Axsys Technologies, Inc.: Precisely prosperous
Axsys Technologies, Inc. (Nasdaq: AXYS)
Rocky Hill, Conn.
http://www.axsys.com
52-week low / high: $15.71 / $43.63
Shares Outstanding: 10.74 million
Market Capitalization: $407 million
In a time when America seems to be one big subprime mess, it’s a joy to talk about an American company that leads the world in the highest manufacturing technology imaginable. Enter Axsys Technologies, Inc. (Nasdaq: AXYS).
Axsys designs and manufactures highly accurate optical and motion control systems for the U.S. government and commercial markets which demand high performance optics. Axsys’ systems are used in such mission-critical environments as airborne thermal targeting, missile tracking, space-borne surveillance, nighttime surveillance, navigation, astronomical research, and medical imaging and highly precise medical imaging and semiconductor micro-inspection.
All of Axsys’ many offerings in precision optics and motion control applications are based on their state-of-the-art manufacturing. Axsys is as a leader in the precision machining (to within 10 millionths of an inch tolerance) of both exotic and conventional materials, including beryllium alloys, titanium, aluminum, quartz and glass. In addition to its slew of proprietary products, the company is a subcontractor to many precision manufacturers and sells its surplus capacity in lapping, ion milling, plasma coating, plating, etching, anodizing and quality measurement.
Considering currently global realities — porous borders and terrorists, to name a few — the smallest groups can represent a massive threat. National defense becomes a matter of relentless vigilance against the most minute threat profile, the human body. What’s more, extreme computational capacity in medical and astronomical research requires optics well beyond the perceptive capacity of the human eye.
These demand trends in surveillance, space and military applications is enabling Axsys to post very impressive results.
Revenues for the third quarter (ended Sept. 29, 2007) were $45.2 million, up 34% from $33.6 million in the third quarter of 2006. Net income was also up, but by a more robust 52% to $4.1 million from $2.7 million, quarter over quarter. Per diluted share, net income was up similarly to $0.37 from $0.25 in the year ago period.
In the third quarter, Axsys’ backlog also increased to a record $138 million, up 38% from its backlog at the end of the third quarter 2006 and up 9% sequentially. The quarters’ backlog included $57 million in new bookings in the quarter alone. Clearly Axsys will have to turn up the heat to meet demand.
Chairman and CEO, Stephen W. Bershad acknowledged the company’s excellent market position. He also noted that “sales from our newly acquired stabilized camera systems business exceeded expectations and the rest of our Optical Systems Group achieved 15% revenue growth during the quarter.”
The company increased its full-year 2007 market guidance, anticipating revenues of between $168 million to $171 million ($159 million to $163 million, previously) and income between $13.7 million to $13.9 million ($12.5 million to $12.8 million, previously). Diluted EPS are expected between $1.24 and $1.26, up from the previous guidance of $1.13 to $1.16.
For 2008, the company is estimating sales of between $193 million to $197 million and diluted earnings per share of between $1.57 and $1.60.
Note: Axsys Technologies, Inc. (Nasdaq: AXYS) is on the “Watch List” of Growth Report, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, Axys displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Growth Report portfolio at a later date.
About the Author
Greg Contreras is a freelance writer in New York, with a background in international sales and marketing, and management consulting.
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