Sunair Reports Second Quarter Results

Sunair Reports Second Quarter Results

FORT LAUDERDALE, Fla., May 17 /PRNewswire-FirstCall/ -- Sunair Electronics, Inc. (AMEX:SNR) announced today results for the second quarter ended March 31, 2005.

Sunair earned net income of $363,102 in the second quarter of fiscal 2005 on revenues of $4,960,982. Revenues for the same period last year were $3,281,575 and net income was $620,562. Primary earnings per share for the quarter were $0.05 compared to $0.16 for the same period last year. The Company earned net income of $735,507 for the first six months of the current fiscal year on revenues of $10,090,746 as compared to net income of $793,101 on revenues of $4,659,491 for the six months ended March 31, 2004, a decrease of 7.3%. Primary earnings per share for the six months were $0.14 compared to $0.21 for the same period last year.

The Company's earnings declined in the second quarter as compared to the second quarter last year due to the shipment of a $1.7 million delivery order in the second quarter last year and increased overhead expenses incurred due to the operation of the businesses acquired in the fourth quarter of fiscal 2004.

Backlog of HF radio products at March 31, 2005 was $5,283,000 as compared to $3,331,000 for the same period last year.

SUNAIR ELECTRONICS, INC. & SUBSIDAIRY
CONSOLIDATED SUMMARY OF INCOME FOR THE PERIOD
ENDED MARCH 31, 2005 (UNAUDITED)

SIX MONTHS THREE MONTHS
2005 2004 2005 2004

REVENUES $10,090,746 $4,659,491 $4,960,982 $3,281,575

INCOME BEFORE
TAXES 1,083,307 1,101,701 571,585 910,662

PROVISION FOR
INCOME TAXES (347,800) (308,600) (208,483) (290,100)

NET INCOME $735,507 $793,101 $363,102 $620,562

AVERAGE SHARES
OUTSTANDING --
BASIC 5,412,524 3,787,249 6,848,203 3,809,777

AVERAGE SHARES
OUTSTANDING --
DILUTED 6,667,402 3,876,088 9,993,921 3,903,353

EARNINGS PER COMMON
SHARE -- BASIC $0.14 $0.21 $0.05 $0.16

EARNINGS PER COMMON
SHARE -- DILUTED $0.11 $0.20 $0.04 $0.16

ABOUT SUNAIR

Sunair Electronics, Inc. is a Florida corporation engaged in the design, manufacture and sale of High Frequency (HF) systems utilized for long-range voice and data communications in fixed station, mobile and marine strategic applications. Since 1956, Sunair has maintained an established presence in domestic and international government and military markets, including the NATO community. Sunair recently closed on a $25 million equity investment to be used to finance acquisitions of pest control services businesses in the United States and the formation of a Pest Control and Termite Services Division. Sunair's existing government and military communications products and systems group shall continue as a separate division of Sunair with its existing management team.

Information Regarding Forward-Looking Statements

Some of the statements in this press release, including those that contain the words "anticipate," "believe," "plan," "estimate," "expect," "should," "intend" and other similar expressions are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or those of our industry to be materially different from any future results, performance or achievements expressed or implied by those forward-looking statements. Among the factors that could cause actual results, performance or achievements to differ materially from those described or implied in the forward-looking statements are general economic conditions, competition, potential technology changes, changes in or the lack of anticipated changes in the regulatory environment in various countries, the ability to raise additional capital to finance expansion, the risks inherent in new product and service introduction and the entry into new geographic markets, and other factors included in our filings with the Securities and Exchange Commission (the "SEC"). Copies of our SEC filings are available from the SEC or may be obtained upon request from us. We do not undertake any obligation to update the information contained herein, which speaks only as of this date.

Source: Sunair Electronics, Inc.

CONTACT: Synnott B. Durham, Chief Financial Officer and Treasurer of
Sunair Electronics, Inc., +1-954-525-1505

Web site: http://www.sunairhf.com/

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