SI Technologies Returns to Profitability In FY2000; Company Completes Business Combination and Factory Consolidation Program
27 October 2000
SI Technologies Returns to Profitability In FY2000; Company Completes Business Combination and Factory Consolidation Program
TUSTIN, Calif.--Oct. 27, 2000--SI Technologies, Inc. , which designs, manufactures and markets high-performance industrial sensors, weighing and factory automation systems, and related products, today announced operating results for its most recent fiscal year.For the twelve months ended July 31, 2000, the Company reported a net profit of $351,190, or $0.09 per diluted share, compared with a net loss of ($229,715), or ($0.07) per diluted share, in the previous fiscal year. Net sales for the year totaled $41.3 million, versus $44.7 million in the year ended July 31, 1999. The Company reported a 58% improvement in operating income, which reached a record $2.5 million in FY2000, compared with $1.6 million in FY1999.
A net loss of ($34,255), or ($0.01) per diluted share, was recorded in the quarter ended July 31, 2000, compared with net income of $100,423, or $0.03 per diluted share, in the fourth quarter of FY1999. Net sales approximated $9.6 million in the final three months of FY2000, versus $12.2 million in the prior-year period.
"Management is pleased to report a return to profitability in Fiscal 2000, despite continued soft demand for industrial equipment and components in many of the markets served by our Company and the negative impact of a weak Euro upon the profitability of our international operations," commented Rick Beets, President and Chief Executive Officer of SI Technologies, Inc. "The completion of our previously announced program to combine and integrate four business units and consolidate manufacturing facilities allowed us to streamline SI's operations significantly during the course of the year. We believe that SI Technologies is operating much more efficiently today than a year ago, and our challenge for Fiscal 2001 is to grow revenues in an uncertain economic environment.
"While net income in the most recent fiscal year did not approach earlier records, I am proud of our accomplishments in a number of areas. Operating income increased by 58% and cash flow provided by operations more than tripled to a record $3.0 million. Not only did we return to profitability, but we were very successful in strengthening our balance sheet. We lowered the amount of debt outstanding by 14%, or $2.4 million; reduced accrued liabilities by 55%, or $2.2 million; and reduced accounts receivable by 17%, or $1.6 million. It now appears that annualized overhead savings from our operational restructuring program will exceed $2 million, compared with projected savings of $1.3 million when we announced the program in April 1999. As a result of these accomplishments, we are currently in the process of renegotiating our bank credit lines on much more favorable terms than would have been available to us a year ago.
"Our challenge now shifts to revenue growth," continued Beets. "The overall market for industrial equipment and components has been far from robust in recent months, and many economists anticipate a slowing of the U.S. economy during our current fiscal year. While our business in Europe increased approximately 15% in volume during Fiscal 2000, a 15% decline in the Euro resulted in flat international sales, when converted to Dollars. While the outlook for Fiscal 2001 is very cloudy at the present time, from a longer term perspective, we are confident that our decision to consolidate synergistic business units and manufacturing facilities will significantly enhance SI Technologies' ability to compete in a global marketplace. Our improved operating efficiencies and stronger balance sheet have significantly benefited the positioning of SI Technologies, relative to its competition, and we are poised for higher profitability when our markets strengthen."
SI Technologies, Inc. is a rapidly growing designer, manufacturer and marketer of high-performance industrial sensors, weighing and factory automation equipment and systems. Its proprietary products enjoy leading positions in their respective markets, while sharing common technologies, manufacturing processes, and customers. Recent acquisitions have diversified the Company's revenue base and positioned SI Technologies as a consolidator of technologies, products and companies which are involved in the handling, measurement and inspection of goods and materials. SI Technologies' products are used throughout the world in a variety of industries, including aerospace, aviation, food processing and packaging, forestry, manufacturing, mining, transportation, warehousing/distribution, and waste management. The Company is headquartered in Tustin, California, and its common stock trades on Nasdaq under the symbol "SISI."
This press release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
SI TECHNOLOGIES, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
Three Months Ended
July 31, 2000 July 31, 1999
---------------- ----------------
Net sales $ 9,561,540 $12,246,517
Cost of sales 6,410,291 7,796,531
---------- ----------
Gross profit 3,151,249 4,449,986
Operating expenses:
------------------
Selling, general &
administrative 2,297,662 3,038,690
Research, development
and engineering 425,508 718,250
Amortization of intangibles 121,048 95,837
----------- ------------
2,844,218 3,852,777
Earnings from operations 307,031 597,209
Interest expense (438,369) (408,909)
Other income 25,201 27,084
----------- -----------
Net earnings before income taxes (106,137) 215,384
Income tax expense 71,882 (114,961)
----------- ----------
Net earnings (loss) $ (34,255) $ 100,423
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Earnings per common share
-------------------------
Basic $ (.01) $ .03
============= =============
Diluted $ (.01) $ .03
============= =============
Weighted average shares outstanding
-----------------------------------
Basic 3,547,123 3,547,123
Diluted 3,707,441 3,637,437
Twelve Months Ended
July 31, 2000 July 31, 1999
---------------- ----------------
Net sales $41,329,345 $44,688,775
Cost of sales 26,725,874 27,580,956
----------- -----------
Gross profit 14,603,471 17,107,819
Operating expenses:
------------------
Selling, general &
administrative 9,740,242 11,364,869
Research, development
and engineering 1,892,656 2,866,494
Amortization of intangibles 471,368 444,889
Restructuring charges - 850,000
----------- -----------
12,104,266 15,526,252
Earnings from operations 2,499,205 1,581,567
Interest expense (1,860,131) (1,656,552)
Other income 55,724 26,366
----------- -----------
Net earnings before
incomes taxes 694,798 (48,619)
Income tax expense (343,608) (181,096)
----------- -----------
Net earnings (loss) $ 351,190 $ (229,715)
============ ===========
Earnings per common share
-------------------------
Basic $ .10 $ (.07)
================ ===============
Diluted $ .09 $ (.07) (1)
================ ==============
Weighted average shares outstanding
-----------------------------------
Basic 3,547,123 3,547,123
Diluted 3,707,441 -- (1)
(1) The computation for loss per share assuming dilution for the
year ended July 31, 1999, was anti-dilutive.
CONSOLIDATED BALANCE SHEETS
ASSETS July 31, 2000 July 31, 1999
---------------- ----------------
Current Assets:
--------------
Cash $ 112,286 $ 32,042
Trade accounts receivable,
net 7,157,160 8,635,695
Unbilled revenues - 126,859
Inventories 8,866,766 10,087,125
Deferred tax asset 970,360 1,423,900
Income tax receivable - 85,894
Other current assets 675,059 441,458
------------ ------------
Total current assets 17,763,631 20,832,973
Plant & equipment, net 5,648,963 6,516,834
Intangible assets, net 9,279,751 9,977,856
Other assets 325,324 340,099
------------ ------------
Total Assets $33,017,669 $37,667,762
============ ============
LIABILITIES AND EQUITY
Current Liabilities:
-------------------
Current maturities of long
term debt 3,804,968 5,564,018
Accounts payable 3,324,559 3,559,770
Customer advances 352,974 109,140
Accrued liabilities 2,057,420 4,192,707
----------- -----------
Total current liabilities 9,539,921 13,425,635
Long term debt, less
current maturities 10,809,300 11,418,485
Other liabilities 816,355 1,021,265
Deferred taxes 159,898 401,600
Stockholders'Equity:
-------------------
Common stock 35,471 35,471
Additional paid-in capital 10,326,711 10,294,071
Retained earnings 1,459,827 1,108,637
Accumulated other comprehensive
income (129,814) (37,402)
------------ ------------
Total equity 11,692,195 11,400,777
----------- -----------
Total Liabilities and Equity $33,017,669 $37,667,762
============ ============