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Elecsys Corporation Reports Second Quarter Financial Results

         Elecsys Corporation Reports Second Quarter Financial Results

Net income grows by 49% over prior year quarter

PR Newswire

OLATHE, Kan., Dec. 10, 2012

OLATHE, Kan., Dec. 10, 2012 /PRNewswire/ -- Elecsys Corporation (NASDAQ:
ESYS), a provider of innovative machine to machine (M2M) communication
technology solutions, data acquisition systems, and custom electronic
equipment for critical industrial applications worldwide, today announced the
financial results for its second fiscal quarter ended October 31, 2012.

Sales for the quarter were $6,138,000, which was almost identical to the
$6,133,000 in sales during the second quarter of fiscal 2012. Total sales
year-to-date decreased 12%, or $1,411,000, to $10,395,000. The overall
decrease in year-to-date sales was the result of decreased sales experienced
during the first quarter of the year.

Operating income for the quarter was $700,000, compared to operating income of
$483,000 for the same quarter in the prior year. For the first six months of
fiscal 2013, operating income was $471,000, a decrease from $871,000 reported
in the first six months of fiscal 2012.

Net income was $413,000, or $0.11 per diluted share, for the quarter ended
October 31, 2012. For the quarter ended October 31, 2011, net income was
$278,000, or $0.07 per diluted share. For the six-month period ended October
31, 2012, net income totaled $252,000, or $0.06 per diluted share, while for
the comparable prior year period net income was $491,000, or $0.13 per diluted
share.

Sales of proprietary products and services were $3,148,000 for the quarter
ended October 31, 2012, an increase of 33%, or $787,000 from the previous year
quarter. Proprietary product sales increased $130,000, or 3%, to $4,854,000
for the six-month period ended October 31, 2012 compared to $4,724,000 in the
comparable period of the prior fiscal year. Sales of wireless remote
monitoring and industrial data communication solutions increased almost 22%,
or $393,000, from the previous year to $2,192,000 for the current quarter.
This overall increase in sales was driven by increased customer orders for
Watchdog remote monitoring equipment and recurring data management services
combined with increased sales of Director series products. In addition, sales
of Radix and eXtremeTAG mobile data acquisition solutions increased by
$417,000, or 97%, for the period as compared to the prior year.

Sales for the Company's custom Electronic Manufacturing Services ("EMS")
business segment decreased 21% to approximately $2,990,000 for the quarter
ended October 31, 2012, a decrease of $782,000 from $3,772,000 in the prior
fiscal year. Fiscal year-to-date EMS sales were $5,541,000, a decrease of
22%, or $1,541,000, from $7,082,000 in the six-month period ended October 31,
2011. 

The Company expects that total sales for its proprietary products and services
will continue to increase during the second half of the fiscal year due to its
continued investments in both sales and marketing and new product
development. The Company anticipates that each of the major proprietary
product lines; wireless remote monitoring solutions, industrial data
communications, and mobile data acquisition systems, will generate increases
in sales over the next few quarters. The Company also believes that EMS sales
will grow modestly over the longer term based upon the current scheduled
orders in backlog, the anticipated addition of new EMS customers, and renewed
investment in sales and marketing that will focus on customers that can
benefit from the Company's proprietary technology solutions. 

Total backlog at October 31, 2012 was approximately $10,638,000, an increase
of $2,733,000, or 35%, from a total backlog of $7,905,000 on April 30, 2012.
The increase in backlog was primarily due to an increase in EMS bookings
during the quarter combined with an increase in proprietary product backlog.

Gross margin for the quarter ended October 31, 2012 was approximately 39%, or
$2,410,000, versus 34%, or $2,097,000 for the quarter ended October 31, 2011.
The increase in both gross margin dollars and gross margin percentage for the
quarter was a function of the overall increase in sales volume and the product
mix between higher margin proprietary product sales and EMS revenues. Gross
margin for the six-month period also increased to 37% of sales, or $3,800,000
from a gross margin of 35% of sales or $4,101,000 from the six-month period
ended October 31, 2011. The reduction in gross margin dollars was the direct
result of lower overall sales during the year-to-date period while the
increase in gross margin percentage during the same period was due to the
increase in proprietary product sales as a percentage of total sales.

Total selling, general and administrative expenses were approximately
$1,710,000 during the quarter ended October 31, 2012 compared with $1,614,000
in the comparable quarter of the prior fiscal year. The increase of $96,000,
or 6%, resulted from increases in research and development costs and sales and
marketing expenses. The increase in research and development costs included
continued investment in engineering design personnel engaged in new product
development. Selling and marketing expenses increased as a result of
additional sales resources and an increase in product support and installation
expenses linked to the increased number of active units deployed in the
field. Selling, general and administrative expenses totaled $3,329,000 and
$3,230,000, for the six-month periods ended October 31, 2012 and 2011,
respectively.

Karl B. Gemperli, Chief Executive Officer, stated, "We are pleased to report
this latest fiscal quarter which reflects revenue growth, enhanced gross
margin, and a substantial increase in earnings compared to last year. Sales
increased 44% over the first quarter with strong growth in our proprietary
products and services, including our wireless remote monitoring, secure
industrial communication, and mobile data acquisition product sales. Elecsys
continued to reliably deliver innovative, dependable products to our select
OEM partners during the quarter as we build stable, long-term business in our
electronic design and manufacturing services segment."

Gemperli continued, "With the return of meaningful growth in our national
economy still uncertain, we are steadfast in our resolve to expand Elecsys
through targeted strategic investments. We remain committed to developing new
products and technologies and expanding sales of both proprietary and OEM
products into new markets with substantial new business potential. Although
economic uncertainties still abound, we anticipate positive trends in both
revenues and earnings during the coming quarters."

About Elecsys Corporation

Elecsys Corporation provides innovative machine to machine (M2M) communication
technology solutions, data acquisition and management systems, and custom
electronic equipment for critical industrial applications worldwide. The
Company's primary markets include energy, agriculture, safety and security
systems, water management, and transportation. Elecsys proprietary equipment
and services encompass wireless remote monitoring, industrial data
communication, and mobile data acquisition technologies that are deployed
wherever high quality and reliability are essential. Elecsys develops,
manufactures, and supports proprietary technology and equipment under several
premium brand names. In addition to its proprietary products, Elecsys designs
and manufactures rugged and reliable custom electronic assemblies and
integrated display modules for multiple original equipment manufacturers in a
variety of industries worldwide. For more information, visit
www.elecsyscorp.com.

Safe-Harbor Statement

The discussions set forth in this press release may contain forward-looking
comments based on current expectations that involve a number of risks and
uncertainties. Actual results could differ materially from those projected or
suggested in the forward-looking comments. The difference could be caused by a
number of factors, including, but not limited to the factors and conditions
that are described in Elecsys Corporation's SEC filings, including the Form
10-K for the year ended April 30, 2012. The reader is cautioned that Elecsys
Corporation does not have a policy of updating or revising forward-looking
statements and thus he or she should not assume that silence by management of
Elecsys Corporation over time means that actual events are bearing out as
estimated in such forward-looking statements.

Investor Relations Contact: Todd A. Daniels
                            (913) 647-0158, Phone
                            (913) 982-5766, Fax
                            investorrelations@elecsyscorp.com

Elecsys Corporation and Subsidiary
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                          Three Months Ended  Six Months Ended

                                          October 31,         October 31,
                                          2012       2011     2012     2011
Sales                                     $6,138     $6,133   $10,395  $11,806
Cost of products sold                     3,728      4,036    6,595    7,705
Gross margin                              2,410      2,097    3,800    4,101
Selling, general and administrative
expenses:
 Research and development expense        427        368      834      710
 Selling and marketing expense           582        526      1,107    1,085
 General and administrative expense      701        720      1,388    1,435
Total selling, general and administrative 1,710      1,614    3,329    3,230
expenses
Operating income                          700        483      471      871
Financial income (expense):
 Interest expense                        (15)       (39)     (36)     (96)
 Other income (expense), net             (2)        (1)      (2)      (1)
                                          (17)       (40)     (38)     (97)
Net income before income taxes            683        443      433      774
Income tax expense                        270        165      181      283
Net income                                $413       $278     $252     $491
Net income per share information:
 Basic                                   $0.11      $0.07    $0.06    $0.13
 Diluted                                 $0.11      $0.07    $0.06    $0.13
Weighted average common shares
outstanding:
 Basic                                  3,887      3,789    3,886    3,789
 Diluted                                3,927      3,903    3,926    3,919

Elecsys Corporation and Subsidiary
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                                            October 31, 2012  April 30, 2012
ASSETS                                      (unaudited)
 Current assets:
 Cash and cash equivalents             $527              $136
 Accounts receivable, net              1,778             2,631
 Inventories, net                      6,041             5,940
 Other current assets                  899               826
 Total current assets                     9,245             9,533
 Property and equipment, net              5,205             5,295
 Goodwill                                 1,942             1,942
 Intangible assets, net                   1,785             1,886
 Other assets, net                        49                51
Total assets                                $18,226           $18,707
LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Accounts payable                      $1,174            $825
 Accrued expenses                      1,098             1,393
 Income taxes payable                  --                5
 Current maturities of long-term debt  183               181
 Total current liabilities                2,455             2,404
Deferred taxes                              486               485
Long-term debt, less current maturities     2,712             3,554
 Stockholders' equity:
 Common stock                          39                39
 Additional paid-in capital            11,223            11,166
 Retained earnings                     1,311             1,059
 Total stockholders' equity               12,573            12,264
Total liabilities and stockholders' equity  $18,226           $18,707

SOURCE Elecsys Corporation

Website: http://www.elecsyscorp.com