[February 07, 2014] |
|
Aeroflex Announces Second Quarter Fiscal 2014 Results
PLAINVIEW, N.Y. --(Business Wire)--
Aeroflex Holding Corp. ("Aeroflex") (NYSE:ARX), a leading global
provider of high performance microelectronic components, and test and
measurement equipment, today announced its financial results for the
second quarter of fiscal 2014, which ended December 31, 2013.
As announced on September 5, 2013, Aeroflex sold the net assets of
Aeroflex Test Equipment Services ("ATES"), a division of its U.K.
subsidiary, Aeroflex Limited, for $18.4 million in cash. The results of
operations of ATES are reported as income from discontinued operations.
Aeroflex's prior period results have been adjusted to reflect this
transaction.
Aeroflex's results from continuing operations for the second quarter of
fiscal 2014 are discussed below:
-
Net sales were $151.1 million compared to $151.9 million in the second
quarter of fiscal 2013.
-
Operating income was $9.5 million and income from continuing
operations was $1.1 million, or $0.01 per share, compared to operating
income of $5.1 million and income from continuing operations of $0.2
million, or $0.00 per share, in the second quarter of fiscal 2013.
-
On a Non-GAAP basis, Adjusted EBITDA was $26.1 million compared to
Adjusted EBITDA of $27.4 million in the second quarter of fiscal 2013.
For the quarter, Non-GAAP operating income was $20.8 million compared
to $22.5 million, and Non-GAAP net income was $9.2 million, or $0.11
per share, compared to of $8.7 million, or $0.10 per share, last year.
"This quarter we regained our momentum across many of our core growth
markets," stated Len Borow, Chief Executive Officer of Aeroflex. "Led in
particular by a strong showing in AMS, our book-to-bill was
significantly above 1-to-1 as a company. Our ATS segment's book-to-bill
was also above 1-to-1 for the quarter. AMS bookings were strong led by
our two significant contract wins for mixed-signal semiconductors in new
market adjacencies. Our ATS wireless infrastructure business continued
to benefit from demand for next generation LTE technology in growing
markets such as Asia, which resulted in a record bookings quarter for
TM500s. Our strong bookings and market momentum are positioning us well
to drive a very strong second half of fiscal 2014."
The following tables present selected financial information for the
three and six months ended December 31, 2013 and 2012 prepared in
accordance with generally accepted accounting principles ("GAAP") and on
a basis other than GAAP ("Non-GAAP"). Prior fiscal year comparative
information has been restated to present the operating results of ATES
as a discontinued operation. A reconciliation between GAAP and Non-GAAP
amounts is presented at the end of this press release. The 32% Non-GAAP
effective tax rate in the fiscal 2014 period and 33% in the fiscal 2013
period result from Aeroflex's geographic mix of Non-GAAP pre-tax income.
These rates were applied to Aeroflex's Non-GAAP pre-tax income for the
three and six months periods ended December 31, 2013 and 2012,
respectively.
Selected GAAP Results
(In thousands, except percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
151,105
|
|
|
|
$
|
151,872
|
|
|
|
$
|
283,837
|
|
|
|
$
|
289,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
74,980
|
|
|
|
|
78,058
|
|
|
|
|
140,798
|
|
|
|
|
146,280
|
|
Gross margin
|
|
|
|
49.6
|
%
|
|
|
|
51.4
|
%
|
|
|
|
49.6
|
%
|
|
|
|
50.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
9,523
|
|
|
|
|
5,074
|
|
|
|
|
9,486
|
|
|
|
|
(949
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
1,127
|
|
|
|
|
173
|
|
|
|
|
(2,828
|
)
|
|
|
|
(14,343
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations
|
|
|
|
-
|
|
|
|
|
572
|
|
|
|
|
14,462
|
|
|
|
|
949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
1,127
|
|
|
|
$
|
745
|
|
|
|
$
|
11,634
|
|
|
|
$
|
(13,394
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per common share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.01
|
|
|
|
$
|
-
|
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.17
|
)
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
0.17
|
|
|
|
|
0.01
|
|
Net income (loss)
|
|
|
$
|
0.01
|
|
|
|
$
|
0.01
|
|
|
|
$
|
0.14
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per common share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.01
|
|
|
|
$
|
-
|
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.17
|
)
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
0.17
|
|
|
|
|
0.01
|
|
Net income (loss)
|
|
|
$
|
0.01
|
|
|
|
$
|
0.01
|
|
|
|
$
|
0.14
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
85,014
|
|
|
|
|
84,870
|
|
|
|
|
84,965
|
|
|
|
|
84,853
|
|
Diluted
|
|
|
|
85,223
|
|
|
|
|
84,880
|
|
|
|
|
84,965
|
|
|
|
|
84,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Non-GAAP Results
(In thousands, except percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Net sales
|
|
|
$
|
151,105
|
|
|
|
$
|
151,872
|
|
|
|
$
|
283,837
|
|
|
|
$
|
289,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
75,539
|
|
|
|
|
78,244
|
|
|
|
|
141,692
|
|
|
|
|
146,661
|
|
Gross margin
|
|
|
|
50.0
|
%
|
|
|
|
51.5
|
%
|
|
|
|
49.9
|
%
|
|
|
|
50.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
20,795
|
|
|
|
|
22,497
|
|
|
|
|
33,913
|
|
|
|
|
37,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
9,248
|
|
|
|
$
|
8,707
|
|
|
|
$
|
13,485
|
|
|
|
$
|
12,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.11
|
|
|
|
$
|
0.10
|
|
|
|
$
|
0.16
|
|
|
|
$
|
0.14
|
|
Diluted
|
|
|
$
|
0.11
|
|
|
|
$
|
0.10
|
|
|
|
$
|
0.16
|
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
85,014
|
|
|
|
|
84,870
|
|
|
|
|
84,965
|
|
|
|
|
84,853
|
|
Diluted
|
|
|
|
85,223
|
|
|
|
|
84,880
|
|
|
|
|
85,229
|
|
|
|
|
84,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
26,071
|
|
|
|
$
|
27,445
|
|
|
|
$
|
44,583
|
|
|
|
$
|
47,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Outlook
For the third quarter ending March 31, 2014, Aeroflex expects net sales
to be between $155 million and $162 million, GAAP income from continuing
operations to be between $4 million and $8 million, Adjusted EBITDA to
be between $26 million and $30 million, GAAP income from continuing
operations per share to be between $0.04 and $0.07 and Non-GAAP net
income per share to be between $0.11 and $0.14.
The business outlook includes the results of Aeroflex's recently
announced Shenick Network Systems ("Shenick") acquisition from the date
of closing through March 31, 2014. Additionally, the Company anticipates
the acquisition of Shenick will be neutral to Adjusted EBITDA in fiscal
2014 and accretive to Adjusted EBITDA in fiscal 2015. For the calendar
year 2013, Shenick had net sales of $9.4 million.
The range of expected GAAP and Non-GAAP earnings per share for the
fiscal third quarter was calculated using GAAP and Non-GAAP effective
tax rates of 29% and 32%, respectively.
Non-GAAP Presentation
This press release contains Non-GAAP financial measures that are not in
accordance with, or an alternative for, measures prepared in accordance
with generally accepted accounting principles and may be different from
Non-GAAP measures used by other companies. In addition, these Non-GAAP
measures: (i) are not based on any comprehensive set of accounting rules
or principles; and (ii) have limitations in that they do not reflect all
of the amounts associated with Aeroflex's results of operations as
determined in accordance with GAAP. As such, these measures should only
be used to evaluate Aeroflex's results of operations in conjunction with
the corresponding GAAP measures.
Aeroflex believes that the presentation of Non-GAAP financial measures,
when shown in conjunction with the corresponding GAAP measures, provides
useful supplemental information to investors and management regarding
financial and business trends relating to its financial condition and
results of operations because they exclude certain non-cash charges or
items that management does not believe are reflective of its ongoing
operating results when assessing the performance of its business.
Aeroflex believes that these Non-GAAP financial measures also facilitate
the comparison by management and investors of results between periods
and among its peer companies. However, its peer companies may calculate
similar Non-GAAP financial measures differently than Aeroflex, limiting
the information's usefulness as comparative measures.
Webcast and Conference Call Information
Aeroflex will host a live webcast and conference call at 8:15 a.m.
(eastern standard time) today, February 7th during which
management will discuss the financial results. To participate in the
live webcast, please visit the events page of the website located at http://ir.aeroflex.com.
Please plan to join five to ten minutes before the start of the webcast
to facilitate a timely connection. If you are unable to participate and
would like to hear a replay of the call, an audio replay of the webcast
will be available on the Aeroflex website or can be accessed
telephonically for domestic callers at (888) 286-8010 or internationally
at (617) 801-6888 with pass code 53187416.
About Aeroflex
Aeroflex Holding Corp. is a leading global provider of high performance
microelectronic components, and test and measurement equipment used by
companies in the space, avionics, defense, commercial wireless
communications, medical and other markets.
Forward-looking Statements
All statements other than statements of historical fact included in this
press release regarding Aeroflex's business strategy, financial results
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, adverse developments in the global economy; changes in
government spending; dependence on growth in customers' businesses; the
ability to remain competitive in the markets Aeroflex serves; the
inability to continue to develop, manufacture and market innovative,
customized products and services that meet customer requirements for
performance and reliability; the failure of suppliers to provide raw
materials and/or properly functioning component parts; the inability to
meet covenants contained in debt agreements; the termination of key
contracts, including technology license agreements, or loss of key
customers; the inability to protect intellectual property; the failure
to comply with regulations such as International Traffic in Arms
Regulations, the Foreign Corrupt Practices Act and Conflict Minerals
regulations, and any changes in regulations; the failure to realize
anticipated benefits from completed acquisitions, divestitures or
restructurings, or the possibility that such acquisitions, divestitures
or restructurings could adversely affect Aeroflex; the loss of key
employees; exposure to foreign currency exchange rate risks; and
terrorist acts or acts of war. Such statements reflect the current views
of management with respect to the future and are subject to these and
other risks, uncertainties and assumptions. Aeroflex does not undertake
any obligation to update such forward-looking statements. Any
projections in this release are based on limited information currently
available to Aeroflex, which is subject to change. Although any such
projections and the factors influencing them will likely change,
Aeroflex will not necessarily update the information, since Aeroflex
will only provide guidance at certain points during the year.
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
151,105
|
|
|
|
$
|
151,872
|
|
Cost of sales
|
|
|
|
76,125
|
|
|
|
|
73,814
|
|
Gross profit
|
|
|
|
74,980
|
|
|
|
|
78,058
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Selling, general and administrative costs
|
|
|
|
34,012
|
|
|
|
|
36,427
|
|
Research and development costs
|
|
|
|
22,694
|
|
|
|
|
21,088
|
|
Amortization of acquired intangibles
|
|
|
|
7,212
|
|
|
|
|
14,063
|
|
Restructuring charges
|
|
|
|
1,539
|
|
|
|
|
66
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
|
1,340
|
|
Total operating expenses
|
|
|
|
65,457
|
|
|
|
|
72,984
|
|
Operating income
|
|
|
|
9,523
|
|
|
|
|
5,074
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(7,240
|
)
|
|
|
|
(9,768
|
)
|
Write-off of deferred financing costs
|
|
|
|
-
|
|
|
|
|
(227
|
)
|
Other income (expense), net
|
|
|
|
(296
|
)
|
|
|
|
(212
|
)
|
Total other income (expense), net
|
|
|
|
(7,536
|
)
|
|
|
|
(10,207
|
)
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
|
1,987
|
|
|
|
|
(5,133
|
)
|
Provision (benefit) for income taxes
|
|
|
|
860
|
|
|
|
|
(5,306
|
)
|
Income from continuing operations
|
|
|
|
1,127
|
|
|
|
|
173
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
Income from discontinued operations, net of tax provision of $178
|
|
|
|
-
|
|
|
|
|
572
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
1,127
|
|
|
|
$
|
745
|
|
|
|
|
|
|
|
|
Income per common share - basic:
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.01
|
|
|
|
$
|
-
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
0.01
|
|
Net income
|
|
|
$
|
0.01
|
|
|
|
$
|
0.01
|
|
Income per common share - diluted:
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
0.01
|
|
|
|
$
|
-
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
0.01
|
|
Net income
|
|
|
$
|
0.01
|
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
|
85,014
|
|
|
|
|
84,870
|
|
Diluted
|
|
|
|
85,223
|
|
|
|
|
84,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
|
|
|
|
|
|
|
|
Six Months Ended December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
283,837
|
|
|
|
$
|
289,507
|
|
Cost of sales
|
|
|
|
143,039
|
|
|
|
|
143,227
|
|
Gross profit
|
|
|
|
140,798
|
|
|
|
|
146,280
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Selling, general and administrative costs
|
|
|
|
67,180
|
|
|
|
|
71,947
|
|
Research and development costs
|
|
|
|
44,179
|
|
|
|
|
41,966
|
|
Amortization of acquired intangibles
|
|
|
|
17,730
|
|
|
|
|
28,643
|
|
Restructuring charges
|
|
|
|
2,223
|
|
|
|
|
3,333
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
|
1,340
|
|
Total operating expenses
|
|
|
|
131,312
|
|
|
|
|
147,229
|
|
Operating income (loss)
|
|
|
|
9,486
|
|
|
|
|
(949
|
)
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(14,492
|
)
|
|
|
|
(19,846
|
)
|
Write-off of deferred financing costs
|
|
|
|
-
|
|
|
|
|
(824
|
)
|
Other income (expense), net
|
|
|
|
(347
|
)
|
|
|
|
(501
|
)
|
Total other income (expense), net
|
|
|
|
(14,839
|
)
|
|
|
|
(21,171
|
)
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
|
(5,353
|
)
|
|
|
|
(22,120
|
)
|
Provision (benefit) for income taxes
|
|
|
|
(2,525
|
)
|
|
|
|
(7,777
|
)
|
Income (loss) from continuing operations
|
|
|
|
(2,828
|
)
|
|
|
|
(14,343
|
)
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
Income from discontinued operations, net of tax provision of $105
and $295
|
|
|
|
360
|
|
|
|
|
949
|
|
Gain on disposal of operations, net of tax of $0
|
|
|
|
14,102
|
|
|
|
|
-
|
|
Income from discontinued operations
|
|
|
|
14,462
|
|
|
|
|
949
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
11,634
|
|
|
|
$
|
(13,394
|
)
|
|
|
|
|
|
|
|
Income (loss) per common share - basic and diluted:
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.17
|
)
|
Discontinued operations
|
|
|
|
0.17
|
|
|
|
|
0.01
|
|
Net income (loss)
|
|
|
$
|
0.14
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
Basic and diluted
|
|
|
|
84,965
|
|
|
|
|
84,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Selected Segment Data
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Microelectronic solutions ("AMS")
|
|
|
$
|
83,757
|
|
|
|
$
|
83,301
|
|
|
|
$
|
157,763
|
|
|
|
$
|
161,373
|
|
Test solutions ("ATS")
|
|
|
|
67,348
|
|
|
|
|
68,571
|
|
|
|
|
126,074
|
|
|
|
|
128,134
|
|
Total net sales
|
|
|
$
|
151,105
|
|
|
|
$
|
151,872
|
|
|
|
$
|
283,837
|
|
|
|
$
|
289,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
- AMS
|
|
|
$
|
37,532
|
|
|
|
$
|
40,928
|
|
|
|
$
|
71,826
|
|
|
|
$
|
78,711
|
|
- ATS
|
|
|
|
37,448
|
|
|
|
|
37,130
|
|
|
|
|
68,972
|
|
|
|
|
67,569
|
|
Total gross profit
|
|
|
$
|
74,980
|
|
|
|
$
|
78,058
|
|
|
|
$
|
140,798
|
|
|
|
$
|
146,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
- AMS
|
|
|
|
44.8
|
%
|
|
|
|
49.1
|
%
|
|
|
|
45.5
|
%
|
|
|
|
48.8
|
%
|
- ATS
|
|
|
|
55.6
|
%
|
|
|
|
54.1
|
%
|
|
|
|
54.7
|
%
|
|
|
|
52.7
|
%
|
Total gross margin
|
|
|
|
49.6
|
%
|
|
|
|
51.4
|
%
|
|
|
|
49.6
|
%
|
|
|
|
50.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
June 30,
|
|
|
|
|
2013
|
|
|
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
60,949
|
|
|
|
$
|
39,424
|
|
Accounts receivable, less allowance for doubtful accounts of
$3,453 and $3,422
|
|
|
|
125,417
|
|
|
|
|
151,163
|
|
Inventories
|
|
|
|
170,146
|
|
|
|
|
156,516
|
|
Deferred income taxes
|
|
|
|
34,496
|
|
|
|
|
35,491
|
|
Prepaid expenses and other current assets
|
|
|
|
14,107
|
|
|
|
|
9,374
|
|
Total current assets
|
|
|
|
405,115
|
|
|
|
|
391,968
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of
$121,091 and $122,479
|
|
|
|
100,982
|
|
|
|
|
101,546
|
|
Deferred financing costs, net
|
|
|
|
10,722
|
|
|
|
|
11,580
|
|
Other assets
|
|
|
|
31,188
|
|
|
|
|
31,886
|
|
Intangible assets with definite lives, net
|
|
|
|
48,676
|
|
|
|
|
65,552
|
|
Intangible assets with indefinite lives
|
|
|
|
113,006
|
|
|
|
|
110,779
|
|
Goodwill
|
|
|
|
316,990
|
|
|
|
|
315,643
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
1,026,679
|
|
|
|
$
|
1,028,954
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
29,174
|
|
|
|
$
|
34,768
|
|
Advance payments by customers and deferred revenue
|
|
|
|
23,280
|
|
|
|
|
23,490
|
|
Income taxes payable
|
|
|
|
3,086
|
|
|
|
|
12,003
|
|
Accrued payroll expenses
|
|
|
|
17,655
|
|
|
|
|
21,694
|
|
Accrued expenses and other current liabilities
|
|
|
|
34,642
|
|
|
|
|
37,184
|
|
Total current liabilities
|
|
|
|
107,837
|
|
|
|
|
129,139
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
587,000
|
|
|
|
|
587,000
|
|
Deferred income taxes
|
|
|
|
62,459
|
|
|
|
|
67,296
|
|
Other long-term liabilities
|
|
|
|
20,262
|
|
|
|
|
23,061
|
|
Total liabilities
|
|
|
|
777,558
|
|
|
|
|
806,496
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Preferred stock, par value $.01 per share; 50,000,000 shares
authorized, no shares issued and outstanding
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock, par value $.01 per share; 300,000,000 shares
authorized, 85,208,482 and 84,936,582 shares issued and outstanding
|
|
|
|
852
|
|
|
|
|
849
|
|
Additional paid-in capital
|
|
|
|
652,175
|
|
|
|
|
651,950
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(28,605
|
)
|
|
|
|
(43,406
|
)
|
Accumulated deficit
|
|
|
|
(375,301
|
)
|
|
|
|
(386,935
|
)
|
Total stockholders' equity
|
|
|
|
249,121
|
|
|
|
|
222,458
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,026,679
|
|
|
|
$
|
1,028,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
|
|
|
|
|
|
|
|
Six Months Ended December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
11,634
|
|
|
|
$
|
(13,394
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
29,762
|
|
|
|
|
39,803
|
|
Gain on disposal of operations
|
|
|
|
(14,102
|
)
|
|
|
|
-
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
|
1,340
|
|
Write-off of deferred financing costs
|
|
|
|
-
|
|
|
|
|
824
|
|
Deferred income taxes
|
|
|
|
(6,208
|
)
|
|
|
|
(7,766
|
)
|
Share-based compensation
|
|
|
|
2,012
|
|
|
|
|
1,367
|
|
Amortization of deferred financing costs
|
|
|
|
858
|
|
|
|
|
1,101
|
|
Other, net
|
|
|
|
208
|
|
|
|
|
774
|
|
Change in operating assets and liabilities, net of effects from sale
of business:
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable
|
|
|
|
23,864
|
|
|
|
|
20,404
|
|
Decrease (increase) in inventories
|
|
|
|
(11,728
|
)
|
|
|
|
(1,342
|
)
|
Decrease (increase) in prepaid expenses and other assets
|
|
|
|
(2,964
|
)
|
|
|
|
3,676
|
|
Increase (decrease) in accounts payable, accrued expenses and other
liabilities
|
|
|
|
(23,292
|
)
|
|
|
|
(2,678
|
)
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
|
10,044
|
|
|
|
|
44,109
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Net proceeds from the sale of business
|
|
|
|
18,389
|
|
|
|
|
-
|
|
Capital expenditures
|
|
|
|
(9,665
|
)
|
|
|
|
(9,262
|
)
|
Other, net
|
|
|
|
126
|
|
|
|
|
335
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
8,850
|
|
|
|
|
(8,927
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Debt repayments
|
|
|
|
-
|
|
|
|
|
(35,000
|
)
|
Other, net
|
|
|
|
(1,757
|
)
|
|
|
|
(641
|
)
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(1,757
|
)
|
|
|
|
(35,641
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
4,388
|
|
|
|
|
811
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
21,525
|
|
|
|
|
352
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
39,424
|
|
|
|
|
41,324
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
60,949
|
|
|
|
$
|
41,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP
Operating Income
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
Operating income (loss) - GAAP
|
|
|
$
|
9,523
|
|
|
$
|
5,074
|
|
|
$
|
9,486
|
|
|
$
|
(949
|
)
|
Amortization of acquired intangibles
|
|
|
|
7,212
|
|
|
|
14,063
|
|
|
|
17,730
|
|
|
|
28,643
|
|
Restructuring related costs, including pro forma savings(a)
|
|
|
|
1,797
|
|
|
|
811
|
|
|
|
3,052
|
|
|
|
5,419
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
1,340
|
|
|
|
-
|
|
|
|
1,340
|
|
Share-based compensation
|
|
|
|
1,130
|
|
|
|
731
|
|
|
|
2,012
|
|
|
|
1,367
|
|
Other adjustments
|
|
|
|
1,133
|
|
|
|
478
|
|
|
|
1,633
|
|
|
|
1,636
|
|
Operating income - non-GAAP
|
|
|
$
|
20,795
|
|
|
$
|
22,497
|
|
|
$
|
33,913
|
|
|
$
|
37,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Net income (loss) - GAAP
|
|
|
$
|
1,127
|
|
|
|
$
|
745
|
|
|
|
$
|
11,634
|
|
|
|
$
|
(13,394
|
)
|
Income from discontinued operations
|
|
|
|
-
|
|
|
|
|
(572
|
)
|
|
|
|
(14,462
|
)
|
|
|
|
(949
|
)
|
Income (loss) from continuing operations
|
|
|
|
1,127
|
|
|
|
|
173
|
|
|
|
|
(2,828
|
)
|
|
|
|
(14,343
|
)
|
Amortization of acquired intangibles
|
|
|
|
7,212
|
|
|
|
|
14,063
|
|
|
|
|
17,730
|
|
|
|
|
28,643
|
|
Restructuring related costs, including pro forma savings(a)
|
|
|
|
1,797
|
|
|
|
|
811
|
|
|
|
|
3,052
|
|
|
|
|
5,419
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
|
1,340
|
|
|
|
|
-
|
|
|
|
|
1,340
|
|
Share-based compensation
|
|
|
|
1,130
|
|
|
|
|
731
|
|
|
|
|
2,012
|
|
|
|
|
1,367
|
|
Write-off of deferred financing costs
|
|
|
|
-
|
|
|
|
|
227
|
|
|
|
|
-
|
|
|
|
|
824
|
|
Amortization of deferred financing costs
|
|
|
|
430
|
|
|
|
|
547
|
|
|
|
|
858
|
|
|
|
|
1,101
|
|
Other adjustments
|
|
|
|
1,139
|
|
|
|
|
478
|
|
|
|
|
1,639
|
|
|
|
|
1,636
|
|
Tax impact of adjustments
|
|
|
|
(3,587
|
)
|
|
|
|
(9,663
|
)
|
|
|
|
(8,978
|
)
|
|
|
|
(13,786
|
)
|
Net income - non-GAAP
|
|
|
$
|
9,248
|
|
|
|
$
|
8,707
|
|
|
|
$
|
13,485
|
|
|
|
$
|
12,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeroflex Holding Corp. and Subsidiaries
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
1,127
|
|
|
$
|
745
|
|
|
|
$
|
11,634
|
|
|
|
$
|
(13,394
|
)
|
Income from discontinued operations
|
|
|
|
-
|
|
|
|
(572
|
)
|
|
|
|
(14,462
|
)
|
|
|
|
(949
|
)
|
Income (loss) from continuing operations
|
|
|
|
1,127
|
|
|
|
173
|
|
|
|
|
(2,828
|
)
|
|
|
|
(14,343
|
)
|
Interest expense
|
|
|
|
7,240
|
|
|
|
9,768
|
|
|
|
|
14,492
|
|
|
|
|
19,846
|
|
Provision (benefit) for income taxes
|
|
|
|
860
|
|
|
|
(5,306
|
)
|
|
|
|
(2,525
|
)
|
|
|
|
(7,777
|
)
|
Depreciation and amortization
|
|
|
|
13,313
|
|
|
|
19,564
|
|
|
|
|
29,762
|
|
|
|
|
39,687
|
|
EBITDA
|
|
|
|
22,540
|
|
|
|
24,199
|
|
|
|
|
38,901
|
|
|
|
|
37,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring related costs, including pro forma savings(a)
|
|
|
|
1,797
|
|
|
|
811
|
|
|
|
|
3,052
|
|
|
|
|
5,419
|
|
Impairment of asset held for sale
|
|
|
|
-
|
|
|
|
1,340
|
|
|
|
|
-
|
|
|
|
|
1,340
|
|
Share-based compensation
|
|
|
|
1,130
|
|
|
|
731
|
|
|
|
|
2,012
|
|
|
|
|
1,367
|
|
Write-off of deferred financing costs
|
|
|
|
-
|
|
|
|
227
|
|
|
|
|
-
|
|
|
|
|
824
|
|
Other defined items(b)
|
|
|
|
604
|
|
|
|
137
|
|
|
|
|
618
|
|
|
|
|
934
|
|
Adjusted EBITDA
|
|
|
$
|
26,071
|
|
|
$
|
27,445
|
|
|
|
$
|
44,583
|
|
|
|
$
|
47,297
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Primarily reflects costs associated with the reorganization of our
European operations and consolidation of certain of our U.S.
operations. Pro forma savings reflect the costs that we estimate
would have been eliminated during the fiscal year in which a
restructuring occurred had the restructuring occurred as of the
first day of that fiscal year. Pro forma savings were estimated to
be $258,000 and $745,000 for the three months ended December 31,
2013 and 2012 and $829,000 and $2.1 million for the six months
ended December 31, 2013 and 2012, respectively. The pro forma
savings for the three months and six months ended December 31,
2012 includes an additional $745,000 and $1.7 million which was
not reflected in our Adjusted EBITDA as reported in our December
31, 2012 report on Form 10-Q as it relates to restructuring
activities recorded throughout fiscal 2013.
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Reflects other adjustments required in calculating our debt
covenant compliance. These other defined items include legal fees
related to certain litigation and business acquisition and
divestiture related costs.
|
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