Hi-Shear Announces First Quarter Results

• Press Release
• Source: Hi-Shear Technology Corporation
• On 3:08 pm EDT, Thursday October 15, 2009

TORRANCE, Calif.--(BUSINESS WIRE)--Hi-Shear Technology Corporation (NYSE Amex: HSR) today announced results for its first quarter of fiscal year 2010 ending August 31, 2009. Revenues recognized during the first quarter were $5,498,000 compared to the revenues of $6,044,000 for the same period last year. Revenues, which are calculated by the Company on a percentage-of-completion basis, were reduced from last year’s first quarter because less direct costs were incurred including labor, overtime and materials, resulting from some previous customer delays in releasing their requirements to the Company. These orders have since been received and efforts to deliver those orders are ongoing. Gross margin for the quarter ended August 31, 2009 increased $158,000 to $3,129,000, and 57% of revenues, from $2,971,000, and 49% of revenues, reported for the same quarter last year. Gross margin increased due to manufacturing efficiencies, reductions in overtime and in overhead expenses during the quarter. Net income for the quarter ended August 31, 2009 was $1,106,000, or $0.16 per share, compared to net income of $1,166,000, or $0.17 per share, for the quarter ended August 31, 2008. The increased gross product margins experienced during the quarter were more than offset by merger-related expenses incurred during the quarter.

On July 16, 2009, the Company’s Board of Directors approved the distribution of a cash dividend of $0.75 per share, or approximately $5,139,312 paid on August 21, 2009 to shareholders of record as of the close of business August 14, 2009.

On September 16, 2009, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Chemring Group PLC, a company organized under the laws of England and Wales (“Chemring”) and Parkway Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Chemring (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Chemring. As of the effective time of the Merger, each outstanding share of common stock, par value $0.001 per share, of the Company (“Common Stock”) will be cancelled and converted into the right to receive an amount in cash equal to $19.18 per share, subject to the terms and conditions set forth in the Merger Agreement. Chemring will fund the aggregate cash consideration by utilizing a credit facility with Lloyds Banking Group plc. The transaction is subject to customary closing conditions, including approval of the transaction by Hi-Shear’s stockholders and the expiration or termination of applicable waiting periods under the Hart-Scott Rodino Antitrust Improvement Act of 1976, and is expected to be completed in the fourth quarter of 2009.

Hi-Shear Technology Corporation provides pyrotechnic, mechanical, and electronic products to the aerospace and defense market in applications where safety, performance and high reliability are essential. It develops and produces advanced systems and products that are primarily used worldwide in space satellites, launch vehicles, national defense, and government programs.

This release, as it relates to product announcements and other Company matters, contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks related to market acceptance of and demand for the Company’s new products, dependence on the uncertainty of government budgetary issues, primary government contracts, and intellectual property rights.

The Company’s Form 10-Q will be filed with the Securities and Exchange Commission on October 15, 2009. The 10-Q will be available for download at www.hstc.com. For more information regarding this release or general information about the company contact Ms. Linda A. Nespole, (310) 784-7821.

Hi-Shear Technology Corporation
Ms. Linda A. Nespole, 310-784-7821