BEI Technologies, Inc. Reports Fiscal 1999 Second Quarter
27 April 1999
BEI Technologies, Inc. Reports Fiscal 1999 Second Quarter; Sales Increase 26%; Net Income Increases to $0.16 Per Share
SAN FRANCISCO, April 27 -- BEI Technologies, Inc.
reported that for the fiscal year 1999 second quarter ended
April 3, 1999, earnings from continuing operations were $1,159,000, or $0.16
per share, compared to $779,000, or $0.11 per share, for the fiscal year 1998
second quarter. Net sales for the quarter increased 26% to $39.0 million
compared to $30.8 million in the second quarter of fiscal 1998, according to
Charles Crocker, chairman, president and chief executive officer.
Crocker stated, "Our sales growth this quarter was again driven by the
continuing expansion of demand for BEI's Gyro Chip(R) and other sensors for
the automotive industry. Shipment of Gyro Chip sensors for automotive
applications in the quarter exceeded 100,000 units. As previously noted, our
customers have told us that BEI sensors will be offered in additional car
makes and models beginning later this year, and we are pleased by the
indications that our customers' advanced safety systems are being well
received.
While sales of core products, including encoders, motors, actuators and
pressure sensors enjoyed sequential growth during recent quarters, they were
below the levels of the second quarter in fiscal 1998 during which sales had
set historic records for several product lines."
Crocker continued, "Gross profit margins, overall, improved to 31.5% in
the most recent quarter driven by year-on-year improvement in auto sensor
margins and higher levels of gross profits that were sustained in most of the
company's traditional product lines. Auto sensor product lines generally have
lower gross profit margins than our traditional product lines, and the
increasing proportion of auto sensors is tending to lower our blended gross
profit margin percentage. In the most recent quarter, we improved auto sensor
margins over the prior year, and we are working to continue this improvement.
However we face a number of challenges in the automotive sector during the
remainder of the year, including the automotive customers' downward pressures
on prices as well as the development and initial production of certain new
products."
Selling, general and administrative expenses as a percentage of sales
improved to 19.9% of sales, compared to 20.3% in the second quarter of fiscal
1998. Development expenses were 4.7% of sales, versus 5.8% of sales in the
second quarter of fiscal 1998. Operating margins for the second quarter of
fiscal 1999 improved to 6.9% from 6.0% in the prior year's second quarter.
For the first six months of fiscal 1999, earnings from continuing
operations were $2,213,000 or $.30 per share which was 33% higher than
earnings in the comparable period of 1998 that were $1,656,000 or $0.23 per
share. An extraordinary, after tax non-operating charge of $326,000 was
recognized in the first quarter of fiscal 1999.
Sales in the first half of fiscal 1999 were $75,790,000, a 28% increase
over the first half of fiscal 1998. Sales to automotive industry customers
accounted for the majority of the increase. Non-automotive product lines that
generated strong sales in the first half of fiscal 1998 were less robust in
the first half of fiscal 1999, but have recently shown a recovering trend.
Summing up, Crocker stated, "We are encouraged by the profit improvement
that BEI Technologies has demonstrated in the first half of this year. We are
also gratified both by the continuing strong demand for BEI's proprietary Gyro
Chip sensor and by the recovering trend shown by our traditional industrial
product lines whose broad customer base and earnings have been a source of the
company's resilience. The price pressures on our automotive products could
slow our margin improvement as a percentage of sales, but we have cost
reduction plans in place and our goal is continued improvement in the absolute
value of earnings."
BEI Technologies, Inc., through its principal subsidiary, BEI Sensors &
Systems Company, Inc. is an established manufacturer of electronic sensors,
motors, actuators and motion control products used for factory and office
automation, medical equipment, military, aviation and space systems, and
transportation equipment including automobiles, trucks and off-road equipment.
The company's micromachined quartz yaw rate sensors are being used in advance
vehicle stability control systems and a significant increase in the production
of those sensors has been in progress since the middle of 1998. 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, Inc.
Except for historical information, this news release may be deemed to
contain forward-looking statements that involve risks and uncertainties,
including statements with respect to 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
reports to the Securities and Exchange Commission, including the company's
Form 10-K Annual Report for fiscal 1998.
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Unaudited
April 3, October 3,
1999 1998
ASSETS
Cash and cash equivalents $3,749 $3,557
Investments 5,685 5,419
Trade receivables - net 23,465 23,475
Inventories - net 31,528 29,623
Other current assets 7,473 5,835
Total current assets 71,900 67,909
Property, plant, and equipment, net 31,041 30,619
Acquired technology 4,535 5,015
Goodwill 1,807 1,876
Other assets, net 3,358 4,096
Total assets $112,641 $109,515
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $10,212 $13,014
Accrued expenses and other liabilities 18,942 18,544
Current portion of long-term debt 65 227
Total current liabilities 29,219 31,785
Long-term debt, less current portion 39,806 37,157
Other liabilities 1,659 379
Stockholders' equity 41,957 40,194
TOTAL $112,641 $109,515
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except per share amounts)
Unaudited
Quarter Ended Six Months Ended
April 3, April 4, April 3, April 4,
1999 1998 1999 1998
Net sales $39,047 $30,848 $75,790 $59,104
Cost of sales 26,731 20,930 52,011 39,564
Total 12,316 9,918 23,779 19,540
Selling, general and administrative
expense 7,789 6,262 15,252 12,380
Research, development and related
expense 1,837 1,796 3,333 3,192
Income from operations 2,690 1,860 5,194 3,968
Interest expense (758) (706) (1,536) (1,347)
Other income 34 167 93 249
Income from continuing operations before
income taxes 1,966 1,321 3,751 2,870
Provision for income taxes 807 542 1,538 1,214
Income from continuing operations 1,159 779 2,213 1,656
Income from discontinued operations, net
of income taxes --- 10 --- 92
Net income before extraordinary item1,159 789 2,213 1,748
Extraordinary item - net of income
taxes --- --- (326) ---
Net income $1,159 $789 $1,887 $1,748
BASIC EARNINGS PER COMMON SHARE
Earnings from continuing
operations $0.16 $0.11 $0.31 $0.24
Earnings from discontinued
operations --- --- --- 0.01
Earnings per share before extraordinary
item $0.16 $0.11 $0.31 $0.25
Loss from extraordinary item --- --- (0.05) ---
Earnings per share after extraordinary
item $0.16 $0.11 $0.26 $0.25
Weighted average shares outstanding 7,154 6,984 7,116 6,967
DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
Earnings from continuing operations $0.16 $0.11 $0.30 $0.23
Earnings from discontinued
operations --- --- --- 0.01
Earnings per share before extraordinary
item $0.16 $0.11 $0.30 $0.24
Loss from extraordinary item --- --- ($0.04) ---
Earnings per share after extraordinary
item $0.16 $0.11 $0.26 $0.24
Weighted average shares outstanding 7,349 7,284 7,319 7,209
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
6 months 12 months
ending ending
April 3, October 3,
1999 1998
Net income $1,887 $2,657
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,899 6,326
Other (4,719) (6,191)
Net cash provided by operating activities 1,067 2,792
Net cash used in investing activities (3,554) (8,645)
Net cash provided by financing activities 2,677 4,376
Net increase (decrease) in cash and
cash equivalents 190 (1,477)
Cash and cash equivalents at beginning of
period 3,557 5,034
Cash and cash equivalents at end of period $3,747 $3,557