Metrologic Instruments, Inc. Reports Financial Results For Fourth Quarter and Full Year of 2000; Company Discloses Sales and Earnings Forecast For 2001

Business Wire, Feb 22, 2001

Business Editors

BLACKWOOD, N.J.--(BUSINESS WIRE)--Feb. 22, 2001

Metrologic Instruments, Inc. (NASDAQ-NMS: MTLG), a leading manufacturer of bar code scanners and high-speed automated data capture solutions using laser, holographic and vision-based technologies, today reported that sales for the quarter ended December 31, 2000, increased 7.8% to $23,971,000 from $22,231,000 for the quarter ended 1999.

Net income for the quarter was $177,000, or $0.03 diluted earnings per share, compared with $1,474,000, or $0.27 diluted earnings per share for the fourth quarter of 1999. The impact of the decline in the value of the euro compared with the US dollar was approximately $0.14 diluted earnings per share for the fourth quarter of 2000.

Sales for the year ended December 31, 2000 increased 14.7% to $91,884,000 compared with $80,103,000 in 1999. Net income, excluding one-time charges, was $2,842,000, or $0.51 diluted earnings per share, compared with $4,897,000, or $0.90 diluted earnings per share in 1999. Diluted earnings per share, including the one-time charges relating to the termination of certain senior managers, was $0.49 for the year ended December 31, 2000. The impact of the decline in the value of the euro against the US dollar was approximately $0.42 diluted earnings per share for the full year ended 2000.

"While the year 2000 has proven challenging, it has invigorated our profit-oriented actions," stated C. Harry Knowles, Metrologic's Chairman and CEO. "The profit impact of a 27% decrease in the value of the euro since 1999, has reduced Metrologic's earnings by $0.14 diluted earnings per share in the fourth quarter alone, plus in addition, the nagging component shortages and related increased costs, and the economic malaise in the US, have combined to stimulate us into significant profit-oriented actions. Our decision to accelerate production in Suzhou, China should mitigate the negative euro impact on an accelerating basis throughout 2001. With our Suzhou based engineers now trained, and with the acquisition of Adaptive Optics Associates ("AOA"), we have quadrupled our total engineering staff since early 1999 to approximately 140 engineers. That increase should accelerate our introduction of new products and entry into new markets. With AOA we have expanded our markets beyond our traditional bar code markets, and with the point-of-sale ("POS") products that we have recently added to our product line, we have strengthened our presence in the POS scanning market. Long term, we see continuing increases in the growth of the bar code scanning market, and we believe that our 27% long-term compounded annual growth rate should continue into the foreseeable future."

Metrologic's President and COO, Thomas E. Mills IV commented, "Metrologic experienced an increase in sales in all geographical territories, most notably in North America, Europe, and Asia. We have seen a continual increase in demand for our products as demonstrated by increased sales of Metrologic scanners to customers of our POS distributors. In addition, notwithstanding the decline in the value of the euro, our European sales increased over 27% in local currency terms during the fourth quarter. However, sales growth must result in profit growth. Therefore, as Harry has stated, Metrologic has taken several measures to reduce costs and restore profits. We have expanded our operations in China, increased sales prices in Europe, instituted tighter operating budgets, eliminated management positions, focused on an aggressive program of material cost reductions and increased production automation in the design of our new POS scanners. We have also noted that our POS distributor buying patterns have become more weighted at the end of the quarter. This pattern resulted in difficulty in forecasting production requirements and extended days sales outstanding in accounts receivable. We are aggressively working to reduce inventory and accounts receivable in 2001 subject to competitive pressures. As sales of Metrologic scanners to customers of our POS distributors continue to increase, we believe this strength will allow us to reduce inventory levels without unduly risking sales growth in 2001."

2001 Forecast

Metrologic also disclosed its forecast for sales and earnings for 2001. Sales are expected to be in excess of $130,000,000 for 2001 compared with the proforma sales for 2000 of approximately $113,000,000. Proforma consolidated sales for 2000 include the sales of AOA as if AOA was acquired on January 1, 2000. The acquisition of AOA was completed on January 8, 2001. Diluted earnings per share are expected to be over $0.75 per share, including the financial results of AOA, assuming that the euro does not reduce significantly compared with the US dollar in 2001. The diluted earnings per share are expected to include approximately $0.05 per share relating to AOA in 2001, net of goodwill amortization and acquisition related interest expense.

For the first quarter of 2001, Metrologic expects diluted earnings per share comparable to the most recent fourth quarter of 2000, or approximately $0.03 diluted earnings per share before consolidating the results of AOA. After consolidating the net income of AOA, net of acquisition interest and goodwill amortization, consolidated diluted earnings per share will range between $0.01 per share to $0.03 per share on consolidated sales ranging between $29,000,000 and $31,000,000.