Exhibit 20
MERRIMAC REPORTS THIRD QUARTER
AND NINE MONTHS 2000 RESULTS;
BACKLOG CONTINUES TO INCREASE
West Caldwell, N.J., November 9, 2000: Merrimac Industries, Inc. (AMEX: MRM), a
leader in the design and manufacture of RF Microwave components, assemblies and
Micro-Multifunction Modules (MMFMTM), today announced results for the third
quarter and first nine months ended September 30, 2000. Chairman and CEO Mason
N. Carter commented, "Merrimac and Filtran have both received strong order
input, and our backlog is at an all-time high, ahead of plan for nine months. A
significant revenue increase of almost 21 percent, coupled with a 49 percent
gross margin, provided a strong operating performance by our management team. We
are very encouraged by the increase in development activity for our
Multi-Mix(TM) technology with the wireless telecommunications industry."
Third quarter 2000 sales of $6,437,000 increased $1,109,000 or 20.8 percent
compared to third quarter sales of the prior year of $5,328,000. Net income for
the third quarter of 2000 was $219,000, an increase of $110,000 compared to
1999. Diluted net income per share was $.09 compared to the diluted per share
amount of $.06 reported for the third quarter of the prior year.
For the first nine months of 2000, sales of $16,298,000 increased $1,106,000 or
7.3 percent compared to prior year's nine-month sales of $15,192,000. Net income
for the first nine months of $94,000 was recorded, after the net effects of a
first quarter personnel restructuring charge of $189,000. Net income of $405,000
was reported for the first nine months of 1999. Diluted net income per share was
$.04, reflecting the first quarter of 2000 restructuring charge of $.09 per
diluted share. For the first nine months of the prior year, diluted net income
per share of $.23 was reported.
The weighted average number of basic and diluted shares outstanding increased
for the third quarter and first nine 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 third quarter of 2000 was $11.7 million, an
increase of $5.6 million or 92 percent over year-end 1999, and $3.8 million or
47 percent when compared to the backlog of $8.0 million at the end of the third
quarter of last year. Orders received during the third quarter of 2000, totaling
$7.3 million, exceeded the third quarter 2000 sales level by approximately 14
percent, and orders for the first nine months of 2000, totaling $21.9 million,
exceeded the nine months 2000 sales level by approximately 35 percent.
Mr. Carter continued, "Multi-Mix(TM) wireless product development is proceeding
with a focus on basestation, broadband internet systems, with wireless local
loop and point-to-point radio applications. A major Multi-Mix(TM) R&D program
offers what we believe is a breakthrough technology for innovative wireless
applications solutions going forward.
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"During this quarter we announced the completion of a $4.6 million private
placement with a group of investors including Ericsson Holding International
B.V., Adam Smith Investment Partners and three members of our Board of
Directors. This brings Ericsson's holdings in Merrimac to 18.5 percent. The
funds will be used for working capital and to finance the continued growth of
operations resulting from the increased demand for telecommunications components
and multifunction modules. "
About Merrimac
Merrimac Industries, Inc. is a leader in the design and manufacture of RF
Microwave components, assemblies and Micro-Multifunction Modules (MMFM(TM))
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 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 approximately 240 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
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
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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.
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: http://www.prnewswire.com .
Merrimac Industries, Inc.
Summary of Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
September 30 October 2
2000 1999
-----------------------------------
<S> <C> <C>
Net sales $6,437,000 $5,328,000
Gross profit 3,135,000 2,634,000
Selling, general and administrative expenses 2,273,000 1,821,000
Research and development 484,000 577,000
Interest and other expense, net 9,000 66,000
Income before income taxes 369,000 170,000
Provision for income taxes 150,000 60,000
Net income 219,000 110,000
Net income per common share - basic $.10 $.06
Net income per common share - diluted $.09 $.06
Weighted average number of shares outstanding - basic 2,186,000 1,741,000
Weighted average number of shares outstanding - diluted 2,379,000 1,772,000
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30 October
2000 2
1999
-----------------------------------
<S> <C> <C>
Net sales $16,298,000 $15,192,000
Gross profit 7,955,000 7,345,000
Selling, general and administrative expenses 6,068,000 5,053,000
Research and development 1,333,000 1,524,000
Interest and other expense, net 115,000 145,000
Income before income taxes (a) 124,000 623,000
<PAGE>
Provision for income taxes (a) 30,000 218,000
Net income (a) 94,000 405,000
Net income per common share - basic (a) $.05 $.23
Net income per common share - diluted (a) $.04 $.23
Weighted average number of shares outstanding - basic 2,021,000 1,750,000
Weighted average number of shares outstanding - diluted 2,171,000 1,776,000
</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 $.09
per diluted share for the first nine months of 2000.
