Woodhead Industries Announces Earnings Per Share of $0.30 for Q4
17 November 1999
Woodhead Industries Announces Earnings Per Share of $0.30 for the Fourth Quarter and $0.96 for Fiscal 1999
DEERFIELD, Ill.--Nov. 17, 1999--Woodhead Industries, Inc. today reported that net sales for the 13 weeks ended October 2, 1999 rose 7 percent to $42,202,000 compared with $39,600,000 reported for the fourth quarter of fiscal 1998. Net income of $3,396,000 for the quarter increased 75 percent over the $1,939,000 figure representing the fourth quarter of last year, excluding the negative after-tax impact of $6,957,000 in special charges. EBITDA was $7,230,000 compared with $6,128,000 last year, excluding special charges. Diluted earnings per share were $0.30 compared with a loss of ($0.45) in the fourth quarter of last year, or a profit of $0.17 excluding the special charges.The increase in sales and an improvement in gross profit resulted in income from operations of $4,905,000 in the fourth quarter. This represented a 26 percent increase over the comparable figure last year of $3,899,000, which excludes $9,379,000 in special charges recorded last year for in-process research and development and the impairment of long-lived assets.
A low effective tax rate in the quarter provided an additional earnings benefit to the Company. This resulted from state tax refunds in Michigan for prior years, tax effecting the income loss at SST, and recognizing foreign tax credits.
Net sales for the fiscal year ending October 2, 1999 rose 14 percent to $168,696,000 compared with $147,560,000 reported for fiscal 1998. Net income was $10,894,000, compared with $3,930,000 reported for the same period last year. Excluding the special charges made in the fourth quarter, last year's net income would have been $10,887,000. EBITDA was $30,858,000 compared with $25,894,000 last year, excluding special charges. Diluted earnings per share were $0.96 for Fiscal 1999, compared with $0.35 last year, or $0.97 excluding the special charges. The street consensus for Fiscal 1999 was $0.86 per share.
C. Mark DeWinter, Chairman and CEO, stated: "Woodhead's sales increase in the fourth quarter reflects a dramatic improvement in sales in North America of the Industrial Communications and Connectivity Products segment of our business. Sales of Brad Harrison products in the United States rose 21 percent, demonstrating a significant increase in major capital investment in the automotive, machine tool, and material handling industries served by our OEM customers. This increase was augmented by sales of our SST subsidiary, which was acquired in July 1998. Global sales of our Connectivity segment grew to 61 percent of total sales, compared with 56 percent in the same quarter last year. Weakness in the industrial MRO markets served by the Company's Electrical Safety & Specialty Products segment resulted in a 6 percent decline in that segment's sales for the quarter."
Total orders entered in the fourth quarter were 10 percent ahead of the same period last year. Ending backlog was $12 million, equal to the balance at the end of June, 1999.
Woodhead's total long-term debt was reduced from $53,000,000 at the end of Fiscal 1998 to $47,120,000, or 36 percent of total capitalization, at the end of the fourth quarter this year.
In regard to the fiscal year's results, DeWinter stated: "Our 14 percent increase in net sales resulted from the continuing success of our connectivity strategy through the internal growth of Brad Harrison products sales and the acquisitions of mPm and SST made in fiscal 1998. mPm has been accretive to earnings since it was acquired, and although the sales of SST continued to grow and its financial results improved during the year, Woodhead's fiscal 1999 net income was adversely affected by SST. As a result, Woodhead's consolidated net income of $10,894,000 was essentially equal to last year's figure of $10,887,000 which excludes the special after-tax charges of $6,957,000 made in the fourth quarter of last year."
Commenting on the outlook, DeWinter stated: "We are very encouraged by the current strength of sales in our connectivity business in North America and some indications that business may be improving in Europe and Asia. Therefore, I anticipate that our sales will increase 12 to 15 percent in fiscal 2000. Furthermore, I expect that Woodhead's consolidated net income will increase 10 to 12 percent, based on growth in total sales and SST's becoming accretive late in fiscal 2000."
Certain statements contained herein constitute "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include: achieving sales levels to fulfill revenue expectations; the absence of presently unexpected costs or charges, certain of which may be outside the control of the Company; general economic and business conditions; competition; and other factors described in the Company's SEC filings.
Woodhead Industries, Inc. develops, manufactures, and markets specialty electrical, electronic, and industrial communications products, primarily serving the global automation and control market with connectivity solutions.
Woodhead Industries, Inc.
Consolidated Income Statement
(Amounts in thousands, except per share data)
Quarter ended: 10/02/99 10/03/98 % Change
Net sales $42,202 $39,600 6.6%
Cost of sales 23,638 23,122 2.2%
Gross profit $18,564 $16,478 12.7%
% of net sales 44.0% 41.6%
Operating expenses 13,659 18,550 (26.4%)
% of net sales 32.4% 46.8%
Impairment of long-
lived assets $ - $ 3,408
Income/(loss)from
operations $4,905 ($5,480)
% of net sales 11.6% (13.8%)
Other expenses (income)
Interest expense 840 761 10.4%
Other expenses, net 189 2,094 (91.0%)
Net other expenses 1,029 2,855 (64.0%)
Income/(loss) before
taxes $3,876 ($8,335)
% of net sales 9.2% (21.0%)
Provision for income 480 (3,317)
taxes
Net income/(loss) $3,396 ($5,018)
% of net sales 8.0% (12.7%)
Earnings per share
Basic $0.30 ($0.46)
Diluted $0.30 ($0.45)
Weighted-average common
shares outstanding
Basic 11,156 10,822 3.1%
Diluted 11,410 11,210 1.8%
Dividends per share $0.09 $0.09 0.0%
EBITDA (Earnings before
interest, taxes,
depreciation, and
amortization $7,230 ($5,418)
Woodhead Industries, Inc.
Consolidated Income Statement
(Amounts in thousands, except per share data)
Fiscal year ended: 10/02/99 10/03/98 % Change
Net sales $168,696 $147,560 14.3%
Cost of sales 95,615 84,002 13.8%
Gross profit $73,081 $63,558 15.0%
% of net sales 43.3% 43.1%
Operating expenses 52,693 48,779 8.0%
% of net sales 31.2% 33.1%
Impairment of long-
lived assets $ - $3,408
Income from operations $20,388 $11,371 79.3%
% of net sales 12.1% 7.7%
Other expenses (income)
Interest expense 3,429 1,187 188.9%
Other expenses, net (193) 3,621
Net other expenses 3,236 4,808 (32.7%)
Income before taxes $17,152 $6,563 161.3%
% of net sales 10.2% 4.4%
Provision for income 6,258 2,633 137.7%
taxes
Net income $10,894 $3,930 177.2%
% of net sales 6.5% 2.7%
Earnings per share
Basic $0.98 $0.37 164.9%
Diluted $0.96 $0.35 174.3%
Weighted-average common
shares outstanding
Basic 11,101 10,653 4.2%
Diluted 11,372 11,201 1.5%
Dividends per share $0.36 $0.36 0.0%
EBITDA (Earnings before
interest, taxes,
depreciation, and
amortization $30,858 $14,348 115.1%
Woodhead Industries, Inc.
Consolidated Balance Sheet
(Amounts in thousands)
Assets: 10/02/99 10/03/98
Current Assets:
Cash & short-term securities $ 1,425 $ 2,923
Accounts receivable 29,276 26,792
Refundable income taxes 1,109 795
Inventories 24,099 19,431
Prepaid expenses 7,171 7,695
Total current assets $63,080 $57,636
Deferred income taxes and
other assets $ 3,315 $ 2,324
Property, plant, & equipment,
at cost $121,281 $114,076
Less - accumulated depreciation (56,836) (48,792)
Net property, plant, & equipment $64,445 $65,284
Goodwill $26,801 $30,697
Total Assets $157,641 $155,941
Woodhead Industries, Inc.
Consolidated Balance Sheet
(Amounts in thousands)
Liabilities & Stockholders'
Investment: 10/02/99 10/03/98
Current Liabilities:
Notes payable $ 125 $ --
Accounts payable 8,564 7,828
Accrued expenses 14,524 17,656
Incomes taxes payable 1,580 837
Portion of long-term debt
payable within one year -- --
Total current liabilities $24,793 $26,321
Other Liabilities $ 3,274 $ 2,070
Long-Term Debt, less portion
payable within one year $47,120 $53,000
Stockholders' Investment:
Preferred stock $ -- $ --
Common stock 11,237 11,032
Additional paid-in capital 11,230 9,276
Deferred stock compensation (315) --
Accumulated other comprehensive
income (2,117) (1,276)
Retained earnings 62,419 55,518
Total stockholders' investment $82,454 $74,550
Total Liabilities and
Stockholders' Investment $157,641 $155,941
Note: A replay of Woodhead's November 17th telephone conference call will be available through the Woodhead web site, www.woodhead.com, from 1:00 p.m. (EST) November 17th through December 17th.