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Metrologic Announces Record Financial Results for the Fourth Quarter and Year Ended December 31, 2005. Initiates Guidance for 2006. Teleconference 8:30 a.m. Wednesday, February 22, 2006
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Blackwood, New Jersey – February 21, 2006 -- Metrologic Instruments, Inc. (NASDAQ-NMS:MTLG) today announced record financial results for the full year and quarter ended December 31, 2005 with total annual revenue of $210.5 million and net income of $25.2 million or $1.09 earnings per fully diluted share.
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- Sales for the full year 2005 increased by 18.3% to $210.5 million as compared to $178.0 million in 2004. Sales for the quarter ended December 31, 2005 increased by 14.8% to a record $61.0 million as compared with sales of $53.1 million for the same period last year. The fourth quarter 2005 was the highest sales quarter in the Company’s 37-year history.
- On an annual basis, gross margin was 43.2%, within the annual target range previously announced by the Company. Gross margin for the fourth quarter was 41.8% versus 44.8% for the fourth quarter 2004. Gross margin for the fourth quarter 2005 was impacted by the successful expansion of the Optical Systems business which carries inherently lower margins than our Data Capture and Collection business, the continued growth of shipments to Tier 1 retailers for recently introduced products, and some additional freight and other costs associated with satisfying increased customer demand.
- Operating expense as a percentage of revenue declined by 0.9% for the full year 2005 and decreased by 2.2% in the fourth quarter versus the fourth quarter of 2004 as a result of increased operating leverage. Selling, general and administrative (SG&A) expenses increased 5.8% as compared to the fourth quarter of 2004, primarily as a result of the costs associated with the reorganization of our sales force in the EMEA sales region.
- For the full year 2005, net income increased 11.2% to a record $25.2 million, or $1.09 earnings per fully diluted share. Net income for the fourth quarter of 2005 was $9.0 million or $0.39 earnings per fully diluted share, compared with net income of $8.7 million or $0.38 earnings per fully diluted share for the fourth quarter of 2004. However, net income for the fourth quarter 2004 included a $2.4 million gain due to foreign currency translation, primarily related to the change in the Euro relative to the value of the US Dollar. The Company benefited from a quarterly tax rate of 10.7% in the fourth quarter of 2005 and resulting effective annual tax rate of 28.8%, primarily due to the benefits afforded by the American Jobs Creation Act of 2004.
Business Segment and Geographical Highlights
The Data Capture and Collection business segment continued its growth with an increase of 21.1% for the full year 2005 and an 18.1% increase over the fourth quarter of 2004, reflecting solid results from both established and newer Channel partners in several major verticals including retail and healthcare as well as successes with Tier 1 retailers. With robust growth of 38.5% for the full year and 65.5% for the quarter, the Optical Systems business offset the expected weakness in the Industrial Automation business, resulting in an increase of 7.7% for the year and flat quarterly segment results. From a geographic perspective, the EMEA sales organization achieved revenue growth of 18.0% and 22.5% for the full year 2005 and fourth quarter, respectively, reflecting strength in the Channel and continuing success with Tier 1 retailer efforts. Sales in the Asia/Pacific region increased 21.9% for the year and 17.0% for the fourth quarter; a clear reflection that the Company’s expanded sales coverage in that region is yielding results. The Americas sales revenue growth was 17.5% for the full year and 7.8% for the fourth quarter of 2005; it is important to note that the fourth quarter of 2004 included several large Tier 1 retailer deals.
2006 Full Year Outlook
Metrologic also announced its guidance for the full year 2006. Revenue is expected within a range of $240.0 million to $250.0 million. The Company expects gross margin to be in the range of 43.0% to 44.0% for the year, with the expectation that wide variances may occur quarter to quarter due to product mix, business segment contribution and other factors. Net income for 2006 is expected to be $27.9 million to $29.0 million, or $1.20 to $1.25 earnings per fully diluted share, exclusive of non-cash stock option expense. Factoring in an estimated $1.6 million or $0.07 per fully diluted share for the expensing of non-vested stock options outstanding as of December 31, 2005 as required under SFAS No. 123 (R), Share-based Payment, net income is expected to be $26.3 million to $27.4 million , or $1.13 to $1.18 per fully diluted share. SFAS No. 123 (R) became effective for Metrologic as of January 1, 2006. Other factors to consider include an assumed rate for the Euro of $1.20 to $1.25 to the US Dollar and an effective annual tax rate of 36%. These statements do not consider the effect of any acquisitions, dispositions, the results of litigation or other significant Company events that may take place during the year.
Conference Call Information
The Company will host a conference call for investors on Wednesday, February 22 at 8:30 AM ET. The dial in numbers for the teleconference are: (800) 946-0705 (Domestic/Canada) or (719) 457-2637 (International). Those interested in participating in the conference call should dial in at least 10 minutes prior to commencement of the call. The audio for the conference call will also be available as an audio web cast that can be accessed through the Metrologic web site at www.metrologic.com by clicking on the banner at the bottom of our home page and following the instructions. Also available through our web site will be a graphical presentation that will be referred to throughout the conference call. The graphical presentation will be available for download and printing 30 minutes before the start of the conference call.
About Metrologic
Metrologic Instruments, Inc. (“Metrologic” or the “Company”) is a global supplier of choice for data capture and collection hardware, optical solutions, and image processing software. Metrologic has been delivering innovative, quality products that are cost effective, reliable and supported by a superior level of personal service for nearly 40 years. Metrologic products are sold worldwide through Metrologic’s sales, service and distribution offices located in The Americas, EMEA and Asia/Pacific. Metrologic provides its customers not only with a great deal, but a great deal more. For more information please call 1-800-667-8400 or visit www.metrologic.com.
Forward Looking Statements
Forward-looking statements contained in this release are highly dependent upon a variety of important factors which could cause actual results to differ materially from those reflected in such forward looking statements. Specifically, the factors that could cause actual results to differ from expectations include: the timing, introduction and market acceptance of Metrologic's new products; foreign currency fluctuations with the US dollar; pricing pressures; competitive factors; sales cycles of Metrologic's products; Metrologic's ability to control manufacturing and operating costs as well as product and revenue mix which affect future profitability; the effect of current and pending legislation on the Company’s effective annual tax rate; technological changes in the data capture industry, including the adoption of imaging-based and RFID technologies; availability of patent protection for Metrologic's vision-based technologies, and other products; the results of litigation; general economic conditions; and the potential impact of terrorism, international hostilities and natural disasters. When used in this release and documents referenced, the words "believes", "expects", "may", "should", "seeks", or "anticipates", and similar expressions as they relate to Metrologic or its management are intended to identify such forward-looking statements. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. For additional factors, please see Metrologic's reports filed with the Securities and Exchange Commission.
For more information contact:
Ann Anthony – Director, Investor Relations
856.228.8100
Email: a.anthony@metrologic.com
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