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Aeroflex Updates Financial Targets for the Fourth Quarter of Fiscal 2011; Lowers Q4 Revenue Guidance

Courtesy of Benzinga

Aeroflex Holding Corp (NYSE: ARX) today announced revised financial targets for its fiscal fourth quarter ended June 30, 2011. Delays in shipment approvals from and orders of test equipment by U.S. government entities have caused Aeroflex to reduce its estimated ranges of net sales and Adjusted EBITDA to $198 million to $200 million and $56 million to $59 million, respectively. At this time, Aeroflex is unable to give revised guidance on non-GAAP net income per share.

A majority of the reduction in net sales is attributable to a $16 million Ground Radio Maintenance Automatic Test System (“GRMATS”) shipment that has passed First Article Test (“FAT”), but still awaiting final approval to ship from the U.S. Marine Corps. In addition, delays in receiving final paperwork on fully funded, sole source orders from branches of the U.S. military have contributed to the negative impact on net sales. The reduced fourth quarter range of Adjusted EBITDA is due to the reduction in gross profit from products that did not ship. Since quarterly operating costs are relatively fixed, the gross profit shortfall will have a negative impact on operating margin in the fourth quarter.

“We are extremely disappointed with the performance in our ATS business this past quarter,” said Len Borow, Chief Executive Officer of Aeroflex. “We are the sole source or primary supplier for all products that were expected to ship during the quarter. Although, we did not lose any of these contracts, a combination of delayed approvals and contract releases from the military’s procurement offices has caused the reduced fourth quarter ranges.”

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