Nitinol & Polymer Product Revenues Spur Memry Growth

BETHEL, Conn., Feb. 13 /PRNewswire-FirstCall/ -- Memry Corporation

(Amex: MRY) reported today that revenue for the second fiscal quarter ended

December 31, 2005 rose 28% to $12,649,000, compared with $9,877,000 reported

in the comparable quarter a year ago.  Including a one-time charge for

separation expenses, the company reported a net loss of ($236,000), or ($0.01)

per diluted share, compared with net income of $406,000, or $0.01 per diluted

share in the comparable quarter a year ago. The company reported a negligible

operating loss ($12,000) versus operating income of $930,000 in last year's

second quarter.

Revenues for the first six months of the fiscal year rose 33% to

$25,316,000 from $18,989,000 in the first six months of FY '05. Including a

charge for separation expenses of $1,130,000, net income decreased by $845,000

to $265,000, or $0.01 per diluted share in the first six months of FY '06,

compared with $1,110,000, or $0.04 per diluted share for the same period in FY

'05. Operating income for the six months of FY '06 was $1,165,000, compared

with $2,057,000 in the first six months of FY '05.

Second quarter operating results were negatively impacted by separation

charges of $1.13 million related to the retirement of the former chief

executive officer.

Robert Belcher, acting CEO and chief financial officer of Memry, said,

"The revenue increase was boosted by the inclusion of polymer product revenues

for the full fiscal quarter. But we also had good gains in revenues from sales

of Nitinol products, which rose 7% in the quarter to $8,839,000 and for the

first six months increased 4% to $18,054,000. Our Nitinol business benefited

from increases in sales of super-elastic tube and tube-based stent components

as well as increased revenue from prototype development. These gains were

partially offset by slippage in shipments of arch wire and microcoil products.

Polymer segment revenue for the quarter was $3,895,000 and $7,375,000 for the

six months ended December 31, 2005.

"Gross margin in the quarter improved slightly from 38.7% to 39.2%,

reflecting the higher level of revenue in the quarter from our polymer

business, which has a higher gross margin than the nitinol segment. Operating

expenses increased by $2.1 million during the quarter, with $1.13 million of

that increase attributable to the one-time expense associated with the

retirement of our chief executive officer, and the balance of the increase due

to additional costs associated with supporting the incremental Putnam

revenues, expenses associated with our adoption of SFAS No. 123(R) of $184,000

and additional legal, accounting and personnel costs.

"Our balance sheet continues to be strong, and we had a healthy cash

position at the end of the quarter of $5.4 million.

"We remain optimistic about the second half of fiscal 2006. We recently

entered into a three-year contract extension agreement with one of our major

customers, and we anticipate several of the new product programs we have been

working on to begin generating meaningful revenue and profits as we move

through this calendar year," Belcher said.