HAMPTON, Va., Aug. 6, 2008 (PRIME NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS), a global designer and manufacturer of sensors and sensor-based systems, announces results for the three months ended June 30, 2008. Unless otherwise stated, results reflect continuing operations only.
The Company reported an increase in consolidated net sales of $5.8 million or 11% to $59.0 million for the three months ended June 30, 2008, as compared to the corresponding period last year. Excluding sales from acquisitions completed in fiscal 2008 of $4.1 million, net sales increased $1.7 million or 3%. For the three months ended June 30, 2008, the Company reported an increase of $0.14 million in income from continuing operations to $3.9 million, or $0.27 per diluted share, as compared to $3.7 million or $0.26 per diluted share for the same period last year.
Please refer to the notes and reconciliation regarding Non-GAAP financial measures contained in this release.
Frank Guidone, Company CEO commented, "First quarter sales were generally soft, in part due to the strong fiscal fourth quarter sales and in part due to the overall weak U.S. economy. However, based on seasonality, as well as growth in new programs, we are expecting a sharp increase in sales for the second quarter. Gross margin improved over our fourth quarter nearly 200 bps as a result of more favorable mix and improvements at Intersema. While we gave up a point with respect to SG&A as a percent of sales, we expect higher second quarter sales to move that ratio back down. Adjusted EBITDA margin was consistent with last quarter, which is actually quite positive given the lower sales for the quarter. Free cash flow of $6 million (cash from operations less capital expenditures) was strong and in line with our plan to exceed $20 million for the year."
Guidone continued, "While the overall environment remains unpredictable, we are expecting continued improvement in sales and operating statistics throughout the year and accordingly, reiterate our 2009 guidance of $255 million in sales and $1.30 EPS."
On August 6, 2008, the Company filed its Form 10-Q for the fiscal quarter ended June 30, 2008. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-Q filed for a more complete discussion of sales, margin and expenses.
The Company will host an investor conference call on Thursday, August 7, 2008 at 10:00 AM EDT to answer questions regarding the first quarter results reported in our Form 10-Q for quarter ended June 30, 2008. US dialers: (877) 407-8031; International dialers (201) 689-8031. Interested parties may also listen via the Internet at: www.investorcalendar.com. The call will be available for replay for 30 days by dialing (877) 660-6853 (US dialers); (201) 612-7415 (International dialers), and entering the replay pass code 286 and conference ID no. 292594, and on Investorcalendar.com.
About Measurement Specialties. Measurement Specialties, Inc. (MEAS) designs and manufactures sensors and sensor-based systems to measure precise ranges of physical characteristics such as pressure, temperature, position, force, vibration, humidity and photo optics. MEAS uses multiple advanced technologies -- piezo-resistive silicon sensors, application-specific integrated circuits, micro-electromechanical systems ("MEMS"), piezoelectric polymers, foil strain gauges, force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, electromagnetic displacement sensors, hygroscopic capacitive sensors, ultrasonic sensors, optical sensors, negative thermal coefficient ("NTC") ceramic sensors and mechanical resonators -- to engineer sensors that operate precisely and cost effectively.
This release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward looking statements may be identified by such words or phrases "should", "intends", " is subject to", "expects", "will", "continue", "anticipate", "estimated", "projected", "may", "we believe", "future prospects", or similar expressions. The forward-looking statements above involve a number of risks and uncertainties. Factors that might cause actual results to differ include, but are not limited to, success of any reorganization; ability to raise additional funds; conditions in the general economy and in the markets served by the Company; competitive factors, such as price pressures and the potential emergence of rival technologies; interruptions of suppliers' operations affecting availability of component materials at reasonable prices; timely development and market acceptance, and warranty performance of new products; success in integrating prior acquisitions; changes in product mix, costs and yields, fluctuations in foreign currency exchange rates; uncertainties related to doing business in Hong Kong and China; and the risk factors listed from time to time in the Company's SEC reports. The Company from time-to-time considers acquiring or disposing of business or product lines. Forward-looking statements do not include the impact of acquisitions or dispositions of assets, which could affect results in the near term. Actual results may differ materially. The Company assumes no obligation to update the information in this issue.
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share amounts)
Quarter ended June 30,
----------------------
2008 2007
--------------------
Net sales $ 58,998 $ 53,151
Cost of goods sold 33,757 30,267
--------------------
Gross profit 25,241 22,884
Total operating expenses 19,587 16,590
--------------------
Operating income 5,654 6,294
Interest expense, net 706 1,186
Foreign currency exchange loss (gain) (63) 36
Other income (421) 102
--------------------
Income from continuing operations
before minority interest and
income taxes 5,432 4,970
Minority interest, net of income taxes 77 82
Income tax expense from continuing
operations 1,500 1,173
--------------------
Income from continuing operations 3,855 3,715
--------------------
Discontinued operations:
Income from discontinued operations
before income taxes -- 36
Income tax expense from discontinued
operations -- 6
--------------------
Income from discontinued operations -- 30
--------------------
Net income $ 3,855 $ 3,745
====================
Net income per common share - Basic:
Income from continuing operations $ 0.27 $ 0.26
Income from discontinued operations -- --
--------------------
Net income per common share - Basic $ 0.27 $ 0.26
====================
Net income per common share - Diluted:
Income from continuing operations $ 0.27 $ 0.26
Income (loss) from discontinued operations -- --
--------------------
Net income per common share - Diluted $ 0.27 $ 0.26
====================
Weighted average shares outstanding
- Basic 14,448 14,287
Weighted average shares outstanding
- Diluted 14,529 14,461
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
June 30, March 31,
2008 2008
-------------------
ASSETS
Current assets:
Cash and cash equivalents $ 26,782 $ 21,565
Accounts receivable, trade, net of
allowance for doubtful accounts of
$696 and $516, respectively 35,900 39,919
Inventories, net 43,048 40,286
Deferred income taxes, net 4,447 4,299
Prepaid expenses and other current assets 4,250 3,760
Other receivables 925 1,270
Due from joint venture partner 1,979 2,155
Current portion of promissory note receivable 540 809
-------------------
Total current assets 117,871 114,063
Property, plant and equipment, net 42,152 40,715
Goodwill 94,518 95,710
Acquired intangible assets, net 30,040 31,766
Deferred income taxes, net 1,795 1,769
Other assets 1,556 1,592
-------------------
Total Assets $287,932 $285,615
===================
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of promissory notes payable $ 2,453 $ 2,511
Current portion of long-term debt 2,867 3,157
Current portion of capital lease obligation 797 822
Accounts payable 22,423 23,523
Accrued expenses 3,837 3,634
Accrued compensation 6,704 7,067
Income taxes payable 1,595 751
Other current liabilities 3,319 3,510
-------------------
Total current liabilities 43,995 44,975
Revolver 58,206 58,206
Long-term debt, net of current portion 14,718 15,309
Capital lease obligation, net of current portion 581 781
Promissory notes payable, net of current portion 7,360 7,535
Other liabilities 1,055 1,067
-------------------
Total liabilities 125,915 127,873
-------------------
Minority Interest 1,849 1,953
-------------------
Shareholders' equity:
Serial preferred stock; 221,756 shares
authorized; none outstanding -- --
Common stock, no par; 25,000,000 shares
authorized; 14,440,848 and 14,280,364 shares
issued and outstanding, respectively -- --
Additional paid-in capital 79,677 78,720
Retained earnings 65,794 61,939
Accumulated other comprehensive income 14,697 15,130
-------------------
Total shareholders' equity 160,168 155,789
-------------------
Total liabilities, minority interest
and shareholders' equity $287,932 $285,615
===================
MEASUREMENT SPECIALTIES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
June 30,
--------------------
(Amounts in thousands) 2008 2007
---------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 3,855 $ 3,745
Less: Income (loss) from discontinued
operations - Consumer -- $ 30
-------- --------
Income from continuing operations 3,855 3,715
Adjustments to reconcile net income to
net cash provided by operating activities
from continuing operations:
Depreciation and amortization 3,337 2,280
Loss on sale of assets 19 8
Provision for doubtful accounts 23 17
Provision for inventory reserve 56 439
Provision for warranty 65 30
Minority interest 77 82
Non-cash equity based compensation (SFAS 123R) 798 813
Deferred income taxes (67) (158)
Net change in operating assets and liabilities:
Accounts receivable, trade 4,066 2,206
Inventories (2,645) (1,328)
Prepaid expenses, other current assets and
other receivables (104) 421
Other assets 220 398
Accounts payable (901) 2,201
Accrued expenses, accrued compensation, other
current and other liabilities (304) (929)
Accrued litigation settlement expenses -- (1,275)
Income taxes payable 827 468
-------- --------
Net cash provided by operating activities
from continuing operations 9,322 9,388
-------- --------
Cash flows used in investing activities
from continuing operations:
Purchases of property and equipment (3,318) (2,341)
Proceeds from sale of assets 4 34
-------- --------
Net cash used in investing activities
from continuing operations (3,314) (2,307)
-------- --------
Cash flows from financing activities
from continuing operations:
Repayments of long-term debt -- (606)
Borrowings of short-term debt, revolver
and notes payable (876) 1,135
Payments of short-term debt, revolver,
leases and notes payable -- (3,050)
Payment of Capital Leases -- (215)
Sale lease-back financing transaction (223) --
Minority interest payments -- (243)
Proceeds from exercise of options 159 17
-------- --------
Net cash provided by financing activities
from continuing operations (940) (2,962)
-------- --------
Net cash provided by operating activities
of discontinued operations -- 36
Net cash provided by investing activities
of discontinued operations 271 802
-------- --------
Net cash provided by discontinued operations 271 838
-------- --------
Net change in cash and cash equivalents 5,339 4,957
Effect of exchange rate changes on cash (122) 88
Cash, beginning of year 21,565 7,709
-------- --------
Cash, end of year $ 26,782 $ 12,754
======== ========
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 904 $ 1,196
Income taxes 656 682
Reconciliation of Non-GAAP Financial Measures (Unaudited):
(In Thousands Except for Percentages and Per Share Amounts)
Fiscal quarter ended
June 30,
---------------------
2008 2007
---------------------
Income from Continuing Operations $ 3,855 $ 3,715
Add Back:
Interest 706 1,186
Income Taxes 1,500 1,173
Depreciation and Amortization 3,337 2,280
Foreign Currency Exchange Loss (Gain) (63) 36
Option Expense under SFAS 123R 798 813
---------------------
Adjusted EBITDA $ 10,133 $ 9,203
As % of Net Sales 17.2% 17.3%
Selling, General and Administrative
(SG&A) Reconciliation
Reported Operating Expense $ 19,587 $ 16,590
Amortization of Acquired Intangibles 1,364 807
Option Expense under SFAS 123R 798 813
---------------------
Adjusted SG&A $ 17,425 $ 14,970
As % of Net Sales 29.5% 28.2%
Free Cash Flow
Net cash provided by operating
activities from continuing operations $ 9,322 $ 9,388
Purchases of property and equipment (3,318) (2,341)
---------------------
$ 6,004 $ 7,047
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," promulgated under the Securities and Exchange Act of 1934, as amended, defines and prescribes the conditions for use of certain non-GAAP financial information. We believe that certain of our financial measures which meet the definition of non-GAAP financial measures are important supplemental information to investors.
The financial information accompanying this press release includes the Company's earnings before interest, income taxes, depreciation, amortization and stock option expense, or "Adjusted EBITDA" and "Free Cash Flow." Adjusted EBITDA is derived by adding interest, taxes, depreciation, amortization, foreign currency transaction gains/losses, litigation settlement expense, and stock option expense to the Company's net income from continuing operations. Free Cash Flow is derived by taking net cash provided by operating activities from continuing operations and subtracting capital expenditures (purchases of property and equipment). The Company believes that Adjusted EBITDA is important to investors because it provides a financial measure that is more representative of the Company's cash flow (prior to taking into account the effects of changes in working capital and purchases of property and equipment), excluding non-cash expenses and items such as foreign currency transaction gains/losses, income taxes and interest, which vary greatly period to period. The Company believes that this measure is important to investors because it more accurately represents the leverage effect of fixed expenses given our rapid growth in sales. The Company believes Free Cash Flow is also important to investors as it is a significant measure used in determined the enterprise value of the Company.
These non-GAAP financial measures are used in addition to and in conjunction with the results presented in accordance with GAAP. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. Non-GAAP financial measures provide an additional way of viewing aspects of our operation that, when viewed with our GAAP results and the accompanying reconciliation's to the corresponding GAAP financial measures, provide an understanding of certain factors and trends relating to our business. The Company strongly encourages investors to review our financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.