LEIX Lowrance Electronics (MM)

Lowrance Electronics, Inc. (NASDAQ:LEIX) today announced that net income for the third quarter ended April 30, 2005, was $6,440,000, or $1.25 per diluted share, compared to $6,671,000, or $1.68 per diluted share, as restated, in the same quarter last year. Net sales increased 15% to a third quarter record $53,200,000, compared to sales of $46,296,000, in the third quarter last year. For the nine months ended April 30, 2005, net income increased 3% to $6,903,000, or $1.41 per diluted share, compared to $6,709,000, or $1.69 per diluted share, as restated, in the same period last year. Net sales for the nine month period increased 22% to $103,321,000, compared to $84,800,000 a year earlier. "Record third quarter and year-to-date sales are due to the introduction this year of over 50 new SONAR and GPS products, including our new turn-by-turn automotive GPS products," said Darrell Lowrance, president and CEO. Lowrance noted that, as expected, the Company's third quarter gross margin declined to 40% of sales from 45% of sales in the same quarter last year. "In the first nine months of fiscal 2005, we have increased research and development, advertising, sales and marketing expenses associated with the launch of the Company's new automotive GPS products. These efforts have resulted in the award-winning iWay 500c, which recently received the Editor's Choice award from PC Magazine. In addition, our strategy to expand the distribution of this product beyond our traditional outdoor specialty markets has resulted in the recent addition of over 1,300 Staples stores nationwide. We are particularly excited that more than 1,100 of these stores will present the iWay 500c in demonstration mode, enabling direct consumer interaction," said Lowrance. The Company also announced a $0.05 increase in its dividend, to $0.30 per share, payable on June 17, 2005, to shareholders of record on June 10, 2005. Order backlog increased 118% to approximately $14,850,000 at April 30, 2005, compared to backlog of approximately $6,800,000 at April 30, 2004. About Lowrance Electronics Lowrance Electronics, Inc. (www.lowrance.com) designs, manufactures and markets SONAR and GPS products, digital mapping systems and accessories under the brand names "Lowrance"(R) and "Eagle"(R) Electronics, "Lowrance Automotive(TM)" and "Lowrance Avionics"(R). These products are used in the following primary product markets: marine, general consumer (which includes handheld GPS outdoor recreational use and voice turn-by-turn navigational systems for aftermarket automotive use) and aviation. This press release may include certain statements concerning expectations for the future that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that are difficult to predict and many of which are beyond management's control, including factors discussed in the Company's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. While the Company makes these statements and projections in good faith, neither the Company nor its management can guarantee that anticipated future results will be achieved. The Company undertakes no obligation to update or revise any forward-looking statement to reflect new information or events. -0- *T LOWRANCE ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (in thousands, except per share information) Three Months Ended Nine Months Ended April 30, April 30, 2005 2004 2005 2004 (As (As Restated) Restated) NET SALES $53,200 $46,296 $103,321 $84,800 COST OF SALES 32,003 25,640 63,259 49,029 Gross profit 21,197 20,656 40,062 35,771 OPERATING EXPENSES: Selling and administrative 10,055 9,206 24,617 21,277 Research and development 1,417 1,316 4,641 3,760 Total operating expenses 11,472 10,522 29,258 25,037 Operating income 9,725 10,134 10,804 10,734 OTHER EXPENSES: Interest expense 361 187 705 558 Other, net 24 48 80 210 Total other expenses 385 235 785 768 INCOME BEFORE INCOME TAXES 9,340 9,899 10,019 9,966 PROVISION FOR INCOME TAXES 2,900 3,228 3,116 3,257 NET INCOME $6,440 $6,671 $6,903 $6,709 NET INCOME PER SHARE BASIC $1.25 $1.77 $1.41 $1.78 DILUTED $1.25 $1.68 $1.41 $1.69 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 5,135 3,761 4,886 3,761 DILUTED 5,135 3,982 4,886 3,975 DIVIDENDS NONE NONE $940 $940 OTHER COMPREHENSIVE INCOME NET OF TAX: NET INCOME $6,440 $6,671 $6,903 $6,709 FOREIGN CURRENCY TRANSLATION ADJUSTMENT 32 (66) 210 155 COMPREHENSIVE INCOME $6,472 $6,605 $7,113 $6,864 LOWRANCE ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) April 30, April 30, July 31, ASSETS 2005 2004 2004 (As Restated) CURRENT ASSETS: Cash and cash equivalents $3,494 $1,193 $1,412 Accounts receivable, less allowances 30,165 21,406 10,276 Inventories 43,473 22,967 23,821 Current deferred income taxes 1,120 1,789 1,107 Prepaid income taxes 233 148 -- Prepaid expenses 2,766 1,360 2,041 Total current assets 81,251 48,863 38,657 PROPERTY, PLANT AND EQUIPMENT, net 18,931 9,745 10,005 OTHER ASSETS 427 64 81 TOTAL ASSETS $100,609 $58,672 $48,743 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $742 $1,842 $1,874 Accounts payable 9,436 8,586 6,072 Accrued liabilities: Compensation and benefits 3,044 2,988 3,175 Product costs 2,093 2,291 1,968 Income taxes 871 2,312 671 Other 1,609 1,181 1,119 Total current liabilities 17,795 19,200 14,879 LONG-TERM DEBT, less current maturities 21,450 12,965 6,040 DEFERRED INCOME TAXES 1,532 959 1,169 STOCKHOLDERS' EQUITY: Common stock, $.10 par value, 10,000,000 shares authorized, 5,135,516 shares issued and outstanding at April 30, 2005; 3,761,196 shares issued and outstanding at April 30, 2004, and July 31, 2004 514 377 377 Paid-in capital 34,316 7,434 7,449 Retained earnings 24,684 17,615 18,721 Accumulated other comprehensive income 318 122 108 Total stockholders' equity 59,832 25,548 26,655 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $100,609 $58,672 $48,743 *T