Sonics & Materials Reports Fiscal 1998 Year End Results
13 October 1998
Sonics & Materials Reports Fiscal 1998 Year End Results
NEWTOWN, Conn.--Oct. 13, 1998--Sonics & Materials, Inc. today reported that revenues for the Fiscal Year 1998, ended June 30, increased 11.6% over Fiscal Year 1997. Revenues for Fiscal Year 1998 were $12,080,552 compared to $10,827,525 for Fiscal Year 1997. Revenues for the fourth quarter of Fiscal Year 1998 were $3,158,513 compared to $3,062,703 for the fourth quarter of Fiscal Year 1997. The Company also reported a loss of $0.11 per share for the Fiscal Year 1998 compared to earnings of $0.01 per share for Fiscal Year 1997. The earnings per share calculation is based on the weighted average number of common and common equivalent shares (warrants and options) outstanding during the period. The Company had a net loss for Fiscal Year 1998 of $396,469 as compared to net income of $29,054 for Fiscal Year 1997.Mr. Robert Soloff, Sonics & Materials' President and Chief Executive Officer stated, "Sonics' improved sales performance is the result of the acquisition and consolidation of Tooltex, Inc., our wholly owned subsidiary in Grove City, Ohio. Sonics' sales performance was adversely affected by reduced sales in its Asian Market, as well as a certain amount of lost sales due to the downtime associated with the move to its new facility." Mr. Soloff added, "The decrease in Sonics' net income was in part attributable to moving expenses incurred this year as well as an expense relating to a prior years audit by the California State Board of Equalization for the period of 1986 to 1995."
Mr. Soloff also noted, "Sonics' recently implemented effective cost cutting measures while maintaining the Company's ability to produce quality products and provide exceptional service." He stated, "The Company has strengthened its domestic sales force, and continues to focus on top line growth while emphasizing streamlined productivity."
Commenting on Sonics' new manufacturing facility, Mr. Soloff added, "Sonics' move to its corporate headquarters enabled us to consolidate our product development, engineering, manufacturing, marketing, and administration units into a more dynamic and cohesive enterprise. It is already apparent to the Company that the move has allowed for enhanced communication and efficiencies. It has provided us with a show place for prospective customers and a pleasant and productive environment for the employees."
Sonics maintains that any statements that are not of historical fact are forward-looking statements that are subject to a number of important risks and uncertainties that could cause actual results to differ materially. Specifically, any forward-looking statements related to Sonics' objectives of future growth, profitability and financial returns are subject to a number of risks and uncertainties, including, but not limited to, risks related to a growing market demand for Sonics' existing and new products, continued growth in sales and market share of Sonics' products, pricing, market acceptance of existing and new products, fluctuation in the sales product mix, general economic conditions, competitive products, and product and technology development.
Sonics & Materials manufactures ultrasonic welding equipment, spin welding equipment, and vibration welding equipment, all of which are used in the bonding of plastics. The Company also manufactures ultrasonic liquid processors. The Company's equipment is installed at locations around the world, serving such diverse industries as automotive, electronics, textiles, medical device, packaging, and a wide range of other manufacturing and research applications. Its headquarters are in Newtown, Connecticut. The Company also has a division in Pennsylvania, a Mid-Western Regional Technical Office in Naperville, Illinois, a branch office in Gland, Switzerland, and a subsidiary in Grove City, Ohio.
SONICS & MATERIALS, INC. AND ITS SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 271,593 $ 503,305
Short-term investments, including
restricted funds of $400,000 at
June 30, 1998 1,665,470 750,000
Accounts receivable, net of allowance
for doubtful accounts of $45,000 and
$112,000 in 1997 and 1998 1,854,118 2,370,960
Inventories 3,718,250 4,457,841
Prepaid income taxes and income
tax refunds receivable 150,061 96,171
Deferred income taxes 80,000
Other current assets 137,562 33,116
Total current assets 7,877,054 8,211,393
PROPERTY AND EQUIPMENT - NET 364,354 4,409,920
GOODWILL - net of accumulated
amortization of $55,503 1,054,547
RESTRICTED CASH FROM
INDUSTRIAL REVENUE BOND 309,371
OTHER ASSETS - NET 917,709 692,584
Total assets $ 9,159,117 $14,677,815
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - bank $ 500,000 $1,465,101
Current maturities of long-term debt 116,600 354,978
Accounts payable 717,509 1,004,351
Customer advances 87,144 327,355
Commissions payable 235,203 123,676
Other accrued expenses
and sundry liabilities 278,310 600,270
Total current liabilities 1,934,766 3,875,731
LONG-TERM DEBT 406,911 4,345,700
Total liabilities 2,341,677 8,221,431
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock - par value $.03 per share;
authorized 10,000,000 shares;
issued and outstanding 3,520,100
shares at June 30, 1997 and 1998 105,603 105,603
Additional paid-in capital 6,539,597 6,575,010
Retained earnings (accumulated deficit) 172,240 (224,229)
Total stockholders' equity 6,817,440 6,456,384
Total liabilities and
stockholders' equity $9,159,117 $14,677,815
SONICS & MATERIALS, INC. AND ITS SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Years ended June 30,
1997 1998
Net Sales $ 10,827,525 $ 12,080,552
Cost of sales 6,410,584 7,064,259
Gross Profit 4,416,941 5,016,293
Operating expenses:
Selling 3,157,193 3,396,209
General and administrative 823,767 1,464,088
Research and development 418,465 544,452
Total operating expenses 4,399,425 5,404,749
Other income (expenses):
Interest expense (79,565) (219,416)
Interest and other income 110,471 250,973
Total other income (expenses) 30,906 31,557
Income (loss) before income taxes 48,422 (356,899)
Provision for income taxes 19,368 39,570
Net income (loss) $ 29,054 $ (396,469)
Basic net income
(loss) per share $ 0.01 $ (0.11)
Diluted net income
(loss) per share $ 0.01 $ (0.11)
Shares used in basic
per share computation 3,505,383 3,520,100
Incremental shares from
issuance of common stock
options and warrants 627,904 --
Shares used in diluted
per share computation 4,133,287 3,520,100