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Aeroflex Inc (2601) SEC Filing 10-K Annual report for the fiscal year ending Thursday, June 30, 2005

Aeroflex Inc

CIK: 2601

EX-99.1
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praero_8k-050816.txt




NEWS RELEASE



                                                                    AEROFLEX









                                                         FOR IMMEDIATE RELEASE
                                                         ---------------------
FOR FURTHER INFORMATION CONTACT:

INVESTOR INQUIRIES:
-------------------
Leonard Borow
Vice Chairman and Chief Operating Officer
(516) 694-6700


                              AEROFLEX INCORPORATED
                 REPORTS RECORD FOURTH QUARTER FISCAL 2005 SALES

                        SALES INCREASED 12% SEQUENTIALLY
                            TO A RECORD $128 MILLION
                   PRO FORMA INCOME FROM CONTINUING OPERATIONS
                    OF $8.1 MILLION OR $.11 PER DILUTED SHARE
                    GAAP INCOME FROM CONTINUING OPERATIONS OF
                     $2.2 MILLION OR $.03 PER DILUTED SHARE


PLAINVIEW,  NEW YORK, AUGUST 16, 2005 -- Aeroflex  Incorporated  (Nasdaq Symbol:
ARXX),  a leading  designer,  developer and  manufacturer  of automated  testing
solutions  and  microelectronics  for  the  aerospace,   defense  and  broadband
communications markets, today announced operating results for its fourth quarter
and year ended June 30, 2005.

Net sales from continuing  operations for the fourth quarter ended June 30, 2005
were a record $128.0  million,  compared with $125.3 million for the same period
of last year. The Company  reported GAAP income from  continuing  operations for
the fourth  quarter  ended June 30,  2005 of $2.2  million,  or $.03 per diluted
share,  versus GAAP income from continuing  operations of $9.0 million,  or $.12
per diluted share, in the same period of last year.

On a pro forma basis, for the quarter ended June 30, 2005, after tax income from
continuing  operations was $8.1 million,  or $.11 per diluted  share,  excluding
pre-tax charges of

     o    $3.0  million for a  write-off  of acquired  in-process  research  and
          development related to the Company's acquisitions,
     o    $2.7 million for amortization of acquired intangibles,
     o    $1.4 million for restructuring costs, and
     o    $0.8 million for the current period impact of an  acquisition  related
          adjustment to inventory.

On a pro forma basis, for the quarter ended June 30, 2004, after tax income from
continuing operations was $10.3 million, or $.13 per diluted share,  excluding a
pre-tax charge of $2.3 million for amortization of acquired intangibles.





Net sales from  continuing  operations  for the year  ended  June 30,  2005 were
$463.4 million, compared with $414.1 million last year, representing an increase
of 12%. The Company reported GAAP income from continuing operations for the year
ended June 30, 2005 of $18.6  million,  or $.25 per diluted  share,  versus GAAP
income from continuing  operations of $20.5 million,  or $.29 per diluted share,
last year.

On a pro forma basis,  for the year ended June 30,  2005,  after tax income from
continuing  operations was $29.3 million,  or $.39 per diluted share,  excluding
pre-tax charges of

     o    $3.0 million for a write-off of  in-process  research and  development
          related to the Company's acquisitions.
     o    $8.9 million for amortization of acquired intangibles,
     o    $3.1 million for restructuring costs, and
     o    $0.8 million for the current period impact of an  acquisition  related
          adjustment to inventory.

On a pro forma basis,  for the year ended June 30,  2004,  after tax income from
continuing  operations was $29.4 million,  or $.42 per diluted share,  excluding
pre-tax  charges of $7.7 million for  amortization  of acquired  intangibles and
$4.2 million for a write-off of acquired in-process research and development.

The pro forma  results are a supplement to financial  statements  based on GAAP.
The Company uses pro forma information to evaluate its operating performance and
believes this presentation  provides  investors with additional insight into its
underlying  operating results. A full  reconciliation  between the pro forma and
GAAP  results  from  continuing  operations  is  included  in  the  accompanying
financial data.

"Fourth quarter results  exceeded our guidance and reflects a new record for net
sales and backlog" said Len Borow,  Vice Chairman and Chief  Operating  Officer.
"Sales reached a record $128.0  million,  a third to fourth  quarter  sequential
increase of 12%.  Pro forma  operating  income  expanded  to 11.2% of sales,  an
improvement of more than 200 basis points over the third  quarter.  We have made
excellent progress in integrating our JcAIR and UbiNetics acquisitions."

FIRST QUARTER FISCAL 2006 BUSINESS OUTLOOK
------------------------------------------

Our estimate of operating results for the September 2005 quarter is as follows:

o    Net sales are expected to be between $121 and $123 million.

o    Gross profit margins are expected to be approximately  47.5% of sales, plus
     or minus a few tenths of a percent.

o    S,G&A costs are expected to be approximately 23.0% to 23.5% of sales.

o    R&D costs are anticipated to be approximately 15.0% to 15.5% of sales.

o    Amortization of acquired  intangibles is expected to be approximately  $.03
     per diluted share, net of taxes.

o    Acquisition related adjustment to inventory is expected to be approximately
     $.01 per diluted share, net of taxes.

o    SFAS 123R stock option  compensation is expected to be  approximately  $.02
     per diluted share, after tax.





o    Using a share count of 76.2 million shares and an expected  income tax rate
     of 38%, we anticipate  pro forma  earnings from  continuing  operations per
     diluted share of $.08 or $.09. Pro forma earnings  exclude  amortization of
     acquired  intangibles,  the acquisition related adjustment to inventory and
     the  stock  option  compensation.  GAAP  earnings  per  diluted  share  are
     anticipated to be $.03 or $.04.


Our conference call discussing fourth quarter results is scheduled for 9:00 a.m.
(New York time) on August 17, 2005 and can be accessed by dialing 1-866-825-3308
in the United States and by dialing  617-213-8062  outside of the United States.
The participant  passcode is 96093266.  There will be a replay of the conference
call starting at approximately 11:00 a.m. (New York time) on August 17, 2005 and
will  be  available  for  one  week.  The  replay  can be  accessed  by  dialing
1-888-286-8010  within the United States and by dialing  617-801-6888 outside of
the United States. The access code for both telephone numbers is 93371729.  This
call is being  webcast  by CCBN and can be  accessed  at  Aeroflex's  website at
WWW.AEROFLEX.COM.  This webcast  will be archived on that site for one year.  In
conjunction  with this  conference  call,  the  Company  has also  posted on its
website certain financial information on its fourth quarter results.


ABOUT AEROFLEX
--------------
Aeroflex  Incorporated is a global provider of high technology  solutions to the
aerospace,  defense and broadband  communications markets. The Company's diverse
technologies allow it to design,  develop,  manufacture and market a broad range
of test,  measurement and microelectronic  products.  The Company's common stock
trades  on the  Nasdaq  National  Market  System  under the  symbol  ARXX and is
included  in the S&P  SmallCap  600  index.  Additional  information  concerning
Aeroflex Incorporated can be found on the Company's Web site: www.aeroflex.com.

ALL STATEMENTS  OTHER THAN  STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS PRESS
RELEASE REGARDING  AEROFLEX'S  FINANCIAL  POSITION,  BUSINESS OUTLOOK,  BUSINESS
STRATEGY AND PLANS AND OBJECTIVES OF ITS  MANAGEMENT  FOR FUTURE  OPERATIONS ARE
FORWARD-LOOKING  STATEMENTS.  WHEN USED IN THIS  PRESS  RELEASE,  WORDS  SUCH AS
"ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "INTEND" AND SIMILAR EXPRESSIONS,
AS  THEY  RELATE  TO  AEROFLEX  OR  ITS  MANAGEMENT,   IDENTIFY  FORWARD-LOOKING
STATEMENTS.  SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON THE CURRENT BELIEFS OF
AEROFLEX'S MANAGEMENT,  AS WELL AS ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY
AVAILABLE TO ITS MANAGEMENT.  ACTUAL RESULTS COULD DIFFER  MATERIALLY FROM THOSE
CONTEMPLATED BY THE  FORWARD-LOOKING  STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING BUT NOT LIMITED TO,  COMPETITIVE  FACTORS AND PRICING  PRESSURES,  THE
INTEGRATION OF THE BUSINESSES OF BOTH JCAIR,  INC. AND THE TEST AND  MEASUREMENT
DIVISION  OF  UBINETICS   HOLDINGS   LTD.,   CHANGES  IN  LEGAL  AND  REGULATORY
REQUIREMENTS,  TECHNOLOGICAL CHANGE OR DIFFICULTIES,  PRODUCT DEVELOPMENT RISKS,
COMMERCIALIZATION  DIFFICULTIES AND GENERAL ECONOMIC CONDITIONS. SUCH STATEMENTS
REFLECT  OUR CURRENT  VIEWS WITH  RESPECT TO THE FUTURE AND ARE SUBJECT TO THESE
AND OTHER RISKS,  UNCERTAINTIES AND ASSUMPTIONS RELATING TO AEROFLEX'S FINANCIAL
CONDITION, RESULTS OF OPERATIONS,  GROWTH STRATEGY AND LIQUIDITY.  AEROFLEX DOES
NOT UNDERTAKE ANY OBLIGATION TO UPDATE SUCH FORWARD-LOOKING STATEMENTS.


AEROFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE QUARTER ENDED (UNAUDITED) --------------------------------- 6/30/05 6/30/05 6/30/04 6/30/04 -------------- ------------- ------------- --------------- (GAAP) (Pro forma) (GAAP) (Pro forma) NET SALES $ 127,965 $ 127,965 $ 125,309 $ 125,309 Cost of sales 67,957 67,117 65,425 65,425 -------------- ------------- ------------- --------------- GROSS PROFIT 60,008 60,848 59,884 59,884 Selling, general and administrative costs 31,675 30,230 27,794 27,794 Research and development costs 16,277 16,277 14,984 14,984 Amortization of acquired intangibles 2,732 - 2,282 - Acquired in-process R&D 2,974 - - - -------------- ------------- ------------- --------------- OPERATING INCOME 6,350 14,341 14,824 17,106 Interest and other income (expense), net 315 315 82 82 -------------- ------------- ------------- --------------- Income from continuing operations before income taxes 6,665 14,656 14,906 17,188 Provision for income taxes 4,430 6,606 5,933 6,915 -------------- ------------- ------------- --------------- Income from continuing operations 2,235 8,050 8,973 10,273 Income (loss) from discontinued operations, net of tax (106) (106) (695) (695) -------------- ------------- ------------- --------------- Net income $ 2,129 $ 7,944 $ 8,278 $ 9,578 ============== ============= ============= =============== Income (loss) per common share: Basic Continuing operations $ 0.03 $ 0.11 $ 0.12 $ 0.14 Discontinued operations - - (0.01) (0.01) -------------- ------------- ------------- --------------- Net income $ 0.03 $ 0.11 $ 0.11 $ 0.13 ============== ============= ============= =============== Diluted Continuing operations $ 0.03 $ 0.11 $ 0.12 $ 0.13 Discontinued operations - - (0.01) (0.01) -------------- ------------- ------------- --------------- Net income $ 0.03 $ 0.11 $ 0.11 $ 0.12 ============== ============= ============= =============== Weighted average number of shares Outstanding - Basic 74,749 74,749 74,349 74,349 ============== ============= ============= =============== - Diluted 75,399 75,399 76,658 76,658 ============== ============= ============= ===============
AEROFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) For the Year Ended (Unaudited) ---------------------------------------------------------------------------- 6/30/05 6/30/05 6/30/04 6/30/04 -------------- ---------------- -------------- ------------------ (GAAP) (Pro forma) (GAAP) (Pro forma) NET SALES $ 463,371 $ 463,371 $ 414,101 $ 414,101 Cost of sales 244,759 243,919 221,409 221,409 -------------- ---------------- -------------- ------------------ GROSS PROFIT 218,612 219,452 192,692 192,692 Selling, general and administrative costs 113,271 110,147 94,735 94,735 Research and development costs 61,399 61,399 49,972 49,972 Amortization of acquired intangibles 8,896 - 7,730 - Acquired in-process R&D 2,974 - 4,220 - -------------- ---------------- -------------- ------------------ OPERATING INCOME 32,072 47,906 36,035 47,985 Interest and other income (expense), net 949 949 (3,114) (3,114) -------------- ---------------- -------------- ------------------ Income from continuing operations before income taxes 33,021 48,855 32,921 44,871 Provision for income taxes 14,377 19,513 12,457 15,460 -------------- ---------------- -------------- ------------------ Income from continuing operations 18,644 29,342 20,464 29,411 Income (loss) from discontinued operations, net of tax (1,603) (1,603) (8,317) (8,317) -------------- ---------------- -------------- ------------------ Net income $ 17,041 $ 27,739 $ 12,147 $ 21,094 ============== ================ ============== ================== Income (loss) per common share: Basic Continuing operations $ 0.25 $ 0.39 $ 0.30 $ 0.43 Discontinued operations (0.02) (0.02) (0.12) (0.12) -------------- ---------------- -------------- ------------------ Net income $ 0.23 $ 0.37 $ 0.18 $ 0.31 ============== ================ ============== ================== Diluted Continuing operations $ 0.25 $ 0.39 $ 0.29 $ 0.42 Discontinued operations (0.03) (0.02) (0.12) (0.12) -------------- ---------------- -------------- ------------------ Net income $ 0.22 $ 0.37 $ 0.17 $ 0.30 ============== ================ ============== ================== Weighted average number of shares Outstanding - Basic 74,634 74,634 67,917 67,917 ============== ================ ============== ================== - Diluted 75,885 75,885 69,931 69,931 ============== ================ ============== ==================
AEROFLEX INCORPORATED AND SUBSIDIARIES RECONCILIATION OF REPORTED GAAP RESULTS TO PRO FORMA ---------------------------------------------------- INCOME FROM CONTINUING OPERATIONS (UNAUDITED) --------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) For the Quarter Ended For the Year Ended --------------------------------- --------------------------------- 6/30/05 6/30/04 6/30/05 6/30/04 -------------- -------------- -------------- -------------- GAAP income from continuing operations $ 2,235 $ 8,973 $ 18,644 $ 20,464 Pro forma adjustments: Add Back: Acquired in-process R&D 2,974 - 2,974 4,220 Amortization of acquired intangible assets 2,732 2,282 8,896 7,730 Restructuring costs 1,445 - 3,124 - Acquisition related inventory adjustment 840 - 840 - Income tax benefit (2,176) (982) (5,136) (3,003) -------------- -------------- -------------- -------------- Pro forma income from continuing operations $ 8,050 $ 10,273 $ 29,342 $ 29,411 ============== ============== ============== ============== Income per common share: Basic GAAP income from continuing operations after tax $ 0.03 $ 0.12 $ 0.25 $ 0.30 Pro forma adjustments, net of tax 0.08 0.02 0.14 0.13 -------------- -------------- -------------- -------------- Pro forma income from continuing operations after tax $ 0.11 $ 0.14 $ 0.39 $ 0.43 ============== ============== ============== ============== Diluted GAAP income from continuing operations after tax $ 0.03 $ 0.12 $ 0.25 $ 0.29 Pro forma adjustments, net of tax 0.08 0.01 0.14 0.13 -------------- -------------- -------------- -------------- Pro forma income from continuing operations after tax $ 0.11 $ 0.13 $ 0.39 $ 0.42 ============== ============== ============== ============== Weighted average number of shares outstanding - Basic 74,749 74,349 74,634 67,917 ============== ============== ============== ============== - Diluted 75,399 76,658 75,885 69,931 ============== ============== ============== ==============
AEROFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) June 30, June 30, 2005 2004 ----------- ---------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 12,974 $ 98,502 Marketable securities - - Accounts receivable, less allowance for doubtful accounts 101,317 97,031 Inventories 118,906 94,617 Deferred income taxes 18,499 16,774 Assets of discontinued operations - 11,910 Prepaid expenses and other current assets 11,107 8,646 --------- --------- Total current assets 262,803 327,480 Property, plant and equipment, net 78,195 74,372 Assets of discontinued operations - 9,717 Other assets 13,537 10,932 Intangible assets with definite lives, net 67,266 40,602 Goodwill 168,048 88,288 --------- --------- Total assets $ 589,849 $ 551,391 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 634 $ 4,770 Accounts payable 35,907 25,293 Advance payments by customers 15,183 11,725 Income taxes payable 3,657 1,088 Liabilities of discontinued operations - 4,573 Accrued payroll expenses 15,222 13,966 Accrued expenses and other current liabilities 30,451 28,200 --------- --------- Total current liabilities 101,054 89,615 Long-term debt 4,190 5,505 Deferred income taxes 17,146 9,445 Liabilities of discontinued operations - 3,613 Other long-term liabilities 23,479 16,116 --------- --------- Total liabilities 145,869 124,294 --------- --------- Stockholders' equity: Preferred Stock, par value $.10 per share; authorized 1,000 shares: Series A Junior Participating Preferred Stock, par value $.10 per share, authorized 110; none issued Common Stock, par value $.10 per share; - - authorized 110,000 shares; issued 74,618 and 74,282 shares 7,462 7,428 Additional paid-in capital 372,666 370,491 Accumulated other comprehensive income 9,020 11,387 Retained earnings 54,846 37,805 --------- --------- 443,994 427,111 Less: Treasury stock, at cost (4 shares) 14 14 --------- --------- Total stockholders' equity 443,980 427,097 --------- --------- Total liabilities and stockholders' equity $ 589,849 $ 551,391 ========= =========

The following information was filed by Aeroflex Inc on Tuesday, August 16, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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CIK: 2601
Form Type: 10-K Annual Report
Accession Number: 0001047469-05-022854
Submitted to the SEC: Tue Sep 13 2005 5:27:13 PM EST
Accepted by the SEC: Tue Sep 13 2005
Period: Thursday, June 30, 2005
Industry: Semiconductors And Related Devices

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