Aeroflex Announces Second Quarter Fiscal 2013 Results

Aeroflex Announces Second Quarter Fiscal 2013 Results

PLAINVIEW, N.Y.--(BUSINESS WIRE)-- Aeroflex Holding Corp. ("Aeroflex") (NYS: ARX) , a leading global provider of high performance microelectronic components, and test and measurement equipment, today announced its financial results for the second quarter of fiscal 2013, which ended December 31, 2012.

For the second quarter of fiscal 2013:

• Net sales were $156.2 million compared to $171.1 million in the second quarter of fiscal 2012.

• Operating income was $5.8 million and net income was $745,000, or $0.01 per share, compared to operating income of $8.2 million and a net loss of $(535,000), or $(0.01) per share, in the second quarter of fiscal 2012.

• On a Non-GAAP basis, operating income was $22.5 million, net income was $8.7 million, or $0.10 per share, and Adjusted EBITDA was $27.6 million compared to operating income of $29.8 million, net income of $13.9 million, or $0.16 per share, and Adjusted EBITDA of $34.4 million, in the second quarter of fiscal 2012.

"Despite the difficult environment, we again exceeded expectations this quarter. We saw continued improvement in both AMS and ATS and had strong bookings led by our high performance, high reliability products in AMS. Our overall book-to-bill was well over one-to-one this quarter," stated Len Borow, Chief Executive Officer of Aeroflex. "The benefits of our operational changes have begun to take effect and we will continue to make improvements throughout the year. We continued to generate sufficient cash that allowed us to repay another $10 million of debt this quarter. Although we are encouraged by the strong bookings, we are still cautious as the political and economic issues affecting our end markets still exist."

The following tables present selected financial information for the three and six months ended December 31, 2012 and 2011 prepared in accordance with generally accepted accounting principles ("GAAP") and on a basis other than GAAP ("Non-GAAP"). A reconciliation between GAAP and Non-GAAP amounts is presented at the end of this press release. The 33% Non-GAAP effective tax rate in the fiscal 2013 period and 35% in the fiscal 2012 period result from Aeroflex's geographic mix of Non-GAAP pre-tax income. These rates were applied to Aeroflex's Non-GAAP pre-tax income for the three and six month periods ended December 31, 2012 and 2011, respectively.

Business Outlook

For the fiscal third quarter ending March 31, 2013, Aeroflex expects net sales to be between $154 million and $162 million, GAAP net loss to be between $(2) million and $(1) million, Adjusted EBITDA to be between $26 million and $29 million, GAAP net loss per share to be between $(0.02) and $(0.01) and Non-GAAP net income per share to be between $0.09 and $0.12.

The range of expected GAAP and Non-GAAP net income per share for the fiscal third quarter was calculated using GAAP and Non-GAAP effective tax rates of 68% and 28%, respectively.

Non-GAAP Presentation

This press release contains Non-GAAP financial measures that are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures: (i) are not based on any comprehensive set of accounting rules or principles; and (ii) have limitations in that they do not reflect all of the amounts associated with Aeroflex's results of operations as determined in accordance with GAAP. As such, these measures should only be used to evaluate Aeroflex's results of operations in conjunction with the corresponding GAAP measures.

Aeroflex believes that the presentation of Non-GAAP financial measures, when shown in conjunction with the corresponding GAAP measures, provides useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations because they exclude certain non-cash charges or items that management does not believe are reflective of its ongoing operating results when assessing the performance of its business.

Aeroflex believes that these Non-GAAP financial measures also facilitate the comparison by management and investors of results between periods and among its peer companies. However, its peer companies may calculate similar Non-GAAP financial measures differently than Aeroflex, limiting the information's usefulness as comparative measures.

Webcast and Conference Call Information

Aeroflex will host a live webcast and conference call at 4:30 p.m. eastern standard time on Wednesday, February 6^th during which management will discuss the financial results. To participate in the live webcast, please visit the events page of the website located at http://ir.aeroflex.com. Please plan to join five to ten minutes before the start of the webcast to facilitate a timely connection. If you are unable to participate and would like to hear a replay of the call, an audio replay of the webcast will be available on the Aeroflex website or can be accessed telephonically for domestic callers at (888) 286-8010 or internationally at (617) 801-6888 with pass code 36066861.

About Aeroflex

Aeroflex Holding Corp. is a leading global provider of high performance microelectronic components, and test and measurement equipment used by companies in the space, avionics, defense, commercial wireless communications, medical and other markets.

Forward-looking Statements

All statements other than statements of historical fact included in this press release regarding Aeroflex's business strategy, financial results and plans and objectives of its management for future operations are forward-looking statements. When used in this press release, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to Aeroflex or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of Aeroflex's management, as well as assumptions made by and information currently available to its management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, adverse developments in the global economy; changes in government spending; dependence on growth in customers' businesses; the ability to remain competitive in the markets Aeroflex serves; the inability to continue to develop, manufacture and market innovative, customized products and services that meet customer requirements for performance and reliability; any failure of suppliers to provide raw materials and/or properly functioning component parts; the inability to meet covenants contained in debt agreements; the termination of key contracts, including technology license agreements, or loss of key customers; the inability to protect intellectual property; the failure to comply with regulations such as International Traffic in Arms Regulations and any changes in regulations; the failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or restructurings could adversely affect Aeroflex; the loss of key employees; exposure to foreign currency exchange rate risks; and terrorist acts or acts of war. Such statements reflect the current views of management with respect to the future and are subject to these and other risks, uncertainties and assumptions. Aeroflex does not undertake any obligation to update such forward-looking statements. Any projections in this release are based on limited information currently available to Aeroflex, which is subject to change. Although any such projections and the factors influencing them will likely change, Aeroflex will not necessarily update the information, since Aeroflex will only provide guidance at certain points during the year.