Continental Materials Corporation Reports Unaudited Second Quarter Results
August 15 2017 - 4:30PM
Continental Materials Corporation (NYSE MKT:CUO) today reported net
income of $1,028,000, or 61 cents per share for the second quarter
ended July 1, 2017 compared to net income of $1,801,000 or $1.08
per share for the second quarter ended July 2, 2016.
Consolidated sales in the second quarter of 2017 were
$39,887,000 or $2,834,000 (6.6%) lower than the second quarter of
2016. The Concrete, Aggregates and Construction Supplies (CACS)
segment accounted for the majority of the decline in sales. In the
second quarter of 2016, the CACS segment reported over $2,800,000
in revenue from a windmill job serviced by a portable plant. There
was no such project in 2017.
The operating income in the second quarter of 2017 was
$1,655,000 compared to $2,830,000 in the second quarter of 2016.
The Door segment reported a 21.4% increase in operating income as
job pricing was favorable; however, all other segments reported
decreases in operating income. The Evaporative Cooling segment
reported a decline of $459,000 as changes in sales mix combined
with higher labor and material costs, notably steel, to reduce
profitability. The Heating and Cooling segment reported a decline
of $260,000, also attributable to higher steel costs and aggressive
pricing of fan coil jobs early in 2017. The CACS segment incurred
higher material, production and delivery costs in the second
quarter of 2017 compared to the prior year second quarter reducing
its operating income by $599,000 between periods.
Consolidated sales in the first half of 2017 were $73,990,000, a
decrease of $2,959,000 or 3.9% compared to the first six months of
2016. Each segment reported a decline in sales for the current year
period. Sales in the CACS segment decreased $1,515,000 (4.6%)
primarily due to the 2016 portable plant job noted in the above
discussion of the quarter’s sales. Sales in the Evaporative Cooling
segment declined $757,000 (4.4%) primarily due to lower volume.
Sales in the Heating and Cooling segment decreased $571,000 (3.2%)
as furnace sales improved, but fan coil sales lagged prior year
levels. Sales in the Door segment declined $116,000 (1.3%).
The operating income for the first six months of 2017 was
$1,044,000 compared to $3,682,000 in the first half of 2016. The
Door segment reported an 11.5% increase in operating income. The
CACS, Evaporative Cooling and Heating and Cooling segments all
reported declines in operating profit between the first half of
2017 and the first half of 2016. The declines, $989,000, $969,000
and $729,000, respectively, were primarily due to the same reasons
discussed in the quarter results above as well as increased freight
costs in the Heating and Cooling segment.
Income taxes are recorded based upon the effective rate for the
year estimated at the end of each quarter. The effective rate
estimated as of July 1, 2017 and July 2, 2016 was 34.0%.
For further information, see the Company’s Form 10-Q report for
the quarterly period ended July 1, 2017.
CAUTIONARY STATEMENT-- Statements in this document that are not
historical facts are forward-looking statements. It is important to
note that the company’s actual results could differ materially from
those projected in such forward-looking statements. Additional
information concerning factors that could cause actual results to
differ materially from those suggested in the forward-looking
statements is contained in the company’s Annual Report on Form 10-K
for the year ended January 2, 2016 filed with the Securities and
Exchange Commission, as the same may be amended from time to time.
Forward-looking statements are not guarantees of performance. They
involve risks, uncertainties and assumptions. The future results
and shareholder values of the company may differ materially from
those expressed in these forward-looking statements. Many of the
factors that will determine these results and values are beyond the
company’s ability to control or predict. Shareholders are cautioned
not to put undue reliance on forward-looking statements. In
addition, the company does not have any intention or obligation to
update forward-looking statements after the date hereof, even if
new information, future events, or other circumstances have made
them incorrect or misleading. For those statements, the company
claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995.
|
CONTINENTAL MATERIALS CORPORATION |
SUMMARY OF SALES AND EARNINGS |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
July 1, 2017 |
July 2, 2016 |
|
July 1, 2017 |
July 2, 2016 |
|
|
|
|
|
|
Sales |
$ |
39,887,000 |
|
$ |
42,721,000 |
|
|
$ |
73,990,000 |
|
$ |
76,949,000 |
|
|
|
|
|
|
|
Operating income |
|
1,655,000 |
|
|
2,830,000 |
|
|
|
1,044,000 |
|
|
3,682,000 |
|
|
|
|
|
|
|
Interest expense,
net |
|
(94,000 |
) |
|
(113,000 |
) |
|
|
(142,000 |
) |
|
(208,000 |
) |
|
|
|
|
|
|
Other (expense) income,
net |
|
(4,000 |
) |
|
12,000 |
|
|
|
16,000 |
|
|
25,000 |
|
|
|
|
|
|
|
Income before income
taxes |
|
1,557,000 |
|
|
2,729,000 |
|
|
|
918,000 |
|
|
3,499,000 |
|
|
|
|
|
|
|
Provision for income
taxes |
|
529,000 |
|
|
928,000 |
|
|
|
312,000 |
|
|
1,190,000 |
|
|
|
|
|
|
|
Net income |
$ |
1,028,000 |
|
$ |
1,801,000 |
|
|
$ |
606,000 |
|
$ |
2,309,000 |
|
|
|
|
|
|
|
Net income per basic
and diluted share: |
$ |
0.61 |
|
$ |
1.08 |
|
|
$ |
0.36 |
|
$ |
1.39 |
|
|
|
|
|
|
|
Average shares
outstanding |
|
1,682,000 |
|
|
1,673,000 |
|
|
|
1,678,000 |
|
|
1,667,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: Mark S. Nichter
(312) 541-7207
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