For the second half of 2004, sales rose 14.4% to $79.7 million. Second half net income was $2.9 million, vs. a loss of $3.7 million.

For the quarter, gross margins were 10%, up from 4.3% last year.

Dynalab electronics manufacturing services include through-hole and surface-mount PCB assembly, wire harness and cable assembly, insert molding, and electromechanical assembly.  The company also supplies proprietary continuity test equipment to the general electronics, automotive and telecommunications industries.

For the year, net income was $7.4 million, down $700,000. Revenue rose 54% to a record $425.4 million.

The fourth quarter proved to be extremely difficult," said Jeffrey T. Gill, president and chief executive, in a statement. "The record increase in revenue was overshadowed by cost overruns that were incurred to increase manufacturing capacity, launch new programs and respond to shortages in material during a period of escalating customer demand."

Gill said he expected the problems to be rectified in the first six months of 2005.

"The outlook for continued growth remains positive, with net orders increasing 30% to $129.7 million during the quarter, resulting in an increase in net orders of 48% to a record $476.4 million," Gill said.

Backlog rose 26% to $249.8 million at the end of 2004, while new contract awards increased to a record $1.5 billion, from $639 million for the prior year.

For the year, electronics revenue fell 9% to $165 million, primarily reflecting lower shipments of federal data storage products and circuit card assemblies for an attack helicopter program and an end-of-life missile program. The company did see a 17% increase in revenue from test and measurement services. Gross profit declined to $28.4 million, from $36.3 million in 2003.