Cherry Corporation Reports Q3 Results in Line With Pre-Release Announcement
22 December 1999
Cherry Corporation Reports Third Quarter Results in Line With Pre-Release Announcement
WAUKEGAN, Ill., Dec. 21 -- The Cherry Corporation
today announced lower sales and earnings for the third quarter
ended November 30, 1999. These results are in line with the Company's third
quarter pre-release on November 24, 1999.
Sales for the quarter of $127,090,000 were down 3.1 percent from the prior
year while net earnings of $3,725,000 were down 54.5 percent from the prior
year. Diluted earnings per share of $.37 for the quarter were down 43.1
percent versus the prior year level of $.65.
Sales for the first nine months of fiscal 2000 increased 2.1 percent to
$369,217,000. Net earnings for the first nine months of fiscal 2000 were
$9,418,000, a 41.3 percent decrease from the comparable nine-month period of
fiscal 1999. Diluted earnings per share of $.92 decreased 27.6 percent from
$1.27 in the first nine months of fiscal 1999.
The substantial decrease in third quarter net earnings on moderately lower
sales is largely attributable to costs incurred in connection with production
difficulties at the Company's domestic automotive operation. In addition, the
Company's semiconductor operation encountered capacity constraints during the
quarter resulting in lower than anticipated sales and earnings from that
operation.
"We are obviously quite disappointed with the events of the quarter," said
Peter Cherry, chairman and president. "We have taken deliberate steps to
remedy our production problems and I am pleased to report that the capacity
issues at our semiconductor operation are largely behind us. With respect to
our domestic automotive operation, we have made progress but we do not expect
to have worked through our difficulties until later this quarter."
The Cherry Corporation manufactures proprietary and custom electrical
switches, sensors, electronic keyboards and controls, and semiconductors for
the worldwide automotive, computer, and consumer and commercial markets. The
company has eight wholly owned subsidiaries in the United States, Germany,
England, France, Australia, Czech Republic, Mexico and Hong Kong. Cherry also
has 50-50 joint ventures in Japan, Hirose Cherry Precision Company Limited,
and in India, TVS Cherry Limited. Additional information is available on the
company's website at http://www.cherrycorp.com .
Certain statements in this press release, including those regarding
manufacturing improvements are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and involve certain
risks and uncertainties that could significantly impact future results. A
discussion of these risks and uncertainties is contained in the Company's Form
10-K for the year ended February 28, 1999, filed with the Securities and
Exchange Commission.
THE CHERRY CORPORATION (Nasdaq CHER)
Condensed Financial Statements (Unaudited)
Three Months Ended
November 30,
Condensed Consolidated Statements of Earnings
(In thousands except share data)
1999 1998 % Change
Net Sales $127,090 $131,187 (3.1)
Cost of Products Sold 92,200 89,980 2.5
Gross Profit 34,890 41,207 (15.3)
Operating Expenses 28,610 27,813 2.9
Operating Income 6,280 13,394 (53.1)
Other Income, Net 446 42 N/M
Earnings Before
Interest and Taxes 6,726 13,436 (49.9)
Interest Expense, Net 1,352 638 111.9
Earnings Before
Income Taxes 5,374 12,798 (58.0)
Income Tax Provision 1,649 4,608 (64.2)
Net Earnings $3,725 $8,190 (54.5)
Earnings Per Share
Basic $.37 $.66 (43.9)
Diluted $.37 $.65 (43.1)
Average Shares
Outstanding
Basic 10,079,242 12,500,377 (19.4)
Diluted 10,126,510 12,658,676 (20.0)
Nine Months Ended
November 30,
Condensed Consolidated Statements of Earnings
(In thousands except share data)
1999 1998 % Change
Net Sales $369,217 $361,516 2.1
Cost of Products Sold 266,697 253,296 5.3
Gross Profit 102,520 108,220 (5.3)
Operating Expenses 85,800 81,158 5.7
Operating Income 16,720 27,062 (38.2)
Other Income, Net 1,087 14 N/M
Earnings Before
Interest and Taxes 17,807 27,076 (34.2)
Interest Expense, Net 3,675 2,013 82.6
Earnings Before
Income Taxes 14,132 25,063 (43.6)
Income Tax Provision 4,714 9,023 (47.8)
Net Earnings $9,418 $16,040 (41.3)
Earnings Per Share
Basic $.93 $1.28 (27.3)
Diluted $.92 $1.27 (27.6)
Average Shares
Outstanding
Basic 10,144,954 12,494,223 (18.8)
Diluted 10,206,718 12,589,733 (18.9)
Condensed Consolidated Balance Sheets
(In thousands except share data)
Nov. 30, 1999 Feb. 28, 1999 % Change
Assets
Cash $6,957 $12,458 (44.2)
Accounts Receivable 66,786 68,021 (1.8)
Inventory 56,195 53,737 4.6
Other Current Assets 12,796 9,467 35.2
Land, Buildings and
Equipment, Net 170,448 179,317 (4.9)
Investment in Affiliates
and Other Assets 15,677 13,491 16.2
Total Assets $328,859 $336,491 (2.3)
Liabilities and
Stockholders' Equity
Short-term Debt $13,499 $17,458 (22.7)
Current Maturities of
Long-term Debt 1,920 2,301 (16.6)
Other Current Liabilities 51,727 46,493 11.3
Long-term Debt 64,246 75,389 (14.8)
Deferred Taxes and Credits 24,365 27,181 (10.4)
Total Liabilities 155,757 168,822 (7.7)
Stockholders' Equity 173,102 167,669 3.2
Total Liabilities and
Stockholders' Equity $328,859 $336,491 (2.3)
Stockholders' Equity
Per Share $17.24 $16.47 4.7
Ending Shares Outstanding 10,041,950 10,180,817 (1.4)