ORLANDO, FL – (Business Wire) – October 9, 2013 — API Technologies Corp. (NASDAQ:ATNY) (“API”, “API Technologies”, or the “Company”), a trusted provider of RF/microwave, microelectronics, and security solutions for critical and high-reliability applications, today announced results for the fiscal third quarter ended August 31, 2013. Results for continuing operations for the third quarter and comparable historical periods do not include the Data Bus product line or Sensors business, which were sold July 5, 2013 and April 17, 2013, respectively. Results for the Data Bus product line and Sensors business are reported under discontinued operations.
“We reported strong results this quarter, with over six percent year-over-year revenue growth and achieved record revenue for our Systems, Subsystems and Components segment, which is bolstered by our differentiated portfolio of innovative products and end market diversity,” said Bel Lazar, President and Chief Executive Officer of API Technologies Corp. “We have delivered our highest Adjusted EBITDA in five quarters and paid down over $77 million in term debt year to date. We continue to execute our business strategy and enhance our operational efficiencies, which positions us to deliver strong performance and positive returns for our shareholders.”
Results for the Quarter Ended August 31, 2013
API Technologies reported revenue of $62.6 million for the quarter ended August 31, 2013, compared to $64.2 million for the quarter ended May 31, 2013, and $58.8 million for the quarter ended August 31, 2012.
Gross profit, as a percent of sales, was 23.9% for the quarter ended August 31, 2013, versus 22.8% for the quarter ended May 31, 2013, compared to 21.9% for the quarter ended August 31, 2012. Adjusted EBITDA from continuing operations for the quarter ended August 31, 2013 was $8.4 million (13.3% margin), versus $7.3 million (11.4% margin) for the quarter ended May 31, 2013, compared to $7.4 million (12.5% margin) in the quarter ended August 31, 2012.
API Technologies posted net income of $7.0 million in the quarter ended August 31, 2013, versus net income of $7.5 million in the quarter ended May 31, 2013, and a net loss of $27.7 million in the quarter ended August 31, 2012. The year-over-year increase in net income is primarily attributable to the goodwill impairment recorded in August 31, 2012 and the income from the sale of the Data Bus product line in the quarter ended August 31, 2013. At the conclusion of the August 31, 2013 quarter, the Company had $14.0 million in cash and cash equivalents, including $1.5 million in restricted cash, and $110.2 million in debt obligations, net of discounts. At the conclusion of the sale of the Data Bus product line, the Company paid down $28.8 million of term debt.
Results for the Nine Months Ended August 31, 2013
API Technologies reported revenue of $185.2 million for the nine months ended August 31, 2013, versus $189.0 million for the nine months ended August 31, 2012. Gross margin was 22.5% for the nine month period ended August 31, 2013 and 18.9% for the comparable period ended August 31, 2012.
The Company posted net income of $0.0 million for the nine months ended August 31, 2013, compared to a $136.4 million net loss in the prior year’s comparable period, primarily attributable to the goodwill impairment recorded in August 31, 2012 and the income from the sales of the Data Bus product line and Sensors business in nine months ended August 31, 2013. Restructuring costs recorded in the nine months ended August 31, 2013 were $0.9 million compared to $13.7 million for the nine month period ended August 31, 2012.
As previously announced, API Technologies’ Board of Directors continues to explore a number of strategic alternatives, including the potential sale of one or more business units, the net proceeds from which would be used to pay down debt.API notes that there can be no assurance that this process will result in any agreement or transaction. API does not intend to disclose developments with respect to the Board’s process unless and until the Board has approved a specific course of action.
API Technologies will host a conference call to review the Company’s fiscal third quarter results tomorrow, October 10, at 10:00 a.m. Eastern Time. Bel Lazar, President and Chief Executive Officer, and Phil Rehkemper, Executive Vice President and Chief Financial Officer, will host the call.
The call will be available by dialing 1-877-317-6789 or 1-412-317-6789 and accessible by webcast at http://www.apitech.com. Recorded replays of the webcast will be available on the Company’s Investor Relations App, and for 30 days on the Company’s website and by telephone at 1-877-344-7529 or 1-412-317-0088, replay passcode #10034221, beginning 2:00 p.m. Eastern Time on October 10, 2013.
The API Technologies Investor Relations App is available free for iPhone® and iPad® via the Apple iTunes store and for Android™ devices via Google Play. For more information, visit http://www.apitech.com/investor-relations.
About API Technologies Corp.
API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company website at www.apitech.com.
Non-GAAP Financial Information
In this press release, API has provided non-GAAP financial measures for Adjusted EBITDA from continuing operations. Non-GAAP Adjusted EBITDA from continuing operations (Earnings before interest, taxes, depreciation and amortization) excludes restructuring charges, acquisition and divestiture-related charges, C-MAC pro forma adjustments, foreign exchange losses, stock-based compensation expenses, amortization of note discounts and deferred financing costs, goodwill impairment, SenDEC earn-out reversal, and certain other adjustments. Management believes the supplemental non-GAAP presentations provide investors an additional analytical tool for understanding the Company’s financial performance by excluding the impact of items which may obscure trends in the operating performance of the business. These are not recognized measures under US GAAP, do not have a standardized meaning, and are unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that these non-GAAP measures should not be construed as an alternative to net earnings or loss determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. We expect our financial statements to continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.
Safe Harbor for Forward-Looking Statements
Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to, general economic and business conditions, including without limitation reductions in government defense spending (including without limitation due to government shutdowns), government regulations, our ability to integrate and consolidate our operations, our ability to expand our operations in both new and existing markets, the ability of our review of strategic alternatives to maximize stockholder value and the effect of growth on our infrastructure. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K under Part I, Item 1A “Risk Factors” as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements in this press release, whether as a result of new information, future events, or otherwise.
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