LaBarge Inc. (St. Louis) reported that financial results for its fiscal 2004 second quarter and first half, ended Dec. 28, 2003, rose significantly over prior-year levels. The company also signed a letter of intent to acquire Pinnacle Electronics LLC (Pittsburgh, PA.) LaBarge indicated the acquisition will be immediately accretive to earnings.

For the second quarter, net sales rose 20% to $29,070,000, up from $24,302,000 one year ago. Net earnings from continuing operations increased 81% over last year. The quarter included a net loss from discontinued operations of $393,000, or $.02 per diluted share. Net earnings grew 267% to $1,404,000 or $.09 per diluted share, up from $383,000, or $.03 per diluted share, in the same quarter last year.

For the fiscal 2004 first half, net sales rose 24% over the first half of 2003. Earnings from continuing operations increased 169% to $2,775,000, or $.18 per diluted share. First-half results also included a net loss from discontinued operations of $102,000, or $.01 per diluted share. In total, net earnings for the fiscal 2004 first half grew 475% to $2,673,000 or $.17 per diluted share, year-on-year.

"The primary contributor to fiscal 2004 second-quarter revenues was shipments to defense customers representing 59% of sales versus 43% in last year's second quarter," said president and chief executive officer Craig LaBarge. "Bookings of new business strengthened during the second quarter from first-quarter levels, primarily attributable to orders from defense customers which represented the largest single component of second-quarter bookings. We continue to experience lingering weakness in our non-defense markets. One brightening spot is oil and gas where we have begun to see increased order activity."

LaBarge has entered into a letter of intent to acquire Pinnacle Electronics, a privately held contract electronics manufacturer that designs, engineers and manufactures printed circuit assemblies, cables and harnesses, full "box-build" assemblies and electronic/electro-mechanical systems for customers in a variety of industrial, non-military markets. Pinnacle, owned by Main Street Capital Holdings LLC, had 2003 revenues of approximately $38 million.

LaBarge expects the acquisition to be immediately accretive to earnings per share. The transaction is expected to close by the end of February and is subject to the satisfactory conclusion of due diligence, finalization of financing, finalization of definitive agreements and other customary terms and conditions.

LaBarge expects to fund the anticipated purchase price of approximately $41 million with a combination of cash on hand and bank financing.

www.labarge.com

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