HAMPTON, Va., Nov. 5, 2008 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS), a global designer and manufacturer of sensors and sensor-based systems, announces results for the three and six months ended September 30, 2008. Unless otherwise stated, results reflect continuing operations only.
The Company reported an increase in consolidated net sales of $2.4 million or 4% to $58.9 million for the three months ended September 30, 2008, as compared to the corresponding period last year. The overall increase in sales is largely attributable to sales from Intersema, which the Company acquired in December 2007, offset by decreased sales from other sensor product lines. Organic sales, which are defined as net sales excluding sales attributed to Intersema, declined $1.8 million or 3%. For the three months ended September 30, 2008, the Company reported an increase of $0.4 million in income from continuing operations to $3.7 million, or $0.26 per diluted share, as compared to $3.3 million or $0.23 per diluted share for the same period last year.
For the six months ended September 30, 2008, the Company reported an increase in consolidated net sales of $8.3 million or 8% to $117.9 million, as compared to the same period last year. Organic sales decreased $0.1 million or less than 0.1%. For the six months ended September 30, 2008, the Company reported an increase of $0.5 million in income from continuing operations to $7.6 million, or $0.52 per diluted share, as compared to $7.1 million or $0.49 per diluted share for the same period last year.
Frank Guidone, Company CEO commented, "Second quarter sales were disappointing; well below our expectation and guidance. The shortfall was largely influenced by curtailed spending by several of our top customers in large part due to the overall global economic conditions, along with the impact of translating Euro denominated sales due to the stronger US Dollar. Customers tied to passenger and non-passenger vehicle, consumer product, residential/commercial construction, semiconductor, and commercial goods markets are all generally reducing forecasts and delaying orders. The passenger and non-passenger vehicle markets have been particularly hard hit, with customers reducing forecasts by 20%-30%. Although we expect a modest decline in sales for the second half of fiscal 2009 over the first six months, the economic uncertainties will likely continue to impact demand for our products and make it difficult to forecast sales with any reasonable degree of certainty in the near term. Accordingly, while we expect to fall short of our prior full year sales guidance of $255 million and our prior full year earnings guidance of $1.30 per share, we are not prepared to provide updated guidance at this time."
Guidone continued, "What is comforting right now is that the Company maintains a strong balance sheet with over $22 million of cash on hand and borrowing availability under our revolving credit facility of nearly $65 million at favorable interest rates. Despite heavy investment in the final stages of the China facility project, the Company generated $15.6 million of cash from operations and $7.6 million in free cash flow (cash from operations less purchases of property and equipment) through the first 6 months. The fact that we are generating cash despite the global economic crisis is indicative of the strength and diversity of our operating model. While fiscal 2009 earnings will be disappointing in relation to prior guidance, we believe the current market conditions will present attractive investment opportunities and feel MEAS has the cash flow, liquidity and balance sheet to capitalize on the situation." Free cash flow is a Non-GAAP financial measure. Please refer to the notes and reconciliation regarding Non-GAAP financial measures contained in this release.
On November 5, 2008, the Company filed its Form 10-Q for the fiscal quarter ended September 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, November 6, 2008 at 11:00 AM EST to answer questions regarding the results for the three and six months ended September 30, 2008 reported in our Form 10-Q. 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# 300584, 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. These forward-looking statements 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 or future 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 release.
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter ended Six months ended
September 30, September 30,
------------------ ------------------
(Amounts in thousands, except
per share amounts) 2008 2007 2008 2007
------------------ ------------------
Net sales $58,888 $56,462 $117,886 $109,613
Cost of goods sold 33,851 33,101 67,608 63,368
------------------ ------------------
Gross profit 25,037 23,361 50,278 46,245
------------------ ------------------
Total operating expenses 18,510 16,086 38,098 32,677
------------------ ------------------
Operating income 6,527 7,275 12,180 13,568
Interest expense, net 806 1,207 1,512 2,393
Foreign currency exchange loss 396 405 332 442
Other expense (income) 68 (134) (353) (33)
------------------ ------------------
Income from continuing
operations before minority
interest and income taxes 5,257 5,797 10,689 10,766
Minority interest, net
of income taxes 93 78 170 161
Income tax expense from
continuing operations 1,446 2,370 2,945 3,543
------------------ ------------------
Income from continuing
operations 3,718 3,349 7,574 7,062
------------------ ------------------
Discontinued operations:
Income (loss) from
discontinued operations
before income taxes -- 20 -- 56
Income tax expense (benefit)
from discontinued operations -- -- -- 6
------------------ ------------------
Income from discontinued
operations -- 20 -- 50
------------------ ------------------
Net income $3,718 $3,369 $7,574 $7,112
================== ==================
Net income per common
share - Basic:
Income from continuing
operations $0.26 $0.24 $0.52 $0.50
Income from discontinued
operations -- -- -- --
------------------ ------------------
Net income per common
share - Basic $0.26 $0.24 $0.52 $0.50
================== ==================
Net income per common
share - Diluted:
Income from continuing
operations $0.26 $0.23 $0.52 $0.49
Income from discontinued
operations -- -- -- --
------------------ ------------------
Net income per common
share - Diluted $0.26 $0.23 $0.52 $0.49
================== ==================
Weighted average shares
outstanding - Basic 14,454 14,318 14,453 14,303
Weighted average shares
outstanding - Diluted 14,530 14,502 14,532 14,481
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Sept 30, March 31,
(Amounts in thousands) 2008 2008
---------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 22,714 $ 21,565
Accounts receivable, trade, net of
allowance for doubtful accounts of $893
and $696, respectively 35,583 39,919
Inventories, net 44,719 40,286
Deferred income taxes, net 4,474 4,299
Prepaid expenses and other current assets 4,201 3,760
Other receivables 1,136 1,270
Due from joint venture partner 1,431 2,155
Current portion of promissory note receivable 271 809
------------------
Total current assets 114,529 114,063
Property, plant and equipment, net 43,389 40,715
Goodwill 94,248 95,710
Acquired intangible assets, net 27,337 31,766
Deferred income taxes, net 2,084 1,769
Other assets 1,517 1,592
------------------
Total Assets $283,104 $285,615
==================
MEASUREMENT SPECIALTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands, Sept 30, March 31,
except share amounts) 2008 2008
---------------------------------------------------------------------
LIABILITIES, MINORITY INTEREST
AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of promissory notes payable $ 2,279 $ 2,511
Current portion of long-term debt 2,612 3,157
Current portion of capital lease obligation 730 822
Accounts payable 21,897 23,523
Accrued expenses 3,840 3,634
Accrued compensation 6,226 7,067
Income taxes payable 2,483 751
Other current liabilities 3,505 3,510
------------------
Total current liabilities 43,572 44,975
Revolver 54,214 58,206
Long-term debt, net of current portion 14,011 15,309
Capital lease obligation, net of current portion 346 781
Promissory notes payable, net of current portion 6,836 7,535
Other liabilities 1,229 1,067
------------------
Total liabilities 120,208 127,873
------------------
Minority Interest 2,119 1,953
------------------
Shareholders' equity:
Serial preferred stock; 221,756 shares
authorized; none outstanding -- --
Common stock, no par; 25,000,000 shares
authorized; 14,471,118 and 14,440,848 shares
issued and outstanding, respectively -- --
Additional paid-in capital 80,420 78,720
Retained earnings 69,513 61,939
Accumulated other comprehensive income 10,844 15,130
------------------
Total shareholders' equity 160,777 155,789
------------------
Total liabilities, minority interest
and shareholders' equity $283,104 $285,615
==================
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
September 30,
------------------
(Amounts in thousands) 2008 2007
---------------------------------------------------------------------
Cash flows from operating activities:
Net income $7,574 $7,112
Less: Income (loss) from discontinued
operations - Consumer -- 50
------------------
Income from continuing operations 7,574 7,062
Adjustments to reconcile net income to net cash
provided by operating activities from
continuing operations:
Depreciation and amortization 6,577 4,447
Loss on sale of assets 107 44
Provision for doubtful accounts 203 106
Provision for inventory reserve 231 479
Provision for warranty 120 355
Minority interest 170 161
Non-cash equity based compensation (SFAS 123R) 1,524 1,633
Deferred income taxes (430) 673
Net change in operating assets and liabilities:
Accounts receivable, trade 3,786 (807)
Inventories (4,915) (1,737)
Prepaid expenses, other current assets
and other receivables (500) (504)
Other assets 834 (183)
Accounts payable (1,018) 2,472
Accrued expenses, accrued compensation, other
current and other liabilities (386) (1,317)
Accrued litigation settlement expenses -- (1,275)
Income taxes payable 1,697 297
------------------
Net cash provided by operating activities
from continuing operations 15,574 11,906
------------------
Cash flows used in investing activities
from continuing operations:
Purchases of property and equipment (7,966) (4,934)
Proceeds from sale of assets 4 25
------------------
Net cash used in investing activities
from continuing operations (7,962) (4,909)
------------------
Cash flows from financing activities
from continuing operations:
Repayments of long-term debt (1,671) (1,340)
Borrowings of short-term debt, revolver
and notes payable 9 4,159
Payments of short-term debt, revolver, leases
and notes payable (4,416) (10,526)
Minority interest payments -- (243)
Proceeds from exercise of options 176 1,018
------------------
Net cash provided by financing activities
from continuing operations (5,902) (6,932)
------------------
Net cash provided by operating activities
of discontinued operations -- 126
Net cash provided by investing activities
of discontinued operations 540 1,492
------------------
Net cash provided by discontinued operations 540 1,618
------------------
Net change in cash and cash equivalents 2,250 1,683
Effect of exchange rate changes on cash (1,101) 281
Cash, beginning of year 21,565 7,709
------------------
Cash, end of year $ 22,714 $ 9,673
==================
Reconciliation of Non-GAAP Financial Measures (Unaudited):
Fiscal quarter ended Six Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
------------------ ------------------
(In thousands, except
percentages and
per share amounts)
Income from
Continuing Operations $ 3,718 $ 3,349 $ 7,574 $ 7,062
Add Back:
Interest 806 1,207 1,512 2,393
Income Taxes 1,446 2,370 2,945 3,543
Depreciation and Amortization 3,239 2,167 6,577 4,447
Foreign Currency
Exchange Loss 396 405 332 442
Non-cash equity based
compensation under
SFAS 123R 726 820 1,524 1,633
------------------ ------------------
Adjusted EBITDA $ 10,331 $ 10,318 $ 20,464 $ 19,520
As % of Net Sales 17.5% 18.3% 17.4% 17.8%
Selling General and
Administrative (SG&A)
Reconciliation
Reported Operating Expense $ 18,510 $ 16,086 38,098 32,677
Amortization of
Acquired Intangibles (1,359) (740) (2,723) (1,547)
Non-cash equity based
compensation under
SFAS 123R (726) (820) (1,524) (1,633)
------------------ ------------------
SG&A $ 16,425 $ 14,526 $ 33,851 $ 29,497
As % of Net Sales 27.9% 25.7% 28.7% 26.9%
Free Cash Flow
Net cash provided by operating
activities from
continuing operations $ 6,252 $ 2,518 15,574 11,906
Purchases of property
and equipment (4,648) (2,593) (7,966) (4,934)
------------------ ------------------
Free Cash Flow $ 1,604 $ (75) $ 7,608 $ 6,972
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, and stock option expense to the Company's net income from continuing operations. Free Cash Flow is non-GAAP measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from free cash flow measures used by other companies. 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 provides useful information about the amount of cash generated by the business after the purchase of property, buildings and equipment, which can then be used to, among other things, invest in the Company's business, make strategic acquisitions and strengthen the balance sheet, and because it is a significant measure used in determining the enterprise value of the Company. A limitation on the use of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period or the residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions.
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 reconciliations 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.