Elecsys Corporation Reports Second Quarter Financial Results

Elecsys Corporation Reports Second Quarter Financial Results

Revenues Increase 19% and Net Income Grows 58% Over Prior Year Quarter

OLATHE, Kansas, Dec. 9, 2013 (GLOBE NEWSWIRE) -- 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, today announced the financial
results for its second fiscal quarter ended October 31, 2013.

Revenues for the quarter were $7,330,000, an increase of 19% from $6,138,000
in revenues during the second quarter of fiscal 2013. Total revenues
year-to-date increased 36% to $14,104,000 from $10,395,000. The overall
increase in both quarterly and year-to-date revenues resulted from the
combined growth of revenues from both of the Company's business segments.

Operating income for the quarter was $1,116,000, compared to operating income
of $700,000 for the same quarter in the prior year. For the first six months
of fiscal 2014, operating income grew to $1,569,000 from $471,000 in the first
six months of fiscal 2013.

Net income was $653,000, or $0.17 per diluted share, for the quarter ended
October 31, 2013. For the quarter ended October 31, 2012, net income was
$413,000, or $0.11 per diluted share. For the six-month period ended October
31, 2013, net income totaled $917,000, or $0.23 per diluted share, while for
the comparable prior year period net income was $252,000, or $0.06 per diluted

Revenues from proprietary products and services were $3,742,000 for the
quarter ended October 31, 2013, an increase of 19%, or $594,000 from the
previous year quarter. For the six-month period ended October 31, 2013,
proprietary product and services revenues improved $1,352,000, or 28%, to
$6,206,000 compared to $4,854,000 in the comparable period of the prior fiscal
year. Sales of wireless remote monitoring and industrial data communication
solutions increased almost 42%, or $920,000, from the previous year to
$3,112,000 for the current quarter. This overall rise in sales was due to
increased customer orders for Watchdog remote monitoring equipment and
recurring data management services combined with the introduction of a new
remote monitoring product for the commercial transportation industry. Revenues
of Radix mobile data acquisition solutions declined $334,000, or 39%, for the
period as compared to the prior year.

The Company's custom solutions for original equipment manufacturers ("OEM")
business segment reported revenue growth of 20% to approximately $3,588,000
for the quarter ended October 31, 2013, an increase of $598,000 from
$2,990,000 in the prior fiscal year. Fiscal year-to-date OEM revenues were
$7,898,000, an increase of 43%, or $2,357,000, from $5,541,000 in the
six-month period ended October 31, 2012.

The Company expects that total revenues for its proprietary products and
services business segment will continue to grow 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 both its wireless remote
monitoring solutions and industrial data communications will show increases in
revenues from the current period while revenues for its mobile data
acquisition products and services will likely be consistent with revenues
reported in the current period.The Company also expects OEM revenues to grow
moderately over the longer term based upon the current scheduled orders in
backlog and the anticipated addition of new OEM customers.

Backlog, which represents orders that are scheduled for delivery over the next
twelve months, was approximately $12,423,000 at October 31, 2013, an increase
of $3,930,000, or 46%, from a backlog of $8,493,000 on April 30, 2013.The
increase in backlog was primarily due to an increase in OEM bookings during
the quarter combined with an increase in proprietary product backlog including
the previously announced $1.25 million order from the Al Rushaid Group in
Saudi Arabia.

Gross margin for the quarter ended October 31, 2013 was approximately 41%, or
$3,029,000, versus 39%, or $2,410,000 for the quarter ended October 31,
2012.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 OEM
revenues.Gross margin for the six-month period remained consistent at 37% of
sales, increasing to $5,236,000 from a gross margin of $3,800,000 during the
six-month period ended October 31, 2012.The growth in gross margin dollars
was the direct result of higher overall revenues during the year-to-date

Total selling, general and administrative expenses were approximately
$1,913,000 during the quarter ended October 31, 2013 compared with $1,710,000
in the comparable quarter of the prior fiscal year.The increase of $203,000,
or 12%, primarily resulted from increases in sales and marketing expenses and
research and development costs.Selling and marketing expenses increased as a
result of higher sales commissions and the increase in research and
development costs included continued investment in engineering design
personnel engaged in new product development.Total selling, general and
administrative expenses for the six-month periods ended October 31, 2013 and
2012, were $3,667,000 and $3,329,000, respectively.The $338,000 increase was
due to growth in research and development expenses due to additional
investments in engineering design personnel, higher sales commissions as a
result of increased revenues, and a rise in professional fees, office costs
and other administrative personnel expenses.

Karl B. Gemperli, Chief Executive Officer, stated, "We are pleased to report
the results of our second quarter as we continued to generate revenue growth
and improved bottom-line performance compared to the prior year.Sales
increased 19% from the second quarter of last year and net income grew by 58%
while our order backlog continued to expand.Most significantly, we
intensified our investments in new product development and expanded market
development during the quarter in order to accelerate our growth rate over the
long term."

Gemperli continued, "During the second quarter, we began volume shipments of a
new remote monitoring product for application in the commercial transportation
industry.Despite lingering uncertainty about the direction of the global
economy, we remain focused on the numerous exciting opportunities to apply M2M
solutions in the rapidly growing industries we target.We expect the positive
trends in both revenues and earnings to continue 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.The Company's
primary markets include energy production and distribution, agriculture,
transportation, safety and security systems, and water management.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 solutions 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, 2013. 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.

Elecsys Corporation and Subsidiary
Consolidated Statements of Operations
(In thousands, except per share data)
                                          Three Months Ended Six Months Ended
                                          October 31,        October 31,
                                          2013      2012     2013     2012
Revenues                                   $7,330    $6,138   $14,104  $10,395
Cost of revenues                           4,301     3,728    8,868    6,595
Gross margin                               3,029     2,410    5,236    3,800
Selling, general and administrative                                 
Research and development expense           498       427      924      834
Selling and marketing expense              659       582      1,166    1,107
General and administrative expense         756       701      1,577    1,388
Total selling, general and administrative  1,913     1,710    3,667    3,329
Operating income                           1,116     700      1,569    471
Financial income (expense):                                         
Interest expense                           (14)      (15)     (28)     (36)
Other income (expense), net                (3)       (2)      (4)      (2)
                                          (17)      (17)     (32)     (38)
Net income before income taxes             1,099     683      1,537    433
Income tax expense                         446       270      620      181
Net income                                 $653      $413     $917     $252
Net income per share information:                                   
Basic                                      $0.17     $0.11    $0.24    $0.06
Diluted                                    $0.17     $0.11    $0.23    $0.06
Weighted average common shares                                      
Basic                                      3,860     3,887    3,877    3,886
Diluted                                    3,937     3,927    3,942    3,926

Elecsys Corporation and Subsidiary
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                                          October 31, 2013 April 30, 2013
ASSETS                                     (unaudited)      
Current assets:                                            
Cash and cash equivalents                  $501             $1,464
Accounts receivable, net                   2,762            2,538
Inventories, net                           8,447            6,238
Other current assets                       807              856
Total current assets                       12,517           11,096
Property and equipment, net                5,439            5,399
Goodwill                                   1,942            1,942
Intangible assets, net                     1,584            1,685
Other assets, net                          45               47
Total assets                               $21,527          $20,169
Current liabilities:                                       
Accounts payable                           $2,000           $1,390
Accrued expenses                           1,414            1,408
Income taxes payable                       282              1
Current maturities of long-term debt       187              185
Total current liabilities                  3,883            2,984
Deferred taxes                             650              637
Long-term debt, less current maturities    2,525            2,619
Stockholders' equity:                                      
Common stock                               40               40
Additional paid-in capital                 11,536           11,429
Treasury stock                             (766)            (282)
Retained earnings                          3,659            2,742
Total stockholders' equity                 14,469           13,929
Total liabilities and stockholders' equity $21,527          $20,169

CONTACT: Investor Relations Contact: Todd A. Daniels
         (913) 647-0158, Phone
         (913) 982-5766, Fax

Elecsys Corporation logo
Press spacebar to pause and continue. Press esc to stop.