Measurement Specialties Announces First Quarter Results
HAMPTON, Va., Aug. 9, 2005 -- Measurement Specialties, Inc. (AMEX:MSS) , a designer and manufacturer of sensors and sensor-based consumer products, announced results for the three months ended June 30, 2005 (first fiscal quarter 2006).
The Company reported income from continuing operations for the three months ended June 30, 2005 of $2.9 million, or $0.21 per diluted share, as compared to $3.3 million, or $0.23 per diluted share for the same period last year. Sales increased 44.6% over the same period last year, from $28.0 million to $40.5 million, as a result of the FY05 acquisitions and continued organic growth.
Frank Guidone, Company CEO commented, "Sensor sales were slightly below our previous guidance of $26 million, due to some new program delays. However, higher than expected sensor gross margin offset the sales shortfall. Consumer sales were slightly above our previous guidance, while mix and continued pricing pressure led to weaker than expected gross margin. On a consolidated basis, gross margin was 39.7%, consistent with our guidance of 39%-40%. Bottom line, results for the quarter were generally in line with our expectations. Looking forward to the second quarter, continued program delays in the sensor division, a decline in the automotive forecast and stronger dollar to euro exchange rate will push sales to the low end -- or slightly below -- our previous guidance to $29-$30 million. In consumer, we anticipate slightly stronger sales in the quarter than previously discussed, to $13-$14 million."
For the three months ended June 30, 2005, net sales increased 44.6% to $40.5 million, as compared to $28.0 million for the three months ended June 30, 2004. For the three months ended June 30, 2005, net sales in the Sensor division increased 47.5% to $25.3 million, as compared to $17.1 million for the three months ended June 30, 2004, and net sales in the Consumer Products division increased 40.0% to $15.2 million for the current fiscal quarter, as compared to $10.9 million for the three months ended June 30, 2004.
Gross margin for the three months ended June 30, 2005 declined to 39.7%, as compared to 44.9% for the three months ended June 30, 2004. Gross margin in the Sensor division declined to 49.7% for the three months ended June 30, 2005, as compared to 56.9% for the same period last year, largely due to automotive price concessions and sales mix shifting to lower margin products in automotive and disposable medical markets. Gross margin in the Consumer Products division declined to 23.2% for current fiscal quarter, as compared to 24.3% for the same period last year.
Excluding amortization of intangible assets, total operating expense for the three months ended June 30, 2005 increased to $11.2 million, as compared to $8 million for the same period last year. Excluding expenses associated with the acquisitions completed in FY05, total operating expense increased to $8.5 million. Included in operating expense for the three months ended June 30, 2005 is $0.4 million in severance and move expenses associated with the acquisition integration and consolidation efforts.
The Company filed its Form 10-Q for the three months ended June 30, 2005 on Tuesday, August 9th. 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 Wednesday, August 10th at 11 a.m. EDT to answer questions regarding the quarterly results reported in our Quarterly Report on Form 10-Q for fiscal quarter ended June 30, 2005. US dialers: (800) 288-8967; International dialers: (612) 234-9960. Interested parties may also listen via the Internet at: http://www.vcall.com/. The call will be available for replay for 30 days through AT&T by dialing 800 475-6701 (US dialers), and entering access code 792256, and on Vcall.
About MSI. Measurement Specialties, Inc. designs and manufactures sensors and sensor-based consumer products. The Sensor division, also known as MSI Sensors, produces a wide variety of sensors and transducers to measure precise ranges of physical characteristics such as pressure, force, vibration, position, humidity and photo optics. MSI Sensors uses multiple advanced technologies -- including piezoresistive, electro-optic, electro-magnetic, capacitive, application specific integrated circuits (ASICs), micro-electromechanical systems (MEMS), piezoelectric polymers and strain gauges -- to engineer sensors that operate precisely and cost effectively. The Consumer division produces OEM bathroom scales, Accutire(R) brand tire pressure gauges and other products.
Company Contact: Frank Guidone, CEO, (757) 766-4400 Investor Contact: Aimee Boutcher or Daniel Boutcher, (973) 239-2878
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. The forward-looking statements above 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 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 issue.
MEASUREMENT SPECIALTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months
($ in thousands, except share and ended June 30,
per share amounts) 2005 2004
Net sales $40,507 $28,020
Cost of goods sold 24,416 15,443
Gross profit 16,091 12,577
Operating expenses (income):
Selling, general and administrative 10,292 7,266
Research and development 939 809
Customer funded development (56) (95)
Amortization of acquired intangibles 428 8
Total operating expenses 11,603 7,988
Operating income 4,488 4,589
Interest expense (income), net 472 (11)
Other expense (income) 43 (9)
Income before income taxes 3,973 4,609
Income taxes 1,037 1,314
Net income $2,936 $3,295
Net income per common share - Basic $0.22 $0.25
Net Income per common share - Diluted $0.21 $0.23
Weighted average shares outstanding - Basic 13,582,488 13,267,552
Weighted average shares outstanding - Diluted 14,302,108 14,195,676
MEASUREMENT SPECIALTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, March 31,
($ IN THOUSANDS) 2005 2005
ASSETS
Current assets:
Cash and cash equivalents $5,853 $4,402
Accounts receivable, trade, net of allowance
for doubtful accounts of $452 and $390,
respectively 17,034 20,369
Inventories 23,180 20,282
Deferred income taxes 4,252 4,284
Prepaid expenses and other current assets 3,100 3,029
Total current assets 53,419 52,366
Property and equipment, net 15,039 14,924
Other assets:
Goodwill 40,853 40,010
Acquired intangible assets, net 9,873 10,583
Deferred income taxes 7,145 7,190
Other assets 1,448 931
Total other assets 59,319 58,714
Total Assets $127,777 $126,004
MEASUREMENT SPECIALTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, March 31,
($ IN THOUSANDS, EXCEPT SHARE AMOUNTS) 2005 2005
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of promissory notes payable $1,000 $1,200
Current portion of deferred acquisition payments 1,720 1,720
Short-term debt 674 2,085
Current portion of long-term debt 2,247 2,310
Accounts payable 15,635 13,394
Accrued expenses and other current liabilities 4,454 4,525
Accrued compensation 1,786 2,231
Income taxes payable 2,363 1,165
Deferred gain on sale of assets, current 2,664 2,925
Total current liabilities 32,543 31,555
Other liabilities:
Deferred gain on sale of assets, net current portion - 839
Promissory notes payable, net current portion 850 1,100
Long-term debt, net of current portion 18,291 18,928
Deferred acquisition payments, net current portion 3,950 4,069
Other liabilities 2,500 1,497
Total liabilities 58,134 57,988
Commitments and contingencies
Shareholders' equity:
Serial preferred stock; 221,756 shares authorized;
none outstanding - -
Common stock, no par; 20,000,000 shares authorized;
13,617,944 and 13,257,084 shares issued and
outstanding, respectively 5,502 5,502
Additional paid-in capital 56,520 56,285
Accumulated earnings 9,665 6,729
Accumulated other comprehensive loss (2,044) (500)
Total shareholders' equity 69,643 68,016
$127,777 $126,004