Exhibit 20
Merrimac Reports Second Quarter and Six Months 2000
Results; Continuing Improvement in Backlog
West Caldwell, N.J., August 10, 2000: Merrimac Industries, Inc. (AMEX: MRM), a
leader in the design and manufacture of RF Microwave components, assemblies and
Micro-Multifunction Modules (MMFM(TM)), today announced results for the second
quarter and first six months of 2000.
Second quarter 2000 sales of $4,949,000 decreased 3.4 percent compared to second
quarter sales of the prior year of $5,125,000. Net income for the second quarter
of 2000 was $40,000, a decrease of $42,000 compared to 1999. Diluted net income
per share was $.02 compared to the diluted per share amount of $.05 reported for
the second quarter of the prior year.
For the first six months of 2000, sales of $9,861,000 were essentially equal to
the prior year's six-month sales of $9,864,000. A net loss for the first six
months of $125,000 was recorded, due to the net effects of a first quarter
personnel restructuring charge of $189,000. Net income of $295,000 was reported
for the first six months of 1999. Diluted net loss per share was $.06,
reflecting the first quarter restructuring charge of $.10 per diluted share. For
the first six months of the prior year, diluted net income per share of $.17 was
reported.
The weighted average number of basic and diluted shares outstanding increased
for the second quarter and first six months of 2000 resulting from the issuance
of 375,000 shares to Ericsson Holding International, B.V. in the second quarter
2000, and higher average common stock prices that increased dilution from stock
options.
The backlog at the end of the second quarter of 2000 was $10.8 million, an
increase of $4.7 million or 77 percent over year-end 1999, and $1.9 million or
21 percent when compared to the backlog of $8.9 million at the end of the second
quarter of last year. Orders received during the second quarter of 2000,
totaling $6.8 million, exceeded the second quarter 2000 sales level by
approximately 38 percent, and orders for the first six months of 2000, totaling
$14.6 million, exceeded the six months 2000 sales level by approximately 48
percent.
Chairman and CEO Mason N. Carter commented: "The six month book-to-bill ratio
approaching 1.5 to 1 bodes well for second-half revenue growth. Our Filtran
Microcircuits subsidiary turned in a solid quarterly operating performance
resulting from strong demand for their precision microcircuitry and ability to
deliver product to the market in a timely manner.
"We are making good progress in designing Multi-Mix(TM) into a variety of
wireless basestation applications. The demand for application solutions that are
met or exceeded by Multi-Mix(TM) is increasing.
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"Merrimac has just been granted a patent on its unique Multi-Mix(TM)
Microtechnology process from the U.S. Patent and Trademark Office entitled
'Method of Making Microwave Multifunction Modules Using Fluoropolymer Composite
Substrates'. One important aspect of this patent is the ability to form cavities
for the subsurface attachments of active components such as MMIC devices. This
patent places Merrimac in an excellent position to capitalize on this growing
demand for complex multifunction modules. The increased level of integration and
functionality created by Multi-Mix(TM) provides a significantly higher dollar
amount and content per module, thereby demanding a higher selling price when
compared to traditional components. This patent is the first of multiple
Multi-Mix(TM) process and new-product patents that we anticipate, further
establishing Merrimac as the clear leader in multilayer multifunction module
technology."
This press release contains statements relating to future results of Merrimac
(including certain projections and business trends) that are "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a result of certain
risks and uncertainties. These risks and uncertainties include, but are not
limited to: general economic and industry conditions; slower than anticipated
penetration into the satellite communications, defense and wireless markets; the
risk that the benefits expected from the acquisition of Filtran Microcircuits
Inc. are not realized; the ability to protect proprietary information and
technology; competitive products and pricing pressures; risks relating to
governmental regulatory actions in communications and defense programs; and
inventory risks due to technological innovation, as well as other risks and
uncertainties, including but not limited to those detailed from time to time in
Merrimac's Securities and Exchange Commission filings. These forward-looking
statements are made only as of the date hereof, and Merrimac undertakes no
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.
Merrimac Industries, Inc. is a leader in the design and manufacture of RF
Microwave components, assemblies and MMFM(TM) (Micro-Multifunction Modules)
serving the wireless telecommunications industry worldwide with enabling
technologies for critical commercial applications. Merrimac is focused on
providing Total Integrated Packaging Solutions(TM) with Multi-Mix(TM)
Microtechnology, a leading edge competency providing value to our customers
through miniaturization and integration. The Multi-Mix(TM) process for
microwave, multilayer integrated circuits and Micro-Multifunction Modules
(MMFM(TM)) is a patented method developed at Merrimac Industries based on
fluoropolymer composite substrates. The fusion bonding of multilayer structures
provides a homogenous dielectric medium for superior electrical performance at
microwave frequencies. The bonded layers may incorporate embedded semiconductor
devices, MMICs, etched resistors, passive circuit elements and plated-through
via holes to form a 3-D subsystem enclosure that requires no further packaging.
The Multi-Mix(TM) Microtechnology Group is ISO 9001 certified.
Merrimac Industries, Inc. and its subsidiary Filtran Microcircuits Inc., with
locations in West Caldwell, NJ, San Jose, Costa Rica, and Ottawa, Ontario,
Canada, have
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approximately 230 co-workers in the design and manufacture of signal processing
components, gold plating of high-frequency microstrip, bonded stripline and
thick metal-backed Teflon (PTFE) micro-circuitry, MMFM(TM) and subsystems.
Merrimac (MRM) is listed on the American Stock Exchange.
Contact: Mason N. Carter Fax: (973) 882-5989
Chairman and CEO Email: [email protected]
Phone: (973) 575-1300, ext. 202
Erika A. Barsness Fax: (973) 808-3906
Director, Investor Relations Email: [email protected]
Phone: (973) 575-1300, ext. 200 for conference call/replay information
Note: Merrimac Industries, Inc. news releases are available in fax form by
calling Company News On-Call. Dial (800) 758-5804, ext. 567525. These news
releases are also available on the Internet at: www.prnewswire.com or the
Company's website www.merrimacind.com.
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Merrimac Industries, Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
-------------
July 1 July 3
2000 1999
-----------------------------------
<S> <C> <C>
Net sales $4,949,000 $5,125,000
Gross profit 2,345,000 2,399,000
Selling, general and administrative expenses 1,772,000 1,671,000
Research and development 493,000 552,000
Interest and other expense (income), net 25,000 56,000
Income before income taxes 55,000 120,000
Provision for income taxes 15,000 38,000
Net income 40,000 82,000
Net income per common share - basic $.02 $.05
Net income per common share - diluted $.02 $.05
Weighted average number of shares outstanding - basic 2,130,000 1,739,000
Weighted average number of shares outstanding - diluted 2,306,000 1,769,000
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
----------------
July 1 July 3
2000 1999
-----------------------------------
<S> <C> <C>
Net sales $9,861,000 $9,864,000
Gross profit 4,820,000 4,711,000
Selling, general and administrative expenses 3,795,000 3,232,000
Research and development 849,000 946,000
Interest and other expense (income), net 106,000 80,000
Income (loss) before income taxes (a) (245,000) 453,000
Provision (benefit) for income taxes (a) (120,000) 158,000
Net income (loss) (a) (125,000) 295,000
Net income (loss) per common share - basic (a) ($.06) $.17
Net income (loss) per common share - diluted (a) ($.06) $.17
Weighted average number of shares outstanding - basic 1,939,000 1,754,000
Weighted average number of shares outstanding - diluted 2,083,000 1,782,000
</TABLE>
(a) Reflects the effects of the first quarter 2000 restructuring charge of
$315,000 which reduced the after-tax results of operations by $189,000 or $.10
per diluted share for the first six months of 2000.
