Herley's Woes Continue
Lancaster, PA -- Herley Industries, Inc. announced that certain divisions of its operations have been suspended from receiving new contract awards from the U.S. Government. The affected operations include facilities in Lancaster, Pennsylvania, Woburn, Massachusetts, Chicago, Illinois and Herley's subsidiary in Farmingdale, New York. The Chicago, Illinois location is a two-person marketing office. The result of this suspension is that these facilities will not be solicited for or awarded new contracts or contract extensions without special exceptions, pending the outcome of legal proceedings. The suspended facilities may receive contract awards or subcontracts from the Federal Government if the head of the agency states in writing the compelling reason to do so. A significant portion of Herley's business is received where the company is the only qualified supplier on critical defense programs. For this reason the effect of the suspension on these manufacturing facilities cannot be determined at this time. Currently, Herley has a funded backlog of approximately $142 million, which is not affected by this action, and which will be delivered to customers within the next year or two. Herley facilities which are not included in the action and who are free to contract with the U.S. Government are our facilities in Whippany, NJ (Herley-CTI), Jerusalem (Herley-Israel), McLean, Virginia, (Innovative Concepts, Inc.), Ft. Walton Beach, Florida, (Micro Systems, Inc.), Farnborough, U.K. (EW Simulation Systems), and Melbourne, Florida, (Herley-RSS).
In other news, Herley also announced that as set forth in the Company's report on Form 10-Q for the period ended April 30, 2006, as filed with the Securities and Exchange Commission (the "10-Q"), the Company's independent registered public accountants were unable to review the 10-Q prior to filing since, under generally accepted auditing standards, they had not completed review procedures in connection with the Company's recent indictment. Since these review procedures were not completed, the required certifications were unable to be provided.
By letter dated June 16, 2006, the Company received written notification from NASDAQ that since the Form 10-Q had not been reviewed by its accountants and did not include the required certifications, the Company was not in compliance with Marketplace Rule 4310(c) (14). Accordingly, the Company was informed that its securities will be delisted from The NASDAQ Stock Market at the opening of business on June 27, 2006 unless it requests a hearing in accordance with the Marketplace Rule 4800 Series on or before 4:00 p.m. Eastern Time on June 23, 2006.
John Kelley, Herley President, stated, "The Company will be requesting a hearing, which automatically stays the delisting of the Company's securities pending the hearing and the decision of the NASDAQ Listing Qualification Panel (the 'Panel'). The Company intends to take such reasonable measures that are necessary to comply with the Marketplace Rules in order to maintain its listing."
SOURCE: Herley Industries, Inc.