LaBarge, Inc. (LB) Reports Record Sales and Earnings for Fiscal 2011 First Quarter

ST. LOUIS–(BUSINESS WIRE)– LaBarge, Inc. (NYSE Amex: LB), a provider of electronics manufacturing services (EMS), today announced that strong, broad-based customer demand helped propel the Company’s financial results to record quarterly levels in the fiscal 2011 first quarter ended October 3, 2010, which consisted of 14 weeks instead of the typical 13 weeks.

“LaBarge had an excellent first fiscal quarter with bookings, sales and earnings setting new Company records and gross margin expanding from the same period last year. Our robust first-quarter results are attributable to outstanding operational execution and continued broad-based strength in customer demand, particularly in the defense, industrial and natural resources market sectors,” said Craig LaBarge, chairman of the board, chief executive officer and president.

Fiscal 2011 first-quarter net sales grew 35 percent to a record $85,448,000, compared with $63,155,000 in the comparable period a year earlier. Fiscal 2011 first-quarter net earnings grew 59 percent to a record $4,928,000, or $0.31 per diluted share, compared with $3,103,000, or $0.19 per diluted share, in the comparable period a year earlier.

Gross margin in the fiscal 2011 first quarter increased 100 basis points to 20.4 percent, compared with 19.4 percent in the fiscal 2010 first quarter.

Selling, general and administrative (SG&A) expense was $9,401,000, or 11.0 percent of sales, in the fiscal 2011 first quarter, compared with $8,090,000, or 12.8 percent of sales, in the fiscal 2010 first quarter.

Operating income in the fiscal 2011 first quarter was $8,030,000, or 9.4 percent of sales, up 94 percent from $4,140,000, or 6.6 percent of sales, in the fiscal 2010 first quarter.

Interest expense in the fiscal 2011 first quarter was $398,000, compared with $508,000 in the fiscal 2010 first quarter, reflecting lower average debt levels in the current-year period.

Income tax expense in the fiscal 2011 first quarter was $2,710,000, compared with $505,000 in the fiscal 2010 first quarter. Income tax expense in the 2010 period was impacted favorably by a one-time positive tax adjustment of $795,000.

Net cash from operating activities in the fiscal 2011 first quarter was $3,037,000, down from $6,262,000 in the fiscal 2010 first quarter, reflecting higher inventories in the current-year period to support increased sales levels.

Total debt at October 3, 2010, was $33,335,000, down 11 percent from $37,327,000 at June 27, 2010. Stockholders’ equity at October 3, 2010, was $120,598,000, up 4 percent from $115,640,000 at June 27, 2010.

Business Overview

Shipments to customers in the defense, industrial, natural resources and medical market sectors comprised approximately 96 percent of LaBarge’s fiscal 2011 first-quarter net sales.

Shipments to defense customers represented the largest portion of fiscal 2011 first-quarter net sales at 36 percent, compared with 49 percent in the fiscal 2010 first quarter. In actual dollars, fiscal 2011 first-quarter net sales from the defense market sector were virtually unchanged from the comparable period a year earlier.

Shipments to industrial customers represented 27 percent of fiscal 2011 first-quarter net sales, versus 17 percent in the fiscal 2010 first quarter. In actual dollars, fiscal 2011 first-quarter net sales from the industrial market sector increased 106 percent from the comparable period a year earlier, due to increased shipments across a wide range of industrial customers.

Shipments to natural resources customers represented 25 percent of fiscal 2011 first-quarter net sales versus 16 percent in the fiscal 2010 first quarter. In actual dollars, fiscal 2011 first-quarter net sales from the natural resources market sector increased 114 percent from the comparable period a year earlier, largely due to much higher shipments of electronic assemblies and systems to oil-and-gas and wind power customers.

Shipments to medical customers represented 9 percent of fiscal 2011 first-quarter net sales, versus 11 percent in the fiscal 2010 first quarter. In actual dollars, fiscal 2011 first-quarter net sales from the medical sector grew 8 percent from the comparable period a year earlier. The growth in medical sales from the prior year was the result of increased shipments to several medical sector customers.

Commentary and Outlook

“Order activity in all major market sectors was very strong during the fiscal 2011 first quarter, driving bookings to a record $113,596,000, up 70 percent from the comparable period a year earlier. Orders in the defense market sector led the way with first-quarter defense bookings growing 77 percent from the same period a year earlier,” said Mr. LaBarge. Higher bookings during the current-year first fiscal quarter resulted in backlog at October 3, 2010, increasing to $226,876,000, up 14 percent from $198,727,000 at June 27, 2010, and up 32 percent from $171,712,000 at the end of the fiscal 2010 first quarter. Approximately 78 percent of backlog at October 3, 2010, was scheduled to ship in the following 12 months.

“We expect sales and earnings in the fiscal 2011 second quarter, which will be a normal 13-week quarter, to be significantly higher than in last year’s second quarter. With regard to the 2011 full fiscal year, we expect net sales of $325 million to $340 million and diluted earnings per share of $1.12 to $1.18, compared with net sales of $289.3 million and diluted earnings per share of $0.93 in the 2010 fiscal year. Based on our current pipeline of new business opportunities, we believe bookings in our major market sectors will continue at a strong pace and will drive ongoing business strength throughout the current fiscal year,” said Mr. LaBarge.

Today’s Conference Call Webcast

Today, at 11 a.m. Eastern Time, LaBarge will host a live audio webcast of its discussion with the investment community regarding financial results for the Company’s fiscal 2011 first quarter. The webcast can be accessed on the Internet through http://viavid.net/dce.aspx?sid=00007CB1 and the investor relations calendar area of http://www.labarge.com. Following the live discussion, a replay of the webcast will be available at the same locations on the Internet. Any financial or statistical information presented during the call, including any non-GAAP financial measures, the most directly comparable GAAP measures and reconciliation to GAAP results, can be accessed via the news and events area of http://www.labarge.com.

About LaBarge, Inc.

LaBarge, Inc. is a broad-based provider of electronics to technology-driven companies in diverse industrial markets. The Company provides its customers with sophisticated electronic and electromechanical products through contract design and manufacturing services. Headquartered in St. Louis, LaBarge has operations in Arkansas, Missouri, Oklahoma, Pennsylvania, Texas and Wisconsin. The Company’s Web site address is http://www.labarge.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Actual results may differ materially from such statements due to a variety of factors that could adversely affect LaBarge, Inc.’s operating results. These risks and factors are set forth in documents LaBarge, Inc. files with the Securities and Exchange Commission, specifically in the Company’s most recent Annual Report on Form 10-K and other reports it files from time to time. These forward-looking statements speak only as of the date such statements were made, or as of the date of the report or document in which they are contained, and the Company undertakes no obligation to update such information.