LaBarge, Inc. Reports Sales and Earnings Increase Sharply in

Fiscal 2007 First Quarter 
Sales Increase 26 Percent 
Net Earnings Increase 19 Percent 
Backlog Grows 15 Percent, Reaches Record High 
ST. LOUIS--(BUSINESS WIRE)--November 02, 2006
LaBarge, Inc. (AMEX: LB) today reported sharply higher sales and
earnings for its fiscal 2007 first quarter ended October 1, 2006
versus the comparable period a year earlier. The financial results
exceeded the Company's recent guidance. 
Fiscal 2007 first-quarter net sales were $49,900,000, up 26
percent from $39,639,000 in the fiscal 2006 first quarter. Fiscal 2007
first-quarter net earnings increased 19 percent to $2,411,000, or $.15
per diluted share, compared with $2,031,000, or $.13 per diluted
share, in the fiscal 2006 first quarter. 
Gross margin in the fiscal 2007 first quarter was 21.4 percent,
compared with 24.0 percent in the fiscal 2006 first quarter and 20.4
percent in the fourth quarter of the previous fiscal year. The 24.0
percent gross margin in last year's comparable quarter was above the
high end of the Company's historical range. Typically, LaBarge's gross
margins run in a range of 20 percent to 23 percent, with the margins
varying primarily based on the mix of shipments during the period. 
Selling and administrative expense declined as a percentage of
sales to 12 percent in the fiscal 2007 first quarter, compared with 14
percent a year earlier. In actual dollars, fiscal 2007 first-quarter
selling and administrative expense increased 7 percent from the fiscal
2006 first quarter, in contrast to the 26 percent increase in sales
volume. Interest expense in the fiscal 2007 first quarter was
$651,000, compared with $404,000 in the fiscal 2006 first quarter.
This increase reflected higher interest rates and higher borrowings in
the current-year quarter. 
Cash flow from operations was $10.4 million in the fiscal 2007
first quarter, compared with a negative $1.5 million in the fiscal
2006 first quarter. As a result of this strong cash flow, total debt
declined 19 percent to $33,809,000 at October 1, 2006, compared with
$41,668,000 at July 2, 2006. Stockholders' equity was $67,635,000 at
October 1, 2006, up 4 percent from $64,834,000 at July 2, 2006. 
Craig LaBarge, chief executive officer and president, commented,
"Shipments to virtually all the market sectors we serve were strong
during the first quarter with the largest dollar increases coming from
government systems, natural resources and defense. 
"The largest contributor to first-quarter revenues was shipments
to defense customers, which accounted for 37 percent of sales,
compared with 41 percent in the fiscal 2006 first quarter. In actual
dollars, current-year sales from the defense market sector increased
13 percent from last year's first quarter. 
"Revenues from the natural resources market sector represented 22
percent of fiscal 2007 first-quarter sales versus 21 percent in the
year-ago period. Actual sales dollars from this sector climbed 34
percent in the fiscal 2007 first quarter compared with the year-ago
period due to higher sales to both oil-and-gas and mining customers. 
"Shipments to industrial customers were 15 percent of
first-quarter sales in fiscal 2007, compared with 18 percent in the
comparable period in fiscal 2006. In actual dollars, current-year
industrial sales were up 6 percent from last year's first quarter,
largely the result of higher sales to semiconductor customers.
LaBarge's customers in the industrial market sector do business in the
glass packaging and specialized instrumentation industries, as well as
other industrial markets. 
"Shipments to government systems customers represented 12 percent
of fiscal 2007 first-quarter sales, compared with 4 percent in the
year-ago period. Actual sales dollars from this sector climbed 248
percent in the fiscal 2007 first quarter compared with the year-ago
period, largely the result of increased shipments of postal automation
and airport security equipment. 
"The balance of first-quarter revenues were attributable to
customers in a variety of other market sectors, including: 
--  Commercial aerospace - 9 percent in fiscal 2007 versus 7 
percent in fiscal 2006; and 
--  Medical - 2 percent in fiscal 2007 versus 3 percent in fiscal 
"Bookings of new and additional business were robust during the
first quarter, particularly in the defense, natural resources and
commercial aerospace market sectors. Our backlog of unshipped orders
at October 1, 2006 reached a new company record at $211,770,000, up 15
percent from $183,869,000 at July 2, 2006, and up 28 percent from
$164,872,000 at October 2, 2005. It's important to note that the
current backlog does not include orders related to a large multiyear
contract signed with Owens-Illinois, Inc. (O-I) during the first
fiscal quarter. We expect to begin receiving initial orders on the new
O-I contract during the current quarter," said Mr. LaBarge. 
Mr. LaBarge concluded, "Based on the continued strength of our
backlog, the pipeline of new business opportunities and the currently
strong business climate in certain of the markets we serve, we believe
LaBarge is well-positioned to expand sales and earnings throughout the
2007 fiscal year. Further, we expect fiscal 2007 second-quarter
results will compare favorably with the comparable period a year
Today's Conference Call Webcast 
Today, at 11 a.m. Eastern time, LaBarge will host a live audio
webcast of its discussion with the investment community regarding
financial results for the Company's fiscal 2007 first quarter. The
webcast can be accessed on the Internet through and the investor relations
calendar area of Following the live
discussion, a replay of the webcast will be available at the same
locations on the Internet. 
About LaBarge, Inc. 
LaBarge, Inc. is a broad-based provider of electronics to
technology-driven companies in diverse industrial markets. The Company
provides its customers with sophisticated electronic and
electromechanical products through contract design and manufacturing
services. Headquartered in St. Louis, LaBarge has operations in
Arkansas, Missouri, Oklahoma, Pennsylvania and Texas. The Company's
Web site address is 
Statements contained in this release relating to LaBarge, Inc.
that are not historical facts are forward-looking statements within
the meaning of the federal securities laws. Matters subject to
forward-looking statements are subject to known and unknown risks and
uncertainties, including economic, competitive and other factors that
may cause LaBarge or its industry's actual results, levels of
activity, performance and achievements to be materially different from
any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Important
factors that could cause LaBarge's actual results to differ materially
from those projected in, or inferred by, forward-looking statements
are (but are not necessarily limited to) the following: the impact of
increasing competition or deterioration of economic conditions in
LaBarge's markets; cutbacks in defense spending by the U.S.
Government; loss of one or more large customers; LaBarge's ability to
replace completed and expired contracts on a timely basis; LaBarge's
ability to integrate recently acquired businesses; the outcome of
litigation LaBarge may be party to; increases in the cost of raw
materials, labor and other resources necessary to operate LaBarge's
business; the availability, amount, type and cost of financing for
LaBarge and any changes to that financing; and other factors
summarized in our reports filed from time to time with the Securities
and Exchange Commission. Given these uncertainties, undue reliance
should not be placed on the forward-looking statements. Unless
otherwise required by law, LaBarge disclaims any obligation to update
any forward-looking statements or to publicly announce any revisions
thereto to reflect future events or developments. 

                            LaBarge, Inc.
            Consolidated Statements of Income (Unaudited)
           (amounts in thousands, except per-share amounts)

                                                  Three Months Ended

                                                October 1,  October 2,
                                                   2006        2005
Net sales                                         $49,900     $39,639
Cost and expenses:
  Cost of sales                                    39,243      30,141
  Selling and administrative expense                5,991       5,625
  Interest expense                                    651         404
  Other income and expense, net                        44         (33)
Earnings before income taxes                        3,971       3,502
Income tax expense                                  1,560       1,471

Net earnings                                       $2,411      $2,031

Basic net earnings per common share:
Basic net earnings                                  $0.16       $0.13

Average common shares outstanding                  15,121      15,084

Diluted net earnings per share:
Diluted net earnings                                $0.15       $0.13

Average diluted common shares outstanding          16,058      16,069


                            LaBarge, Inc.
                     Consolidated Balance Sheets
             (amounts in thousands, except share amounts)

                                              October 1,     July 2,
                                                 2006         2006

Current assets:
  Cash and cash equivalents                       $1,600         $947
  Accounts and other receivables, net             27,058       29,759
  Inventories                                     56,728       53,819
  Prepaid expenses                                 1,597        1,743
  Deferred tax assets, net                         1,437        1,395
    Total current assets                          88,420       87,663

Property, plant and equipment, net                20,878       20,453
Intangible assets, net                             2,604        2,743
Goodwill, net                                     24,292       24,292
Other assets, net                                  5,349        5,199
    Total assets                                $141,543     $140,350


Current liabilities:
  Short-term borrowings                          $12,750      $19,475
  Current maturities of long-term debt             6,042        5,791
  Trade accounts payable                          16,775       15,714
  Accrued employee compensation                    8,218        7,783
  Other accrued liabilities                        3,377        1,961
  Cash advances                                    8,995        5,395
    Total current liabilities                     56,157       56,119
Long-term advances from customers for
 purchase of materials                             2,621        2,760
Deferred tax liabilities, net                        113          235
Long-term debt                                    15,017       16,402

Stockholders' equity:
  Common stock, $.01 par value. Authorized
   40,000,000 shares; 15,773,253 issued at
   October 1, 2006 and July 2, 2006,
   including shares in treasury                      158          158
  Additional paid-in capital                      15,491       15,185
  Retained earnings                               54,843       52,431
  Less cost of common stock in treasury,
   shares of 525,636 at October 1, 2006 and
   606,262 at July 2, 2006                        (2,857)      (2,940)

    Total stockholders' equity                    67,635       64,834

    Total liabilities and stockholders'
     equity                                     $141,543     $140,350

LaBarge, Inc.
Colleen Clements, 314-997-0800, ext. 409 
-0- Nov/02/2006 12:00 GMT
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