Sheldahl Announces Third Quarter, Nine-Month Results
23 June 1999
Sheldahl Announces Third Quarter, Nine-Month Results; Sales and Gross Margin Improved, Progress Toward Profitability Continues
NORTHFIELD, Minn., June 23 -- Sheldahl, Inc. ,
today announced sales of $32.6 million for its fiscal 1999 third quarter ended
May 28, 1999, up from $31.9 million a year ago. Gross margin for the current
quarter, positively affected by sales growth and decreased expenses, rose 45
percent to $4.0 million, or 12.4 percent of sales, up from $2.8 million, or
8.8 percent of sales, for the same period last year. During the most recent
quarter, Sheldahl continued to make progress toward profitability, reporting a
net loss of $2.0 million, or $0.18 per share, as compared to a net loss of
$19.1 million, or $1.98 per share, for the same quarter a year ago.
For the most recent quarter, excluding special items, the net loss was
$2.5 million, or $0.22 per share, compared to a net loss for the same quarter
a year ago of $3.5 million, or $0.37 per share, excluding restructuring and
special charges. The current period marked the Company's third consecutive
quarter of improved operating results.
Nine-month results support upward trend
Sales for the current nine-month period totaled $89.1 million, up from
$88.6 million a year ago. Gross margin at $9.9 million, or 11.1 percent of
sales, rose 79 percent, up from $5.5 million, or 6.2 percent of sales, for the
fiscal 1998 nine months. Growing sales, improved gross margin, along with
decreased expenses, significantly reduced Sheldahl's fiscal 1999 year-to-date
net loss from that of a year ago to $11.1 million, or $1.02 per share, versus
a net loss of $33.1 million, or $3.57 per share, for the previous period.
Excluding special items, Sheldahl's year-to-date net loss was $8.5 million, or
$0.78 per share, as compared to the fiscal 1998 nine-month net loss of $13.2
million, or $1.42 per share, excluding restructuring and special charges.
Core businesses, Micro Products contribute to progress
Edward L. Lundstrom, Sheldahl's President and Chief Executive Officer
said: "It is evident that we made a good deal of progress toward the
achievement of our business objectives during the third quarter. Record sales,
as well as performance improvements resulting from last year's restructuring
and cost-reduction efforts, elevated our gross margin to it's highest level
since fiscal 1996." He continued, "As we had expected, our core business
volume grew nicely, up $4.8 million for the quarter with improved
profitability. During the quarter, Micro Products made significant progress in
moving several key customers from the qualification to the sales stage, and
has made a healthy contribution to quarter end backlog."
Lundstrom concluded, "Our accomplishments over the past three quarters
have put us within range of breakeven, and we anticipate that fiscal 2000 will
be a year of transition to profitability. During the fourth quarter, we expect
to complete the restructuring begun a year ago -- and at a
lower-than-anticipated cost. The datacom market continues to generate
significant growth, showing no signs of abating, with Micro Products order
volume building. Add to this improved cash flow from operations, along with
the resulting liquidity benefits, and you have the elements to position the
Company toward profitable growth."
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, Minnesota, has operations in Northfield;
Longmont, Colorado; South Dakota; Toronto, Ontario, Canada; Chihuahua, Chih.,
Mexico. Its sales offices are located in Detroit, Michigan; 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.
(More -- financials follow)
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
May 28, May 29,
(In thousands, except for
per share data) 1999 1998
Net sales $89,091 $88,632
Cost of sales 79,224 83,130
Gross profit 9,867 5,502
Expenses:
Sales and marketing 6,923 7,416
General and administrative 6,153 6,056
Research and development 1,870 3,048
Interest 1,787 1,688
Impairment charges -- 3,300
Restructuring costs 2,600 8,500
Total expenses 19,333 30,008
Loss before income taxes and
cumulative effect of change
in method of accounting (9,466) (24,506)
Provision for income taxes -- (2,952)
Net loss before cumulative effect
of change in method of accounting
for start-up costs (9,466) (27,458)
Cumulative effect of change in method of
accounting for start-up costs -- (5,206)
Net loss before preferred dividends (9,466) (32,664)
Convertible preferred stock dividends (1,593) (455)
Net loss applicable to common
shareholders $(11,059) $(33,119)
Net loss per common share:
Basic -
Net loss before change in method
of accounting and after convertible
preferred stock dividends $ (1.02) $ (3.01)
Change in accounting method -- (0.56)
Net loss per common share $ (1.02) $ (3.57)
Diluted -
Net loss before change in method
of accounting and after convertible
preferred stock dividends $ (1.02) $ (3.01)
Change in accounting method -- (0.56)
Net loss per common share $ (1.02) $ (3.57)
Number of shares outstanding -- Basic 10,857 9,267
Number of shares outstanding -- Diluted 10,857 9,267
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
May 28, May 29,
(In thousands, except for
per share data) 1999 1998
Net sales $32,575 $31,890
Cost of sales 28,527 29,093
Gross profit 4,048 2,797
Expenses:
Sales and marketing 2,172 2,502
General and administrative 2,396 2,115
Research and development 616 1,046
Interest 799 566
Impairment charges -- 3,300
Restructuring costs (500) 4,500
Total expenses 5,483 14,029
Loss before income taxes (1,435) (11,232)
Provision for income taxes -- (7,792)
Net loss before preferred dividends (1,435) (19,024)
Convertible preferred stock dividends (521) (96)
Net loss applicable to common
shareholders $ (1,956) $(19,120)
Net loss per common share:
Basic
Net loss per common share $ (0.18) $ (1.98)
Diluted
Net loss per common share $ (0.18) $ (1.98)
Number of shares outstanding
-- Basic 11,153 9,634
Number of shares outstanding
-- Diluted 11,153 9,634
SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands) unaudited
May 28, August 28,
1999 1998
Current assets:
Cash $628 $1,005
Accounts receivable, net 20,526 15,727
Inventories 18,023 15,488
Other current assets 745 627
Total current assets 39,922 32,847
Construction in process 3,512 26,682
Land and buildings 28,561 28,255
Machinery and equipment 137,682 113,642
Less: accumulated depreciation (76,104) (66,322)
Net plant and equipment 93,651 102,257
Other assets 998 1,202
Total $134,571 $136,306
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of
long-term debt $4,144 $4,296
Accounts payable 9,486 7,766
Accrued compensation 1,397 1,554
Other accruals 5,174 4,518
Restructuring reserves 2,936 5,494
Total current liabilities 23,137 23,628
Long-term debt 29,205 27,829
Restructuring reserves 2,600 2,131
Other long-term accruals 3,578 3,961
Total liabilities 58,520 57,549
Stockholders' Equity:
Convertible preferred stock 42 41
Common stock 2,788 2,415
Additional paid-in capital 107,730 99,751
Accumulated deficit (34,509) (23,450)
Total shareholders' equity 76,051 78,757
Total $134,571 $136,306