EX-99.1
2
v050609_99-1.txt

NEWS RELEASE
                                                               [GRAPHIC OMITTED]

                                                           FOR IMMEDIATE RELEASE



FOR FURTHER INFORMATION CONTACT:

Investor Inquiries:
------------------
Leonard Borow
President and Chief Operating Officer
(516) 694-6700

                                    AEROFLEX
                        REPORTS RECORD SALES AND EARNINGS

PLAINVIEW, NEW YORK, August 16, 2006 -- Aeroflex Incorporated (Nasdaq Symbol:
ARXX), today announced operating results for its fiscal 2006 fourth quarter and
fiscal year, which ended June 30, 2006.

                                                                   %
      For the fourth quarter:            2006          2005     Increase
                                       -------       -------    ---------
      Sales (in millions)              $ 150.5       $ 128.0          18% (a)
                                       =======       =======    =========
      Diluted earnings per share from
        continuing operations:
        GAAP                           $  0.10       $  0.03         233%
                                       =======       =======    =========
        Pro forma                      $  0.16       $  0.11          45%
                                       =======       =======    =========

      (a) Includes contributions from fourth quarter 2005 acquisitions; organic
      growth amounted to 16%.

Pro forma gross profit margins were 45.7%, compared to 47.6% last year and pro
forma operating income of $19.7 million increased 37% compared to last year. The
fourth quarter 2006 margins and operating income were adversely affected by a
$3.9 million (2.6% of sales) adjustment to a development contract in our Radar
Test Systems division, that we expect to recover in fiscal 2007. The fourth
quarter pro forma results from continuing operations exclude the following
items:

                                         2006       2005
                                       --------   --------
      Acquisition-related items:
         Amortization of intangibles   $   0.03   $   0.02
         Write-off of in-process R&D          -       0.04
          Adjustments to inventory            -       0.01
      Stock based compensation             0.01          -
      Restructuring charges (a)            0.02       0.01
                                       --------   --------
         Total EPS impact              $   0.06   $   0.08
                                       ========   ========

      (a) Represents charges for the integration of our operations in the United
      Kingdom.







On a GAAP basis, gross profit margins for the fiscal 2006 fourth quarter were
45.1% compared to 46.9% last year. The effect of the adjustment related to the
development contract in our Radar division adversely impacted our gross profit
margins in the fourth quarter by 2.6%. Operating income for the fiscal 2006
fourth quarter increased 96% compared to last year. Income from continuing
operations for the fiscal 2006 fourth quarter amounted to $8.0 million, or $.10
per diluted share, compared with $2.2 million, or $.03 per diluted share, last
year representing a per share increase of 233%. The quarterly results were
meaningfully impacted by:

o     a $1.8 million ($1.1 million after tax or $0.01 per share) charge for
      share based compensation in fiscal 2006 (for which there was no comparable
      expense in the prior year);
o     a $3.5 million ($2.2 million after tax or $0.03 per share) charge for
      amortization of acquired intangibles in fiscal 2006, compared to $2.7
      million ($1.5 million after tax or $0.02 per share) in fiscal 2005 related
      to our acquisitions in the fourth quarter of fiscal 2005;
o     a $2.0 million ($1.3 million after tax or $0.02 per share) charge in
      fiscal 2006 for restructuring costs, compared to $1.4 million ($0.8
      million after tax or $0.01 per share) in fiscal 2005; and
o     fiscal 2005 charges of $3.0 million ($3.0 million after tax or $0.04 per
      share) for acquired in-process research and development and $0.8 million
      ($0.5 million after tax, or $0.01 per share) for an acquisition related
      inventory adjustment (for which there were no comparable items in the
      current fiscal year).

      For the year:
                                                      %
                                 2006     2005     Increase
                               -------   -------   --------

      Sales (in millions)      $ 551.8   $ 463.4        19% (a)
                               =======   =======   ========
      Diluted earnings from
      continuing operations:
        GAAP                   $  0.37   $  0.25        48%
                               =======   =======   ========
        Pro forma              $  0.57   $  0.39        46%
                               =======   =======   ========

      (a) Includes contributions from fourth quarter 2005 acquisitions; organic
      growth amounted to 10%.

Pro forma gross profit margins were 47.3%, compared to 47.4% last year and pro
forma operating income of $69.1 million increased 44% compared to last year. The
development contract adjustment had a 70 basis points adverse affect on the 2006
gross margins. The full year pro forma results from continuing operations
exclude the following items:

                                                     2006            2005
                                                 -----------     -----------
            Acquisition-related items:
               Amortization of intangibles            $ 0.11          $ 0.07
               Write-off of in-process R&D                 -            0.04
               Adjustments to inventory                 0.01            0.01
            Stock based compensation                    0.05               -
            Restructuring charges(a)                    0.03            0.02
                                                 -----------     -----------
               Total EPS impact                       $ 0.20          $ 0.14
                                                 ===========     ===========

      (a) Represents charges for the integration of our operations in the United
      Kingdom.







On a GAAP basis, gross profit margins for fiscal 2006 were 46.8% compared to
47.2% last year. The effect of the adjustment to the development contract in our
Radar division adversely impacted our gross profit margins in fiscal 2006 by 70
basis points. Operating income for fiscal 2006 increased 38% compared to last
year. Income from continuing operations for fiscal 2006 increased 51% to $28.1
million, or $.37 per diluted share, compared with $18.6 million, or $.25 per
diluted share last year. The full year results were meaningfully impacted by:

o     a $6.8 million ($4.2 million after tax or $0.05 per share) charge for
      share based compensation in fiscal 2006 (for which there was no comparable
      expense in the prior year);
o     a $13.8 million ($8.5 million after tax or $0.11 per share) charge in
      fiscal 2006 for amortization of acquired intangibles compared with $8.9
      million ($5.3 million after tax or $0.07 per share) in fiscal 2005 related
      to our acquisitions in the fourth quarter 2005;
o     a $1.1 million ($0.7 million after tax or $0.01 per share) charge in
      fiscal 2006 for an acquisition related inventory adjustment compared with
      $0.8 million ($0.5 million after tax charge or $0.01 per share) in fiscal
      2005;
o     a $3.2 million ($2.0 million after tax or $0.03 per share) charge in
      fiscal 2006 for restructuring costs compared with a $3.1 million ($1.9
      million after tax charge or $0.02 per share) in fiscal 2005; and
o     fiscal 2005 charge of $3.0 million ($3.0 million after tax or $0.04 per
      share) for acquired in process research and development (for which there
      was no comparable item in the current year).

"Aeroflex continued to report outstanding results," said Len Borow, President
and Chief Operating Officer. Mr. Borow continued "We finished with a strong
fourth quarter performance, and realized record sales and earnings for the year.
The $0.16 pro forma EPS represented a 45% increase over last year. The charge on
the development contract in our Radar division adversely effected the earnings
per share by $0.03 per share. Organic sales growth was 16% and 10% for the
quarter and year, respectively. Financial performance was solid in both segments
of our business as our bookings and year end backlog, which stands at $240.3
million, also set records."

Our estimate of operating results for the September 2006 quarter is as follows:

o     net sales are expected to be approximately $136 million; and

o     pro forma earnings per diluted share are anticipated to be $.12. Pro forma
      earnings exclude estimated amortization of acquired intangibles, share
      based compensation and additional restructuring charges of a combined $.04
      per diluted share. GAAP earnings from continuing operations per diluted
      share are anticipated to be $.08.

Commenting on the pro forma earnings per share expectation, Mr. Borow stated
"This represents a 9.1% improvement over last year's first quarter, which is
traditionally the Company's weakest quarter of the fiscal year. The comparison
is negatively affected by a "tough comp" due to a highly profitable satellite
shipment in last year's first quarter."

Our conference call discussing fourth quarter results is scheduled for 8:30 a.m.
(New York time) on August 17, 2006 and can be accessed by dialing 888-396-2384
in the United States and by dialing 617-847-8711 outside of the United States.
The participant passcode is 34314081. There will be a replay of the conference
call beginning one hour after the call's conclusion and will be available for
one week. The replay can be accessed by dialing 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 60197896. 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 related
to 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 acquired businesses, changes in legal and regulatory
requirements, technological change or difficulties, product development risks,
commercialization difficulties, general economic conditions, and other risk
factors disclosed in Aeroflex's most recently filed Form 10-Q. Such statements
reflect the current views of management 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.



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.







                              AEROFLEX INCORPORATED
                                AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                 -----------------------------------------------
                      (In thousands, except per share data)


June 30, June 30, 2006 2005 -------- -------- ASSETS ------ Current assets: Cash and cash equivalents $ 10,387 $ 12,974 Marketable securities 28,332 - Accounts receivable, less allowance for doubtful accounts 120,296 101,317 Inventories 133,420 118,906 Deferred income taxes 24,732 18,499 Prepaid expenses and other current assets 11,187 11,107 -------- -------- Total current assets 328,354 262,803 Property, plant and equipment, net 77,940 78,195 Other assets 14,276 13,537 Intangible assets with definite lives, net 54,215 67,266 Goodwill 163,237 168,048 -------- -------- Total assets $638,022 $589,849 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Current portion of long-term debt $ 607 $ 634 Accounts payable 37,832 35,907 Advance payments by customers 21,128 15,183 Income taxes payable 9,162 3,657 Accrued payroll expenses 17,440 15,222 Accrued expenses and other current liabilities 33,046 30,451 -------- -------- Total current liabilities 119,215 101,054 Long-term debt 3,558 4,190 Deferred income taxes 4,631 17,146 Other long-term liabilities 22,948 23,479 -------- -------- Total liabilities 150,352 145,869 -------- -------- 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 75,270 and 74,618 shares 7,527 7,462 Additional paid-in capital 384,870 372,666 Accumulated other comprehensive income 13,468 9,020 Retained earnings 81,805 54,846 -------- -------- 487,670 443,994 Less: Treasury stock, at cost (4 shares) - 14 -------- -------- Total stockholders' equity 487,670 443,980 -------- -------- Total liabilities and stockholders' equity $638,022 $589,849 ======== ========
AEROFLEX INCORPORATED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS -------------------------------------------------- (In thousands, except per share data)
For the Quarter Ended --------------------- 6/30/06 6/30/06 6/30/05 6/30/05 --------- --------- --------- --------- (GAAP) (Pro forma) (GAAP) (Pro forma) Net sales $ 150,514 $ 150,514 $ 127,965 $ 127,965 Cost of sales 82,642 81,713 67,957 67,117 --------- --------- --------- --------- Gross profit 67,872 68,801 60,008 60,848 Selling, general and administrative expenses 32,809 30,022 31,675 30,230 Research and development costs 19,158 19,078 16,277 16,277 Amortization of acquired intangibles 3,450 - 2,732 - Acquired in-process R&D - - 2,974 - --------- --------- --------- --------- Operating income 12,455 19,701 6,350 14,341 Interest and other income (expense), net 172 172 315 315 --------- --------- --------- --------- Income from continuing operations before income taxes 12,627 19,873 6,665 14,656 Provision for income taxes 4,579 7,221 4,430 6,606 --------- --------- --------- --------- Income from continuing operations 8,048 12,652 2,235 8,050 Income (loss) from discontinued operations, net of tax - - (106) (106) Cumulative effect of change in accounting principle, net of tax (a) (1,137) (1,137) - - --------- --------- --------- --------- Net income $ 6,911 $ 11,515 $ 2,129 $ 7,944 ========= ========= ========= ========= Income (loss) per common share: Basic Continuing operations $ 0.11 $ 0.17 $ 0.03 $ 0.11 Discontinued operations - - - - Cumulative effect of change in accounting principle, net of tax (a) (0.02) (0.02) - - --------- --------- --------- --------- Net income $ 0.09 $ 0.15 $ 0.03 $ 0.11 ========= ========= ========= ========= Diluted Continuing operations $ 0.10 $ 0.16 $ 0.03 $ 0.11 Discontinued operations - - - - Cumulative effect of change in accounting principle, net of tax (a) (0.01) (0.01) - - --------- --------- --------- --------- Net income $ 0.09 $ 0.15 $ 0.03 $ 0.11 ========= ========= ========= ========= Weighted average number of shares Outstanding - Basic 75,344 75,344 74,749 74,749 ========= ========= ========= ========= - Diluted 77,387 77,387 75,399 75,399 ========= ========= ========= =========
(a) Change in accounting principle related to the adoption of FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143" AEROFLEX INCORPORATED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS -------------------------------------------------- (In thousands, except per share data)
For the Year Ended (Unaudited) ------------------------------------------------ 6/30/06 6/30/06 6/30/05 6/30/05 --------- --------- --------- --------- (GAAP) (Pro forma) (GAAP) (Pro forma) Net sales $ 551,846 $ 551,846 $ 463,371 $ 463,371 Cost of sales 293,428 290,928 244,759 243,919 --------- --------- --------- --------- Gross profit 258,418 260,918 218,612 219,452 Selling, general and administrative expenses 124,481 116,292 113,271 110,147 Research and development costs 75,900 75,515 61,399 61,399 Amortization of acquired intangibles 13,778 - 8,896 - Acquired in-process R&D - - 2,974 - --------- --------- --------- --------- Operating income 44,259 69,111 32,072 47,906 Interest and other income (expense), net 1,058 1,058 949 949 --------- --------- --------- --------- Income from continuing operations before income taxes 45,317 70,169 33,021 48,855 Provision for income taxes 17,221 26,653 14,377 19,513 --------- --------- --------- --------- Income from continuing operations 28,096 43,516 18,644 29,342 Income (loss) from discontinued operations, net of tax - - (1,603) (1,603) Cumulative effect of change in accounting principle, net of tax (a) (1,137) (1,137) - - --------- --------- --------- --------- Net income $ 26,959 $ 42,379 $ 17,041 $ 27,739 ========= ========= ========= ========= Income (loss) per common share: Basic Continuing operations $ 0.37 $ 0.58 $ 0.25 $ 0.39 Discontinued operations - - (0.02) (0.02) Cumulative effect of change in accounting principle, net of tax (a) (0.01) (0.02) - - --------- --------- --------- --------- Net income $ 0.36 $ 0.56 $ 0.23 $ 0.37 ========= ========= ========= ========= Diluted Continuing operations $ 0.37 $ 0.57 $ 0.25 $ 0.39 Discontinued operations - - (0.03) (0.02) Cumulative effect of change in accounting principle, net of tax (a) (0.02) (0.02) - - --------- --------- --------- --------- Net income $ 0.35 $ 0.55 0.22 $ 0.37 ========= ========= ========= ========= Weighted average number of shares Outstanding - Basic 75,028 75,028 74,634 74,634 ========= ========= ========= ========= - Diluted 76,576 76,576 75,885 75,885 ========= ========= ========= =========
(a) Change in accounting principle related to the adoption of FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations - an interpretation of FASB Statement No. 143" 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 ---------------------- ---------------------- 6/30/06 6/30/05 6/30/06 6/30/05 --------- --------- --------- --------- GAAP income from continuing operations $ 8,048 $ 2,235 $ 28,096 $ 18,644 Pro forma adjustments: Acquired in-process R&D - 2,974 - 2,974 Stock-based compensation 1,761 - 6,772 - Amortization of acquired intangible assets 3,450 2,732 13,778 8,896 Restructuring costs 2,035 1,445 3,214 3,124 Acquisition related inventory adjustment - 840 1,088 840 Income tax benefit (2,642) (2,176) (9,432) (5,136) --------- --------- --------- --------- Pro forma income from continuing operations $ 12,652 $ 8,050 $ 43,516 $ 29,342 ========= ========= ========= ========= Income per common share: Basic GAAP income from continuing operations after tax $ 0.11 $ 0.03 $ 0.37 $ 0.25 Pro forma adjustments, net of tax 0.06 0.08 0.21 0.14 --------- --------- --------- --------- Pro forma income from continuing operations after tax $ 0.17 $ 0.11 $ 0.58 $ 0.39 ========= ========= ========= ========= Diluted GAAP income from continuing operations after tax $ 0.10 $ 0.03 $ 0.37 $ 0.25 Pro forma adjustments, net of tax 0.06 0.08 0.20 0.14 --------- --------- --------- --------- Pro forma income from continuing operations after tax $ 0.16 $ 0.11 $ 0.57 $ 0.39 ========= ========= ========= ========= Weighted average number of shares outstanding - Basic 75,344 74,749 75,028 74,634 ========= ========= ========= ========= - Diluted 77,387 75,399 76,576 75,885 ========= ========= ========= =========

The following information was filed by Aeroflex Inc on Wednesday, August 16, 2006 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.

View differences made from one year to another to evaluate Aeroflex Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Aeroflex Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account