Schmitt Industries Announces First Quarter Fiscal 2019 Operating Results
October 12 2018 - 4:10PM
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 $91,201 in quarter over quarter
comparison.
Summary data for the three months ended August
31, 2018 and 2017:
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Three Months Ended August 31, |
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2018 |
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2017 |
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Change ($) |
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Change (%) |
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Total net
sales |
$ |
3,440,453 |
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$ |
3,083,648 |
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$ |
356,805 |
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11.6 |
% |
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Balancer segment |
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2,194,332 |
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2,070,397 |
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123,935 |
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6.0 |
% |
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Measurement
segment |
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1,246,121 |
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1,013,251 |
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232,870 |
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23.0 |
% |
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Gross
margin |
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38.9 |
% |
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45.4 |
% |
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Operating
expenses |
$ |
1,453,600 |
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$ |
1,544,801 |
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(91,201 |
) |
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-5.9 |
% |
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Net
loss |
$ |
(211,819 |
) |
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$ |
(134,098 |
) |
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(77,721 |
) |
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Net loss per fully diluted
share |
$ |
(0.05 |
) |
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$ |
(0.04 |
) |
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"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.
FORWARD-LOOKING STATEMENTS
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 www.schmitt-ind.com |
SCHMITT INDUSTRIES, INC. |
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CONSOLIDATED BALANCE SHEETS |
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(UNAUDITED) |
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August 31, 2018 |
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May 31, 2018 |
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ASSETS |
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Current
assets |
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Cash and cash equivalents |
$ |
1,742,786 |
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$ |
2,053,181 |
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Restricted cash |
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58,040 |
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58,352 |
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Accounts
receivable, net |
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1,871,737 |
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2,047,032 |
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Inventories |
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6,134,627 |
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5,710,888 |
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Prepaid expenses |
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119,883 |
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148,924 |
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Total current assets |
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9,927,073 |
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10,018,377 |
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Property and equipment, net |
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754,989 |
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770,915 |
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Other assets |
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Intangible assets, net |
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470,622 |
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496,768 |
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TOTAL ASSETS |
$ |
11,152,684 |
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$ |
11,286,060 |
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LIABILITIES &
STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable |
$ |
1,008,211 |
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$ |
1,024,256 |
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Accrued commissions |
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219,005 |
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194,797 |
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Accrued payroll liabilities |
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167,050 |
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188,568 |
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Other accrued liabilities |
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364,868 |
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358,790 |
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Income taxes payable |
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4,472 |
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3,993 |
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Total current
liabilities |
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1,763,606 |
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1,770,404 |
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Stockholders’ equity |
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Common stock, no par value, 20,000,000 shares
authorized, |
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3,994,545 shares issued and outstanding at May 31,
2018 and |
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August 31, 2018 |
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13,091,249 |
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13,085,652 |
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Accumulated other comprehensive loss |
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(456,663 |
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(536,307 |
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Accumulated deficit |
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(3,245,508 |
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(3,033,689 |
) |
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Total stockholders’ equity |
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9,389,078 |
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9,515,656 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
11,152,684 |
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$ |
11,286,060 |
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SCHMITT INDUSTRIES, INC. |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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FOR THE THREE MONTHS ENDED AUGUST 31, 2018 AND
2017 |
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(UNAUDITED) |
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Three Months Ended August 31, |
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2018 |
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2017 |
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Net
sales |
$ |
3,440,453 |
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$ |
3,083,648 |
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Cost of
sales |
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2,100,655 |
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1,684,129 |
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Gross profit |
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1,339,798 |
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1,399,519 |
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Operating
expenses: |
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General,
administration and sales |
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1,405,363 |
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1,468,344 |
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Research
and development |
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48,237 |
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76,457 |
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Total operating
expenses |
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1,453,600 |
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1,544,801 |
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Operating loss |
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(113,802 |
) |
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(145,282 |
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Other income (expense), net |
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(91,651 |
) |
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17,543 |
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Loss before income taxes |
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(205,453 |
) |
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(127,739 |
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Provision for income taxes |
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6,366 |
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6,359 |
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Net loss |
$ |
(211,819 |
) |
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$ |
(134,098 |
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Net loss per common share, basic |
$ |
(0.05 |
) |
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$ |
(0.04 |
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Weighted
average number of common shares, basic |
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3,994,545 |
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2,995,910 |
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Net loss per common share, diluted |
$ |
(0.05 |
) |
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$ |
(0.04 |
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Weighted
average number of common shares, diluted |
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3,994,545 |
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2,995,910 |
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