Cherry Corporation Reports Year and Fourth Quarter Results
6 April 2000
Cherry Corporation Reports Year and Fourth Quarter Results
WAUKEGAN, Ill., April 5 The Cherry Corporation
today announced sales and earnings for its fourth quarter
and fiscal year ended February 29, 2000. The results of the Company's
semiconductor operation, which was recently sold, is reflected as a
discontinued operation.
For the Company's continuing operations, sales for the year were
$360,727,000, up slightly from last year. Sales for the fourth quarter
were $83,924,000, down 2.1 percent from last year's level.
For the year, net earnings from continuing operations were $5,865,000 down
57.9 percent from a year earlier. For the fourth quarter, continuing
operations reported a net loss of $306,000 compared to net earnings of
$1,961,000 from the prior year. Including the results of discontinued
operations, net earnings for the year were $12,255,000, a decrease of
35 percent from the prior year while net earnings for the quarter were
$2,837,000, an increase of approximately 1.0 percent.
For continuing operations, the diluted earnings per share for the year was
$.57 compared with $1.15 a year earlier. For the fourth quarter, the diluted
loss per share from continuing operations was $.03 compared with $.18 per
share in earnings last year. Including the results of discontinued
operations, diluted earnings per share for the year were $1.20, a decrease of
22.6 percent while net earnings for the quarter were $.28, an increase of 7.7
percent.
The fourth quarter continued to be negatively affected by the operational
problems with the North American automotive division that started in the third
quarter of fiscal 2000. In addition the North American switches and controls
business continued to be negatively affected by the delay in the launch of a
major new custom electronic control panel and the startup costs associated
with the development of the Cherry sensor business. The Company's European
operations continue to perform in line with the prior year. The quarter was
positively affected by lower depreciation expense resulting from an adjustment
to previous estimates to reflect actual capital expenditures for the year, and
by a $1.0 million tax benefit for foreign tax credits to be utilized as the
result of a dividend declared at its German subsidiary.
The year, as the fourth quarter, was negatively affected by the North
American automotive division operational problems, the customer delay in a
custom electronic control panel launch, and the startup costs associated with
Cherry's sensor business. European operations, in local currency, were in
line with the prior year but negatively impacted in U.S. dollars as the result
of the devaluation of the Euro.
"We are disappointed with our North American performance and quite
satisfied with our European performance," said Peter Cherry, chairman and
president. "We believe, however, that we are taking the right actions to
achieve our long-term goals."
The Cherry Corporation manufactures proprietary and custom electrical
switches, sensors, and electronic keyboards and controls, for the worldwide
automotive, computer, and consumer and commercial markets. The company has
seven wholly owned subsidiaries in 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
actions to achieve long-term goals, 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
Condensed Financial Statements
Summary of Consolidated Statements of Earnings
(In thousands except Three Months Ended Last Day of February
share data) 2000 1999 % Change
Net Sales $83,924 $85,741 (2.1)
Cost of Products Sold 62,441 65,349 (4.4)
Gross Profit 21,483 20,392 5.4
Operating Expenses 22,349 18,899 18.3
Operating Income (Loss) (866) 1,493 (158.0)
Other Income, Net 455 968 (53.0)
Earnings (Loss) Before
Interest and Taxes (411) 2,461 (116.7)
Interest Expense, Net 828 435 90.3
Earnings (Loss) from Continuing
Operations Before Income
Taxes (1,239) 2,026 (161.2)
Income Tax Provision (Benefit) (933) 65 N/M
Earnings (Loss) from
Continuing Operations (306) 1,961 (115.6)
Income from Discontinued
Operations of Cherry
Semiconductor (less applicable
income taxes of $869 and $412,
respectively) 3,143 851 269.3
Net Earnings $2,837 $2,812 0.9
Earnings Per Share - Basic:
Earnings (Loss) from
Continuing Operations $(.03) $.18 (116.7)
Earnings from Discontinued
Operations .31 .08 287.5
Net Earnings Per Share - Basic $.28 $.26 7.7
Earnings Per Share - Diluted:
Earnings (Loss) from
Continuing Operations $(.03) $.18 (116.7)
Earnings from Discontinued
Operations .31 .08 287.5
Net Earnings Per Share
- Diluted $.28 $.26 7.7
Averages Shares Outstanding
Basic 10,053,756 10,916,800 (7.9)
Diluted 10,118,957 10,993,182 (8.0)
Year Ended Last Day of February
2000 1999 % Change
Net Sales $360,727 $359,881 0.2
Cost of Products Sold 268,725 261,621 2.7
Gross Profit 92,002 98,260 (6.4)
Operating Expenses 82,439 77,409 6.5
Operating Income 9,563 20,851 (54.1)
Other Income, Net 1,542 982 57.0
Earnings Before
Interest and Taxes 11,105 21,833 (49.1)
Interest Expense, Net 2,877 790 264.2
Earnings from Continuing
Operations Before Income
Taxes 8,228 21,043 (60.9)
Income Tax Provision 2,363 7,097 (66.7)
Earnings from Continuing
Operations 5,865 13,946 (57.9)
Income from Discontinued
Operations of Cherry
Semiconductor (less applicable
income taxes of $2,287, and $2,403,
respectively) 6,390 4,906 30.2
Net Earnings $12,255 $18,852 (35.0)
Earnings Per Share - Basic:
Earnings from
Continuing Operations $.58 $1.15 (49.6)
Earnings from Discontinued
Operations .63 .41 53.7
Net Earnings Per Share - Basic $1.21 $1.56 (22.4)
Earnings Per Share - Diluted:
Earnings from Continuing
Operations $.57 $1.15 (50.4)
Earnings from Discontinued
Operations .63 .40 57.5
Net Earnings Per Share
- Diluted $1.20 $1.55 (22.6)
Averages Shares Outstanding
Basic 10,122,279 12,105,269 (16.4)
Diluted 10,184,674 12,196,670 (16.5)
Condensed Consolidated Balance Sheets
(In thousands except share data)
Feb. 29, Feb. 28,
2000 1999 % Change
Assets
Cash $13,602 $13,720 (0.9)
Accounts Receivable 48,019 53,003 (9.4)
Inventory 37,317 33,201 12.4
Net Assets of Discontinued
Operations 78,738 79,161 (0.5)
Other Current Assets 4,889 7,391 (33.9)
Land, Buildings and Equipment,
Net 116,358 121,641 (4.3)
Investment in Affiliates and
Other Assets 13,195 12,379 6.6
Total Assets $312,118 $320,496 (2.6)
Liabilities and Stockholders'
Equity
Short-term Debt $19,014 $17,458 8.9
Current Maturities of
Long-term Debt 60,785 2,301 N/M
Other Current Liabilities 43,090 38,218 12.7
Long-term Debt 4,732 75,389 (93.7)
Deferred Taxes and Credits 10,346 19,461 (46.8)
Total Liabilities 137,967 152,827 (9.7)
Stockholders' Equity 174,151 167,669 3.9
Total Liabilities and
Stockholders' Equity $312,118 $320,496 (2.6)
Stockholders' Equity Per Share $17.28 $16.47 4.9
Ending Shares Outstanding 10,079,983 10,180,817 (1.0)