Elecsys Corporation Reports Third Quarter Financial Results

Elecsys Corporation Reports Third Quarter Financial Results

Record Quarterly Revenues and Growing Backlog

OLATHE, Kan., March 10, 2014 (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 third fiscal quarter ended January 31, 2014.

Revenues for the quarter were $7,683,000, which was an increase of 3%, or
$225,000, from revenues of $7,458,000 during the third quarter of fiscal 2013.
Total revenues year-to-date increased 22%, or $3,934,000, to $21,787,000. The
increase in quarterly revenues resulted primarily from growth in the Company's
proprietary product sales.

Operating income for the quarter was $891,000, compared to operating income of
$1,146,000 for the same quarter in the prior year. For the first nine months
of fiscal 2014, operating income grew to $2,460,000, an increase of $843,000
over the same period of the prior year.

Net income was $569,000, or $0.14 per diluted share, for the quarter ended
January 31, 2014.For the quarter ended January 31, 2013, net income was
$716,000, or $0.18 per diluted share. For the nine-month period ended January
31, 2014, net income totaled $1,486,000, or $0.38 per diluted share, while for
the comparable prior year period net income was $968,000, or $0.25 per diluted
share.

Revenues from proprietary products and services were $4,651,000 for the
quarter ended January 31, 2014, an increase of 53%, or $1,617,000 from the
previous year quarter.Proprietary product revenues increased $2,972,000, or
38%, to $10,857,000 for the nine-month period ended January 31, 2014 compared
to $7,885,000 in the comparable period of the prior fiscal year.Revenues from
wireless remote monitoring and industrial data communication solutions
increased 190% from the previous year to $4,259,000 for the current
quarter.For the year-to-date period ended January 31, 2014, these revenues
increased 88%, or $4,257,000, as compared to the year-to-date period of the
prior year.The increase in revenues was due to a number of factors including
shipments made towards a previously announced order for Saudi Arabia,
continuing shipments of a recently released remote monitoring product for the
commercial transportation industry, and an overall increase in customer orders
received and shipped for our mature M2M remote monitoring products.Revenues
of Radix mobile data acquisition solutions declined 48%, or $1,326,000, as a
result of fewer overall shipments due to a large shipment and deployment of
Radix handheld computers and peripherals that was completed to a specific
domestic customer during the prior year period.

The Company's custom solutions for original equipment manufacturers ("OEM")
business segment reported a decrease in revenue of 32%, or $1,392,000, to
approximately $3,032,000 for the quarter ended January 31, 2014.Fiscal
year-to-date OEM revenues were $10,930,000, an increase of 10%, or $962,000,
from $9,968,000 in the nine-month period ended January 31, 2013.

The Company expects that total revenues for its proprietary products and
services will continue to increase as a result of continued customer demand
for existing M2M solutions, the introduction of new products, and continued
expansion into new industrial markets.The Company anticipates that its
wireless remote monitoring solutions and industrial data communications
product lines will generate increased revenues over the next few quarters as
compared to equivalent periods in prior years.The Company also believes that
OEM revenues will generate moderate long-term growth based upon efforts to
target potential customers who will benefit from the Company's M2M solutions
and technologies combined with the current scheduled orders in backlog.

On January 31, 2014, total backlog was approximately $10,637,000, an increase
of $2,144,000, or 25%, from a total backlog of $8,493,000 on April 30,
2013.The increase in backlog was primarily due to an increase in OEM bookings
during the nine-month period ended January 31, 2014 combined with an increase
in proprietary product backlog.

Gross margin for the quarters ended January 31, 2014 and 2013 was
approximately 38%, or $2,922,000 and $2,803,000, respectively.The $119,000
increase in gross margin dollars for the quarter was the direct result of the
mix of proprietary product revenues as compared to OEM revenues.Gross margin
for the nine-month period increased to $8,158,000, or 37% of revenues, from a
gross margin of $6,603,000, or 37% of revenues, from the nine-month period
ended January 31, 2013.The increase of gross margin dollars was the result of
both the increase in overall sales volumes in each business segment as well as
a shift in product mix within each business segment.

Total selling, general and administrative expenses were approximately
$2,031,000 during the quarter ended January 31, 2014 compared with $1,657,000
in the comparable quarter of the prior fiscal year.The increase of $374,000
resulted primarily from additional research and development costs along with
increases in sales and marketing expenses.The increase in research and
development costs included continued investment in engineering design
personnel engaged in new product development.The increases in selling and
marketing expenses were due to higher sales commissions for both domestic and
international sales, as well as growth in marketing expenses and additional
personnel costs.Total selling, general and administrative expenses for the
nine-month periods ended January 31, 2014 and 2013 were $5,698,000 and
$4,986,000, respectively.

Karl B. Gemperli, Chief Executive Officer, stated, "We are pleased with our
performance during the third quarter in which we achieved record revenues and
strong bottom-line results, while continuing to make substantial investments
in both new product development and market expansion.Gross margin for the
quarter remained solid at 38% while backlog increased by 25% since the
beginning of the year.We are particularly happy with the rapid revenue growth
of our proprietary M2M solutions that stemmed from both new product
introductions and additional market applications."

Gemperli continued, "We believe that our innovative M2M technology is a key
component of our future expansion that can open numerous new business
opportunities.With additional products currently in development combined with
our investment in several long-term strategic initiatives, we anticipate the
growth of these proprietary solutions to accelerate.We continue to expand our
customer base through business development activities focused on both
expanding applications for our products into new industry segments and
increasing our business in new markets with attractive new business
potential.Despite lackluster growth of the overall economy, we remain focused
on expanding the applications for our M2M solutions in the strong and growing
market sectors 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 worldwide.The
Company's primary markets include energy production and distribution,
agriculture, transportation, safety and security systems, and water
management.Elecsys equipment and services encompass remote monitoring,
industrial data communication, mobile data acquisition, and wireless
communication technologies that are deployed wherever high quality and
reliability are essential. Elecsys develops, manufactures, and supports
proprietary M2M technology and products under several premium brand names.In
addition to its proprietary products, Elecsys designs and manufactures rugged
and reliable custom solutions for original equipment manufacturers in a
variety of industries.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)
(Unaudited)
                                                                  
                                         Three Months Ended Nine Months Ended
                                          January 31,        January 31,
                                         2014      2013     2014     2013
Revenues                                  $7,683    $7,458   $21,787  $17,853
Cost of revenues                          4,761     4,655    13,629   11,250
Gross margin                              2,922     2,803    8,158    6,603
                                                                  
Selling, general and administrative                                
expenses:
Research and development expense          475       411      1,398    1,245
Selling and marketing expense             760       529      1,927    1,636
General and administrative expense        796       717      2,373    2,105
Total selling, general and administrative 2,031     1,657    5,698    4,986
expenses
                                                                  
Operating income                          891       1,146    2,460    1,617
                                                                  
Financial income (expense):                                        
Interest expense                          (14)      (15)     (43)     (51)
Other income (expense), net               (1)       (2)      (4)      (3)
                                         (15)      (17)     (47)     (54)
                                                                  
Net income before income taxes            876       1,129    2,413    1,563
                                                                  
Income tax expense                        307       413      927      595
                                                                  
Net income                                $569      $716     $1,486   $968
                                                                  
Net income per share information:                                  
Basic                                     $0.15     $0.18    $0.39    $0.25
Diluted                                   $0.14     $0.18    $0.38    $0.25
                                                                  
Weighted average common shares                                     
outstanding:
Basic                                     3,814     3,914    3,856    3,895
Diluted                                   3,953     3,925    3,947    3,904


Elecsys Corporation and Subsidiary
Condensed Consolidated Balance Sheets
(In thousands, except share data)
                                                          
                                          January 31, 2014 April 30, 2013
ASSETS                                     (unaudited)      
Current assets:                                            
Cash and cash equivalents                  $250             $1,464
Accounts receivable, net                   3,090            2,538
Inventories, net                           7,840            6,238
Other current assets                       887              856
Total current assets                       12,067           11,096
                                                          
Property and equipment, net                5,537            5,399
                                                          
Goodwill                                   1,942            1,942
Intangible assets, net                     1,534            1,685
Other assets, net                          44               47
Total assets                               $21,124          $20,169
                                                          
LIABILITIES AND STOCKHOLDERS' EQUITY                       
Current liabilities:                                       
Accounts payable                           $1,281           $1,390
Accrued expenses                           1,425            1,408
Income taxes payable                       242              1
Current maturities of long-term debt       188              185
Total current liabilities                  3,136            2,984
                                                          
Deferred taxes                             593              637
Long-term debt, less current maturities    2,478            2,619
                                                          
Stockholders' equity:                                      
Common stock                               40               40
Additional paid-in capital                 11,634           11,429
Treasury stock                             (985)            (282)
Retained earnings                          4,228            2,742
Total stockholders' equity                 14,917           13,929
Total liabilities and stockholders' equity $21,124          $20,169

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

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