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Filer: EDO Corporation
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed under Rule
14a-12 of the Securities Exchange Act of 1934
pursuant to Rule 14a-12(b)
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE 60 East 42nd Street, Ste. 5010
- --------------------- New York, NY 10165
212-716-2000
Agency Contact: Company Contact:
Berkman Associates William J. Frost
(310) 277-5162 Vice President - Administration
[email protected] (212) 716-2000
www.edocorp.com
EDO Corporation Reports Fourth Quarter Earnings
From Continuing Operations of $0.21 Per Share
On 17% Higher Sales
NEW YORK, NY - February 22, 2000 - EDO Corporation (NYSE: EDO) announced today
that earnings from continuing operations available for common shares for the
fourth quarter ended December 31, 1999 were $1,654,000, or $0.21 per diluted
share, reflecting a 30% effective tax rate. Sales for the period increased 17%
to $27,441,000. For the fourth quarter of 1998, earnings from continuing
operations available for common shares, excluding non-recurring litigation
settlement income (net of income taxes) of $1,769,000, or $0.23 per diluted
share, were $1,584,000, or $0.21 per diluted share, on sales of $23,533,000.
Including litigation settlement income, earnings from continuing operations
available for common shares for the 1998 fourth quarter were $3,353,000, or
$0.44 per diluted share, reflecting a 20% effective tax rate for the quarter.
The Company attributed the increase in sales from continuing operations
for the fourth quarter of 1999 over the comparable period of 1998 to the
contributions of recent acquisitions and higher sales of airborne mine
countermeasures systems and integrated combat systems, partially offset by
reduced sales of undersea warfare sonar systems.
For the twelve months ended December 31, 1999, earnings from continuing
operations available for common shares were $5,084,000, or $0.65 per diluted
share, reflecting a 30% effective tax rate. This compares with earnings from
continuing operations available for common shares for 1998, excluding litigation
settlement income (net of income taxes) of $2,024,000, or $0.26 per diluted
share, of $7,260,000, or $0.95 per diluted share, reflecting an 8% effective tax
rate. Including the litigation settlement income, earnings from continuing
operations available for common shares for 1998 were $9,284,000, or $1.21 per
diluted share. The decrease in earnings from continuing operations for 1999
compared with 1998,
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excluding the litigation settlement income (net of income taxes), resulted from
the adverse impact on margins of lower sales of electro-ceramics products, lower
relative margins of recent acquisitions, and the higher effective tax rate.
(more)
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EDO Corporation Reports Fourth Quarter Earnings From Continuing Operations of
$0.21 Per Share On 17% Higher Sales
February 22, 2000
Page Two
Sales for 1999 increased 20% to $97,936,000 from $81,403,000 for 1998.
This increase was the result of the contributions of recent acquisitions and
higher sales of aircraft stores suspension and release equipment, airborne mine
countermeasures systems and integrated combat systems, partially offset by
reduced sales of undersea warfare sonar systems and electro-ceramic and fiber
composite products.
The backlog of unfilled orders from continuing operations at December
31, 1999 rose to $133,880,000 from $130,151,000 a year earlier.
"In keeping with our commitment to growth, on January 3, 2000 we
announced the signing of a definitive agreement to merge with privately-held AIL
Technologies Inc., Deer Park, New York. This merger, if approved by each
company's shareholders, will create an integrated defense and aerospace
technology company with current annualized revenue of approximately $240.0
million. We expect the merger to set the stage for additional growth in the
years ahead," said Chairman and Chief Executive Officer Frank A. Fariello. He
said that EDO will combine its annual meeting with the meeting of shareholders
required to consider and vote upon the proposed merger with AIL Technologies on
a date to be announced soon.
At December 31, 1999, EDO reported cash and short-term investments of
$29,642,000, a current ratio of 1.8, and shareholders' equity of $40,241,000.
About EDO Corporation
EDO Corporation (www.edocorp.com) designs and manufactures advanced
electronic and mechanical systems and engineered materials for domestic and
international defense and industrial markets.
The statements contained in this release which are not historical facts may be
deemed to contain forward-looking statements with respect to events, the
occurrence of which involve risks and uncertainties, including, without
limitation, demand and competition for the Company's products, and other risks
or uncertainties detailed in the Company's Securities and Exchange Commission
filings.
(tables attached)
#2253
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EDO Corporation and Subsidiaries
Condensed Consolidated Statements of Earnings
(000's omitted, except per share data)
<TABLE>
<CAPTION>
Three months ended Twelve months ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
------------ ------------ ------------- -------------
(unaudited)
<S> <C> <C> <C> <C>
Sales from continuing operations $ 27,441 $ 23,533 $ 97,936 $ 81,403
Operating earnings (a) 2,813 4,732 9,249 11,755
Interest and other (94) (240) (555) (528)
------------ ------------ ------------- -------------
Earnings before Federal income taxes 2,719 4,492 8,694 11,227
Federal income tax expense (820) (880) (2,610) (880)
------------ ------------ ------------- -------------
Earnings from continuing operations 1,899 3,612 6,084 10,347
Loss from discontinued operations,
net of income tax benefit (998) (1,836) (4,064) (2,116)
------------ ------------ ------------- -------------
Net earnings 901 1,776 2,020 8,231
Dividends on preferred shares (245) (259) (1,000) (1,063)
------------ ------------ ------------- -------------
Net earnings available for common shares $ 656 $ 1,517 $ 1,020 $ 7,168
============ ============ ============= =============
Basic earnings (loss) per common share:
Continuing operations (a) $ 0.25 $ 0.51 $ 0.76 $ 1.42
Discontinued operations (0.15) (0.28) (0.61) (0.33)
------------ ------------ ------------- -------------
Net $ 0.10 $ 0.23 $ 0.15 $ 1.09
============ ============ ============= =============
Diluted earnings (loss) per common share (b)
Continuing operations (a) $ 0.21 $ 0.44 $ 0.65 $ 1.21
Discontinued operations (0.12) (0.24) (0.50) (0.27)
------------ ------------ ------------- -------------
Net $ 0.09 $ 0.20 $ 0.15 $ 0.94
============ ============ ============= =============
Weighted average shares outstanding - basic 6,751 6,624 6,701 6,549
============ ============ ============= =============
Weighted average shares outstanding - diluted (b) 8,058 7,780 8,032 7,785
============ ============ ============= =============
Backlog of unfilled orders,
excluding discontinued operations $133,880 $130,151
============= =============
</TABLE>
(a) The three and twelve month periods ended December 31, 1998 include
litigation settlement income of $2.2 million. The impact of the
litigation settlement income, net of income taxes, was $0.23 and $0.26
per diluted share for the three and twelve month periods ended December
31, 1998, respectively.
(b) Assumes conversion of ESOP preferred shares and exercise of dilutive
stock options.
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EDO Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
($000's omitted)
<TABLE>
<CAPTION>
Dec. 31, Dec. 31,
1999 1998
-------------- --------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 13,799 $ 21,991
Marketable securities 15,843 11,519
Accounts receivable, net 32,818 30,182
Inventories 12,188 9,250
Deferred tax asset, net 2,336 1,280
Prepayments and other 2,299 2,071
-------------- --------------
Total current assets 79,283 76,293
Property, plant and equipment, net 10,218 8,694
Notes receivable 1,450 2,300
Goodwill 9,050 5,308
Other assets 16,351 12,215
Net assets of discontinued operations 8,139 19,820
-------------- --------------
Total Assets $ 124,491 $ 124,630
============== ==============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 23,108 $ 23,253
Contract advances and deposits 19,153 13,589
Current portion of notes payable 397 5,460
Current portion of long-term debt 1,515 1,317
-------------- --------------
Total current liabilities 44,173 43,619
Note payable 892 --
Long-term debt 26,250 28,000
ESOT loan obligation 7,429 8,955
Postretirement benefits obligation 3,402 3,443
Environmental obligation 2,104 2,562
Shareholders' equity 40,241 38,051
-------------- --------------
Total Liabilities & Shareholders' Equity $ 124,491 $ 124,630
============== ==============
</TABLE>
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* * *
We urge investors and security holders to read the following documents when they
become available, regarding the merger between EDO Corporation and AIL
Technologies, Inc., because they will contain important information:
- EDO Corporation's preliminary proxy statement on Schedule 14A,
including all related proxy materials, schedules, exhibits and
appendices;
- EDO Corporation's registration statement on Form S-4,
including EDO Corporation's final prospectus and final proxy
statement and containing or incorporating by reference such
other documents and other information; and
- EDO Corporation's annual report on Form 10-K for the year
ended December 31, 1999, containing or incorporating by
reference such other documents and other information.
These documents and amendments to these documents will be filed with the United
States Securities and Exchange Commission.
When these and other documents are filed with the SEC, they may be obtained free
at the SEC's web site at www.sec.gov. You may also obtain for free each of these
documents (when available) from EDO by directing your request to Marvin D.
Genzer, secretary, at (212) 716-2005 (fax: (212) 716-2050).
