Sheldahl Reports Improved Second-Quarter, Six-Month Results
23 March 1999
Sheldahl Reports Improved Second-Quarter, Six-Month Results; Core Business Profits Continue Upward Trend, Micro Products Business Building
NORTHFIELD, Minn., March 23 -- Sheldahl, Inc. ,
announced today that sales for its second quarter ended February 26, 1999,
were $28.0 million, up slightly from the same period last year. Pretax
operating results, excluding restructuring costs, improved $3.1 million to a
loss of $2.6 million when compared to the $5.7 million loss for the second
quarter one year ago. Net loss for the current quarter, including a
restructuring charge and dividends, was $6.1 million, or $0.55 per share,
compared to a $0.70 per share loss for the second quarter last fiscal year.
For the six months ended February 26, 1999, sales were $56.5 million,
essentially flat with last year's $56.7 million. Pretax operating results,
excluding restructuring cost, improved $4.3 million to a loss of $4.9 million
when compared to the $9.3 million loss for the first half of fiscal 1998. Net
loss for this period was $9.1 million and $0.84 per share compared to a loss
of $14.0 million and $2.11 per share for the first six months of fiscal 1998.
Said Edward L. Lundstrom, Sheldahl's President and Chief Executive
Officer, "While we are not satisfied with our performance, we are definitely
seeing signs that our business has turned the corner, and we are moving toward
profitability. In our core business, along with declining revenue a year ago,
we were faced with problems of manufacturing yields and costs resulting in a
six-month loss. Today, we have turned the core business loss into a
$4.3 million profit the first six months of this year through strategic
restructuring and expanded sales effort in the datacom market."
Lundstrom continued, "In Micro Products, we have moved beyond the product
development issues to a point where we are ready to take on the volume
production orders that are beginning to come from leading semiconductor
manufacturers and assemblers. And," he added, "we have the financing to
accommodate this upswing in our business." During the most recent quarter,
Sheldahl reported that it had raised $8.5 million in new equity to satisfy its
bank covenants and fund growth.
Lundstrom concluded, "Based on the positive achievements of the first
half, we believe that Sheldahl is well positioned for future profitability."
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.; South Dakota; Toronto, Ontario, Canada; and Chihuahua,
Chih., Mexico. Its sales offices are located in Hong Kong, China; Singapore;
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.
-- financials follow --
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended
(in thousands, except for per February 26, February 27,
share data) 1999 1998
Net sales $28,042 $27,751
Cost of sales 24,930 27,184
Gross profit 3,112 567
Expenses:
Sales and marketing 2,531 2,515
General and administrative 1,831 2,092
Research and development 679 1,070
Interest 664 609
Restructuring costs 3,100 4,000
Total expenses 8,805 10,286
Loss before income taxes (5,693) (9,719)
Benefit for income taxes -- 3,465
Net loss before preferred dividends (5,693) (6,254)
Convertible preferred stock dividends (418) (172)
Net loss applicable to common
shareholders $(6,111) $(6,426)
Net loss per common share:
Basic
Net loss per common share $ (0.55) $ (0.70)
Diluted
Net loss per common share $ (0.55) $ (0.70)
Number of shares outstanding -- Basic 11,037 9,131
Number of shares outstanding -- Diluted 11,037 9,131
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Six Months Ended
(in thousands, except February 26, February 27,
for per share data) 1999 1998
Net sales $56,516 $56,743
Cost of sales 50,697 54,036
Gross profit 5,819 2,707
Expenses:
Sales and marketing 4,751 4,915
General and administrative 3,758 3,942
Research and development 1,253 2,002
Interest 987 1,122
Restructuring costs 3,100 4,000
Total expenses 13,849 15,981
Loss before income taxes and cumulative
effect of change in method of accounting (8,030) (13,274)
Benefit for income taxes -- 4,840
Net loss before cumulative effect of changes
in method of accounting for start-up costs (8,030) (8,434)
Cumulative effect of changes in accounting
method for start-up costs -- (5,206)
Net loss before preferred dividends (8,030) (13,640)
Convertible preferred stock dividends (1,072) (359)
Net loss applicable to common shareholders $(9,102) $(13,999)
Net loss per common share:
Basic
Net loss before change in method of
accounting and after convertible
preferred stock dividends $ (0.84) $ (1.54)
Change in accounting method in accounting -- (0.57)
Net loss per common share $ (0.84) $ (2.11)
Diluted
Net loss before change in method of
accounting and after convertible
preferred stock dividends $ (0.84) $ (0.97)
Change in accounting method -- (0.57)
Net loss per common share $ (0.84) $ (1.54)
Number of shares outstanding -- Basic 10,772 9,084
Number of shares outstanding -- Diluted 10,772 9,084
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
unaudited
(In thousands) February 26, August 28,
1999 1999
Current assets:
Cash $ 1,327 $ 1,005
Accounts receivable, net 19,100 15,727
Inventories 17,224 15,488
Other current assets 1,257 627
Total current assets 38,908 32,847
Construction in process 5,985 26,682
Land and buildings 28,555 28,255
Machinery and equipment 133,715 113,642
Less: accumulated depreciation (71,664) (66,322)
Net plant and equipment 96,591 102,257
Other assets 1,109 1,202
$136,608 $136,306
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt $ 3,884 $ 4,296
Accounts payable 8,845 7,766
Accrued compensation 1,126 1,554
Other accruals 5,228 4,518
Restructuring reserves 5,166 5,494
Total current liabilities 24,949 23,628
Long-term debt 31,839 27,829
Restructuring 1,638 2,131
Other long-term accruals 3,920 3,961
Convertible preferred stock 40 41
Common stock 2,788 2,415
Additional paid-in capital 106,381 99,751
Subscribed preferred stock (1,695) --
Accumulated deficit (32,552) (23,450)
Total equity 74,962 78,757
$136,608 $136,306