Schmitt Industries Announces First Quarter Fiscal 2019 Operating Results

Date : 10/12/2018 @ 9:10PM
Source : GlobeNewswire Inc.
Stock : Schmitt Industries, Inc. (SMIT)
Quote : 2.16  0.0 (0.00%) @ 12:00PM

Schmitt Industries Announces First Quarter Fiscal 2019 Operating Results

Schmitt Industries, Inc. (NASDAQ:SMIT)
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1 Year : From May 2018 to May 2019

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Schmitt Industries, Inc. (NASDAQ: SMIT) today announced its operating results for the first quarter of Fiscal 2019.  Results for the three months ended August 31, 2018 reflect the Company’s on-going initiatives to focus on increasing sales in both business segments, Balancer and Measurement, and decreasing operating expenses.

Highlights of the quarter ended August 31, 2018:

  • Balancer segment sales exceeded $2 million for the sixth consecutive quarter;
  • Xact product sales and monitoring revenues, as a component of the Measurement segment, totaled $824,999 for three months ended August 31, 2018 and;
  • Operating expenses decreased $91,201 in quarter over quarter comparison.

Summary data for the three months ended August 31, 2018 and 2017:

  Three Months Ended August 31,                                  
  2018  2017   Change ($) Change (%)                             
Total net sales$3,440,453  $3,083,648  $356,805  11.6%                             
 Balancer segment 2,194,332   2,070,397   123,935  6.0%                             
 Measurement segment 1,246,121   1,013,251   232,870  23.0%                             
Gross margin 38.9%  45.4%                                  
Operating expenses$1,453,600  $1,544,801   (91,201) -5.9%                             
Net loss$(211,819) $(134,098)  (77,721)                               
Net loss per fully   diluted share$(0.05) $(0.04)                                  

"While the net loss this quarter is disappointing, we see these results are largely driven by two significant events occurring during the quarter. These include foreign currency losses in the amount of $98,872, which were driven by currency shifts of the US Dollar against the Chinese RMB during the quarter, and $162,155 in additional legal and professional expenses incurred as compared to the same quarter a year ago,” commented David W. Case, President and CEO of Schmitt Industries. “It is worth noting that even with these additional legal and professional expenses incurred during our first quarter of Fiscal 2019, we were still able to reduce overall operating expenses by $91,201.  We look forward to moving beyond the 2019 Annual Meeting and refocusing our attention on the Company’s strategic initiatives,” Case added.

About Schmitt Industries

Schmitt Industries, Inc. (the Company) designs, manufactures and sells high precision test and measurement products for two main business segments: the Balancer Segment and the Measurement Segment. For the Balancer Segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems for the worldwide machine tool industry, particularly for grinding machines.  The Company also provides sales and service for Europe and Asia through its wholly owned subsidiary, Schmitt Europe Limited (SEL), located in Coventry, England and through its sales representative office located in Shanghai, China. For the Measurement Segment, the Company has two core product lines: the Acuity® product line, which consists of sales of laser and white light sensor distance measurement and dimensional sizing products; and the Xact® product line, which consists of sales of remote tank monitoring products that measure the fill levels of tanks holding propane, diesel and other tank-based liquids and revenues from the related monitoring services associated with the transmission of data from the tanks to a secure web site.


Certain statements in this release, including but not limited to remarks by David W. Case, are “forward-looking statements.” These statements are based upon current expectations, estimates and projections about the Company’s business that are based, in part, on assumptions made by management.  These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.  Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic conditions and global financial concerns, the volatility of the Company’s primary markets, the ability to develop new products to satisfy changes in consumer demands, the intensity of competition, increased pricing pressure from both competitors and customers, the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary supplier increases the prices of raw materials or components, the ability to ramp up manufacturing to satisfy increasing demand, maintenance of a significant investment in inventories in anticipation of future sales, existing cash levels which may not be sufficient to fund future growth, fluctuations in quarterly and annual operating results, risks associated with operating a global business including risks from international sales, reduction in demand or loss of significant customers, changes in foreign import tariffs and currency fluctuations including the United Kingdom’s likely exit from the European Union, ability to reduce operating costs if sales decline, attracting and retaining key management and qualified technical and sales personnel, impact resulting from the actions of activist shareholders, changes in effective tax rates, protection of intellectual property rights and the increased costs due to changes in securities laws and regulations.

For further information regarding risks and uncertainties associated with the Company’s business, please refer to Schmitt’s SEC filings, including, but not limited to, its Forms 10-K, 10-Q and 8-K.

The forward-looking statements in this release speak only as of the date on which they were made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes to this document made by wire services or internet service providers.

  For more information contact:Ann M. Ferguson, CFO and Treasurer(503) 227-7908 or visit our web site at

  August 31, 2018 May 31, 2018 
 Current assets      
   Cash and cash equivalents$  1,742,786  $  2,053,181  
   Restricted cash   58,040     58,352  
   Accounts receivable, net   1,871,737     2,047,032  
   Inventories   6,134,627     5,710,888  
   Prepaid expenses   119,883     148,924  
 Total current assets   9,927,073     10,018,377  
 Property and equipment, net   754,989     770,915  
 Other assets       
   Intangible assets, net   470,622     496,768  
 TOTAL ASSETS$  11,152,684  $  11,286,060  
                                                                  LIABILITIES & STOCKHOLDERS’ EQUITY 
 Current liabilities      
   Accounts payable$  1,008,211  $  1,024,256  
   Accrued commissions   219,005     194,797  
   Accrued payroll liabilities   167,050     188,568  
   Other accrued liabilities   364,868     358,790  
   Income taxes payable   4,472     3,993  
 Total current liabilities    1,763,606     1,770,404  
 Stockholders’ equity      
   Common stock, no par value, 20,000,000 shares authorized,      
      3,994,545 shares issued and outstanding at May 31, 2018 and      
      August 31, 2018   13,091,249     13,085,652  
   Accumulated other comprehensive loss   (456,663)    (536,307) 
   Accumulated deficit   (3,245,508)    (3,033,689) 
 Total stockholders’ equity   9,389,078     9,515,656  

    Three Months Ended August 31, 
    2018  2017  
 Net sales$  3,440,453  $  3,083,648  
 Cost of sales   2,100,655     1,684,129  
    Gross profit   1,339,798     1,399,519  
 Operating expenses:      
  General, administration and sales   1,405,363     1,468,344  
  Research and development   48,237     76,457  
   Total operating expenses   1,453,600     1,544,801  
 Operating loss   (113,802)    (145,282) 
  Other income (expense), net   (91,651)    17,543  
 Loss before income taxes   (205,453)    (127,739) 
  Provision for income taxes   6,366     6,359  
 Net loss$  (211,819) $  (134,098) 
  Net loss per common share, basic$  (0.05) $  (0.04) 
  Weighted average number of common shares, basic   3,994,545     2,995,910  
  Net loss per common share, diluted$  (0.05) $  (0.04) 
  Weighted average number of common shares, diluted   3,994,545     2,995,910  


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