HSR Hi-Shear Technology Corp

Hi-Shear Technology Corporation, Torrance, CA (AMEX:HSR) today announced results for its fiscal year ended May 31, 2008. Revenue for the fiscal year grew 34% to $27,628,000 compared to $20,550,000 for the same period last year. Strong customer demand for satellite related hardware and national missile defense products increased orders to $30,087,000 during the year. The volume of space and defense production improved product gross margin to 46% of revenues compared to the 43% of revenues in the prior year. Net income was $3,540,000 or $0.52 per share compared to $3,418,000 or $0.50 per share last year. Net income was significantly reduced by a $3,846,000 charge in the year for litigation expense related to a singular lawsuit which Hi-Shear filed in fiscal year 2001. Net income, not including this charge, would be $5,724,000 or $0.84 per share. The operations of the Company are not impacted by this cost going forward and the cost accrual made this year reflects an estimate of total liability for adverse rulings in the conclusion of the case. The basis for these adverse rulings is currently being appealed. Positive earnings and growing space and defense orders supported the distribution of dividends to shareholders which totaled $0.75 per share for the fiscal year. �We are pleased with this year�s growth in both revenues and product profitability. Hi-Shear�s capability and product reliability is clearly recognized by its customers, who rely on our products to support their important space and defense missions. This year�s charge to earnings for litigation expense is unrelated to operations and may be reversed on appeal,� stated George W. Trahan, President and CEO. Hi-Shear Technology Corporation provides pyrotechnic, mechanical, and electronic products to prime aerospace customers for use in aerospace and defense markets 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-KSB will be filed with the Securities and Exchange Commission on or about August 29, 2008. The 10-KSB 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. BALANCE SHEET � May 31, 2008 � ASSETS: � � � Current Assets: Cash and cash equivalents $ 1,655,000 Accounts receivable, net 14,474,000 Inventories, net 1,345,000 Deferred income taxes 2,430,000 Prepaid expenses and other current assets 182,000 Total current assets $ 20,086,000 � Land 846,000 Equipment, net 2,003,000 Total assets $ 22,935,000 � LIABILITIES AND STOCKHOLDERS' EQUITY: � � � Current Liabilities: Trade accounts payable 740,000 Accrued liabilities 5,872,000 Deferred revenue 1,204,000 Current portion of obligations under capital leases 40,000 Total current liabilities $ 7,856,000 � Deferred income taxes 315,000 Obligation under capital leases (less current portion) 34,000 Total liabilities $ 8,205,000 � Commitments and Contingencies Stockholders' Equity Preferred stock, $1.00 par value; 500,000 shares authorized; no shares issued 0 Common stock, $.001 par value - 25,000,000 shares authorized; 6,817,541 shares issued and outstanding at May 31, 2008 7,000 Additional paid-in capital 7,823,000 Retained earnings 6,900,000 Total stockholders' equity $ 14,730,000 � Total liabilities and stockholders' equity $ 22,935,000 STATEMENTS OF OPERATIONS � � Year Ended May 31, � � � � 2008 � � 2007 � Revenues $ 27,628,000 $ 20,550,000 � Cost of Revenues 14,827,000 11,652,000 � Gross Margin 12,801,000 8,898,000 � Selling, General and Administrative Expenses 3,413,000 2,974,000 Litigation Expense 3,846,000 251,000 � Operating Income 5,542,000 5,673,000 � Interest Income, Net 44,000 0 � Income before Income Tax Expense 5,586,000 5,673,000 � Income Tax Expense 2,046,000 2,255,000 � Net Income $ 3,540,000 $ 3,418,000 � � Earnings per Common Share - Basic $ 0.52 $ 0.50 Earnings per Common Share - Diluted $ 0.52 $ 0.50 � Weighted # Common Shares Outstanding: Basic 6,808,000 6,778,000 Diluted 6,825,000 6,812,000