PORTLAND, Ore., July 12, 2011 (GLOBE NEWSWIRE) -- Schmitt Industries, Inc. (Nasdaq:SMIT) today announced its operating results for the fourth quarter and fiscal year ended May 31, 2011. Sales for the three months ended May 31, 2011 increased $1,135,483, or 53.6%, to $3,253,824 compared to $2,118,341 for the same period last year. Net income for the fourth quarter ended May 31, 2011 was $58,190, or $.02 per diluted share, compared to net loss of $469,119, or $.16 per diluted share, for the same period last year. The fourth quarter results included approximately $174,000 of stock-based compensation expense, which if excluded from earnings would have resulted in net income per diluted share of $.08.
For the fiscal year ended May 31, 2011, sales increased $4,687,111, or 68.9%, to $11,492,859 compared to $6,805,748 for the prior year. Net loss for the fiscal year ended May 31, 2011 was $205,383, or $.07 per diluted share, compared to net loss of $1,711,013, or $.59 per diluted share, for the prior year. Fiscal 2011 results included approximately $203,000 of stock-based compensation expense which if excluded from net loss would have resulted in net loss per diluted share of $.00.
For the fourth quarter ended May 31, 2011, sales in the SBS Balancer segment increased $894,555, or 61.5%, to $2,349,247 for the three months ended May 31, 2011 from $1,454,692 in the fourth quarter of Fiscal 2010. For the year ended May 31, 2011, sales in the Balancer segment increased $3,340,456, or 71.5%, to $8,011,179 from $4,670,723 in the prior year. Sales in the Measurement segment increased $240,928, or 36.3%, to $904,577 in the fourth quarter of Fiscal 2011 from $663,649 in the fourth quarter of the prior year. Measurement segment sales increased $1,346,655, or 63.1% in Fiscal 2011 to $3,481,680 as compared to $2,135,025 for Fiscal 2010. Sales of the Company's balancer and laser-based measurement products increased from prior periods due primarily to higher volumes of shipments as the worldwide automotive and manufacturing industries continue their recovery from the previous low levels experienced due to the global economic downturn.
Gross margins for the fourth quarter and the year have improved as compared to the same periods in the prior year primarily due to a shift in product sales mix. Operating expenses increased during the fourth quarter of the current year primarily due to higher commissions related to the increased sales, higher stock-based compensation, and higher expenses associated with an international trade show that occurs every two years.
"We are pleased with the improvement we are seeing in both the Balancer and Measurement business segments this past year. We are also excited about the potential growth that the Xact™ product line offers," commented Wayne A. Case, CEO of Schmitt Industries. "We have started to sell higher volumes of large tank systems and have completed development of a product for small propane tanks. The Xact™ product line is expected to be an important contributor to the Company's future growth," Case concluded.
Jim Fitzhenry, President of Schmitt Industries, added, "As our financial results indicate, we are seeing a gradual recovery in our markets after a long period of decline. During this time period, we have been careful with our expenditures, focusing our resources on new product development and enhancing our sales organization and distribution channels. We believe that we have started to see the positive results of those investments as evidenced by the return to profitability in the fourth quarter. We are continuing to work hard to return the Company to consistent profitability while making the investments necessary to position the Company for long-term growth," Fitzhenry concluded.
About Schmitt Industries
Schmitt Industries, Inc. designs, manufactures and markets computer-controlled vibration detection and balancing equipment (the Balancer segment) primarily to the machine tool industry. Through its wholly owned subsidiary, Schmitt Measurement Systems, Inc., the Company designs, manufactures and markets precision laser-based surface measurement products for a wide variety of commercial applications in addition to the disk drive, silicon wafer and optics industries; laser-based distance measurement products for a wide variety of industrial applications; and ultrasonic measurement products that accurately measure the fill levels of large liquefied propane tanks and transmit that data via satellite to a secure web site (the Measurement segment). The Company also sells and markets its products in Europe through its wholly owned subsidiary, Schmitt Europe Ltd. located in the United Kingdom.
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including but not limited to remarks by Wayne Case and Jim Fitzhenry, are "forward-looking statements." These statements are based upon current expectations, estimates and projections about the Company's business that are based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic conditions and the global financial crisis, the volatility of the Company's primary markets, the Xact™ tank monitoring system's commercial viability and our ability to satisfy expected demand, the ability to develop new products to satisfy changes in consumer demands, protection of intellectual property rights, the intensity of competition, the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary supplier increases the prices of raw materials, fluctuations in quarterly and annual operating results, the ability to reduce operating costs if sales decline, maintenance of a significant investment in inventories in anticipation of future sales, attracting and retaining key management and qualified technical and sales personnel, changes in effective tax rates, increased costs due to changes in securities laws and regulations, and risks from international sales and currency fluctuations.
For further information regarding risks and uncertainties associated with the Company's business, please refer to Schmitt's SEC filings, including, but not limited to, it's Form 10-K, 10-Q and 8-K.
The forward-looking statements in this release speak only as of the date on which they were made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes to this document made by wire services or internet service providers.
| SCHMITT INDUSTRIES, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (UNAUDITED) | ||
| May 31, 2011 | May 31, 2010 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 2,760,506 | $ 3,545,986 |
| Accounts receivable, net | 1,831,811 | 1,144,420 |
| Inventories | 4,146,408 | 3,645,303 |
| Prepaid expenses | 166,779 | 192,167 |
| Income taxes receivable | -- | 21,570 |
| 8,905,504 | 8,549,446 | |
| Property and equipment | ||
| Land | 299,000 | 299,000 |
| Buildings and improvements | 1,582,936 | 1,564,880 |
| Furniture, fixtures and equipment | 1,199,143 | 1,059,496 |
| Vehicles | 129,330 | 90,452 |
| 3,210,409 | 3,013,828 | |
| Less accumulated depreciation and amortization | (1,876,234) | (1,720,880) |
| 1,334,175 | 1,292,948 | |
| Other assets | ||
| Intangible assets, net | 1,349,583 | 1,509,711 |
| TOTAL ASSETS | $ 11,589,262 | $ 11,352,105 |
| LIABILITIES & STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 841,416 | $ 665,044 |
| Accrued commissions | 308,396 | 170,614 |
| Accrued payroll liabilities | 116,129 | 231,390 |
| Other accrued liabilities | 163,940 | 160,717 |
| Income taxes payable | 2,073 | -- |
| Total current liabilities | 1,431,954 | 1,227,765 |
| Long-term liabilities | -- | 3,591 |
| Stockholders' equity | ||
| Common stock, no par value, 20,000,000 shares authorized, | ||
| 2,895,635 and 2,870,160 shares issued and outstanding at | ||
| May 31, 2011 and 2010, respectively | 9,943,910 | 9,739,391 |
| Accumulated other comprehensive loss | (226,581) | (264,004) |
| Retained earnings | 439,979 | 645,362 |
| Total stockholders' equity | 10,157,308 | 10,120,749 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 11,589,262 | $ 11,352,105 |
| SCHMITT INDUSTRIES, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| FOR THE THREE MONTHS AND YEARS ENDED MAY 31, 2011 AND 2010 | ||||
| (UNAUDITED) | ||||
| Year Ended May 31, | Three Months Ended May 31, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Net sales | $ 11,492,859 | $ 6,805,748 | $ 3,253,824 | $ 2,118,341 |
| Cost of sales | 5,887,207 | 3,763,756 | 1,485,275 | 1,363,120 |
| Gross profit | 5,605,652 | 3,041,992 | 1,768,549 | 755,221 |
| Operating expenses: | ||||
| General, administration and sales | 5,297,083 | 4,184,100 | 1,619,275 | 1,122,909 |
| Research and development | 504,251 | 584,582 | 83,777 | 112,669 |
| Total operating expenses | 5,801,334 | 4,768,682 | 1,703,052 | 1,235,578 |
| Operating income (loss) | (195,682) | (1,726,690) | 65,497 | (480,357) |
| Other income (expense) | (8,042) | 31,107 | (4,070) | 12,866 |
| Income (loss) before income taxes | (203,724) | (1,695,583) | 61,427 | (467,491) |
| Provision for income taxes | 1,659 | 15,430 | 3,237 | 1,628 |
| Net income (loss) | $ (205,383) | $ (1,711,013) | $ 58,190 | $ (469,119) |
| Net income (loss) per common share: | ||||
| Basic | $ (0.07) | $ (0.59) | $ 0.02 | $ (0.16) |
| Weighted average number of common shares, basic | 2,895,042 | 2,886,633 | 2,895,635 | 2,894,802 |
| Diluted | $ (0.07) | $ (0.59) | $ 0.02 | $ (0.16) |
| Weighted average number of common shares, diluted | 2,895,042 | 2,886,633 | 2,970,572 | 2,894,802 |