BENTHOS, INC. (NASDAQ: BTHS) today reported financial results for
the second quarter and first half of fiscal 2005 ended March 31,
2005. Net sales for the quarter were $5,914,000, an increase of
41.0% from net sales of $4,195,000 in the second quarter of the
previous fiscal year. Net income for the quarter was $271,000, or
$0.17 per diluted share, compared to a net loss of $36,000, or
($0.03) per share, in the second quarter of fiscal 2004. Gross
profit margin for the second quarter of fiscal 2005 was 42.5% vs.
42.0% in the second quarter of the previous year, and the first
half gross profit margin was 41.8% vs. 39.9% in the first half of
fiscal year 2004. Selling, general and administrative expenses for
the second quarter of fiscal 2005 were $1,624,000, including
approximately $103,000 of expenses related to the Company's
evaluation of its strategic alternatives and expenses related to
Sarbanes-Oxley Section 404 compliance. In the Undersea Systems
Division, second quarter 2005 net sales were $4,148,000, a 50.5%
increase compared to net sales of $2,757,000 in the same period
last year. Net sales in the TapTone Package Inspection Systems
Division in the second quarter of fiscal 2005 were $1,766,000, a
22.8% increase over net sales of $1,438,000 in the second quarter
of 2004. For the first half of this year, net sales for the Company
were $10,933,000, an increase of 36.4% compared to $8,018,000 in
same period of last year. For the first half of fiscal 2005, net
sales of Undersea Systems Division products increased by 45.4% to
$7,572,000 as compared to $5,208,000 for the same period last year,
while TapTone Package Inspection Systems Division net sales
increased by 19.6% to $3,361,000 as compared to $2,810,000 in the
first half of last year. Pretax profit in the second quarter of
fiscal 2005 was $347,000, up from a loss of $36,000 in the second
quarter of the prior year. In the first half of fiscal 2005, pretax
profit was $554,000 vs. a loss of $223,000 in the first half of the
prior year, an improvement of $777,000. Net income for the first
half of fiscal 2005 was $432,000, or $0.27 per diluted share
compared to a net loss of $223,000, or ($0.16) per share, in the
first half of fiscal 2004, an improvement of $655,000. Commenting
on today's announcement, Ronald L. Marsiglio, Benthos President and
CEO, said, "Growth in both of our divisions has fueled a successful
first half for Benthos and we are pleased with these fiscal 2005
year-to-date results. The Undersea Systems Division has been
particularly strong with a 45% gain in year-over-year sales for the
first six months and virtually all segments of that business are
up. This is due in large part to continuing strong sales of our
hydrophone products, as well as geophysical, remotely operated
vehicles, acoustic, and communications products." "Hydrophone sales
are up by 132.5% over the first half of last year with large orders
received in both the first and second quarters of fiscal 2005.
Modem sales are up by 75.1% due to strong demand from commercial
and U.S. Navy customers. Geophysical sales are up 35.4% in the same
period due, in part, to the shipment of a C3D(TM) 3-Dimensional
Side Scan Sonar system to the Mississippi Department of Fisheries
in the most recent quarter. We are continuing to promote this
innovative system to potential users and having systems in the
field is a great aid in this effort." "Also included in the sales
for the second quarter were five Stingray Remotely Operated Vehicle
systems for the Canada Border Services Agency. These systems join
the five systems already in use throughout Canada that were shipped
last year and have been highly successful in port and harbor
security operations, including drug seizures." "The TapTone Package
Inspection Systems Division has grown by nearly 20% over the first
half of last year. Sales to beverage processors are strong as the
demand for leak detection in plastic containers increases. Now,
many of the major players in the food, beverage, dairy and
industrial chemical industries are turning to TapTone to increase
the integrity of their products in plastic containers. TapTone's
expansion in recent years into x-ray fill level inspection will
also aid future growth of the Package Inspection Systems Division."
Marsiglio concluded, "We are focused on profitable growth and are
pleased with the 36.4% sales increase for the first half of fiscal
2005. While we are still cautious about the timing of large orders,
market conditions, and sales to major customers, the third quarter
is off to a good start and we anticipate a further strengthening of
the Company in the second half of fiscal 2005." Benthos, Inc.,
through its Undersea Systems Division, designs, manufactures, sells
and services a variety of oceanographic products for underwater
tasks; and through its TapTone Package Inspection Systems Division
makes systems for testing consumer packages made of glass, metal or
plastic. The common stock of the Company is traded on the Nasdaq
SmallCap market under the symbol "BTHS". For more information,
Benthos can be found on the Internet at www.benthos.com. Forward
Looking Statements The statements in this news release relating to
plans, strategies, economic performance and trends and other
statements that are not descriptions of historical facts are
"forward-looking statements" within the meaning of the Federal
Securities Laws. Forward-looking statements are based on
management's current assumptions and expectations, which are
inherently subject to risks and uncertainties and are difficult to
predict. Actual results could differ materially from those
currently anticipated due to a number of factors which include: the
timing of large project orders, competitive factors, shifts in
customer demand, government spending, economic cycles, availability
of financing, regulatory changes and other factors. More
information about these factors is contained in the Company's
filings with the Securities and Exchange Commission. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results or outcomes
may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company undertakes
no obligation to publicly review or update any forward-looking
information, whether as a result of future developments, newly
acquired information or other matters. -0- *T Benthos, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets (in thousands)
(unaudited) Assets March 31, 2005 September 30, 2004
----------------- ------------------- Current Assets: Cash and Cash
Equivalents $ 1,108 $ 241 Accounts Receivable, Net 2,935 3,565
Inventories 3,469 3,149 Prepaid Expenses and Other Current Assets
124 168 ------- ------ Total Current Assets 7,636 7,123 Property,
Plant and Equipment, Net 1,181 1,189 Goodwill 576 576 Acquired
Intangible Assets, Net 98 218 Other Assets, Net 29 35 -------
------ $ 9,520 $9,141 ======= ====== Liabilities and Stockholders'
Investment Current Liabilities: Current Portion of Long-Term Debt $
279 $ 279 Accounts Payable 1,404 1,217 Accrued Expenses 1,325 1,558
Customer Deposits 353 302 ------- ------ Total Current Liabilities
3,361 3,356 ------- ------ Long-Term Debt, Net of Current Portion
116 256 ------- ------ Stockholders' Investment: Common stock, $.06
2/3 Par Value- Authorized - 7,500 Shares Issued - 1,679 and 1,665
Shares at March 31, 2005 and September 30, 2004, respectively 112
111 Capital in Excess of Par Value 1,729 1,648 Retained Earnings
4,833 4,401 Treasury Stock, at cost- 270 shares at March 31, 2005
and September 30, 2004 (631) (631) ------- ------ Total
Stockholders' Investment 6,043 5,529 ------- ------ $ 9,520 $9,141
======= ====== Benthos, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations (in thousands, except per
share amounts) (unaudited) Three Months Six Months Ended Ended
March 31, March 31, 2005 2004 2005 2004 ------ ------ -------
------ Product Sales $5,403 $3,642 $ 9,832 $7,034 Services 511 553
1,101 984 ------ ------ ------- ------ Total Net Sales 5,914 4,195
10,933 8,018 Cost of Product Sales 3,139 2,070 5,762 4,260 Cost of
Services 259 364 605 555 ------ ------ ------- ------ Gross Profit
2,516 1,761 4,566 3,203 Selling, General & Administrative
Expenses 1,624 1,298 2,922 2,481 Research and Development Expenses
479 424 956 794 Amortization of Acquired Intangibles 59 59 119 119
------ ------ ------- ------ Income (Loss) from Operations 354 (20)
569 (191) Interest Expense (7) (16) (15) (32) ------ ------ -------
------ Income (Loss) before Income Taxes 347 (36) 554 (223)
Provision for Income Taxes 76 -- 122 -- ------ ------ -------
------ Net Income (Loss) $ 271 $ (36) $ 432 $ (223) ====== ======
======= ====== Basic Earnings (Loss) Per Share $ 0.19 $(0.03) $
0.31 $(0.16) ====== ====== ======= ====== Diluted Earnings (Loss)
Per Share $ 0.17 $(0.03) $ 0.27 $(0.16) ====== ====== =======
====== Weighted Average Number of 1,404 1,383 1,401 1,383 Shares
Outstanding ===== ===== ===== ===== Weighted Average Number of
1,616 1,383 1,607 1,383 Shares Outstanding, Assuming Dilution =====
===== ===== ===== *T
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