|
Commencing its 70th year of operations, Telephonics Corporation continues to demonstrate market leadership in supplying high technology, mission critical systems for military and civil applications worldwide. Since its founding in 1933 and through present day, Telephonics has maintained an excellent reputation for its vision, innovation, and advanced technology.
Responding to ever-changing world threats, Telephonics has been working with long-standing customers such as the United States Navy, Air Force, Army, and Coast Guard, as well as new agencies such as the Department of Homeland Security to deploy advanced surveillance radars and fully integrated system solutions. Whether in the air, on land, or on the sea, Telephonics brings its wealth of knowledge and experience to meet the challenges of maritime surveillance and weather tracking, air traffic management and perimeter and border security.
From its original customer, the U.S. Army Air Corps in 1933, to the intercommunications system on U.S. Air Force One, Telephonics Corporation has and will continue to meet the challenges and opportunities of the markets it serves with superior products, outstanding performance and the highest level of commitment.
The Company continued its strong performance in fiscal 2003 with a solid and very profitable third quarter.
Net sales for the quarter ended June 30, 2003 were $312,547,000 compared to $297,335,000 for the third quarter of fiscal 2002. Income before income taxes
increased to $19,183,000 from $17,108,000. Net income was $11,322,000 in the current quarter compared to $11,437,000 in the third quarter of 2002. Diluted earnings per share was $.33 per share for the third quarter of fiscal 2003 compared to $.32 per share last year. Basic earnings per share was $.34 per share in the third quarter of both fiscal 2003 and 2002.
Garage doors’ profitability continued to improve due to higher unit volume and effective cost control, as well as the 2002 divestiture of Atlas, an unprofitable commercial operation. Excluding the effect of the Atlas divestiture, net sales of the garage doors segment increased 3.6% compared to last year.
Specialty plastic films also continued to perform well
as the segment realized substantial increases in sales and higher earnings compared to last year’s third quarter. Growth continued to be driven principally by higher unit volumes, the effect of a weaker U.S. dollar on translated foreign sales and the net sales of the Brazilian operation acquired in the latter half of fiscal 2002. The segment’s profitability in the quarter was tempered by costs associated with ongoing manufacturing facility expansion for existing and new products.
The electronic information and communication systems segment, Telephonics, reported lower sales primarily due to lower than anticipated awards of new orders. Earnings in this segment declined compared to last year principally due to the sales decrease.
Earnings for the three and nine month periods ended June 30, 2003 and 2002 benefited from tax credits approximating $1,700,000 in 2003 and $2,000,000 in 2002 to reflect the resolution of certain previously recorded tax liabilities and, in 2003, the finalization of income taxes on foreign earnings and remittances.
Net sales for the nine months ended June 30, 2003 were $892,031,000 compared to $866,545,000 for the first nine months of fiscal 2002. Pretax income for the nine months rose to $51,500,000 compared to $47,847,000 last year. Income before the accounting change last year to adopt Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” was $26,859,000 for the first nine months of 2003 compared to $26,834,000 last year.
During the quarter, cash generated from operations increased to $28,000,000, funding further reductions in bank debt of $3,700,000 and capital expenditures of $13,000,000 primarily in connection with ongoing programs in the specialty plastic films segment. In July 2003, the company sold $130,000,000 (including $5,000,000 related to an over-allotment option) of 4% convertible subordinated notes. Approximately $50,000,000 of the net proceeds from the sale of the notes was used to repurchase 3,067,484 shares of common stock, $49,000,000 was used to repay revolving credit debt with the remainder to be used for general corporate purposes.
We look forward to reporting continued success throughout the balance of the year and into 2004.
Harvey R. Blau
Chairman of the Board
Robert Balemian
President |
