Sames Second-Quarter Operating Income Exceeds Prior Year's
9 August 2000
Decline In SG&A Expense Continuing; Company Sells First Quick Change Powder Booth to US Customer
FRANKLIN PARK, Ill. - Sames Corporation today reported net sales of $20
million for the quarter ended June 30, 2000, compared to sales of $22.9 million
for the prior fiscal year quarter ended May 31, 1999. Year to date sales would
have been approximately $2.2 million higher had sales denominated in French
Francs been translated at 1999 foreign exchange rates. Operating income for the
current quarter was breakeven compared to a loss of $.32 million in the prior
fiscal year quarter. For the six months ended June 30, 2000, operating income
was $.67 million, compared to $.09 million in the prior fiscal year's first six
months.
Income from continuing operations was $.11 million, or $.04 per share, in
the second quarter of 2000, compared to $.33 million, or $.11 per share, for
the fiscal quarter ended May 31. 1999. The difference is largely attributable
to fluctuations in the value of the French Franc versus the US Dollar in the
period ended May 31, 1999 and the difference between recording a tax expense
this quarter versus a benefit in the prior fiscal year quarter. These two
non-operating income categories accounted for approximately $.5 million in the
prior fiscal year quarter.
Arnold Dratt, Chairman, President and CEO, said, "While year to date sales
exceed the corresponding period in the prior fiscal year by approximately $2
million, a significant automotive contract worth more than $6 million was
delayed five months; Sames has now begun work on this contract. This kind of
shift is typical of quarterly fluctuations we often see in our automotive
installation business."
Dratt also noted, "Our continued focus on reducing internal costs is
reflected in SG&A expense, as a percentage of sales, of 29% in the second
quarter, compared to 31% in the second quarter of the prior fiscal year. This
reduction in SG&A continues a similar decline in the first fiscal quarter,
compared to the prior first fiscal quarter. We expect this trend to continue
as part of our drive to enhance operating income."
General Industry Division Gains
With regard to its general industry business, Dratt stated, "Sames has
secured its largest single order ($2.5 million in two stages for an Asian
client), and has sold its first PVV quick change color powder booth to a US
customer, a nationally known manufacturer of fitness equipment. Our general
industry sales push in the U.S. is now supported by a full demonstration and
training center in our Livonia, Michigan facility. We have signed 65
distributors nationwide, and are targeting aggressive growth in the US market
which we believe exceeds $175 million."
Six Sigma
As part of its push to increase quality, Sames worldwide senior executives
have started Six Sigma training. Six Sigma is a process adopted by a number
of leading companies, such as General Electric, which has the capacity to
dramatically increase customer satisfaction while decreasing cost. This
program will be on-going, and Sames expects to see tangible benefits from its
implementation in 2001.
Sames Corporation is engaged in the design, manufacture and sale of high-
quality spray finishing and coating application equipment. The Sames business
is noted for its global leadership position in electrostatic finishing
equipment for the automotive finishing market and for the general
industrial finishing market. The Company's website is http://www.sames.com .
SAMES CORPORATION AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited, in thousands except share and per share amounts)
For the three For the six
months ended months ended
June 30, May 31, June 30, May 31,
2000 1999 2000 1999
Net sales $ 19,972 22,900 42,586 40,676
Cost of goods sold 13,442 15,033 28,256 24,715
Gross profit 6,530 7,867 14,330 15,961
Selling, general and
administrative expenses 5,873 7,163 12,362 13,851
Research and development costs 656 1,022 1,298 2,016
Operating income 1 (318) 670 94
Other expense (income):
Interest expense 106 172 369 523
Other expense (income), net (285) (640) (236) (1,170)
(179) (468) 133 (647)
Income (loss) from
continuing operations
before income taxes 180 150 537 741
Income tax expense (benefit) 66 (177) 180 (190)
Income from continuing operations,
net of tax 114 327 357 931
Loss from discontinued
operations, net of tax (473) (472) (957) (1,662)
Net loss $ (359) (145) (600) (731)
Income (loss) per share - basic
Continuing operations $.04 .11 .12 .31
Discontinued operations (.16) (.16) (.32) (.56)
Net loss $(.12) (.05) (.20) (.25)
Income (loss) per share - diluted
Continuing operations $.04 .11 .12 .31
Discontinued operations (.16) (.16) (.32) (.56)
Net loss $(.12) (.05) (.20) (.25)
Weighted average shares:
Basic 2,930 2,965 2,932 2,965
Effect of stock options 7 9 6 7
Diluted 2,937 2,974 2,938 2,972