Lowrance Third Quarter Sales Increase 15% to Record $53,200,000; Announces $0.30 Per Share Cash Dividend; April 30, 2005, Backlog More than Doubles to $14,850,000
TULSA, Okla.--May 3, 20051, 2005--Lowrance Electronics, Inc. today announced that net income for the third quarter ended April 30, 2005, was $6,440,000, or $1.25 per diluted share, compared to $6,671,000, or $1.68 per diluted share, as restated, in the same quarter last year. Net sales increased 15% to a third quarter record $53,200,000, compared to sales of $46,296,000, in the third quarter last year.For the nine months ended April 30, 2005, net income increased 3% to $6,903,000, or $1.41 per diluted share, compared to $6,709,000, or $1.69 per diluted share, as restated, in the same period last year. Net sales for the nine month period increased 22% to $103,321,000, compared to $84,800,000 a year earlier.
"Record third quarter and year-to-date sales are due to the introduction this year of over 50 new SONAR and GPS products, including our new turn-by-turn automotive GPS products," said Darrell Lowrance, president and CEO.
Lowrance noted that, as expected, the Company's third quarter gross margin declined to 40% of sales from 45% of sales in the same quarter last year. "In the first nine months of fiscal 2005, we have increased research and development, advertising, sales and marketing expenses associated with the launch of the Company's new automotive GPS products. These efforts have resulted in the award-winning iWay 500c, which recently received the Editor's Choice award from PC Magazine. In addition, our strategy to expand the distribution of this product beyond our traditional outdoor specialty markets has resulted in the recent addition of over 1,300 Staples stores nationwide. We are particularly excited that more than 1,100 of these stores will present the iWay 500c in demonstration mode, enabling direct consumer interaction," said Lowrance.
The Company also announced a $0.05 increase in its dividend, to $0.30 per share, payable on June 17, 2005, to shareholders of record on June 10, 2005.
Order backlog increased 118% to approximately $14,850,000 at April 30, 2005, compared to backlog of approximately $6,800,000 at April 30, 2004.
About Lowrance Electronics
Lowrance Electronics, Inc. (www.lowrance.com) designs, manufactures and markets SONAR and GPS products, digital mapping systems and accessories under the brand names "Lowrance"(R) and "Eagle"(R) Electronics, "Lowrance Automotive(TM)" and "Lowrance Avionics"(R). These products are used in the following primary product markets: marine, general consumer (which includes handheld GPS outdoor recreational use and voice turn-by-turn navigational systems for aftermarket automotive use) and aviation.
This press release may include certain statements concerning expectations for the future that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that are difficult to predict and many of which are beyond management's control, including factors discussed in the Company's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. While the Company makes these statements and projections in good faith, neither the Company nor its management can guarantee that anticipated future results will be achieved. The Company undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
LOWRANCE ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except per share information)
Three Months Ended Nine Months Ended
April 30, April 30,
2005 2004 2005 2004
(As (As
Restated) Restated)
NET SALES $53,200 $46,296 $103,321 $84,800
COST OF SALES 32,003 25,640 63,259 49,029
Gross profit 21,197 20,656 40,062 35,771
OPERATING EXPENSES:
Selling and administrative 10,055 9,206 24,617 21,277
Research and development 1,417 1,316 4,641 3,760
Total operating expenses 11,472 10,522 29,258 25,037
Operating income 9,725 10,134 10,804 10,734
OTHER EXPENSES:
Interest expense 361 187 705 558
Other, net 24 48 80 210
Total other expenses 385 235 785 768
INCOME BEFORE INCOME TAXES 9,340 9,899 10,019 9,966
PROVISION FOR INCOME TAXES 2,900 3,228 3,116 3,257
NET INCOME $6,440 $6,671 $6,903 $6,709
NET INCOME PER SHARE
BASIC $1.25 $1.77 $1.41 $1.78
DILUTED $1.25 $1.68 $1.41 $1.69
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
BASIC 5,135 3,761 4,886 3,761
DILUTED 5,135 3,982 4,886 3,975
DIVIDENDS NONE NONE $940 $940
OTHER COMPREHENSIVE INCOME
NET OF TAX:
NET INCOME $6,440 $6,671 $6,903 $6,709
FOREIGN CURRENCY TRANSLATION
ADJUSTMENT 32 (66) 210 155
COMPREHENSIVE INCOME $6,472 $6,605 $7,113 $6,864
LOWRANCE ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (Unaudited)
April 30, April 30, July 31,
ASSETS 2005 2004 2004
(As
Restated)
CURRENT ASSETS:
Cash and cash equivalents $3,494 $1,193 $1,412
Accounts receivable, less allowances 30,165 21,406 10,276
Inventories 43,473 22,967 23,821
Current deferred income taxes 1,120 1,789 1,107
Prepaid income taxes 233 148 --
Prepaid expenses 2,766 1,360 2,041
Total current assets 81,251 48,863 38,657
PROPERTY, PLANT AND EQUIPMENT, net 18,931 9,745 10,005
OTHER ASSETS 427 64 81
TOTAL ASSETS $100,609 $58,672 $48,743
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $742 $1,842 $1,874
Accounts payable 9,436 8,586 6,072
Accrued liabilities:
Compensation and benefits 3,044 2,988 3,175
Product costs 2,093 2,291 1,968
Income taxes 871 2,312 671
Other 1,609 1,181 1,119
Total current liabilities 17,795 19,200 14,879
LONG-TERM DEBT, less current maturities 21,450 12,965 6,040
DEFERRED INCOME TAXES 1,532 959 1,169
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value,
10,000,000 shares authorized, 5,135,516
shares issued and outstanding at April
30, 2005; 3,761,196 shares issued and
outstanding at April 30, 2004, and
July 31, 2004 514 377 377
Paid-in capital 34,316 7,434 7,449
Retained earnings 24,684 17,615 18,721
Accumulated other comprehensive income 318 122 108
Total stockholders' equity 59,832 25,548 26,655
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $100,609 $58,672 $48,743