LaBarge, Inc. Reports Results for Fiscal 2009 Fourth Quarter and Full Year

ST. LOUIS--(Business Wire)--
LaBarge, Inc. (NYSE Amex: LB) today reported financial results for the fiscal
2009 fourth quarter and full year ended June 28, 2009.

"The prolonged economic recession interrupted LaBarge`s growth trajectory in
fiscal 2009 and, as anticipated, drove the Company`s sales, earnings and backlog
below prior-year levels. Although we are disappointed in our fiscal 2009
financial results, we believe we are managing the business prudently and
effectively in this challenging environment. Our healthy financial condition,
strong pipeline of new business opportunities and outstanding operational
performance validate our confidence in LaBarge`s excellent long-term business
and financial prospects," said Craig LaBarge, chief executive officer and
president.

Fiscal 2009 fourth-quarter net sales were $64,753,000, compared with record
quarterly net sales of $77,801,000 generated in the fiscal 2008 fourth quarter.
Fiscal 2009 fourth-quarter net sales included $12,107,000 contributed by the
Company`s Appleton, Wisconsin, facility, which was acquired in December 2008.
Fiscal 2009 fourth-quarter net earnings were $2,608,000, or $0.16 per diluted
share, compared with record quarterly earnings of $4,577,000, or $0.28 per
diluted share, in the fiscal 2008 fourth quarter. Fiscal 2009 fourth-quarter net
earnings include an after-tax loss of $216,000, or $0.02 per diluted share, from
the Appleton acquisition.

Net sales for the 2009 fiscal year ended June 28, 2009 were $273,368,000,
including $25,914,000 from the Appleton acquisition, compared with a record
$279,485,000 in fiscal 2008. Fiscal 2009 net earnings were $10,338,000, or $0.64
per diluted share, compared with record full-year earnings of $14,827,000, or
$0.92 per diluted share, in fiscal 2008. The Company`s fiscal 2009 net earnings
include an after-tax net loss of $289,000, or $0.02 per diluted share, recorded
by the Appleton acquisition. Also reflected in the Company`s fiscal 2009 net
earnings is a second-quarter one-time after-tax net charge of $3,739,000, or
$0.23 per diluted share, related to the bankruptcy filing of Eclipse Aviation
Corporation, a former customer. Excluding the Eclipse charge, fiscal 2009 net
earnings were $14,077,000, or $0.87 per diluted share.

Gross margin in the fiscal 2009 fourth quarter was 17.9 percent, down from 19.5
percent in the comparable period a year earlier, primarily due to much lower
sales volume in the fiscal 2009 quarter. Gross margin for the 2009 full fiscal
year was 18.6 percent, compared with 19.7 percent in fiscal 2008. The decline in
fiscal 2009 gross margin was the result of lower sales volume, particularly in
the fourth quarter, and the Eclipse bankruptcy. Excluding the impact of the
Eclipse-related charge, fiscal 2009 full-year gross margin was 20.1 percent.

Selling, general and administrative (SG&A) expense as a percentage of sales was
10.9 percent in the fiscal 2009 fourth quarter versus 9.6 percent in the fiscal
2008 fourth quarter and 10.8 percent in the fiscal 2009 third quarter. In actual
dollars, fiscal 2009 fourth-quarter SG&A expense decreased $386,000, or 5.2
percent, from the previous year`s fourth quarter. For the full fiscal year, SG&A
expense as a percentage of sales was 12.0 percent in fiscal 2009 versus 10.6
percent in fiscal 2008. In actual dollars, fiscal 2009 full-year SG&A expense
increased $3,253,000, or 11.0 percent, from the fiscal 2008 level. The increase
includes $2,134,000 related to the Appleton acquisition and $1,883,000
attributable to the Eclipse-related charge.

As a percentage of sales, operating income (defined as net sales less cost of
sales and SG&A) was 7.0 percent in the fiscal 2009 fourth quarter versus 9.9
percent in the fiscal 2008 fourth quarter and 9.5 percent in the fiscal 2009
third quarter. For the full fiscal year, operating income was 6.6 percent in
fiscal 2009 versus 9.1 percent in fiscal 2008. Excluding the impact of the
Eclipse-related charges, operating income in fiscal 2009 was 8.8 percent of
sales.

Interest expense in the fiscal 2009 fourth quarter was $483,000, compared with
$253,000 in the fiscal 2008 fourth quarter and $508,000 in the fiscal 2009 third
quarter. For the full fiscal year, interest expense was $1,294,000 in fiscal
2009 versus $1,459,000 in fiscal 2008, reflecting lower average interest rates
in fiscal 2009.

Net cash flow from operating activities was $4,177,000 in the fiscal 2009 fourth
quarter, compared with $12,910,000 in the fiscal 2008 fourth quarter and
12,156,000 in the fiscal 2009 third quarter. For the full fiscal year, net cash
flow from operating activities was $29,620,000 in fiscal 2009 versus $18,047,000
in fiscal 2008. The higher full-year net cash flow from operating activities in
fiscal 2009 was largely attributable to reductions in accounts receivable and
inventory, higher depreciation and amortization related to the Appleton
acquisition, and lower estimated tax payments. Offsetting cash flow from
operations during fiscal 2009 was record capital expenditures of $10,800,000,
including new manufacturing equipment and facility upgrades, to increase
operating efficiencies and expand capabilities.

Total debt at June 28, 2009 was $45,488,000, compared with $45,528,000 at March
29, 2009 and $15,629,000 at June 29, 2008. The increase in debt from the June
29, 2008 level is the result of the Company`s $45,074,000 cash acquisition of
its Appleton operation. Stockholders` equity at June 28, 2009 was $103,151,000,
compared with $100,295,000 at March 29, 2009, and $91,469,000 at June 29, 2008.

Business Overview

Including the Appleton acquisition, shipments to customers in the defense,
natural resources, industrial and medical market sectors comprised 92 percent of
LaBarge`s fiscal 2009 net sales. "The Appleton acquisition added significant new
customers and expands LaBarge's presence in the medical, natural resources and
industrial market sectors," said Mr. LaBarge.

Shipments to defense customers comprised the largest portion of fiscal 2009 net
sales at 46 percent, compared with 38 percent in fiscal 2008. In actual dollars,
fiscal 2009 sales from the defense market sector increased 18 percent from the
previous fiscal year, reflecting increased shipments from a variety of defense
programs.

Shipments to natural resources customers represented 18 percent of fiscal 2009
net sales versus 23 percent in fiscal 2008. In actual dollars, fiscal 2009 sales
from the natural resources market sector declined 23 percent compared with the
previous fiscal year, due to overall weakness in the sector. Approximately 19
percent of fiscal 2009 natural resources sales was attributable to the Appleton
acquisition.

Shipments to industrial customers represented 18 percent of net sales in both
the 2009 and 2008 fiscal years. In actual dollars, fiscal 2009 sales from the
industrial market sector declined 3 percent from the previous year due to
overall weakness in the sector. Approximately 5 percent of fiscal 2009
industrial sales was attributable to the Appleton acquisition.

Shipments to medical customers represented 9 percent of fiscal 2009 net sales
versus 7 percent in fiscal 2008. In actual dollars, Fiscal 2009 sales from the
medical sector grew 24 percent compared with fiscal 2008, primarily due to the
addition of the Appleton operation which contributed approximately 35 percent of
fiscal 2009 medical sales.

Shipments to commercial aerospace customers were 3 percent of fiscal 2009
revenues, compared with 8 percent in fiscal 2008. In actual dollars, fiscal 2009
sales from the commercial aerospace market sector declined 55 percent compared
with fiscal 2008, due to cessation of shipments to Eclipse Aviation in the
fiscal 2009 second quarter.

Backlog at June 28, 2009 was $168,008,000, compared with $221,293,000 a year
earlier and $185,602,000 at March 29, 2009. "The backlog decline is the result
of continued weakness in key market sectors and a fiscal 2009 second-quarter
reduction of $39,566,000 due to the removal of Eclipse orders. The current-year
weakness is primarily attributable to the industrial and natural resources
market sectors where the majority of our business is tied to capital equipment
purchases, which many customers have deferred," said Mr. LaBarge.

Commentary and Outlook

"Although down from the previous fiscal year`s levels, fiscal 2009 results were
bolstered by strength in the defense and medical market sectors, excellent
operating efficiencies, internal cost reductions, and the acquisition of our
Appleton facility. The current business environment remains challenging and we
anticipate that sales and earnings in our fiscal 2010 first quarter will be down
from fiscal 2009 fourth-quarter levels. However, on a brighter note, based on
the visibility we have today, we believe the fiscal 2009 fourth quarter and
current-year first quarter represent the bottom. Bookings in the first quarter
have strengthened from fourth-quarter levels and, based on this improvement, we
expect sales and earnings to follow suit in the second quarter," 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 2009 fourth quarter and full year. The webcast can be accessed
on the Internet through http://viavid.net/dce.aspx?sid=00006688 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.

(Financial tables follow.)

LA BARGE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(amounts in thousands - except per-share amounts)

Three Months Ended Twelve Months Ended
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
Net sales $ 64,753 $ 77,801 $ 273,368 $ 279,485

Costs and expenses:
Cost of sales 53,141 62,594 222,583 224,498
Selling and administrative expense 7,070 7,456 32,810 29,557
Interest expense 483 253 1,294 1,459
Other expense (income), net (6 ) 80 14 133
Earnings before income taxes 4,065 7,418 16,667 23,838
Income tax expense 1,457 2,841 6,329 9,011

Net earnings $ 2,608 $ 4,577 $ 10,338 $ 14,827

Basic net earnings per common share $ 0.17 $ 0.30 $ 0.67 $ 0.98

Average common shares outstanding 15,651 15,171 15,498 15,198

Diluted net earnings per share $ 0.16 $ 0.28 $ 0.64 $ 0.92

Average diluted common shares outstanding 16,029 16,115 16,044 16,138

LA BARGE, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands -- except share and per-share amounts)

June 28, June 29,
2009 2008
ASSETS (Unaudited)

Current assets:
Cash and cash equivalents $ 4,297 $ 1,646
Accounts and other receivables, net 37,573 40,778
Inventories 54,686 66,927
Prepaid expenses 1,090 1,245
Deferred tax assets, net 3,055 1,960
Total current assets 100,701 112,556

Property, plant and equipment, net 30,624 17,248
Intangible assets, net 11,255 1,548
Goodwill, net 43,457 24,292
Other assets, net 4,798 4,828
Total assets $ 190,835 $ 160,472

LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities:
Short-term borrowings $ --- $ 10,500
Current maturities of long-term debt 6,162 4,682
Trade accounts payable 18,354 22,684
Accrued employee compensation 10,957 13,494
Other accrued liabilities 2,483 2,552
Cash advances from customers 6,738 11,897
Total current liabilities 44,694 65,809
Long-term advances from customers for purchase of materials 47 622
Deferred tax liabilities, net 1,885 ---
Deferred gain on sale of real estate and other liabilities 1,732 2,125
Long-term debt 39,326 447

Stockholders` equity:
Common stock, $0.01 par value. Authorized 40,000,000 shares; 15,958,839 issued at June 28, 2009 and 15,773,253 at June 29, 2008, including shares in treasury 160 158
Additional paid-in capital 14,700 16,547
Retained earnings 88,939 78,601
Accumulated other comprehensive loss (141 ) ---
Less cost of common stock in treasury; 56,765 at June 28, 2009 and 419,503 at June 29, 2008 (507 ) (3,837 )

Total stockholders` equity 103,151 91,469

Total liabilities and stockholders` equity $ 190,835 $ 160,472

LA BARGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(amounts in thousands)

Fiscal Year Ended
June 28, June 29,
2009 2008
Cash flows from operating activities:
Net earnings $ 10,338 $ 14,827
Adjustments to reconcile net cash provided by operating activities, net of effects of acquisition:
Depreciation and amortization 6,930 5,290
Gain on sale of real estate --- ---
Amortization of deferred gain on sale of real estate (481 ) (481 )
Loss on disposal of property, plant and equipment 108 45
Stock-based compensation 1,128 1,445
Other than temporary impairment of investments 26 59
Deferred taxes 790 361
Changes in operating assets and liabilities:
Accounts and notes receivable, net 10,480 (10,574 )
Inventories 18,589 (7,210 )
Prepaid expenses 259 1,088
Trade accounts payable (9,794 ) 3,531
Accrued liabilities (3,018 ) 2,350
Advance payments from customers (5,735 ) 7,316
Net cash provided by operating activities 29,620 18,047

Cash flows from investing activities:
Acquisition, net of cash acquired (45,074 ) ---
Additions to property, plant and equipment (10,799 ) (4,840 )
Proceeds from disposal of property and equipment and other assets 25 130
Additions to other assets and intangibles (652 ) (480 )
Proceeds from sale of real estate --- ---
Proceeds from surrender of insurance policy --- ---
Other investing activities --- 5
Net cash (used) provided by investing activities (56,500 ) (5,185 )

Cash flows from financing activities:
Borrowings on revolving credit facility 50,050 91,278
Payments of revolving credit facility (60,550 ) (95,603 )
Excess tax benefits from stock option exercises 3,083 213
Remittance of minimum taxes withheld as part of a net share
settlement of stock option exercises (1,689 ) ---
Borrowings of long-term debt 42,014 ---
Repayments of long-term debt (1,654 ) (6,302 )
Transaction costs related to bank financing (274 ) ---
Issuance of treasury stock 2,055 781
Purchase of treasury stock (3,504 ) (1,975 )
Net cash provided (used) by financing activities 29,531 (11,608 )
Net increase (decrease) in cash and cash equivalents 2,651 1,254

Cash and cash equivalents at beginning of fiscal year 1,646 392
Cash and cash equivalents at end of fiscal year $ 4,297 $ 1,646

Non-cash investing transactions:
Increase in capital lease obligations $ --- $ ---

LA BARGE, INC.
SCHEDULE I

UNAUDITED RECONCILIATION OF GAAP RESULTS TO NON-GAAP MEASURES
TWELVE MONTHS ENDED JUNE 28, 2009
(amounts in thousands, except per-share amounts)

Non-GAAP
Pre-Charge Adjustments Post-Charge
Operating for Eclipse GAAP
Results Charge Results
Net sales $ 273,368 $ -- $ 273,368
Costs and expenses:
Cost of sales 218,357 4,226 (1 ) 222,583
Selling and administrative expense 30,927 1,883 (2 ) 32,810
Interest expense 1,294 -- 1,294
Other expense, net 14 -- 14
Earnings before income taxes 22,776 (6,109 ) 16,667
Income tax expense 8,699 (2,370 ) 6,329
Net earnings $ 14,077 $ (3,739 ) $ 10,338
Diluted net earnings per share $ 0.87 $ (0.23 ) $ 0.64

(1) Write-down of Eclipse inventory

(2) Write-off of Eclipse accounts receivable ($3,676) and reduction of accrued incentive compensation ($1,793)

The non-GAAP financial measures are presented to assist investors in evaluating
the operating performance of the Company and the impact that a non-recurring
event - the bankruptcy of Eclipse Aviation - had on financial results in the
periods presented.

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.

LaBarge, Inc.
Colleen Clements, 314-997-0800, ext. 409
colleen.clements@labarge.com

Copyright Business Wire 2009

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