This excerpt taken from the MRY 8-K filed Nov 16, 2005.
Net Income $501,000 or $0.02 Per Diluted Share
Bethel, CT, November 14, 2005 Memry Corporation (AMEX: MRY) reported today that revenue for the first fiscal quarter ended September 30, 2005 rose 39% to $12,667,000, compared with $9,112,000 reported in the comparable quarter a year ago. Net income was $501,000, or $0.02 per diluted share, compared with net income of $703,000, or $0.03 per diluted share in the comparable quarter a year ago. Operating income was $1,177,000 versus $1,127,000 in the comparable quarter a year ago, an increase of approximately 4%.
James G. Binch, CEO of Memry, said, Our revenue growth was attributable primarily to the acquisition of Putnam Plastics, which we acquired last November. Revenue from Nitinol products grew approximately 1%. We had strong performance in Nitinol components used in general surgical applications, tube-based stent components and prototype development products. Offsetting these increases, however, were decreased shipments of wire-based stent components to our largest customer due primarily to shortages in acceptable raw material from one of our Nitinol suppliers, and a decrease in sales of super-elastic tube due to customer inventory adjustments, price discounts and a customer loss of market share. Sales of arch wire products also decreased.
Chief Financial Officer Robert P. Belcher said, Our gross profit percent in the first fiscal quarter of 2006 was 37.5% compared with 38.4% a year ago. The reduction in gross profit was primarily attributable to a shift in product mix on the Nitinol side toward general surgical applications and prototype development and away from higher margin super-elastic tube. We experienced price pressure on several product lines as well as additional expenses associated with the launch of a new guidewire product. Operating expenses, as a percentage of revenue, increased from 26% to 28%, reflecting higher amortization expenses of intangible assets acquired in the Putnam acquisition and increased expenses for legal and accounting activities. First quarter 2006 operating expenses also included $141,000 for stock-based compensation associated with the adoption of SFAS No. 123(R). Net interest expense for the quarter was $278,000 compared to net interest income of $26,000 a year ago, primarily reflecting increased borrowings associated with the Putnam acquisition.
Binch said, We expect our Nitinol business to remain at the current levels until early in the second half, at which point the commercial launch of several new programs should provide positive year-over-year growth. Stent component revenue for the year is likely to decline slightly from 2005, offset by growth from new applications and procedures and an upturn in super-elastic tubing volumes. Our polymer extrusion operations are enjoying very solid growth in nearly all areas and are expected to benefit from several client product launches in calendar 2006. We are benefiting from a broadened customer base and the addition of the polymer capabilities, which have helped insulate us from individual product variations from quarter to quarter. We are looking forward to a strong second half with significant momentum building into the fiscal year beyond.