Sheldahl Reports Improved First Quarter Results
22 December 1998
Sheldahl Reports Improved First Quarter Results
NORTHFIELD, Minn., Dec. 22 -- Sheldahl, Inc. ,
today reported improved results for its fiscal 1999 first quarter ended
November 27, 1998. For the period, the Company posted sales of $28.5 million,
down 1.8 percent from the $29.0 million reported for the same quarter in
fiscal 1998. However, pretax operating results for the fiscal 1999 first
quarter improved by $1.2 million to a loss of $2.3 million, compared to an
operating loss of $3.5 million for the same period last year. For the most
recent quarter, the Company posted a net loss to common shareholders of
$3.0 million, or $0.29 per share (after dividends for preferred shares), as
compared to a net loss of $7.6 million, or $0.84 per share, for the fiscal
1998 first quarter, including a $5.2 million charge related to the adoption of
a new accounting method.
Edward L. Lundstrom, Sheldahl's President said, "The most recent quarter
showed an improvement when compared to results for the first and fourth
quarters of fiscal 1998. This was largely due to the restructuring and cost
reductions implemented during the second half of the last fiscal year. Our
automotive demand remains solid and the datacom business is growing with the
added volume from Seagate for the Company's Novaflex(R) VHD product line. As a
result, our core business performance improved; pretax operating results
increased to $2.6 million, as compared to $825,000 a year ago, on slightly
lower sales revenue."
He added, "We continue to make progress at our Longmont, Colo. plant. We
delivered the Seagate volume production order on time and ahead of target
production yields -- testimony to the fact that our proprietary processes are
in place and working at the facility. We are also delivering actual production
or qualification product to several other major customers including ASAT,
Hana, Hewlett Packard, STATS, and Texas Instruments."
Lundstrom concluded, "Clearly, our core business cost reductions are
having the desired effect and margins are improving. We remain optimistic that
additional volume production will be realized at our Longmont plant early in
calendar-year 1999. We are well-positioned to continue to achieve improved
results throughout fiscal 1999."
Sheldahl is a leading producer of high-density substrates, high-quality
flexible printed circuitry, and flexible laminates primarily for sale to the
automotive electronics and datacommunications markets. The Company, which is
headquartered in Northfield, Minn., has operations in Northfield; Longmont,
Colo.; Detroit, Mich.; Britton, S.D.; Chihuahua Chih., Mexico; and sales
offices in Hong Kong, China, and Mainz, Germany. Sheldahl's common stock
trades on the Nasdaq National Market tier of the Nasdaq Stock Market under the
symbol: SHEL. Sheldahl news and information can be found on the World Wide
Web at http://www.sheldahl.com
Statements contained here, other than historical data, may be
forward-looking and subject to risks and uncertainties including, but not
limited to, those set forth in the Company's annual report, 10K, 10Q and other
SEC filings.
(more -- financials follow)
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended
November 27, November 28,
(in thousands, except for per share data) 1998 1997
Net sales $28,474 $28,992
Cost of sales 25,767 26,852
Gross profit 2,707 2,140
Expenses:
Sales and marketing 2,220 2,401
General and administrative 1,926 1,850
Research and development 575 931
Interest 323 513
Total expenses 5,044 5,695
Loss before income taxes and cumulative
effect of change in method of accounting (2,337) (3,555)
Benefit (provision) for income taxes -- 1,375
Net loss before cumulative effect of changes
in method for start-up costs (2,337) (2,180)
Cumulative effect of changes in accounting
method for start-up costs -- (5,206)
Net income before preferred dividends (2,337) (7,386)
Convertible preferred stock dividends (654) (187)
Net loss applicable to common shareholders $(2,991) $(7,573)
Net loss per common share:
Basic
Net loss before change in method of
accounting and after convertible preferred
stock dividends $(0.29) $(0.26)
Change in accounting method in accounting $ -- $(0.58)
Net loss per common share $(0.29) $(0.84)
Diluted
Net loss before change in method of
accounting and after convertible preferred
stock dividends $(0.29) $(0.26)
Change in accounting method in accounting $ -- $(0.58)
Net loss per common share $(0.29) $(0.84)
Number of shares outstanding -- Basic 10,402 9,036
Number of shares outstanding -- Diluted 10,402 9,036
SHELDAHL, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
unaudited
(In thousands) November 27, August 28,
1998 1998
Current assets:
Cash and cash equivalents $1,072 $1,005
Accounts receivable, net 16,558 15,727
Inventories 15,721 15,488
Other current assets 507 627
Total current assets 33,858 32,847
Construction in progress 25,875 26,682
Land and buildings 28,255 28,255
Machinery and equipment 116,065 113,642
Less: accumulated depreciation (70,187) (66,322)
Net plant and equipment 100,008 102,257
Other assets 1,169 1,202
$135,035 $136,306
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term debt $4,352 $4,296
Accounts payable 6,912 7,766
Accrued salaries 1,435 1,554
Other accrued liabilities 5,337 4,518
Restructuring reserves 4,309 5,494
Total current liabilities 22,345 23,628
Long-term debt 31,876 27,829
Restructuring reserves 1,511 2,131
Other non-current liabilities 3,992 3,961
Shareholders' investment:
Convertible preferred stock 37 41
Common stock 2,579 2,415
Additional paid-in capital 99,136 99,751
Retained earnings (26,441) (23,450)
Total shareholders' investment 75,311 78,757
$135,035 $136,306