API Technologies Reports Results for the Three and Six Months Ended November 30, 2011

Published on Thursday, 09 February 2012 08:24 Written by TradersHuddle Staff

ORLANDO, Fla., Feb. 9, 2012 /PRNewswire/ -- API Technologies Corp. (NASDAQ: ATNY) ("API", "API Technologies", or the "Company"), a provider of electronic systems, subsystems, RF, and secure solutions for the defense, aerospace, and commercial industries, today announced results for the three and six months ended November 30, 2011.  This is a transition reporting period, with the fiscal year henceforth ending November 30.

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• Revenue of $75.1 million for the quarter ended November 30, 2011, up 8.5% sequentially from $69.2 million in the quarter ended August 31, 2011
• Operating income of $4.4 million (5.9% margin) for the quarter ended November 30, 2011 compared to $1.6 million (2.3% margin) for the quarter ended August 31, 2011
• Adjusted EBITDA of $11.4 million (15.2% margin) for the quarter ended November 30, 2011, an increase of 40.5% compared to $8.1 million (11.7% margin) for the quarter ended August 31, 2011
• Implemented $20.4 million of annualized net cost reductions from February through November, 2011
• Completed the acquisition of Commercial Microwave Technology, Inc. ("CMT"), a leading manufacturer of RF and microwave filters to the satellite and commercial industries

"API Technologies' November quarter reflects good progress towards achieving our financial goal of 20% Adjusted EBITDA margins," said Bel Lazar, President and Chief Operating Officer of API Technologies.  "Revenue grew 8.5% sequentially, Adjusted EBITDA increased by 40.5%, and we exceeded our previous cost reduction plans.  In addition, we are seeing new market opportunities, given our differentiated technology portfolio and design-in activities, at various commercial and defense customers as well as government agencies both domestically and overseas.

"We continue to make progress aligning our businesses, targeting new growth areas, and increasing margins.  While 2011 was a transformational year for API, with a focus on major acquisitions and integration, we expect to reap further benefits from our consolidations and deliver top line growth through technical cross-selling efforts in 2012."

Results for the Quarter Ended November 30, 2011

API Technologies reported revenue of $75.1 million for the quarter ended November 30, 2011 compared to $25.9 million for the same period in the prior year, primarily due to the acquisitions of Spectrum Control and SenDEC. Sequentially, revenue increased 8.5% from the quarter ended August 31, 2011 due primarily to increased military sales.  Gross profit was $17.8 million compared to $6.4 million in the previous year's November quarter; gross margin was 23.7% for the period ended November 30, 2011, versus 24.9% in the comparable period last year.  Adjusted EBITDA was $11.4 million for the quarter compared to $1.9 million for the three months ended November 30, 2010.  

API Technologies posted a net loss of $2.5 million for the quarter ended November 30, 2011 compared to a net loss of $1.8 million for this period in 2010, due primarily to higher interest and amortization charges pertaining to the acquisition of Spectrum Control and to an increase in deferred taxes. At the end of the quarter, the Company had $15.7 million of cash and cash equivalents and $167.2 million of debt obligations, net of $3.8 million discount on term loan.

Results for the Six Months Ended November 30, 2011

API Technologies reported revenue of $144.3 million for the six months ended November 30, 2011 compared to $55.0 million for the same period in the prior year, primarily due to the acquisitions of Spectrum Control and SenDEC. Gross profit was $34.4 million compared to $13.4 million in the previous year; gross margin was 23.8% for the six-month period ended November 30, 2011, versus 24.3% in the comparable period last year.  Adjusted EBITDA was $19.6 million for the six months compared to $4.7 million in 2010.  

API Technologies posted net income of $7.9 million for the six months ended November 30, 2011 compared to a net loss of $1.0 million for the six months ended November 30, 2010.  The 2011 period includes a benefit of $10.9 million in deferred income taxes, partially offset by higher interest and amortization charges due to the Spectrum Control acquisition.  

"In 2011, we created API to be a dominant provider of RF/microwave, microelectronics, and security technologies for critical and high-reliability applications," added Brian Kahn, Chairman and Chief Executive Officer. "Under Bel Lazar's leadership, the API team has done an exceptional job of integrating API, Spectrum Control, SenDEC, and CMT into one company, with one culture and one common goal of creating value for our stakeholders. With this foundation firmly in place, we look forward to realizing the benefits in 2012."

Conference Call

API Technologies will host a conference call to review the Company's fiscal second quarter results today, February 9, at 10:00 a.m. Eastern Time.  Brian Kahn, Chairman and Chief Executive Officer, and Bel Lazar, President and Chief Operating Officer, will host the call.

The call will be available by dialing 877-317-6789 or 412-317-6789 and accessible by webcast at www.apitech.com.  Recorded replays of the webcast will be available for 90 days on the Company's website and by telephone for 30 days at 877-344-7529, replay passcode #10008201, beginning 2:00 p.m. Eastern Time on February 9, 2012.

About API Technologies Corp.

API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company website at www.apitechnologies.com. 

Non-GAAP Financial Information

In this press release, API has provided a non-GAAP financial measure for Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization), excluding discontinued operations, restructuring charges, acquisition charges, stock-based compensation expenses, amortization of note discounts and deferred financing costs, and certain other adjustments. Management believes the supplemental non-GAAP presentations provide investors an additional analytical tool for understanding the Company's financial performance by excluding the impact of items which may obscure trends in the core operating performance of the business. These are not recognized measures under US GAAP, do not have a standardized meaning, and are unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that these non-GAAP measures should not be construed as an alternative to net earnings or loss determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. We expect our financial statements to continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.

Safe Harbor for Forward-Looking Statements 

Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to, general economic and business conditions, government regulations, our ability to integrate and consolidate our operations, our ability to expand our operations in both new and existing markets, and the effect of growth on our infrastructure. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K under Part I, Item 1A "Risk Factors" as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements in this press release, whether as a result of new information, future events, or otherwise. 

Investor Relations Contact:

Bel Lazar

President and Chief Operating Officer

+1-877-274-0274

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Chris Witty

Darrow Associates

+1-646-438-9385

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SOURCE API Technologies Corp.