ARGON ST (STST)

Three Month Results

For the fourth quarter ended September 30, 2009 revenue was $95.5 million, up slightly from revenue of $95.1 million in the fourth quarter of the prior year and a 4.9 percent sequential increase over revenue of $91.0 for the third quarter of fiscal year 2009.

Operating income for the quarter was $9.7 million. This represents a 15.8 percent improvement over operating income of $8.3 million in the fourth quarter of the prior year and a 1.3 percent sequential increase over operating income of $9.5 million for the third quarter of fiscal year 2009.

Adjusted EBITDA for the fourth quarter ended September 30, 2009 was $13.5 million, or 14.1 percent margin on revenue. This represents a 14.1 percent increase over Adjusted EBITDA of $11.8 million, or 12.4 percent margin on revenue in the fourth quarter of the prior year and a 7.4 percent sequential increase over Adjusted EBITDA of $12.5 million, or 13.8 percent margin on revenue for the third quarter of fiscal year 2009.

Net income for the quarter was $6.1 million. This represents a 14.9 percent improvement over net income of $5.3 million in the fourth quarter of the prior year.

Fully diluted EPS for the quarter was $0.28 on 22.1 million shares and share equivalents. Fully diluted EPS in the fourth quarter of the prior year was $0.24 on 22.0 million shares and share equivalents.

Nine Month Results

For the nine months ended June 28, 2009 revenue was $270.6 million. This represents a 10.1 percent improvement over revenue of $245.9 million in the first nine months of the prior year.

GAAP operating income for the nine months ended June 28, 2009 was $26.5 million. Non-GAAP operating income for the nine months ended June 28, 2009 was $27.2 million. This represents a 15.3 percent improvement over non-GAAP operating income of $23.6 million in the same period of the prior year.

Non-GAAP measures in the nine months ended June 28, 2009 excludes a one-time charge of $0.6 million for the resolution of a legal claim.

Adjusted EBITDA for the nine months ended June 28, 2009 was $37.2 million, or 13.7 percent margin on revenue. This represents a 13.1 percent increase over Adjusted EBITDA of $32.9 million, or 13.4 percent margin on revenue in the same period of the prior year.

GAAP net income for the nine months ended June 28, 2009 was $17.6 million. Non-GAAP net income for the nine months ended June 28, 2009 was $18.0 million compared to $15.0 million for the nine months ended June 29, 2008.

GAAP fully diluted earnings per share for the nine months ended June 28, 2009 was $0.80 on 22.0 million shares and share equivalents. Non-GAAP fully diluted earnings per share for the nine months ended June 28, 2009 was $0.82 on 22.0 million shares and share equivalents. GAAP and non-GAAP fully diluted earnings per share in the same period of the prior year was $0.68 on 22.1 million shares and share equivalents.

Six Month Results

For the six months ended March 29, 2009 revenue was $179.6 million. This represents a 10.4 percent improvement over revenue of $162.7 million in the first six months of the prior year.

GAAP operating income for the first six months was $17.0 million. Non-GAAP operating income for the first six months was $17.6 million. This represents a 12.1 percent improvement over operating income of $15.7 million in the same period of the prior year. Non-GAAP operating income excludes a one-time charge of $0.6 million for the resolution of a legal claim.

Adjusted EBITDA for the six months ended March 29, 2009 was $24.6 million, or 13.7 percent margin on revenue. This represents a 13.2 percent increase over Adjusted EBITDA of $21.8 million, or 13.4 percent margin on revenue in the same period of the prior year.

GAAP net income for the six months ended March 29, 2009 was $11.0 million. Non-GAAP net income for the six months ended March 29, 2009 was $11.4 million compared to $9.8 million for the six months ended March 30, 2008.

GAAP fully diluted earnings per share for the six months ended March 29, 2009 was $0.50 on 22.0 million shares and share equivalents. Non-GAAP fully diluted earnings per share for the six months ended March 29, 2009 was $0.52 on 22.0 million shares and share equivalents. Fully diluted earnings per share in the same period of the prior year was $0.44 on 22.1 million shares and share equivalents.

First Quarter Results

For the first quarter ended December 28, 2008 revenue was $84.0 million. This represents a 13 percent improvement over revenue of $74.3 million in the first quarter of the prior year and a 12 percent sequential decrease of revenue compared to $95.1 million in the fourth quarter of 2008.

Operating income for the quarter was $7.6 million. This compared favorably to the $6.8 million reported in first quarter of the prior year. Sequential operating income decreased by $0.7 million from the $8.3 million reported in the fourth quarter of 2008.

Adjusted EBITDA for the first quarter ended December 28, 2008 was $10.8 million or 13 percent margin on revenue. This represents a 12 percent increase over Adjusted EBITDA of $9.6 million, or 13 percent margin on revenue in the first quarter of the prior year and a nine percent sequential decrease over Adjusted EBITDA of $11.8 million, or 12 percent margin on revenue in the fourth quarter of 2008.

The effective income tax rate for the quarter was 31.8 percent. This rate includes a one time catch-up adjustment to reflect the re-enactment of the Federal Research and Development tax credit.

Net income for the quarter was $5.2 million, an increase of 21 percent compared to the $4.3 million reported in the first quarter of the prior year. Net income for the quarter decreased two percent from the $5.3 million reported in the fourth quarter of 2008.

Fully diluted earnings per share for the quarter was $0.24 on 22.0 million shares and share equivalents. Fully diluted earnings per share in the first quarter of the prior year was $0.19 on 22.3 million shares and share equivalents and was $0.24 in the fourth quarter of 2008 on 22.0 million shares and share equivalents.

Fiscal Year Results

For the fiscal year ended September 30, 2008 revenue was $340.9 million. This represents a 21 percent improvement over revenue of $282.2 million in the prior year.

Operating income for the year was $31.9 million. This compared favorably to operating income for fiscal year ended September 30, 2007 of $21.3 million which included a charge related to the impairment of intangible assets and other one-time charges of approximately $7.0 million.

Adjusted EBITDA for the fiscal year ended September 30, 2008 was $44.7 million or 13 percent margin on revenue compared to Adjusted EBITDA of $38.5 million, or 14 percent margin on revenue in the prior year.

On both GAAP and non-GAAP basis, net income for fiscal year 2008 was $20.3 million. Net income on a non-GAAP basis in the prior year was $18.9 million and on a GAAP basis it was $14.7 million.

Fully diluted earnings per share for the fiscal year was $0.92 on 22.1 million shares and share equivalents. Fully diluted earnings per share in the prior year was $0.65 on 22.8 million shares and share equivalents.

Nine Month Results

For the nine months ended June 29, 2008 revenue was $245.9 million. This represents a 23.9 percent improvement over revenue of $198.4 million for the first nine months ended July 1, 2007.

Operating income for the first nine months was $23.6 million. This represents a 14.2 percent improvement over operating income of $20.6 million in the same period of the prior year.

Adjusted EBITDA for the nine months ended June 29, 2008 was $32.9 million, or 13.4 percent margin on revenue. This represents an 18.1 percent increase over Adjusted EBITDA of $27.8 million, or 14.0 percent margin on revenue in the same period of the prior year.

Net income for the nine months ended June 29, 2008 was $15.0 million, an increase of 9.8 percent over net income of $13.6 million for the nine months ended July 1, 2007.

Fully diluted earnings per share for the nine months ended June 29, 2008 were $0.68 on 22.1 million shares and share equivalents. Fully diluted earnings per share in the same period of the prior year were $0.60 on 22.8 million shares and share equivalents.

Six Month Results

For the six months ended March 30, 2008 revenue was $162.7 million. This represents a 30.5 percent improvement over revenue of $124.7 million in the first six months of the prior year.

Operating income for the first six months was $15.7 million. This represents a 10.7 percent improvement over operating income of $14.2 million in the same period of the prior year.

Adjusted EBITDA for the six months ended March 30, 2008 was $21.8 million or 13.4 percent margin on revenue. This represents a 14.3 percent increase over Adjusted EBITDA of $19.0 million, or 15.3 percent margin on revenue in the same period of the prior year.

Net income for the six months ended March 30, 2008 was $9.8 million. Net income was $9.3 million for the six months ended April 1, 2007.

Fully diluted earnings per share for the six months ended March 30, 2008 was $0.44 on 22.1 million shares and share equivalents. Fully diluted earnings per share in the same period of the prior year was $0.41 on 22.8 million shares and share equivalents.

First Quarter Results

For the first quarter ended December 30, 2007 revenue was $74.3 million. This represents a 23 percent improvement over revenue of $60.4 million in the first quarter of the prior year.

Operating income for the quarter was $6.8 million. Operating income in the first quarter of the prior year was $7.7 million.

Adjusted EBITDA for the first quarter ended December 30, 2007 was $9.6 million or 13 percent margin on revenue. This compares to Adjusted EBITDA of $10.1 million, or 16.7 percent margin on revenue in the first quarter of the prior year.

Net income for the quarter was $4.3 million. Net income in the first quarter of the prior year was $5.2 million.

Fully diluted earnings per share for the quarter was $0.19 on 22.3 million shares and share equivalents. Fully diluted earnings per share in the first quarter of the prior year was $0.23 on 22.7 million shares and share equivalents.