HAMPTON, Va., June 5, 2013 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS) (the "Company"), a global designer and manufacturer of sensors and sensor-based systems, announces results for the three and twelve months ended March 31, 2013.
The Company reported an increase in consolidated net sales of $33.8 million, or 10.8%, to $347.0 million for the twelve months ended March 31, 2013, as compared to the corresponding period of last year. For the twelve months ended March 31, 2013, the Company reported net income of $34.2 million, or $2.12 per diluted share, as compared to net income of $27.7 million, or $1.74 per diluted share, for the same period last year.
The Company reported an increase in consolidated net sales of $2.5 million, or 2.9%, to $89.0 million for the three months ended March 31, 2013, as compared to the corresponding period of last year. For the three months ended March 31, 2013, the Company reported net income of $9.1 million, or $0.56 per diluted share, as compared to net income of $8.3 million, or $0.52 per diluted share, for the same period last year.
As detailed in the attached Reconciliation of Non-GAAP Financial Measures and in our SEC Form 10-K, there were several items recorded during the twelve months ended March 31, 2013 impacting our net income, including gains relating to the fair value adjustments to acquisition earn-outs, restructuring charges, and impairment of asset held for sale. The net impact to earnings after income taxes for the year ended March 31, 2013 for these adjustments was an increase of $1.6 million or approximately $0.11 per diluted share.
Frank Guidone, Company CEO commented, "We had a solid finish to another challenging year. We began fiscal 2013 with a strong first half, but similar to fiscal 2012, weak macro conditions created a situation where many customers cut their outlook resulting in inventory contraction in the supply chain and soft sales in our second half. Global demand increased in the fourth quarter as evidenced by our strong bookings and solid book-to-bill which gave us some recovery in sales; however, not back to first half levels. With strong 4th quarter bookings, momentum on development programs and contribution from both the RTD and Spectrum acquisitions, we believe we are well positioned to deliver against our adjusted sales guidance of $400 to $405 million for fiscal 2014 and target Adjusted EBITDA margin of 20%+. Increasing our first quarter sales guidance for the Spectrum acquisition yields a target of $98 million. While we remain cautious given the tepid macro-economic environment, we are confident in our long term growth strategy and ability to drive shareholder value."
On June 5, 2013, the Company filed its Form 10-K for the twelve months ended March 31, 2013. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-K for a more complete discussion of sales, margin and expenses.
The Company will host an investor conference call on Thursday, June 6, 2013 at 11:00 AM Eastern to answer questions regarding the results reported in our Form 10-K for the three and twelve months ended March 31, 2013. US dialers: (877) 407-9210; International dialers (201) 689-8049. 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 conference ID# 415496, 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 measuring pressure, linear/rotary position, force, torque, piezoelectric polymer film sensors, custom microstructures, load cells, vibrations and acceleration, optical absorption, humidity, gas concentration, gas flow rate, temperature, fluid properties and fluid level. MEAS uses multiple advanced technologies - piezoresistive silicon, polymer and ceramic piezoelectric materials, application specific integrated circuits, micro-electromechanical systems ("MEMS"), foil strain gauges, electromagnetic force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, anisotropic magneto-resistive devices, electromagnetic displacement sensors, hygroscopic capacitive structures, ultrasonic measurement systems, optical measurement systems, negative thermal coefficient ("NTC") ceramic sensors, 3-6 DOF (degree of freedom) force/torque structures, complex mechanical resonators, magnetic reed switches, high frequency multipoint scanning algorithms, and high precision submersible hydrostatic level detection – 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," " 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; Competitive factors, such as price pressures and the potential emergence of rival technologies; Compliance with export control laws and regulations; Fluctuations in foreign currency exchange and interest rates; 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; Legislative initiatives, including tax legislation and other changes in the Company's tax position; Legal proceedings; Compliance with debt covenants, including events beyond our control; Conditions in the credit markets, including our ability to raise additional funds or refinance our existing credit facility; Adverse developments in the automotive industry and other markets served by us; 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 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| Three Months Ended | Twelve Months Ended | |||
| March 31, | March 31, | |||
| (Unaudited) | ||||
| (Amounts in thousands, except per share amounts ) | 2013 | 2012 | 2013 | 2012 |
| Net sales | $ 88,969 | $ 86,436 | $ 346,968 | $ 313,204 |
| Cost of goods sold | 53,159 | 51,874 | 204,879 | 187,323 |
| Gross profit | 35,810 | 34,562 | 142,089 | 125,881 |
| Selling, general, and administrative expenses | 25,944 | 23,681 | 101,537 | 89,963 |
| Operating income | 9,866 | 10,881 | 40,552 | 35,918 |
| Interest expense, net | 621 | 642 | 2,693 | 2,574 |
| Foreign currency exchange loss (gain) | (345) | (222) | (110) | (175) |
| Equity income in unconsolidated joint venture | (122) | (194) | (656) | (806) |
| Impairment of asset held for sale | -- | 400 | 489 | 400 |
| Acquisition earn-out adjustment | (662) | -- | (4,384) | -- |
| Other expense (income) | 49 | 27 | (19) | 68 |
| Income before income taxes | 10,325 | 10,228 | 42,539 | 33,857 |
| Income tax expense | 1,202 | 1,883 | 8,346 | 6,153 |
| Net income | $ 9,123 | $ 8,345 | $ 34,193 | $ 27,704 |
| Earnings per common share - Basic: | ||||
| Net income - Basic | $ 0.59 | $ 0.55 | $ 2.22 | $ 1.84 |
| Net income - Diluted | $ 0.56 | $ 0.52 | $ 2.12 | $ 1.74 |
| Weighted average shares outstanding - Basic | 15,481 | 15,167 | 15,381 | 15,086 |
| Weighted average shares outstanding - Diluted | 16,259 | 16,024 | 16,158 | 15,936 |
| MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||
| March 31, | March 31, | |
| (Amounts in thousands) | 2013 | 2012 |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 36,028 | $ 32,725 |
| Accounts receivable trade, net of allowance for doubtful accounts of $1,040 and $766, respectively | 56,134 | 49,315 |
| Inventories, net | 55,984 | 57,704 |
| Deferred income taxes, net | 1,919 | 1,626 |
| Prepaid expenses and other current assets | 4,593 | 5,229 |
| Other receivables | 1,532 | 2,967 |
| Asset held for sale | 940 | 1,429 |
| Total current assets | 157,130 | 150,995 |
| Property, plant and equipment, net | 64,329 | 60,484 |
| Goodwill | 153,924 | 144,455 |
| Acquired intangible assets, net | 56,017 | 49,378 |
| Deferred income taxes, net | 3,781 | 3,613 |
| Investment in unconsolidated joint venture | 2,657 | 3,038 |
| Other assets | 7,704 | 6,244 |
| Total assets | $ 445,542 | $ 418,207 |
| MEASUREMENT SPECIALTIES, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| March 31, | March 31, | |
| (Amounts in thousands, except share amounts) | 2013 | 2012 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Short-term debt | $ -- | $ 1,867 |
| Current portion of long-term debt | 224 | 123 |
| Current portion of capital lease obligations | 21 | 30 |
| Current portion of earn-out contingencies | 1,122 | -- |
| Current portion of deferred acquisition payment | 1,500 | -- |
| Accounts payable | 26,601 | 31,879 |
| Accrued expenses | 6,579 | 5,116 |
| Accrued compensation | 10,315 | 8,755 |
| Income taxes payable | 313 | 3,124 |
| Deferred income taxes, net | 263 | 375 |
| Restructuring liabilities | 396 | -- |
| Other current liabilities | 3,255 | 3,201 |
| Total current liabilities | 50,589 | 54,470 |
| Revolver | 78,000 | 80,251 |
| Long-term debt, net of current portion | 20,064 | 20,711 |
| Capital lease obligations, net of current portion | 7 | 30 |
| Acquisition earn-out contingencies | -- | 4,317 |
| Deferred income taxes, net | 11,267 | 10,184 |
| Other liabilities | 5,291 | 5,227 |
| Total liabilities | 165,218 | 175,190 |
| Equity: | ||
| Serial preferred stock; 221,756 shares authorized; none outstanding | -- | -- |
| Common stock, no par; 25,000,000 shares authorized; 15,553,677 shares and 15,297,151 shares issued and outstanding | -- | -- |
| Additional paid-in capital | 108,287 | 101,435 |
| Retained earnings | 163,206 | 129,013 |
| Accumulated other comprehensive income | 8,831 | 12,569 |
| Total equity | 280,324 | 243,017 |
| Total liabilities and shareholders' equity | $ 445,542 | $ 418,207 |
| MEASUREMENT SPECIALTIES, INC AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| Years ended March 31, | ||
| (Amounts in thousands) | 2013 | 2012 |
| Cash flows from operating activities: | ||
| Net income | $ 34,193 | $ 27,704 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 17,870 | 16,735 |
| Non-cash equity based compensation | 4,733 | 4,264 |
| Acquisition earn-out adjustment | (4,384) | -- |
| Impairment of asset held for sale | 489 | 400 |
| Deferred income taxes | 770 | (713) |
| Research tax credits | (1,449) | (1,551) |
| Equity income in unconsolidated joint venture | (656) | (806) |
| Unconsolidated joint venture distributions | 828 | 582 |
| Net change in operating assets and liabilities, excluding the effects of acquisitions: | ||
| Accounts receivable, trade | (5,023) | (1,506) |
| Inventories | 2,790 | (1,326) |
| Prepaid expenses, other current assets and other receivables | 1,879 | (712) |
| Other assets | (171) | (1,855) |
| Accounts payable | (4,377) | 7,804 |
| Accrued expenses, accrued compensation, restructuring, other current and other liabilities | 3,911 | (3,034) |
| Income taxes payable | (3,697) | (3,366) |
| Net cash provided by operating activities | 47,706 | 42,620 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (12,998) | (20,655) |
| Acquisition of business, net of cash acquired, and acquired intangible assets | (28,058) | (46,575) |
| Net cash used in investing activities | (41,056) | (67,230) |
| Cash flows from financing activities: | ||
| Borrowings from revolver and short-term debt | 25,797 | 64,193 |
| Repayments of revolver and capital leases | (29,883) | (30,764) |
| Repayments of long-term debt | (547) | (186) |
| Payment of deferred financing costs | (231) | (353) |
| Purchase of treasury stock | (7,000) | (6,500) |
| Proceeds from exercise of options and employee stock purchase plan | 7,790 | 8,973 |
| Excess tax benefit from exercise of stock options | 1,329 | 1,090 |
| Net cash provided by (used in) financing activities | (2,745) | 36,453 |
| Net change in cash and cash equivalents | 3,905 | 11,843 |
| Effect of exchange rate changes on cash | (602) | 22 |
| Cash, beginning of year | 32,725 | 20,860 |
| Cash, end of period | $ 36,028 | $ 32,725 |
Reconciliations of Non-GAAP Financial Measures (Unaudited):
| Three Months Ended | Twelve Months Ended | |||
| March 31, | March 31, | |||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands, except percentages) | ||||
| Net income | $ 9,123 | $ 8,345 | $ 34,193 | $ 27,704 |
| Add Back: | ||||
| Interest | 621 | 642 | 2,693 | 2,574 |
| Provision for income taxes | 1,202 | 1,883 | 8,346 | 6,153 |
| Depreciation and amortization | 4,659 | 4,787 | 17,870 | 16,735 |
| Foreign currency exchange gain | (345) | (222) | (110) | (175) |
| Non-cash equity based compensation | 989 | 602 | 4,733 | 4,264 |
| Gain on fair value adjustments for earn-outs | (662) | -- | (4,384) | -- |
| Impairment of asset held for sale | -- | 400 | 489 | 400 |
| Restructuring costs | 396 | -- | 758 | -- |
| ITAR legal fees and acquisition related costs | 185 | 188 | 401 | 988 |
| Adjusted EBITDA | $ 16,168 | $ 16,625 | $ 64,989 | $ 58,643 |
| As % of Net Sales | 18.2% | 19.2% | 18.7% | 18.7% |
| Free Cash Flow | ||||
| Capital expenditures for new French and Chinese facilities | $ (83) | $ (5,657) | $ (1,122) | $ (8,375) |
| Purchases of property and equipment, excluding new facilities | (1,671) | (5,239) | (11,876) | (12,280) |
| Purchases of property and equipment | (1,754) | (10,896) | (12,998) | (20,655) |
| Net cash provided by operating activities | 12,921 | 15,426 | 47,706 | 42,620 |
| Free Cash Flow | $ 11,167 | $ 4,530 | $ 34,708 | $ 21,965 |
| Three Months Ended | Twelve Months Ended | |||
| (Amount in thousands, except per share amounts) | March 31, 2013 | March 31, 2013 | ||
| Net income | $ 9,123 | $ 34,193 | ||
| Adjustments: | ||||
| Impairment of asset held for sale, after income taxes | -- | 303 | ||
| Acquisition earn-out fair value gain, after income taxes | (464) | (3,047) | ||
| Restructuring in Scotland and with Cosense, after income taxes | 305 | 529 | ||
| Swiss income tax claw-back | (529) | 324 | ||
| Acquisition related professional fees, after income taxes | 115 | 249 | ||
| Total adjustments | (573) | (1,642) | ||
| Adjusted Net Income | $ 8,550 | $ 32,551 | ||
| Net income per diluted share | $ 0.56 | $ 2.12 | ||
| Adjusted Net Income per diluted share | $ 0.53 | $ 2.01 | ||
| Weighted average shares outstanding - Diluted | 16,259 | 16,158 | ||
| Three Months Ended | Twelve Months Ended | |||
| (Amount in thousands, except per share amounts) | March 31, 2012 | March 31, 2012 | ||
| Net income | $ 8,345 | $ 27,704 | ||
| Adjustments: | ||||
| Impairment of asset held for sale, after income taxes | 248 | 248 | ||
| Acquisition related professional fees, after income taxes | 117 | 613 | ||
| Adjusted Net Income | $ 8,462 | $ 28,317 | ||
| Net income per diluted share | $ 0.52 | $ 1.74 | ||
| Adjusted Net Income per diluted share | $ 0.53 | $ 1.78 | ||
| Weighted average shares outstanding - Diluted | 16,024 | 15,936 | ||
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, non-cash equity based compensation and certain legal expenses, or "Adjusted EBITDA," "Adjusted Net Income" and "Free Cash Flow." Adjusted EBITDA, Adjusted Net Income 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, Adjusted Net Income and Free Cash Flow measures used by other companies. Adjusted EBITDA is derived by adding interest, taxes, depreciation, amortization, foreign currency transaction gains/losses, non-cash equity based compensation, certain legal expenses related to International Traffic in Arms Regulation (ITAR) matters and certain restructuring costs related to site consolidation to the Company's Adjusted Net Income from continuing operations and professional fees related to acquisitions. Adjusted Net Income is derived by taking net income and removing the impact of adjustments recorded for the gains on fair value of adjustments to earn-outs, impairment of asset held for sale and non-cash discrete income tax expense for the Company's Swiss 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 Adjusted EBITDA 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.