WEB NEWS GeoSpecial Notes
On 10/28/2011 we added NOIZ to the GeoSpecial list @ $ 6.80
Catalyst : Break out second quarter 2011 results and culmination of past restructuring efforts.
We are now removing NOIZ from the GeoSpeicial List @ $14.80
Current road block : Being acquired by Mercury Computer Systems for $14.80 per share.
Peak performance: Reached a high of $14.75 on 06/11/2012 for a maiximum potential return of 117%
Current Price : $14.75
Acquisitions
HUDSON, N.H.--(BUSINESS WIRE )--Micronetics, Inc. (NASDAQ: NOIZ) announced today that it has signed a definitive merger agreement with Mercury Computer Systems, Inc. (NASDAQ: MRCY, www.mc.com ) and a new Mercury subsidiary under which Mercury will acquire Micronetics for $14.80 per common share in cash. The transaction is valued at approximately $75.4 million, which includes the assumption of Micronetics net debt. This price represents a premium of approximately 97.6% to Micronetics closing price of $7.49 on June 8, 2012.
The transaction is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if necessary, and the approval of Micronetics shareholders. The Boards of Directors of both Micronetics and Mercury have unanimously approved the transaction and the Micronetics Board of Directors has recommended that Micronetics shareholders vote in favor of the transaction. The transaction is currently expected to close within Micronetics’ fiscal 2013 second quarter ending September 30, 2012. Shareholders of Micronetics holding shares representing approximately 20.0% of the shares outstanding have entered into agreements with Mercury under which they have agreed to vote their shares in favor of the proposed merger.
"Around this time in 2001, Micronetics embarked on a strategy to increase the value it brought to its shareholders, customers, and employees,” commented David Robbins, CEO of Micronetics. "Since then we have grown from fewer than 50 people to over 200 employees, and increased revenue from a few million dollars per year to almost $46 million in our most recent fiscal year that ended on March 31, 2012. We have successfully completed 5 acquisitions, and grown to become an important supplier of microwave component and subsystems solutions to both the defense and commercial marketplace. After careful deliberation, we on the Board of Directors believe it is time that we seized the opportunity that validated and recognized our strategic and financial achievements, and at a price that represents a very attractive return for our shareholders."
"We are excited about the opportunity to contribute to Mercury’s capabilities, services and offerings in their integrated digital and RF subsystem solutions. With Mercury’s size, scale and market presence, we expect to enable the combination of our two companies to blend our product platform and customer relationships into an even broader growth opportunity.”
D’Anne Hurd, Micronetics Lead Independent Director remarked, “Today’s announcement is the result of a comprehensive evaluative process conducted by the Micronetics Board of Directors, during which the Company received and evaluated interest from numerous parties. We are extremely pleased that this transaction delivers significant value to the shareholders as evidenced by the 98% premium.”
Micronetics’ exclusive financial advisor on the proposed transaction was Cypress Associates LLC, and its legal counsel was Latham & Watkins LLP.
GeoBargain GeoSpecial Takeovers
CHELMSFORD, Mass., June 10, 2012 (GLOBE NEWSWIRE ) -- Mercury Computer Systems, Inc. (Nasdaq:MRCY) (www.mc.com) contractors, today announced that it has signed a definitive agreement to acquire Micronetics, Inc. (Nasdaq:NOIZ) (www.micronetics.com), a leading designer and manufacturer of microwave and radio frequency (RF) subsystems and components for defense and commercial customers.
Pursuant to the terms of the agreement, Mercury will acquire Micronetics via merger for $14.80 per share. This represents a fully diluted equity value of approximately $71.7 million and an enterprise value of approximately $75.4 million, including $3.7 million of net debt as of March 31, 2012. The acquisition will be funded with available cash and is expected to be immediately accretive to EBITDA. Subject to finalization of purchase accounting, the transaction is also anticipated to be accretive on a GAAP basis within 12 months of the closing date.
The acquisition is subject to customary closing conditions, including approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if necessary, and the approval of Micronetics' shareholders. The boards of directors of both Mercury and Micronetics have unanimously approved the transaction and the Micronetics board has recommended that Micronetics' shareholders vote in favor of the transaction. The transaction is currently expected to close within Mercury's fiscal 2013 first quarter ending September 30, 2012.
"We are pleased to have reached this agreement with Micronetics and are excited about the prospects this combination will provide for our customers, employees, and shareholders," said Mark Aslett, President & CEO of Mercury. "The proposed acquisition is well-aligned with our stated acquisition strategy of growing our capabilities, services and offerings along the sensor processing chain. Micronetics' unique microwave and RF capabilities will enhance our integrated digital and RF subsystem solutions for existing and next generation defense and intelligence programs. This type of integrated solution is unique in the marketplace and is in high demand by our defense prime customers."
Based in Hudson, NH, Micronetics designs and manufactures high performance microwave and RF subsystems and components used in a variety of defense and commercial applications, including electronic warfare, radar, electronic countermeasures, satellite communications and commercial wireless products. For its fiscal year ended March 31, 2012, Micronetics reported revenues of $46.0 million, a 30% increase from the previous fiscal year, with net income of $3.4 million which was more than double earnings from the previous fiscal year. Approximately 78% of Micronetics' revenues are defense-related. Micronetics had 208 employees as of March 31, 2012, all based in the U.S., including manufacturing locations in Hudson, NH, West Caldwell and Ewing, NJ, and Manteca, CA.
Comments & Business Outlook
Fourth Quarter 2012 Results
Net sales were $12,258,367 for the quarter ended March 31, 2012, an increase of $2,913,873 or 31% as compared to $9,344,494 for quarter ended March 31, 2011.
For the quarter ended March 31, 2012, the Company reported net income of $863,123 or $0.18 per diluted share as compared to net income of $444,137 or $0.10 per diluted share, for the quarter ended March 31, 2011.
Backlog as of March 31, 2012 was over $26M and bookings in the quarter ended March 31, 2012 were $12M.
David Robbins, Micronetics CEO stated “We are pleased with this fiscal year’s financial performance. We achieved improved operating margins and cash flow driven from subsystems business momentum and steady components revenue growth. We expanded our product portfolio to include high performance microwave subsystems. We believe that our positive engagements with many of our key customers point toward further growth in the niche markets in which we compete.”
Comments & Business Outlook
Third Quarter 2012 Results
Net sales for Q3 FY 2012 were $12.0 million, an increase of $4.4 million or 58% compared to $7.6 million for Q3 FY 2011.
Net income for Q3 FY 2012 was $902,395 or $0.20 per diluted share as compared to net income of $101,123 or $0.02 per diluted share for Q3 FY 2011.
David Robbins, Micronetics’ CEO, stated, “We are pleased to have achieved another quarter of record revenues and strong earnings performance. This growth is a direct result of pursuing and investing in our customers’ high performance subsystem programs. Building upon our positive momentum from the past twelve months, in fiscal year 2012 we’ve already been awarded approximately $12 million in multi-year development and production subsystem contracts. These are primarily in support of US DoD electronic modernization and commercial aerospace programs. We continue to be confident in our ability to complement these large subsystems bookings with steady, profitable core component bookings.”
Backlog was $26 million at the end of Q3 FY 2012.
Comments & Business Outlook
HUDSON, N.H.--(BUSINESS WIRE
David Robbins, Micronetics' CEO stated, "We are happy to have secured this initial contract. This product and design win reflects our latest in engineering expertise and we are optimistic that demand for this product will contribute to our growth. We targeted airborne high speed data links based on the strength and diversity of commercial and military applications, consistent with our strategy to leverage our strong technology capabilities and breadth of product offerings across multiple end markets.”
GeoSpecial Notes
On October 28, 2011 we coded NOIZ as a GeoSpecial/Bargain @ $6.80
Company Description: Manufactures microwave and radio frequency (RF) components and integrated subassemblies used in a variety of defense, aerospace and commercial applications.
Criteria Check List
NOIZ Meets 8 out of 10 of the most important GeoBargain® Requirements
Requirement Comments
Recent 52-week High (generally within 3 months) Yes (8/16/2011)
Strong EPS Growth Rate
As of 2nd quarter 2012
yes
> 30% EPS Growth Rate
2nd Qtr. 2012 EPS increased 129%
yes
GeoPowerRanking (GPR); Number of consecutive quarters that we expect EPS to grow by at least 30% . (20% may be acceptable under certain circumstances)
3
To see more requirements, reasons for optimism, as well as potential valuation, see our November 16, 2011 GeoNugget .
Comments & Business Outlook
Second Quarter 2012 Results
Net Income for the second quarter ended October 1, 2011 more than doubled that of the prior year’s second quarter. Net income was $1.1 million, or $0.24 per diluted share, an increase of 129% compared to $0.5 million, or $0.10 per diluted share, for the prior year’s second quarter.
Backlog was approximately $29 million with approximately $11 million in bookings for the quarter ended October 1, 2011.
David Robbins, Micronetics' CEO stated, “I am pleased to report that Micronetics had another quarter of continued strong financial performance and was positively impacted by operational leverage. Our second quarter fiscal year 2012 revenue and earnings exceeded any prior quarter’s reported revenue and earnings in our history. We remain positive in our ability to convert our existing backlog into profitable revenue while booking new subsystem business that we believe will support organic sales and earnings growth.”
Comments & Business Outlook
First Quarter 2012 Results
Net sales for Q1 FY 2012 were $10,039,293, an increase of $672,599 or 7% compared to $9,366,694 for Q1 FY 2011.
Net income of $564,372 or $0.12 per diluted share, as compared to a net income of $499,850 or $0.11 per diluted share for Q1 FY 2011.
David Robbins, Micronetics' CEO stated, ”Our Q1 FY 2012 revenue exceeds our historic reported revenue for any quarter by over $0.6M. We are pleased with this positive trend in revenue, earnings, backlog, and subsystems bookings for the quarter. We are also optimistic about booking additional subsystems orders this calendar year, which we expect will continue to fuel positive financial performance.”
Backlog is $31 million with approximately $10 million in bookings for the quarter.
