Key Technology, Inc. (NASDAQ:KTEC) announced today sales and
operating results for fiscal 2016 and the fourth quarter ended
September 30, 2016.
Fiscal 2016 OverviewNet sales for
fiscal 2016 were $120.0 million, an increase of $17.1 million, or
17% compared to the $102.9 million reported for fiscal 2015.
The Company reported a net loss for fiscal 2016 of $697,000, or
$0.11 per diluted share, compared to a net loss of $5.0 million, or
$0.80 per diluted share, for fiscal 2015.
For the 2016 fiscal year, gross profit was $36.0
million, compared to $28.8 million for fiscal 2015, or 30.0% and
28.0%, respectively, of net sales.
Operating expenses for the year ended September 30,
2016 were $36.2 million, or 30.2% of net sales, compared to $36.2
million, or 35.2% of net sales, for fiscal 2015.
Fourth Quarter OverviewNet sales
for the three months ended September 30, 2016 were $30.5 million,
an increase of $0.1 million, or 0.3%, compared to the $30.4 million
reported for the same quarter last year. The Company reported
net earnings for the fourth quarter of $515,000, or $0.08 per
diluted share, compared with a net loss of $1.5 million, or $0.24
per diluted share, in the same period a year ago.
Gross profit for the fourth quarter of fiscal 2016
was $9.9 million, compared to $8.4 million in the corresponding
period last year, or 32.6% compared to 27.6%, respectively, of net
sales.
Operating expenses for the quarter ended September
30, 2016 were $8.8 million, or 29.0% of net sales, compared to
$10.2 million, or 33.7% of net sales, in the same quarter last
year.
Orders and BacklogOrders received
for the fiscal year ended September 30, 2016 were $128.7 million,
compared to $114.8 million in fiscal 2015. New orders
received during the fiscal 2016 fourth quarter were $36.5 million,
compared to $30.6 million in the same period last year. As of
September 30, 2016, the Company's backlog was $40.4 million,
compared to $30.7 million at September 30, 2015.
Jack Ehren, President and Chief Executive Officer,
commented, “We are encouraged by our overall company-wide execution
in the fourth quarter of fiscal 2016. We realized improved
results in all areas of our business during the quarter and fiscal
year, including orders, net sales, gross margins, and operating
results. We achieved our highest fourth quarter orders level
ever at $36.5 million, and our annual orders of $128.7 million was
the second largest orders year in the history of our Company.
Our orders in the fourth quarter and fiscal year were extremely
strong in the EMEIA region, driven by several significant strategic
projects, most notably in the potato market. For fiscal 2016,
orders in euros in the EMEIA region grew 26% over our prior record
order level achieved in fiscal 2015. Orders in this region
over the last two fiscal years have grown 66%. Our fourth
quarter ending backlog of $40.4 million set a new Company record as
the largest backlog entering a new fiscal year.”
Ehren further commented, “We continue to make
significant market progress with our new VERYX® platform.
During fiscal 2016, we won orders for VERYX chute- and belt-fed
systems in all three of our core markets: processed potatoes,
processed fruit and vegetables, and nuts and dried fruit.
VERYX belt-fed orders received during the fourth quarter include
significant wins for multiple systems at several strategic potato
processing customer sites in Europe, demonstrating our increasing
ability to serve the important EMEIA region. Subsequently, in
fiscal 2017, we received an additional large European order for the
VERYX platform in one of our core markets.”
ConclusionEhren concluded, “Our
ongoing VERYX beta site testing at customer sites as well as
customer demonstrations in our Innovation and Solutions Centers in
both North America and Europe have been received very favorably by
our customers in all of our core markets. We expect that
these positive customer experiences will continue to drive
important orders throughout fiscal 2017. We remain committed
and focused on executing our long-term strategy, and generating
positive returns for the Company and our shareholders.”
Conference CallThe Company's
conference call related to the fiscal 2016 year-end and fourth
quarter results can be heard live on the Internet at 2:00 p.m.
Pacific Time on Thursday, November 17, 2016.
To access the audio webcast:Phone - Q&A
participation: Toll-Free: 877-341-5668 International:
224-357-2205Internet - Audio
webcast: http://edge.media-server.com/m/p/n7vhqo5y
Replay - Available through Thursday, December 1,
2016 Audio
replay: http://edge.media-server.com/m/p/n7vhqo5y
About Key TechnologyKey Technology
(NASDAQ:KTEC) is a global leader in the design and manufacture of
automation systems including digital sorters, conveyors, and other
processing equipment. Applying processing knowledge and application
expertise, Key helps customers in the food processing and other
industries improve quality, increase yield, and reduce cost. An
ISO-9001 certified company, Key manufactures its products at its
headquarters in Walla Walla, Washington, USA; in Beusichem, the
Netherlands; Hasselt, Belgium; and Redmond, Oregon, USA. Key offers
customer demonstration and testing services at five locations
including Walla Walla, Beusichem, and Hasselt as well as
Sacramento, California, USA and Melbourne, Australia; and maintains
a sales and service office in Santiago de Queretaro, Mexico.
Forward-Looking StatementsCertain
statements in this press release may be forward-looking statements
for purposes of the Private Securities Litigation Reform Act of
1995. These statements may relate to expected results of
operations or gross margins; expected trends in sales, orders,
earnings and other financial measures; projected expenses,
including general and administrative expenses; national and
international economic conditions; the effect of foreign exchange
fluctuations; or other future occurrences. Actual results
could differ materially from those anticipated in the
forward-looking statements as a result of a variety of economic,
competitive, and governmental risks and uncertainties. These
risks and uncertainties include, among other things: factors
that could increase our cost of operations and reduce gross margins
and profitability, including expanding into new markets,
undertaking complex projects and applications, increasing research
and development expenses, and offering increasingly integrated
products; acquisitions that may harm our operating results; failure
of our existing and new products to compete successfully, which
could result in the loss of market share and a decrease in our
sales and profits; significant investments in unsuccessful research
and development efforts; industry consolidation increasing
competition in the food processing equipment industry; advances in
technology by competitors adversely affecting our sales and
profitability; the failure of our independent sales representatives
to perform as expected, thereby harming our net sales; our
dependence on certain suppliers leaving us temporarily without
adequate access to raw materials or products; and increased or
unanticipated costs associated with product warranties adversely
affecting our profitability. These and other risk factors are
discussed in our filings with the Securities and Exchange
Commission, including in Item 1A, "Risk Factors," of our Annual
Report on Form 10-K for the fiscal year ended September 30,
2015. We undertake no obligation to update or revise any
forward-looking statements in this press release as a result of
subsequent developments, except as may be required by law.
News releases and other information about Key
Technology, Inc. can be accessed at www.key.net.
Key Technology, Inc. and
Subsidiaries |
Statement of Selected Operating
Information |
(Unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Year Ended September 30, |
|
Three Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
Net sales |
$ |
120,040 |
|
|
$ |
102,925 |
|
|
$ |
30,520 |
|
|
$ |
30,443 |
|
Cost of sales |
83,994 |
|
|
74,111 |
|
|
20,577 |
|
|
22,048 |
|
Gross profit |
36,046 |
|
|
28,814 |
|
|
9,943 |
|
|
8,395 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and
marketing |
16,389 |
|
|
17,037 |
|
|
4,096 |
|
|
4,694 |
|
Research and
development |
10,615 |
|
|
9,560 |
|
|
2,704 |
|
|
3,006 |
|
General and
administrative |
8,070 |
|
|
8,104 |
|
|
1,809 |
|
|
2,192 |
|
Amortization of
intangibles |
1,121 |
|
|
1,484 |
|
|
234 |
|
|
357 |
|
Total operating
expenses |
36,195 |
|
|
36,185 |
|
|
8,843 |
|
|
10,249 |
|
Gain (loss) on
disposition of assets |
(1 |
) |
|
13 |
|
|
(11 |
) |
|
2 |
|
Income (loss) from
operations |
(150 |
) |
|
(7,358 |
) |
|
1,089 |
|
|
(1,852 |
) |
Other income
(expense) |
(1,004 |
) |
|
(621 |
) |
|
(245 |
) |
|
(393 |
) |
Earnings (loss) before
income taxes |
(1,154 |
) |
|
(7,979 |
) |
|
844 |
|
|
(2,245 |
) |
Income tax expense
(benefit) |
(457 |
) |
|
(2,960 |
) |
|
329 |
|
|
(705 |
) |
Net earnings
(loss) |
$ |
(697 |
) |
|
$ |
(5,019 |
) |
|
$ |
515 |
|
|
$ |
(1,540 |
) |
Net earnings (loss) per
share |
|
|
|
|
|
|
|
- basic |
$ |
(0.11 |
) |
|
$ |
(0.80 |
) |
|
$ |
0.08 |
|
|
$ |
(0.24 |
) |
- diluted |
$ |
(0.11 |
) |
|
$ |
(0.80 |
) |
|
$ |
0.08 |
|
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
Shares used in per
share calculation - basic |
6,332 |
|
|
6,295 |
|
|
6,403 |
|
|
6,356 |
|
Shares used in per
share calculation - diluted |
6,332 |
|
|
6,295 |
|
|
6,403 |
|
|
6,356 |
|
Key Technology, Inc. and
Subsidiaries |
Balance Sheet Information |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
Cash and cash
equivalents |
|
$ |
10,491 |
|
|
|
$ |
7,726 |
|
|
Trade accounts
receivable, net |
|
|
14,024 |
|
|
|
|
14,836 |
|
|
Inventories |
|
|
30,687 |
|
|
|
|
31,297 |
|
|
Deferred income
taxes |
|
|
3,934 |
|
|
|
|
3,972 |
|
|
Income tax
receivable |
|
|
59 |
|
|
|
|
65 |
|
|
Prepaid expenses and
other assets |
|
|
3,226 |
|
|
|
|
4,043 |
|
|
Total
current assets |
|
|
62,421 |
|
|
|
|
61,939 |
|
|
Property, plant and
equipment, net |
|
|
13,789 |
|
|
|
|
14,799 |
|
|
Deferred income
taxes |
|
|
3,001 |
|
|
|
|
2,917 |
|
|
Intangibles and other
assets, net |
|
|
5,149 |
|
|
|
|
6,221 |
|
|
Investment in
Proditec |
|
|
1,127 |
|
|
|
|
1,127 |
|
|
Goodwill |
|
|
10,277 |
|
|
|
|
10,223 |
|
|
Other Assets |
|
|
220 |
|
|
|
|
320 |
|
|
Total
assets |
|
$ |
95,984 |
|
|
|
$ |
97,546 |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
7,381 |
|
|
|
$ |
10,800 |
|
|
Accrued payroll
liabilities and commissions |
|
|
4,932 |
|
|
|
|
5,452 |
|
|
Customers'
deposits |
|
|
9,139 |
|
|
|
|
4,712 |
|
|
Accrued customer
support and warranty costs |
|
|
2,197 |
|
|
|
|
2,618 |
|
|
Income tax payable |
|
— |
|
|
|
2 |
|
|
Current portion of
long-term debt |
|
|
587 |
|
|
|
|
705 |
|
|
Customer purchase
plans |
|
|
1,124 |
|
|
|
|
1,506 |
|
|
Other accrued
liabilities |
|
|
956 |
|
|
|
|
1,313 |
|
|
Total
current liabilities |
|
|
26,316 |
|
|
|
|
27,108 |
|
|
Long-term debt |
|
|
4,565 |
|
|
|
|
5,149 |
|
|
Deferred income
taxes |
|
|
1,761 |
|
|
|
|
2,144 |
|
|
Other long-term
liabilities |
|
|
348 |
|
|
|
|
408 |
|
|
Shareholders'
equity: |
|
|
|
|
Common stock |
|
|
34,237 |
|
|
|
|
32,676 |
|
|
Warrants |
|
— |
|
|
|
665 |
|
|
Retained earnings |
|
|
30,548 |
|
|
|
|
31,245 |
|
|
Accumulated other
comprehensive income (loss) |
|
|
(1,791 |
) |
|
|
|
(1,849 |
) |
|
Total shareholders'
equity |
|
|
62,994 |
|
|
|
|
62,737 |
|
|
TOTAL |
|
$ |
95,984 |
|
|
|
$ |
97,546 |
|
|
Jeff Siegal
Senior Vice President and Chief Financial Officer
Key Technology, Inc.
150 Avery Street
Walla Walla, WA 99362 USA
Tel: 509-394-3300
Email: jsiegal@key.net
URL: www.key.net
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