HAMPTON, Va., June 9, 2010 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS), a global designer and manufacturer of sensors and sensor-based systems, announces results for the fiscal year ended March 31, 2010.
The Company reported an increase in consolidated net sales of $5.7 million or 3% to $209.6 million for the year ended March 31, 2010, as compared to the corresponding period last year. The overall increase in sales is largely attributable to the Atexis and FGP acquisitions, and improvements in sales to our largest customer, Sensata. For the year ended March 31, 2010, the Company reported net income from continuing operations attributable to MEAS of $6.1 million, or $0.41 per diluted share, as compared to $5.3 million or $0.36 per diluted share for the same period last year. The increase in net income primarily reflects a decrease in income tax expense due to the valuation allowance recorded last year for certain deferred tax assets, which reduced our net income by $2.9 million or approximately $0.20 per diluted share, as well as the impact of various cost control measures implemented to address the global recession.
For the quarter ended March 31, 2010, the Company reported an increase in consolidated net sales of $18.3 million or 43% to $61.0 million, as compared to the same period last year. For the three months ended March 31, 2010, the Company reported net income from continuing operations attributable to MEAS of $4.2 million or $0.28 per diluted share, as compared to the prior year net loss from continuing operations attributable to MEAS of $3.2 million or $0.22 per diluted share.
Frank Guidone, Company CEO, commented, "We had a very strong finish to fiscal 2010. Our fourth quarter sales were basically back to pre-recession levels, while stronger fourth quarter bookings -- a record high for the Company at $66 million -- resulted in a book to bill of 1.1. We believe the majority of the improvement in our sales and bookings is due to improvements in the economy, successful new product introductions, and increased market penetration."
Guidone continued, "Despite one of the worst global recessions in decades, we remained profitable for the year with adjusted EBITDA of $27.5 million, and as a result of efficient balance sheet management, we generated $24.6 million in free cash flow. We delivered $9.8 million in adjusted EBITDA in Q4 -- consistent with pre-recession earnings -- which includes the impact of the fourth quarter discretionary bonus accrual of $1.7 million, which was in part, rewarding employees for sacrifices made over the prior year. As a result of the steady improvement in bookings and backlog, we have good momentum as we move into fiscal 2011."
Bookings are orders the Company has accepted from customers and are supported by purchase orders. Billings are orders the Company has invoiced to the customer for which sales revenue is recognized. The book to bill ratio is the ratio of bookings to billings. Adjusted EBITDA and free cash flow are non-GAAP financial measures. Please refer to the notes and reconciliation regarding Non-GAAP financial measures contained in this release.
On June 9, 2010, the Company filed its Form 10-K for the fiscal year ended March 31, 2010. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-K filed for a more complete discussion of sales, margin and expenses.
The Company will host an investor conference call on Thursday, June 10, 2010 at 11:00 AM Eastern to answer questions regarding the fiscal year results reported in our Form 10-K for year ended March 31, 2010. US dialers: (877) 407-8031; International dialers (201) 689-8031. Interested parties may also listen via the Internet at: www.investorcalendar.com. ; The call will be available for replay for 30 days by dialing (877) 660-6853 (US dialers); (201) 612-7415 (International dialers), and entering the replay pass code #286 and conference ID# 350741, and on Investorcalendar.com.
About Measurement Specialties: Measurement Specialties, Inc. (MEAS) designs and manufactures sensors and sensor-based systems to measure precise ranges of physical characteristics such as pressure, temperature, position, force, vibration, humidity and photo optics. MEAS uses multiple advanced technologies – piezo-resistive silicon sensors, application-specific integrated circuits, micro-electromechanical systems ("MEMS"), piezoelectric polymers, foil strain gauges, force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, electromagnetic displacement sensors, hygroscopic capacitive sensors, ultrasonic sensors, optical sensors, negative thermal coefficient ("NTC") ceramic sensors and mechanical resonators – to engineer sensors that operate precisely and cost effectively.
This release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward looking statements may be identified by such words or phrases as "should", "intends", " is subject to", "expects", "will", "continue", "anticipate", "estimated", "projected", "may", "we believe", "future prospects", or similar expressions. Factors that might cause actual results to differ materially from the expected results described in or underlying our forward-looking statements include: Conditions in the general economy, including risks associated with the current financial crisis and worldwide economic conditions and reduced demand for products that incorporate our products; Conditions in the credit markets, including our ability to raise additional funds or refinance our existing credit facility; Competitive factors, such as price pressures and the potential emergence of rival technologies; Interruptions of suppliers' operations or the refusal of our suppliers to provide us with component materials, particularly in light of the current economic conditions and potential for suppliers to fail; Timely development, market acceptance and warranty performance of new products; Changes in product mix, costs and yields; Uncertainties related to doing business in Europe and China; Fluctuations in foreign currency exchange and interest rates; Legislative initiatives, including tax legislation and other changes in the Company's tax position; Legal proceedings; Compliance with export control laws and regulations; Compliance with debt covenants, including events beyond our control; Adverse developments in the automotive industry and other markets served by us; compliance with export control laws and regulations; and risk factors listed from time to time in the reports we file with the SEC. The Company from time-to-time considers acquiring or disposing of business or product lines. Forward-looking statements do not include the impact of acquisitions or dispositions of assets, which could affect results in the near term. Actual results may differ materially. The Company assumes no obligation to update the information in this release.
| MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| Three Months Ended | ||||
| March 31, 2010 (Unaudited) |
Fiscal Year Ended March 31, 2010 |
|||
| (Amounts in thousands, except per share amounts) | 2010 | 2009 | 2010 | 2009 |
| Net sales | $ 61,027 | $ 42,758 | $ 209,610 | $ 203,943 |
| Cost of goods sold | 35,769 | 26,346 | 128,241 | 118,333 |
| Gross profit | 25,258 | 16,412 | 81,369 | 85,610 |
| Selling, general, and administrative expenses | 19,633 | 17,144 | 71,146 | 72,108 |
| Operating income (loss) | 5,625 | (732) | 10,223 | 13,502 |
| Interest expense, net | 807 | 905 | 3,899 | 3,081 |
| Foreign currency exchange loss (gain) | 50 | 96 | (987) | 771 |
| Other expense (income) | 14 | (81) | 93 | (253) |
| Income (loss) from continuing operations, before income taxes | 4,754 | (1,652) | 7,218 | 9,903 |
| Income tax expense from continuing operations | 453 | 1,406 | 733 | 4,236 |
| Income (loss) from continuing operations, net of income taxes | 4,301 | (3,058) | 6,485 | 5,667 |
| Loss from discontinued operations, net of income taxes | -- | -- | (142) | -- |
| Net income (loss) | 4,301 | (3,058) | 6,343 | 5,667 |
| Less: Net income attributable to noncontrolling interest | 99 | 112 | 427 | 388 |
| Net income (loss) attributable to Measurement Specialties, Inc. ("MEAS") | $ 4,202 | $ (3,170) | $ 5,916 | $ 5,279 |
| Amounts attributable to MEAS common shareholders: | ||||
| Income (loss) from continuing operations, net of income taxes | $ 4,202 | $ (3,170) | $ 6,058 | $ 5,279 |
| Loss from discontinued operations attributable to MEAS | -- | -- | (142) | -- |
| Net income (loss) | $ 4,202 | $ (3,170) | $ 5,916 | $ 5,279 |
| Earnings per common share - Basic: | ||||
| Income (loss) from continuing operations, net of income taxes | $ 0.29 | $ (0.22) | $ 0.42 | $ 0.36 |
| Loss from discontinued operations attributable to MEAS | -- | -- | (0.01) | -- |
| Net income (loss) - Basic | $ 0.29 | $ (0.22) | $ 0.41 | $ 0.36 |
| Earnings per common share - Diluted: | ||||
| Income (loss) from continuing operations, net of income taxes | $ 0.28 | $ (0.22) | $ 0.41 | $ 0.36 |
| Loss from discontinued operations attributable to MEAS | -- | -- | (0.01) | -- |
| Net income (loss) - Diluted | $ 0.28 | $ (0.22) | $ 0.40 | $ 0.36 |
| Weighted average shares outstanding - Basic | 14,504 | 14,465 | 14,498 | 14,465 |
| Weighted average shares outstanding - Diluted | 14,964 | 14,465 | 14,686 | 14,575 |
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MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES |
||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Amounts in thousands) |
March 31, 2010 |
March 31, 2009 |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 24,293 | $ 23,483 |
| Accounts receivable trade, net of allowance for doubtful accounts of $464 and $898, respectively | 31,224 | 28,830 |
| Inventories, net | 41,483 | 45,384 |
| Deferred income taxes, net | 1,720 | 2,091 |
| Prepaid expenses and other current assets | 3,149 | 3,968 |
| Other receivables | 757 | 458 |
| Due from joint venture partner | 918 | 1,824 |
| Promissory note receivable | -- | 283 |
| Income taxes receivable | 997 | -- |
| Total current assets | 104,541 | 106,321 |
| Property, plant and equipment, net | 44,795 | 46,875 |
| Goodwill | 99,235 | 99,176 |
| Acquired intangible assets, net | 23,613 | 27,478 |
| Deferred income taxes, net | 6,607 | 7,440 |
| Other assets | 1,184 | 1,319 |
| Total assets | $ 279,975 | $ 288,609 |
|
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES |
||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Amounts in thousands, except share amounts) |
March 31, 2010 |
March 31, 2009 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Short-term debt | $ 5,000 | $ -- |
| Current portion of promissory notes payable | 2,349 | 2,176 |
| Current portion of long-term debt | 2,295 | 2,356 |
| Current portion of capital lease obligations | 193 | 797 |
| Accounts payable | 18,144 | 15,381 |
| Accrued expenses | 4,719 | 3,041 |
| Accrued compensation | 8,075 | 5,656 |
| Income taxes payable | -- | 1,838 |
| Deferred income taxes, net | 182 | 24 |
| Other current liabilities | 3,197 | 3,394 |
| Total current liabilities | 44,154 | 34,663 |
| Revolver | 53,547 | 71,407 |
| Promissory notes payable, net of current portion | 2,349 | 4,352 |
| Long-term debt, net of current portion | 6,488 | 12,769 |
| Capital lease obligations, net of current portion | 63 | 250 |
| Deferred income taxes, net | 2,969 | 4,455 |
| Other liabilities | 1,292 | 1,085 |
| Total liabilities | 110,862 | 128,981 |
| Equity: | ||
| Measurement Specialties, Inc. ("MEAS") shareholders' equity: | ||
| Serial preferred stock; 221,756 shares authorized; none outstanding | -- | -- |
|
Common stock, no par; 25,000,000 shares authorized; 14,534,431 and 14,483,622 shares issued and outstanding, respectively |
-- | -- |
| Additional paid-in capital | 85,338 | 81,948 |
| Retained earnings | 73,134 | 67,218 |
| Accumulated other comprehensive income | 8,524 | 8,110 |
| Equity attributable to MEAS | 166,996 | 157,276 |
| Noncontrolling interest | 2,117 | 2,352 |
| Total equity | 169,113 | 159,628 |
| Total liabilities and shareholders' equity | $ 279,975 | $ 288,609 |
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MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES |
|||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| Years ended March 31, | |||
| (Amounts in thousands) | 2010 | 2009 | 2008 |
| Cash flows from operating activities: | |||
| Net income | $ 6,343 | $ 5,667 | $ 16,806 |
| Loss from discontinued operations | 142 | -- | -- |
| Income from continuing operations | 6,485 | 5,667 | 16,806 |
| Adjustments to reconcile net income (loss) to net cash | |||
| provided by operating activities from continuing operations: | |||
| Depreciation and amortization | 14,072 | 13,210 | 9,905 |
| Loss on sale of assets | 63 | 94 | 94 |
| Non-cash equity based compensation | 3,218 | 2,942 | 3,397 |
| Unrealized foreign currency exchange loss (gain) | -- | 90 | (1,088) |
| Deferred income taxes | (1,944) | 768 | 3,307 |
| Research tax credits | 1,677 | 974 | 714 |
| Net change in operating assets and liabilities: | |||
| Accounts receivable, trade | (2,237) | 13,217 | (1,165) |
| Inventories | 4,307 | (2,516) | 3,670 |
| Prepaid expenses, other current assets and other receivables | 674 | 654 | (516) |
| Other assets | 909 | 354 | (579) |
| Accounts payable | 1,304 | (10,481) | 3,950 |
| Accrued expenses, accrued compensation, other current and other liabilities | 4,293 | (4,487) | (1,837) |
| Accrued litigation settlement expenses | -- | -- | (1,275) |
| Income taxes payable and income taxes receivable | (3,039) | 1,546 | (2,148) |
| Net cash provided by operating activities from continuing operations | 29,782 | 22,032 | 33,235 |
| Cash flows from investing activities from continuing operations: | |||
| Purchases of property and equipment | (5,217) | (14,001) | (12,818) |
| Proceeds from sale of assets | 67 | 59 | 40 |
| Acquisition of business, net of cash acquired | (100) | (12,667) | (23,386) |
| Net cash used in investing activities from continuing operations | (5,250) | (26,609) | (36,164) |
| Cash flows from financing activities from continuing operations: | |||
| Repayments of long-term debt | (6,382) | (3,017) | (2,675) |
| Borrowings of short-term debt, revolver and notes payable | 5,000 | 17,196 | 46,457 |
| Repayments of revolver, capital leases and notes payable | (21,074) | (6,952) | (30,802) |
| Payment of deferred financing costs | (832) | -- | (1,973) |
| Tax benefit on exercise of stock options | -- | 10 | 260 |
| Noncontrolling interest distributions | (815) | -- | (243) |
| Proceeds from exercise of options and employee stock purchase plan | 172 | 276 | 1,664 |
| Net cash used in financing activities from continuing operations | (23,931) | 7,513 | 12,688 |
| Net cash provided by investing activities of discontinued operations | 141 | 540 | 2,507 |
| Net cash provided by discontinued operations | 141 | 540 | 2,507 |
| Net change in cash and cash equivalents | 742 | 3,476 | 12,266 |
| Effect of exchange rate changes on cash | 68 | (1,558) | 1,590 |
| Cash, beginning of year | 23,483 | 21,565 | 7,709 |
| Cash, end of period | $ 24,293 | $ 23,483 | $ 21,565 |
Reconciliation of Non-GAAP Financial Measures (Unaudited):
|
Three Months Ended March 31, |
Fiscal Year Ended March 31, |
|||
| 2010 | 2009 | 2010 | 2009 | |
| (In thousands, except percentages) | ||||
| Income from continuing operations, net of income taxes | $ 4,301 | $ (3,058) | $ 6,485 | $ 5,667 |
| Less: Net income attributable to noncontrolling interest | 99 | 112 | 427 | 388 |
| Income from continuing operations attributable to MEAS | 4,202 | (3,170) | 6,058 | 5,279 |
| Add Back: | ||||
| Interest | 807 | 905 | 3,899 | 3,081 |
| Provision for income taxes | 453 | 1,406 | 733 | 4,236 |
| Depreciation and amortization | 3,237 | 3,623 | 14,072 | 13,210 |
| Foreign currency exchange loss (gain) | 50 | 96 | (987) | 771 |
| Non-cash equity based compensation | 943 | 691 | 3,218 | 2,942 |
| ITAR legal fees | 76 | -- | 534 | -- |
| Adjusted EBITDA | $ 9,768 | $ 3,551 | $ 27,527 | $ 29,519 |
| As % of Net Sales | 16.0% | 8.3% | 13.1% | 14.5% |
| Free Cash Flow | ||||
| Net cash provided by operating activities from continuing operations | $ 7,897 | $ 4,398 | $ 29,782 | $ 22,032 |
| Purchases of property and equipment | (1,534) | (2,667) | (5,217) | (14,001) |
| Free Cash Flow | $ 6,363 | $ 1,731 | $ 24,565 | $ 8,031 |
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," promulgated under the Securities and Exchange Act of 1934, as amended, defines and prescribes the conditions for use of certain non-GAAP financial information. We believe that certain of our financial measures which meet the definition of non-GAAP financial measures provide important supplemental information to investors.
The financial information accompanying this press release includes the Company's earnings before interest, income taxes, depreciation, amortization, foreign currency transaction gains/losses, stock option expense and certain legal expenses, or "Adjusted EBITDA" and "Free Cash Flow." Adjusted EBITDA and Free Cash Flow are non-GAAP measures that are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from Adjusted EBITDA and Free Cash Flow measures used by other companies. Adjusted EBITDA is derived by adding interest, taxes, depreciation, amortization, foreign currency transaction gains/losses, stock option expense and certain legal expenses to the Company's net income from continuing operations. Free Cash Flow is derived by taking net cash provided by operating activities from continuing operations and subtracting capital expenditures (purchases of property and equipment). The Company believes that Adjusted EBITDA is important to investors because it provides a financial measure that is more representative of the Company's cash flow (prior to taking into account the effects of changes in working capital and purchases of property and equipment), excluding non-cash expenses and items such as foreign currency transaction gains/losses, income taxes, interest and certain legal expenses, which vary greatly period to period. Legal expenses relate to the Company's previously announced investigation into certain export compliance issues. The Company believes that this measure is important to investors because it more accurately represents the leverage effect of fixed expenses. The Company believes Free Cash Flow is also important to investors as it provides useful information about the amount of cash generated by the business after the purchase of property, buildings and equipment, which can then be used to, among other things, invest in the Company's business, make strategic acquisitions and strengthen the balance sheet, and because it is a significant measure used in determining the enterprise value of the Company. A limitation on the use of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period or the residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions.
These non-GAAP financial measures are used by management in addition to and in conjunction with the results presented in accordance with GAAP. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. Non-GAAP financial measures provide an additional way of viewing aspects of our operation that, when viewed with our GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide an understanding of certain factors and trends relating to our business. The Company strongly encourages investors to review our financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.