Attached files
| file | filename |
|---|---|
| 8-K - Measurement Specialties Inc | v209797_8k.htm |
 |
|
Contact:
|
Mark
Thomson, CFO
|
|
(757)
766-4224
|
FOR IMMEDIATE
RELEASE
Measurement
Specialties Announces Strong Results
for
Quarter and Nine Months Ended December 31, 2010
Third
Quarter fiscal 2011 - Net Income of $7.5 million on Net Sales of $71.7
million
Hampton,
VA, February 2, 2011 – Measurement Specialties, Inc. (NASDAQ: MEAS) (the
“Company”), a global designer and manufacturer of sensors and sensor-based
systems, announces results for the three and nine months ended December 31,
2010.
The
Company reported an increase in consolidated net sales of $18.1 million or 34%
to $71.7 million for the three months ended December 31, 2010, as compared to
the corresponding period last year. Organic sales, defined as net
sales excluding sales attributed to the Pressure Systems Inc. (“PSI”)
acquisition of $5.3 million, increased $12.8 million or 24%. For the
three months ended December 31, 2010, the Company reported income from
continuing operations, net of income taxes, of $7.5 million, or $0.49 per
diluted share, as compared to income from continuing operations, net of income
taxes, of $3.3 million or $0.22 per diluted share, for the same period last
year.
The
Company reported an increase in consolidated net sales of $52.8 million or 36%
to $198.0 million for the nine months ended December 31, 2010, as compared to
the corresponding period last year. Excluding sales attributed to the
PSI acquisition of $7.2 million, organic sales increased $45.6 million or 31.4%.
For the nine months ended December 31, 2010, the Company reported income from
continuing operations, net of income taxes, of $19.8 million, or $1.30 per
diluted share, as compared to income from continuing operations, net of income
taxes, of $1.9 million, or $0.13 per diluted share, for the same period last
year.
The
Company recorded higher amortization expense during the third quarter of fiscal
2011 related largely to the short amortization period of PSI’s acquired backlog,
which was fully amortized as of December 31, 2010. The Company
expects quarterly amortization expense to decline during its fourth quarter by
approximately $0.4 million.
The
Company recorded an income tax provision of $0.9 million for the third quarter
of fiscal 2011. During the third quarter, the Company recognized a
deferred tax benefit of $3.2 million related to the release of a valuation
allowance associated with a deferred tax asset in its German subsidiary, which
was in part offset by a U.S. deferred tax expense of $2.8 million relating to
distributable foreign earnings. The Company estimates its Effective
Tax Rate, excluding discrete tax adjustments, to be 17% for fiscal
2011.
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
Frank
Guidone, Company CEO commented, “Our results for the quarter remained consistent
and demonstrate we now have the scale and diversity to deliver stable,
predicable results. Slightly unfavorable mix at the gross margin
level was offset by improved SG&A leverage, resulting in Adjusted EBITDA
margins in-line with our target rate of 20%. As previously disclosed,
as a result of strong organic growth coupled with the full year impact of the
PSI acquisition, we expect to achieve our goal of $300 million in sales and $60
million in Adjusted EBITDA in Fiscal Year 2012 (rather than Fiscal 2013, as
originally outlined). We remain confident the organic growth of our
served markets – which are benefiting from the general increase in sensor
content on products – accelerated by our new pipeline wins will support double
digit top-line growth for the foreseeable future.”
On
February 2, 2011, the Company filed its Form 10-Q for the three and nine months
ended December 31, 2010. 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, February 3, 2011 at
11:00 AM Eastern to answer questions regarding the results reported in our Form
10-Q for three and nine months ended December 31, 2010. US dialers: (877)
407-8035; International dialers (201) 689-8035. 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# 366199, 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, mechanical resonators and
submersible hydrostatic level sensors – to engineer sensors that operate
precisely and cost effectively.
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
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 as “should”, "intends", “ is subject
to”, "expects", "will", "continue", "anticipate", "estimated", "projected",
"may", " believe", "future prospects", or similar expressions.
Factors that might cause actual results to differ materially from the expected
results described in or underlying our forward-looking statements include:
Conditions in the general economy, including risks associated with the current
financial crisis and worldwide economic conditions and reduced demand for
products that incorporate our products; Competitive factors, such as price
pressures and the potential emergence of rival technologies; Compliance with
export control laws and regulations; Fluctuations in foreign currency exchange
and interest rates; Interruptions of suppliers’ operations or the refusal of our
suppliers to provide us with component materials, particularly in light of the
current economic conditions and potential for suppliers to fail; Timely
development, market acceptance and warranty performance of new products; Changes
in product mix, costs and yields; Uncertainties related to doing business in
Europe and China; Legislative initiatives, including tax legislation and other
changes in the Company’s tax position; Legal proceedings; Compliance with debt
covenants, including events beyond our control; Conditions in the credit
markets, including our ability to raise additional funds or refinance our
existing credit facility; Adverse developments in the automotive industry and
other markets served by us; and risk factors listed from time to time in the
reports we file with the SEC. 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.
Company
Contact: Mark Thomson, CFO, (757) 766-4224
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
MEASUREMENT
SPECIALTIES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
(Amounts in thousands, except per share amounts)
|
2010
|
(As
Adjusted)
2009
|
2010
|
(As
Adjusted)
2009
|
||||||||||||
|
Net
sales
|
$ | 71,687 | $ | 53,595 | $ | 198,022 | $ | 145,256 | ||||||||
|
Cost
of goods sold
|
42,030 | 32,327 | 114,424 | 91,065 | ||||||||||||
|
Gross
profit
|
29,657 | 21,268 | 83,598 | 54,191 | ||||||||||||
|
Selling,
general, and administrative expenses
|
20,752 | 17,425 | 58,065 | 50,800 | ||||||||||||
|
Operating
income
|
8,905 | 3,843 | 25,533 | 3,391 | ||||||||||||
|
Interest
expense, net
|
753 | 905 | 2,395 | 3,092 | ||||||||||||
|
Foreign
currency exchange loss (gain)
|
(63 | ) | (64 | ) | 134 | (1,037 | ) | |||||||||
|
Equity
income in unconsolidated joint venture
|
(153 | ) | (118 | ) | (402 | ) | (328 | ) | ||||||||
|
Other
expense (income)
|
(24 | ) | 52 | 110 | 79 | |||||||||||
|
Income
before income taxes
|
8,392 | 3,068 | 23,296 | 1,585 | ||||||||||||
|
Income
tax expense (benefit)
|
893 | (196 | ) | 3,453 | (271 | ) | ||||||||||
|
Income
from continuing operations, net of income taxes
|
7,499 | 3,264 | 19,843 | 1,856 | ||||||||||||
|
Loss
from discontinued operations, net of income taxes
|
- | (16 | ) | - | (142 | ) | ||||||||||
|
Net
income
|
$ | 7,499 | $ | 3,248 | $ | 19,843 | $ | 1,714 | ||||||||
|
Earnings
per common share - Basic:
|
||||||||||||||||
|
Income
from continuing operations, net of income taxes
|
$ | 0.51 | $ | 0.22 | $ | 1.36 | $ | 0.13 | ||||||||
|
Loss
from discontinued operations
|
- | - | - | (0.01 | ) | |||||||||||
|
Net
income - Basic
|
$ | 0.51 | $ | 0.22 | $ | 1.36 | $ | 0.12 | ||||||||
|
Earnings
per common share - Diluted:
|
||||||||||||||||
|
Income
from continuing operations, net of income taxes
|
$ | 0.49 | $ | 0.22 | $ | 1.30 | $ | 0.13 | ||||||||
|
Loss
from discontinued operations
|
- | - | - | (0.01 | ) | |||||||||||
|
Net
income - Diluted
|
$ | 0.49 | $ | 0.22 | $ | 1.30 | $ | 0.12 | ||||||||
|
Weighted
average shares outstanding - Basic
|
14,684 | 14,504 | 14,609 | 14,492 | ||||||||||||
|
Weighted
average shares outstanding - Diluted
|
15,447 | 14,686 | 15,222 | 14,629 | ||||||||||||
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
MEASUREMENT
SPECIALTIES, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
(As Adjusted)
|
||||||||
|
December 31,
|
March 31,
|
|||||||
|
(Amounts in thousands)
|
2010
|
2010
|
||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 30,716 | $ | 23,165 | ||||
|
Accounts
receivable trade, net of allowance for doubtful accounts of $618 and $464,
respectively
|
37,303 | 29,689 | ||||||
|
Inventories,
net
|
53,670 | 40,774 | ||||||
|
Deferred
income taxes, net
|
1,609 | 1,602 | ||||||
|
Prepaid
expenses and other current assets
|
3,878 | 3,148 | ||||||
|
Other
receivables
|
1,237 | 659 | ||||||
|
Income
taxes receivable
|
- | 1,287 | ||||||
|
Total
current assets
|
128,413 | 100,324 | ||||||
|
Property,
plant and equipment, net
|
48,439 | 44,437 | ||||||
|
Goodwill
|
116,067 | 99,235 | ||||||
|
Acquired
intangible assets, net
|
29,358 | 23,613 | ||||||
|
Deferred
income taxes, net
|
6,994 | 6,607 | ||||||
|
Investment
in unconsolidated joint venture
|
2,410 | 2,117 | ||||||
|
Other
assets
|
1,642 | 939 | ||||||
|
Total
assets
|
$ | 333,323 | $ | 277,272 | ||||
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
MEASUREMENT
SPECIALTIES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
(As Adjusted)
|
||||||||
|
December 31,
|
March 31,
|
|||||||
|
(Amounts in thousands, except share amounts)
|
2010
|
2010
|
||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Short-term
debt
|
$ | 5,000 | $ | 5,000 | ||||
|
Current
portion of long-term debt
|
161 | 2,295 | ||||||
|
Current
portion of capital lease obligations
|
80 | 193 | ||||||
|
Current
portion of promissory notes payable
|
2,657 | 2,349 | ||||||
|
Accounts
payable
|
19,505 | 17,884 | ||||||
|
Accrued
expenses
|
5,479 | 4,719 | ||||||
|
Accrued
compensation
|
10,777 | 7,882 | ||||||
|
Income
taxes payable
|
1,072 | - | ||||||
|
Deferred
income taxes, net
|
205 | 182 | ||||||
|
Other
current liabilities
|
3,089 | 3,064 | ||||||
|
Total
current liabilities
|
48,025 | 43,568 | ||||||
|
Revolver
|
56,746 | 53,547 | ||||||
|
Long-term
debt, net of current portion
|
20,873 | 6,488 | ||||||
|
Capital
lease obligations, net of current portion
|
16 | 63 | ||||||
|
Promissory
notes payable, net of current portion
|
2,657 | 2,349 | ||||||
|
Deferred
income taxes, net
|
6,828 | 2,969 | ||||||
|
Other
liabilities
|
1,335 | 1,292 | ||||||
|
Total
liabilities
|
136,480 | 110,276 | ||||||
|
Equity:
|
||||||||
|
Serial
preferred stock; 221,756 shares authorized; none
outstanding
|
- | - | ||||||
|
Common
stock, no par; 25,000,000 shares authorized; 14,906,596 and 14,534,431
shares issued and outstanding, respectively
|
- | - | ||||||
|
Additional
paid-in capital
|
92,509 | 85,338 | ||||||
|
Retained
earnings
|
92,977 | 73,134 | ||||||
|
Accumulated
other comprehensive income
|
11,357 | 8,524 | ||||||
|
Total
equity
|
196,843 | 166,996 | ||||||
|
Total
liabilities and shareholders' equity
|
$ | 333,323 | $ | 277,272 | ||||
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Nine months ended December 31,
|
||||||||
|
(Amounts in thousands)
|
2010
|
(As Adjusted)
2009
|
||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 19,843 | $ | 1,714 | ||||
|
Loss
from discontinued operations
|
- | (142 | ) | |||||
|
Income
from continuing operations
|
19,843 | 1,856 | ||||||
|
Adjustments
to reconcile net income to net cash
|
||||||||
|
provided
by operating activities:
|
||||||||
|
Depreciation
and amortization
|
11,226 | 10,835 | ||||||
|
Loss
(gain) on sale of assets
|
(3 | ) | 71 | |||||
|
Non-cash
equity based compensation
|
2,231 | 2,275 | ||||||
|
Deferred
income taxes
|
360 | 619 | ||||||
|
Equity
income in unconsolidated joint venture
|
(402 | ) | (328 | ) | ||||
|
Unconsolidated
joint venture distributions
|
114 | 815 | ||||||
|
Net
change in operating assets and liabilities:
|
||||||||
|
Accounts
receivable, trade
|
(5,264 | ) | 1,000 | |||||
|
Inventories
|
(10,316 | ) | 3,819 | |||||
|
Prepaid
expenses, other current assets and other receivables
|
(864 | ) | (164 | ) | ||||
|
Other
assets
|
62 | (3 | ) | |||||
|
Accounts
payable
|
451 | (175 | ) | |||||
|
Accrued
expenses, accrued compensation, other current and other
liabilities
|
3,365 | 3,139 | ||||||
|
Income
taxes payable and income taxes receivable
|
1,784 | (2,744 | ) | |||||
|
Net
cash provided by operating activities
|
22,587 | 21,015 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment
|
(6,676 | ) | (3,727 | ) | ||||
|
Proceeds
from sale of assets
|
33 | 74 | ||||||
|
Acquisition
of business, net of cash acquired
|
(27,037 | ) | (100 | ) | ||||
|
Net
cash used in investing activities
|
(33,680 | ) | (3,753 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Borrowings
from revolver
|
62,746 | - | ||||||
|
Borrowings
from long-term debt
|
20,000 | - | ||||||
|
Repayments
of short-term debt, revolver, and capital leases
|
(59,700 | ) | (8,549 | ) | ||||
|
Repayments
of long-term debt
|
(8,145 | ) | (5,801 | ) | ||||
|
Tax
benefit from exercise of stock options
|
122 | - | ||||||
|
Payment
of deferred financing costs
|
(1,568 | ) | (832 | ) | ||||
|
Proceeds
from exercise of options and employee stock purchase plan
|
4,818 | 56 | ||||||
|
Net
cash provided by (used in) financing activities
|
18,273 | (15,126 | ) | |||||
|
Net
cash provided by operating activities of discontinued
operations
|
- | 141 | ||||||
|
Net
cash provided by discontinued operations
|
- | 141 | ||||||
|
Net
change in cash and cash equivalents
|
7,180 | 2,277 | ||||||
|
Effect
of exchange rate changes on cash
|
371 | 444 | ||||||
|
Cash,
beginning of year (As Adjusted)
|
23,165 | 22,277 | ||||||
|
Cash,
end of period
|
$ | 30,716 | $ | 24,998 | ||||
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
Reconciliation
of Non-GAAP Financial Measures (Unaudited):
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2010
|
(As Adjusted)
2009
|
2010
|
(As Adjusted)
2009
|
|||||||||||||
|
(In
thousands, except percentages)
|
||||||||||||||||
|
Income
from continuing operations, net of income taxes
|
$ | 7,499 | $ | 3,264 | $ | 19,843 | $ | 1,856 | ||||||||
|
Add
Back:
|
||||||||||||||||
|
Interest
|
753 | 905 | 2,395 | 3,092 | ||||||||||||
|
Provision
for income taxes
|
893 | (196 | ) | 3,453 | (271 | ) | ||||||||||
|
Depreciation
and amortization
|
4,106 | 3,630 | 11,226 | 10,835 | ||||||||||||
|
Foreign
currency exchange loss (gain)
|
(63 | ) | (64 | ) | 134 | (1,037 | ) | |||||||||
|
Non-cash
equity based compensation
|
974 | 865 | 2,231 | 2,275 | ||||||||||||
|
ITAR
legal fees
|
14 | 300 | 32 | 458 | ||||||||||||
|
Adjusted
EBITDA
|
$ | 14,176 | $ | 8,704 | $ | 39,314 | $ | 17,208 | ||||||||
|
As
% of Net Sales
|
19.8 | % | 16.2 | % | 19.9 | % | 11.8 | % | ||||||||
|
Free
Cash Flow
|
||||||||||||||||
|
Net
cash provided by operating activities from continuing
operations
|
$ | 9,834 | $ | 5,070 | $ | 22,587 | $ | 21,015 | ||||||||
|
Purchases
of property and equipment
|
(1,932 | ) | (1,443 | ) | (6,676 | ) | (3,727 | ) | ||||||||
|
Free
Cash Flow
|
$ | 7,902 | $ | 3,627 | $ | 15,911 | $ | 17,288 | ||||||||
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 provide important supplemental information to
investors.
The
financial information accompanying this press release includes the Company’s
earnings before interest, income taxes, depreciation, amortization, foreign
currency transaction gains/losses, non-cash equity based compensation and
certain legal expenses, or “Adjusted EBITDA” and “Free Cash
Flow.” Adjusted EBITDA and Free Cash Flow are non-GAAP measures that
are not in accordance with, or an alternative to, measures prepared in
accordance with GAAP and may be different from Adjusted EBITDA and Free Cash
Flow measures used by other companies. Adjusted EBITDA is derived by
adding interest, taxes, depreciation, amortization, foreign currency transaction
gains/losses, non-cash equity based compensation and certain legal expenses 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, interest and certain legal expenses, which vary greatly period to
period. Legal expenses relate to the Company’s previously announced
investigation into certain export compliance issues. The Company
believes that this measure is important to investors because it more accurately
represents the leverage effect of fixed expenses. The Company
believes Free Cash Flow is also important to investors as it 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.
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com
These
non-GAAP financial measures are used by management 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.
*****End
of Press Release*****
Measurement
Specialties
Inc. • 1000 Lucas
Way • Hampton,
VA 23666 • www.meas-spec.com