Key Technology, Inc. (NASDAQ:KTEC) announced today sales and
operating results for its fiscal 2017 second quarter, ended
March 31, 2017.
Second Quarter OverviewNet sales for the three
months ended March 31, 2017 totaled $27.4 million, compared to
$28.5 million recorded in the corresponding quarter last
year. The Company reported a net loss for the quarter of
$216,000, or $0.03 per diluted share, compared to a net loss of
$550,000, or $0.09 per diluted share, in the same period a year
ago.
The gross profit for the second quarter of fiscal 2017 was $9.1
million, compared to $8.5 million in the corresponding period last
year. As a percentage of net sales, gross profit was 33.2%
and 29.7% in the second quarter of fiscal 2017 and 2016,
respectively. Operating expenses for the quarter ended
March 31, 2017 were $9.2 million, or 33.5% of net sales,
compared to $9.1 million, or 31.9% of net sales, in the same
quarter last year.
Six Month Year-to-Date OverviewNet sales for
the six months ended March 31, 2017 were $54.7 million,
compared with $53.3 million for the comparable period in fiscal
2016. The Company reported a net loss for the fiscal 2017
six-month period of $200,000, or $0.03 per diluted share, compared
to a net loss of $2.2 million, or $0.36 per diluted share, for the
corresponding six-month period in fiscal 2016.
For the six-month period ended March 31, 2017, gross profit
was $18.3 million, compared to $15.4 million for the same six-month
period of fiscal 2016, or 33.5% and 29.0% of net sales,
respectively. Operating expenses for the six-month period
ended March 31, 2017 were $18.3 million, or 33.4% of net
sales, compared to $18.5 million, or 34.7% of net sales, for the
corresponding period of fiscal 2016.
Jack Ehren, President and CEO stated, “For the 2017 second
fiscal quarter and year-to-date, we achieved significantly higher
gross margins and improved operating results compared to the same
periods in the prior fiscal year, with very similar net sales
levels. Net sales for the second quarter of fiscal 2017 were
slightly lower than our expectations resulting from shipments and
installations that, due to customer-requested schedule changes,
were delayed until after the end of the second quarter.”
Orders and BacklogKey's backlog at the end of
the second quarter of fiscal 2017 was $54.4 million, compared to
$38.0 million one year ago. New orders received during the
second quarter were $35.8 million, compared to $29.2 million in the
corresponding period last year. New orders for the six months
ended March 31, 2017 were $68.3 million, compared to $60.3
million for the corresponding period in fiscal 2016.
Ehren commented, “Our orders were the second highest of any
second quarter order level, and we have now delivered eight
consecutive quarters of year-over-year quarterly order
growth. Our ending backlog of $54.4 million, up 43% over the
prior year’s second quarter ending backlog, is the largest
quarter-end backlog in our Company’s history.”
Ehren further commented, “We have continued to build on the
prior fiscal year’s record order levels in the EMEIA region, with
second quarter and year-to-date EMEIA orders in Euro’s increasing
by 70% and 61%, respectively, over the same periods in the prior
fiscal year. The last three quarters have been our largest three
individual EMEIA bookings quarters ever. The second quarter
again included a number of strategic wins for our new VERYX
platform and other Key solutions in both North America and EMEIA,
including significant orders associated with a large plant
expansion in EMEIA by a major global potato processor.
Additional large orders for this same expansion project were
received in our 2017 third fiscal quarter, resulting in total
orders for this project of approximately $9 million.”
ConclusionEhren concluded, “Our record backlog
at the end of the second fiscal quarter positions Key well for the
second half of fiscal 2017. We anticipate that net sales in
the third quarter of fiscal 2017 will be significantly higher than
the net sales recorded in the third quarter of fiscal 2016.
In addition, we continue to see significant opportunities for our
industry-leading solutions in all of our core markets
globally. We continue to focus on the execution of our
long-term strategy and the generation of attractive returns for the
Company and our shareholders.”
Conference CallThe Company's conference call
related to the fiscal 2017 second quarter can be heard live on the
Internet at 2:00 p.m. Pacific Time on Thursday, April 27,
2017.
To access the call and audio webcast:
Phone -- |
Q&A
participation: |
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Toll-Free: 877-341-5668
International: 224-357-2205 |
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|
Internet -- |
Audio webcast: |
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http://edge.media-server.com/m/p/k5mpgvyq |
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Replay -- |
Available through
Thursday, May 11, 2017 |
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http://edge.media-server.com/m/p/k5mpgvyq |
|
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About Key TechnologyKey Technology
(NASDAQ:KTEC) is a global leader in the design and manufacture of
process automation systems including digital sorters, conveyors,
and 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; and 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, governmental, and
other 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, 2016. 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 beaccessed at www.key.net.
(Financial Tables to Follow)
|
|
Key Technology, Inc. and
Subsidiaries |
Statement of Selected Operating
Information |
(Unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net sales |
$ |
27,355 |
|
|
$ |
28,510 |
|
|
$ |
54,718 |
|
|
$ |
53,313 |
|
Cost of sales |
18,272 |
|
|
20,041 |
|
|
36,405 |
|
|
37,864 |
|
Gross profit |
9,083 |
|
|
8,469 |
|
|
18,313 |
|
|
15,449 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and
marketing |
4,506 |
|
|
4,089 |
|
|
8,824 |
|
|
8,159 |
|
Research
and development |
2,527 |
|
|
2,913 |
|
|
5,021 |
|
|
5,192 |
|
General
and administrative |
1,919 |
|
|
1,795 |
|
|
4,011 |
|
|
4,480 |
|
Amortization of intangibles |
215 |
|
|
303 |
|
|
442 |
|
|
652 |
|
Total operating
expenses |
9,167 |
|
|
9,100 |
|
|
18,298 |
|
|
18,483 |
|
Gain (loss) on
disposition of assets |
1 |
|
|
(10 |
) |
|
3 |
|
|
(2 |
) |
Loss from
operations |
(83 |
) |
|
(641 |
) |
|
18 |
|
|
(3,036 |
) |
Other income
(expense) |
(244 |
) |
|
(192 |
) |
|
(322 |
) |
|
(530 |
) |
Loss before income
taxes |
(327 |
) |
|
(833 |
) |
|
(304 |
) |
|
(3,566 |
) |
Income tax benefit |
(111 |
) |
|
(283 |
) |
|
(104 |
) |
|
(1,318 |
) |
Net loss |
$ |
(216 |
) |
|
$ |
(550 |
) |
|
$ |
(200 |
) |
|
$ |
(2,248 |
) |
Net loss per share |
|
|
|
|
|
|
|
-
basic |
$ |
(0.03 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.36 |
) |
-
diluted |
$ |
(0.03 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
Shares used in per
share calculations - basic |
6,442 |
|
|
6,297 |
|
|
6,408 |
|
|
6,279 |
|
Shares used in per
share calculations - diluted |
6,442 |
|
|
6,297 |
|
|
6,408 |
|
|
6,279 |
|
|
Key Technology, Inc. and
Subsidiaries |
Balance Sheet Information |
(Unaudited, in thousands) |
|
|
|
|
|
March 31, 2017 |
|
September 30, 2016 |
Cash and cash
equivalents |
$ |
8,532 |
|
|
$ |
10,491 |
|
Trade accounts
receivable, net |
14,901 |
|
|
14,024 |
|
Inventories |
40,356 |
|
|
30,687 |
|
Deferred income
taxes |
3,892 |
|
|
3,934 |
|
Prepaid expenses and
other assets |
4,553 |
|
|
3,285 |
|
Total current
assets |
72,234 |
|
|
62,421 |
|
Property, plant and
equipment, net |
13,119 |
|
|
13,789 |
|
Deferred income
taxes |
3,232 |
|
|
3,001 |
|
Goodwill |
9,875 |
|
|
10,277 |
|
Investment in
Proditec |
1,127 |
|
|
1,127 |
|
Intangibles and other
assets, net |
4,612 |
|
|
5,369 |
|
Total assets |
$ |
104,199 |
|
|
$ |
95,984 |
|
|
|
|
|
Accounts payable |
$ |
10,318 |
|
|
$ |
7,381 |
|
Accrued payroll
liabilities and commissions |
5,344 |
|
|
4,932 |
|
Customers'
deposits |
15,484 |
|
|
9,139 |
|
Accrued customer
support and warranty costs |
1,990 |
|
|
2,197 |
|
Customer purchase
plans |
884 |
|
|
1,124 |
|
Current portion of
long-term debt |
467 |
|
|
587 |
|
Other accrued
liabilities |
1,142 |
|
|
956 |
|
Total current
liabilities |
35,629 |
|
|
26,316 |
|
Long-term debt |
4,358 |
|
|
4,565 |
|
Deferred income
taxes |
1,508 |
|
|
1,761 |
|
Other long-term
liabilities |
267 |
|
|
348 |
|
Shareholders'
equity: |
|
|
|
Common stock |
34,512 |
|
|
34,237 |
|
Retained earnings and
other shareholders' equity |
27,925 |
|
|
28,757 |
|
Total
shareholders' equity |
62,437 |
|
|
62,994 |
|
Total liabilities and shareholder's equity |
$ |
104,199 |
|
|
$ |
95,984 |
|
Contact
Jeff Siegal
Senior Vice President and CFO
Key Technology, Inc.
150 Avery Street
Walla Walla, WA 99362
Tel: +1 509-394-3300
Email: jsiegal@key.net
URL: www.key.net
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