HSR Net Income Increases 33% in Fiscal Year 1999
5 August 1999
HSR Net Income Increases 33% in Fiscal Year 1999
TORRANCE, Calif.--Aug. 5, 1999-- Hi-Shear Technology Corporation (AMEX:HSR) today announced results for its fiscal year ended May 31, 1999. Net income of $2.1 million or $0.31 per share was reported for the fiscal year 1999, an increase of 33% over the $1.6 million or $0.24 per share reported for fiscal year 1998. Gross profits rose to 31% of revenues as compared to gross profits of 29% of revenues after the exit from a line of business in fiscal year 1998. Revenue for fiscal year 1999 was $17.3 million as compared to $17.6 million for fiscal year 1998. Sales of satellite and launch vehicle components increased during the year. The slight decrease in revenues during fiscal year 1999 as compared to fiscal year 1998 revenues was the result of delayed aerial flight tests by the Air Force for its PAC-3 anti-missile program. This program was scheduled to add $0.8 million of revenues for the year. This important defensive anti-missile program is moving forward again with a successful missile range test accomplished.Mr. George W. Trahan, President, commented, "Hi-Shear continues to significantly invest in its future by more than doubling its Precision Machining Center capabilities. The industry continues to communicate increased demand for Hi-Shear's products. The new machining configuration will result in accelerated delivery of products, increased capacity, and lower overall costs. To satisfy customer requirements we are expanding our marketing and manufacturing of additional types of satellite devices that will result in increasing the revenue dollars realized from each space vehicle launch."
During the year the United States Patent and Trademark Office awarded the Company an additional patent for its automobile air bag inflator designs. This is in addition to the air bag inflator patents already awarded to the Company. Mr. Trahan commented: "The additional patent continues to strengthen our proprietary rights regarding Hi-Shear's unique technology. Hi-Shear's automobile air bag inflator technology, with its lower projected costs, offers the automobile industry a high performance, non-toxic, low cost alternative to current air bag inflator systems. We believe air bag inflators using Hi-Shear's technology can be implemented in automobiles as early as the 2002 model year."
Hi-Shear Technology Corporation provides aerospace and commercial products in applications where safety, performance and high reliability are essential. It develops and produces advanced systems and products that are primarily used worldwide in commercial space satellites, launch vehicles, and government programs. The Company is also continuing to adapt its technology to produce advanced, competitively priced products for commercial markets such as emergency rescue equipment, industrial cutting tools and improved inflators for air bag systems.
This release, as it relates to product announcements and other Company matters, contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks related to market acceptance of and demand for the Company's new commercial products, dependence on the uncertainty of government budgetary issues, primary government contracts, and intellectual property rights.
The Company's Form 10-KSB will be filed with the Securities and Exchange Commission on or about August 15, 1999. The 10-KSB will be available through Edgar or Hi-Shear's Website at www.hstc.com. Please contact Ms. Linda A. Nespole (310) 784-7821 for additional information.
BALANCE SHEET
Year Ended May 31, 1999
ASSETS 1999
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Current Assets
Cash and cash equivalents $ 33,000
Accounts receivable 7,302,000
Inventories 3,275,000
Deferred taxes 1,200,000
Prepaid expenses and other current assets 112,000
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Total current assets 11,922,000
Equipment, Net 3,390,000
Intangible assets, net 105,000
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$ 15,417,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities
Notes payable to bank $ 1,701,000
Current portion of long-term debt 348,000
Trade accounts payable 2,338,000
Accrued payroll and related costs 673,000
Total current liabilities 5,398,000
Long-Term Debt, less current portion 811,000
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Total liabilities 6,209,000
Excess of Net Assets Acquired Over
Purchase Price 553,000
Stockholders' Equity
Preferred stock $1.00 par value; 500,000 shares authorized;
no shares issued
Common stock, $.001 par value;
25,000,000 shares authorized;
6,670,000 shares issued and outstanding 7,000
Additional paid-in capital 7,193,000
Retained Earnings 1,455,000
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Total stockholders' equity 8,655,000
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$ 15,417,000
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STATEMENTS OF OPERATIONS
Years Ended May 31, 1999 and 1998
1999 1998
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Revenues $ 17,298,000 $ 17,641,000
Cost of Revenues 11,858,000 11,731,000
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Gross Profit $ 5,440,000 $ 5,910,000
Exit from Line of Business --- 772,000
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Gross Profit after Exit
from Line of Business 5,440,000 5,138,000
Selling, General and
Administrative Expenses 3,055,000 2,742,000
Research and Development
Expenses 697,000 794,000
------------------- ---------------
Operating Income $ 1,688,000 $ 1,602,000
Interest (Expense) (213,000) (257,000)
------------------- ---------------
Income before Provision
for Tax credits and Change
in Accounting Method $ 1,475,000 $ 1,345,000
Provision for Income
Tax credits (624,000) (530,000)
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Income before Cumulative
Effect of Accounting Change 2,099,000 1,875,000
Cumulative Effect of
Accounting Change --- 298,000
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Net Income $ 2,099,000 $ 1,577,000
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Earnings per Common
Share and per Common Share
Assuming Dilution:
Income before Cumulative
Effect of Accounting Change 0.31 0.28
Cumulative Effect of
Accounting Change --- (0.04)
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Net Income $ 0.31 $ 0.24
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Weighted Number of Common
Shares 6,669,000 6,654,000
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Weighted Number of Common
Shares Assuming Dilution 6,682,000 6,702,000
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