BEI Technologies Reports Fiscal 1998 Q4 and Year-End Results
17 November 1998
BEI Technologies Reports Fiscal 1998 Fourth-Quarter and Year-End Results
SAN FRANCISCO, Nov. 17 -- BEI Technologies, Inc.
reported that for the fiscal 1998 year ended October 3, 1998,
consolidated after-tax income from continuing operations was $2,515,000, or
$0.35 per share, compared to $2,997,000, or $0.42 per share, in fiscal year
1997. Net sales from continuing operations for the year (53 weeks in FY 1998)
increased 22% to $124.3 million compared with $101.6 million in fiscal 1997,
according to Charles Crocker, chairman, president and chief executive officer.
Crocker commented, "Commercial sales in the year were approximately
$102.8 million, of which sales to the automotive industry increased to
approximately $20.2 million. In 1997, commercial sales were $79.0 million, of
which sales for automotive applications were $11.8 million. Sales to
non-automotive commercial customers in fiscal 1998 were led by strong
increases in the first three quarters compared to the prior year, but slower
growth in the fourth quarter moderated the full-year increase. Sales from
continuing operations for government programs in the year declined
approximately 4% from the prior year to approximately $21.5 million."
FOURTH-QUARTER RESULTS
For the fiscal 1998 fourth quarter ended October 3, 1998, consolidated
after-tax net income from continuing operations was $154,000, or $0.02 per
share, compared with $1,202,000, or $0.17 per share, in fiscal 1997. Net
sales increased approximately 30% to $35.3 million from $27.1 million in the
comparable quarter of the prior year.
Crocker continued, "Sales of sensors for automotive applications accounted
for approximately $5.0 million of the sales gain and an acquisition during the
quarter accounted for another $1.2 million of the sales increase over the same
quarter in the prior year. Operating income was $955,000, down from
$2,542,000 in the year earlier quarter. The decline in operating income was
principally attributable to low gross profit margins on increased sales of the
Company's GyroChip(R) sensors for automotive applications. Start-up costs
associated with training new workers, inefficiencies due to customer delays --
including the GM strike -- and low production yields were factors contributing
to low gross profit margins on the GyroChip sensors. Another significant
expense recognized in the fourth quarter was a provision for the excess costs
estimated to complete a technically challenging military program. Selling,
general and administrative expense (SG&A) rose primarily because of legal
expenses in connection with the completion of several pending issues. SG&A as
a percentage of sales, however, decreased 1.8 percentage points."
With respect to other developments, Crocker added, "We remain committed to
our goal of progressively reducing the cost of our automotive products.
Progress in reducing manufacturing costs of these products was visible in our
September results, and we will continue these efforts in the quarters ahead.
Our recently announced exclusive agreement with Akebono Brake Industry Co.,
Ltd. to distribute BEI GyroChip sensors for the automotive industry in Japan
and other Asian countries is a positive sign. We look forward to working with
Akebono to develop opportunities in this significant market. Based on current
visibility of customer requirements, we continue to foresee the opportunity
for expanded sales and earnings from automotive applications in fiscal 1999
and beyond, although we remain cautious about prospects for growth in our
non-automotive business in fiscal 1999."
"We have also taken steps to provide for the Company's ongoing financial
needs. The Company recently concluded negotiations for $35 million in new
senior notes to replace the remaining $13.4 million balance of senior notes
issued to other lenders in 1993. The new notes have an average maturity of
five years at 6.70%."
BEI Technologies, Inc., through its principal subsidiary BEI Sensors &
Systems Company, is an established manufacturer of electronic sensors and
motion control products used for factory and office automation, medical and
scientific equipment, military, aviation and space systems, and transportation
equipment including automobiles, trucks and off-road equipment. BEI has
recently expanded its production of micromachined quartz yaw rate sensors used
in advanced vehicle stability control systems. BEI also manufactures
electronic steering wheel position sensors, seat-memory modules, throttle
position and pressure sensors and other devices used in automotive systems.
GyroChip(R) is a registered trademark of BEI Sensors & Systems Company.
Except for historical information, this news release may be deemed to
contain forward-looking statements that involve risks and uncertainties,
including timely development, acceptance and pricing of new products; impact
of competitive products and pricing; the ability to manufacture products in
sufficient volume on an efficient and timely basis; general economic
conditions as they affect the Company's customers, as well as other risks
detailed from time to time in the Company's SEC reports, including the
Company's Form 10-K Annual Report for fiscal 1997.
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Unaudited
October 3, September 27,
1998 1997
ASSETS
Cash and cash equivalents $3,557 $5,034
Investments 5,419 --
Trade receivables - net 23,475 17,241
Inventories - net 29,623 22,656
Other current assets 5,835 5,618
Current assets of
discontinued operations -- 1,418
Total current assets 67,909 51,967
Property, plant and equipment, net 30,619 25,361
Tradenames and patents 1,583 1,753
Acquired technology 5,015 5,977
Goodwill 1,876 654
Other assets, net 2,513 2,072
Non-current assets of
discontinued operations -- 1,625
Total assets $109,515 $89,409
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $13,014 $6,317
Accrued expenses and
other liabilities 18,437 10,497
Current portion of long-term debt 5,791 5,628
Current liabilities of
discontinued operations -- 2,558
Total current liabilities 37,242 25,000
Long-term debt, less current portion 31,700 27,508
Other liabilities 379 284
Stockholders' equity 40,194 36,617
$109,515 $89,409
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
Unaudited
Quarter Ended Year Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
1998 1997 1998 1997
Net sales $35,263 $27,102 $124,264 $101,539
Cost of sales 25,504 16,908 85,562 65,291
9,759 10,194 38,702 36,248
Selling, general and
administrative expense 7,095 5,945 25,491 24,959
Research, development
and related expense 1,709 1,707 6,410 4,866
Income from operations 955 2,542 6,801 6,423
Interest expense (822) (549) (2,924) (1,942)
Other income 126 58 445 304
Income from continuing
operations before
income taxes 259 2,051 4,322 4,785
Provision for income taxes 105 849 1,807 1,788
Income from continuing
operations 154 1,202 2,515 2,997
Income from discontinued
operations, net of
income taxes -- 198 142 1,586
Net income $154 $1,400 $2,657 $4,583
BASIC EARNINGS PER
COMMON SHARE
Earnings from continuing
operations $0.02 $0.18 $0.36 $0.44
Earnings from discontinued
operations -- 0.03 0.02 0.23
Earnings per share $0.02 $0.21 $0.38 $0.67
Weighted average
shares outstanding 7,115 6,822 7,012 6,818
DILUTED EARNINGS PER
COMMON AND COMMON
EQUIVALENT SHARE
Earnings from continuing
operations $0.02 $0.17 $0.35 $0.42
Earnings from discontinued
operations -- 0.03 0.02 0.23
Earnings per share $0.02 $0.20 $0.37 $0.65
Weighted average
shares outstanding 7,265 7,099 7,274 7,058
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
Year Ended
Oct. 3, Sept. 27,
1998 1997
Net income $2,657 $4,583
Adjustments to reconcile
net income to net cash provided
by operating activities:
Depreciation and amortization 6,466 5,940
Other (5,958) (4,803)
Net cash provided by
operating activities 3,165 5,720
Net cash used in
investing activities (8,754) (6,733)
Net cash provided (used)
by financing activities 4,112 (2,154)
Net decrease in cash and
cash equivalents (1,447) (3,167)
Cash and cash equivalents
at beginning of period 5,034 8,201
Cash and cash equivalents
at end of period $3,557 $5,034