equity: Common stock 16 16 Additional paid-in
capital 55,242 53,102 Accumulated deficit (5,042) (9,500) Total
stockholders' equity 50,216 43,618 $56,226 $50,609 Radyne ComStream
Inc. Consolidated Statements of Operations (Unaudited, in thousands
except share data) Three Months Ended Six Months Ended June 30,
June 30, 2004 2003 2004 2003 Net sales $12,020 $14,792 $27,093
$25,672 Cost of sales 5,971 8,160 13,064 15,374 Gross profit 6,049
6,632 14,029 10,297 Operating expenses: Selling, general and
administrative 3,462 3,702 6,872 7,153 Research and development
1,258 1,612 2,554 3,329 Total operating expenses 4,720 5,314 9,426
10,482 Earnings (loss) from operations 1,329 1,318 4,603 (185)
Other (income) expense: Interest expense 3 9 5 18 Interest and
other income (89) (64) (172) (126) Earnings (loss) before income
taxes 1,415 1,372 4,770 (76) Income taxes 92 -- 312 -- Net earnings
(loss) $1,323 $1,372 $4,458 $(76) Earnings (loss) per share: Basic
$0.08 $0.09 $0.27 $(0.00) Diluted $0.08 $0.09 $0.26 $(0.00)
Weighted average number of common shares outstanding: Basic
16,475,517 15,310,185 16,410,220 15,309,512 Diluted 17,210,574
15,310,185 17,429,743 15,309,512 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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