SI Technologies Reports FY2003 Operating Results
TUSTIN, Calif., Nov. 19, 2003 -- SI Technologies, Inc. , which designs, manufactures and markets high- performance industrial sensors, weighing and factory automation equipment and systems, today announced its operating results for the quarter and fiscal year ended July 31, 2003.
For the fourth quarter of FY2003, which ended July 31, 2003, net sales increased slightly to approximately $8,318,000, compared with approximately $8,304,000 in the quarter ended July 31, 2002. The Company reported net income of $287,000, or $0.06 per diluted share, in the quarter ended July 31, 2003 (including an income tax benefit of $1,049,000), versus net income of $957,000, or $0.27 per diluted share (including an income tax benefit of $592,000) in the fourth quarter of FY2002. A pretax loss of ($762,000) was incurred in the fourth quarter of FY2003, versus pretax income of $365,000 in the final three months of FY2002. Results for the final quarter of FY2003 included a restructuring charge of $486,000, representing the balance of lease payments due on a plant in Maryland that the Company closed earlier but has been unable to sublease to a third party.
For the fiscal year ended July 31, 2003, net sales increased 1.3% to approximately $33,047,000, compared with approximately $32,613,000 in FY2002. Net income totaled $1,197,000, or $0.32 per diluted share, in FY2003 (including an income tax benefit of $1,078,000), compared with net income of $1,673,000, or $0.47 per diluted share (including an income tax benefit of $540,000), in the previous fiscal year. Pretax income declined to $119,000 in the most recent fiscal year, versus pretax income of $1,133,000 in the fiscal year ended July 31, 2002. FY2003 pretax income was impacted by the abovementioned restructuring charge totaling $486,000 in the final quarter of the year.
"Globally, the Industrial Measurement and Industrial Automation markets in which we compete remained soft and highly competitive during Fiscal 2003," stated Rick Beets, President and Chief Executive Officer of SI Technologies, Inc. "As a result of strategic initiatives undertaken approximately three years ago, we have made significant progress in reducing overhead and product costs and believe the Company is favorably positioned to leverage these operating benefits once global capital spending markets improve. In order to expand our ability to compete effectively, we increased our sales and marketing efforts, as well as our research and development activities, in Fiscal 2003, even though we were unable to recoup such costs in the short term through increased product shipments."
"Manufacturing overhead expenses have been reduced by approximately $2.6 million annually since Fiscal 2001 through the consolidation of facilities and outsourcing the manufacturing of certain strategic materials and components," continued Beets. "However, a soft industrial real estate market has prevented us from downsizing our operations in Southern California as planned. I am pleased to report that the lease on our Tustin, California manufacturing plant expires in September 2004. A subsequent move into more appropriately sized facilities late this fiscal year should result in additional cost savings and allow us to fully complete our cost reduction initiatives."
The Company's current bank credit facility expires on January 2, 2004. Management is currently negotiating with other financing sources to replace the current bank credit agreement with the financial resources necessary to support the Company's long-term operational objectives.
SI Technologies, Inc. is a leading designer, manufacturer and marketer of high-performance industrial sensors/controls, weighing and factory automation systems and related products. Its proprietary products enjoy leading positions in their respective markets, while sharing common technologies, manufacturing processes, and customers. The Company is positioned as an integrator of technologies, products and companies that are involved in the handling, measurement and inspection of goods and materials. SI Technologies' products are used throughout the world in a variety of industries, including aerospace, aviation, food processing and packaging, forestry, manufacturing, mining, transportation, warehousing/distribution, and waste management. The Company is headquartered in Tustin, California, and its common stock is traded on Nasdaq under the symbol "SISI."
This press release includes statements which may constitute "forward- looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward- looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
For further information, please contact:
Rick Beets, President and CEO of SI Technologies at 714-505-6483
Or
RJ Falkner & Company, Inc., Investor Relations Counsel at 800-377-9893 or via
email at info@rjfalkner.com
SI TECHNOLOGIES, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(In Thousands Except Share Data)
Three Months Ended July 31
2003 2002
Net Sales $8,318 $8,304
Cost of Sales 5,743 5,037
Gross Profit 2,575 3,267
Selling, General & Admin. Expenses 2,199 2,261
Research, Develop. & Engineering Expenses 440 377
Amortization of Intangibles (15) 90
Restructuring Charges 486 --
3,110 2,728
Earnings (Loss) from Operations (535) 539
Interest Expense (238) (214)
Other Income, net 11 40
Earnings (Loss) Before Income Taxes (762) 365
Income Tax Benefit 1,049 592
Net Income $287 $957
Net Earnings Per Common Share:
Basic $0.07 $0.27
Diluted $0.06 $0.27
Weighted Average Shares Outstanding:
Basic 3,967,595 3,579,935
Diluted 4,097,378 3,584,571
SI TECHNOLOGIES, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(In Thousands Except Share Data)
Twelve Months Ended July 31
2003 2002
Net Sales $33,047 $32,613
Cost of Sales 21,508 20,894
Gross Profit 11,539 11,719
Selling, General & Admin. Expenses 8,537 8,023
Research, Develop. & Engineering Expenses 1,565 1,388
Amortization of Intangibles 9 365
Restructuring Charges 486 --
10,597 9,776
Earnings from Operations 942 1,943
Interest Expense (976) (904)
Other Income, net 153 94
Earnings Before Income Taxes 119 1,133
Income Tax Benefit 1,078 540
Net Income $1,197 $1,673
Net Earnings Per Common Share:
Basic $0.33 $0.47
Diluted $0.32 $0.47
Weighted Average Shares Outstanding:
Basic 3,684,926 3,579,935
Diluted 3,752,837 3,584,571
SI TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Data)
July 31, July 31,
2003 2002
Current Assets:
Cash $284 $238
Trade Accounts Receivable, net 5,516 5,570
Inventories, net 10,234 9,665
Other Current Assets 337 842
Total Current Assets 16,371 16,315
Property and Equipment, net 1,679 1,968
Deferred Income Taxes 1,509 446
Goodwill and Other Intangibles, net 7,384 7,053
TOTAL ASSETS $26,943 $25,782
Current Liabilities:
Revolving lines of credit $8,242 $7,300
Current Maturities of Long-term Debt 1,898 2,148
Accounts Payable 3,050 3,307
Accrued Liabilities 1,557 2,435
Total Current Liabilities 14,747 15,190
Long-term Debt, less current maturities 3,366 4,039
Other Liabilities 408 360
Stockholders' Equity:
Common Stock ($.01 par value, authorized
10,000,000 shares, 4,026,996 and 3,579,935
shares issued and outstanding in 2003
and 2002, respectively) 40 36
Additional Paid-in Capital 11,163 10,377
Accumulated Deficit (2,798) (3,995)
Accumulated other comprehensive loss 17 (225)
Total Stockholders' Equity 8,422 6,193
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $26,943 $25,782