BEI Technologies Reports Fiscal 1999 Third Quarter; Sales Increase 38%
30 July 1999
BEI Technologies, Inc. Reports Fiscal 1999 Third Quarter; Sales Increase 38%; Earnings Per Share Up 60% to $0.16
SAN FRANCISCO, Calif., July 29 -- BEI Technologies, Inc.
reported earnings from continuing operations for the fiscal
1999 third quarter ended July 3, 1999, of $1,170,000, or $0.16 per share,
compared to $704,000, or $0.10 per share, for the third quarter of fiscal
1998. Net sales for the quarter increased 38% to $41.2 million compared to
$29.9 million in same period last year, according to Charles Crocker,
chairman, president and chief executive officer.
Crocker said, "Our sales growth this quarter continues to be favorably
affected by the growing demand for BEI's GyroChip(R) sensors used in
automotive stability systems. GyroChip shipments in the quarter exceeded
140,000 units, compared to 90,000 and 100,000 units in the first and second
quarters, respectively. Sales of motors and actuators increased, both
sequentially and year-on-year, and international sales of a wide variety of
products rose as well. Domestic sales of sensors for government programs and
industrial applications declined slightly in the quarter compared with the
prior year when sales for some of our industrial product lines had achieved
record highs."
"We continued to make progress during the third quarter on our plan of
reducing costs of our GyroChip sensors in the face of pricing pressures from
customers. This plan includes technology initiatives, as well as efforts in
our factory and with vendors, customers and others. For instance, we launched
a new, cost saving, electronically programmed temperature compensation method
for GyroChip sensors in the third quarter. We planned for this milestone in
our technology roadmap and the validation of its benefit is very encouraging."
Crocker continued, "Another cost-reduction initiative has involved
protracted negotiations to adjust the royalty rate we pay in connection with
the license we own for solid-state quartz yaw rate sensors. The goal of this
adjustment has been to enable BEI to vigorously promote the early adoption of
our GyroChip sensors for automotive stability systems and capture an important
share of this market."
"We are pleased to have concluded this agreement for royalty relief that
has helped BEI during an intensive period of production start-up and
engineering -- a period in which we have established ourselves as the
preeminent worldwide supplier of these important automotive sensors." The
reduced royalty rate, which was initiated in May 1998, will continue to apply
to royalty payments on sensors for automotive applications through December
1999. By January 2000, the regular royalty rate will have been phased in,
adding approximately $3.00 to the cost of each sensor, which the Company
expects to offset with other savings.
Selling, general and administrative (SG&A) expense as a percentage of net
sales improved in the 1999 third quarter to 19.2% from 20.1% in the
year-earlier period. Development expense in the third quarter of fiscal 1999
was 4.5% of net sales, compared to 5.1% in the 1998 third quarter.
NINE-MONTH RESULTS
For the fiscal 1999 nine-month period ended July 3, 1999, earnings from
continuing operations increased 43% to $3,383,000, or $0.47 per share, versus
$2,361,000, or $0.33 per share, in the comparable period of fiscal 1998.
Sales in the recent nine-month period were $117.0 million, a 31% increase over
the $89.0 million reported last year. Sales to automotive customers accounted
for the majority of the increase.
For the recent nine-month period, SG&A expense was 19.8% of net sales, an
improvement from 20.7% in fiscal 1998. Development expense was 4.4% of net
sales, versus 5.3% for the nine months of fiscal 1998. Operating income
increased approximately 31% to $7.6 million from $5.8 million, respectively,
in the fiscal 1999 and 1998 nine-month periods.
Summing up, Crocker said, "Our current shipping schedules for GyroChips
include new car models, which is an encouraging sign. As we achieve higher
rates of production, our cost reduction and profit improvement plans for these
sensors should be more effective. We look forward to meeting the challenge of
growing all our businesses and continuing progress."
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 advanced
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 price; 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
July 3, October 3,
1999 1998
ASSETS
Cash and cash equivalents $3,936 $3,557
Investments 5,795 5,419
Trade receivables - net 24,553 23,475
Inventories - net 30,682 29,623
Other current assets 6,809 5,835
Total current assets 71,775 67,909
Property, plant, and equipment, net 33,066 30,619
Acquired technology 4,295 5,015
Goodwill 2,483 1,876
Other assets, net 3,301 4,096
Total assets $114,920 $109,515
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $10,535 $13,014
Accrued expenses and other liabilities 19,844 18,544
Current portion of long-term debt 66 227
Total current liabilities 30,445 31,785
Long-term debt, less current portion 39,776 37,157
Other liabilities 1,612 379
Stockholders' equity 43,087 40,194
$114,920 $109,515
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except per share amounts)
Unaudited
Quarter Ended Nine Months Ended
July 3, July 4, July 3, July 4,
1999 1998 1999 1998
Net sales $41,175 $29,897 $116,965 $89,001
Cost of sales 28,981 20,494 80,992 60,058
12,194 9,403 35,973 28,943
Selling, general and
administrative expense 7,891 6,016 23,143 18,396
Research, development and
related expense 1,855 1,509 5,188 4,701
Income from operations 2,448 1,878 7,642 5,846
Interest expense (730) (755) (2,266) (2,102)
Other income 234 70 327 319
Income from continuing
operations before
income taxes 1,952 1,193 5,703 4,063
Provision for income taxes 782 489 2,320 1,702
Income from continuing
operations 1,170 704 3,383 2,361
Income from discontinued
operations, net of
income taxes --- 50 --- 142
Net income before
extraordinary item 1,170 754 3,383 2,503
Extraordinary item -
net of income taxes --- --- (326) ---
Net income $1,170 $754 $3,057 $2,503
BASIC EARNINGS PER
COMMON SHARE
Earnings from continuing
operations $ 0.16 $ 0.10 $ 0.48 $ 0.34
Earnings from discontinued
operations --- 0.01 --- 0.02
Earnings per share before
extraordinary item $ 0.16 $ 0.11 $ 0.48 $ 0.36
Loss from extraordinary
item --- --- (0.05) ---
Earnings per share after
extraordinary item $ 0.16 $ 0.11 $ 0.43 $ 0.36
Weighted average shares
outstanding 7,169 7,069 7,120 6,978
DILUTED EARNINGS PER
COMMON AND COMMON
EQUIVALENT SHARE
Earnings from continuing
operations $ 0.16 $ 0.10 $ 0.47 $ 0.33
Earnings from
discontinued operations --- --- --- 0.02
Earnings per share
before extraordinary
item $ 0.16 $ 0.10 $ 0.47 $ 0.35
Loss from extraordinary
item --- --- $(0.05) ---
Earnings per share after
extraordinary item $ 0.16 $ 0.10 $ 0.42 $ 0.35
Weighted average shares
outstanding 7,286 7,349 7,249 7,250
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
Nine Months Nine Months
Ending Ending
July 3, July 4,
1999 1998
Net income $3,057 $2,503
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 5,918 4,592
Other (3,870) (8,931)
Net cash provided by operating activities 5,105 (1,836)
Net cash used in investing activities (6,896) (4,961)
Net cash provided by financing activities 2,170 7,866
Net increase (decrease) in cash and
cash equivalents 379 1,069
Cash and cash equivalents at
beginning of period 3,557 5,034
Cash and cash equivalents at
end of period $3,936 $6,103