Schmitt Industries, Inc. (NASDAQ:SMIT) today announced its
operating results for the quarter ended August 31, 2017. For
the three months ended August 31, 2017, total sales increased
$191,116, or 6.6%, to $3,083,648 from $2,892,532 in the three
months ended August 31, 2016. Net loss was $134,098, or
$(0.04) per fully diluted share, for the three months ended August
31, 2017 as compared to net loss of $125,629, or $(0.04) per fully
diluted share, for the three months ended August 31, 2016.
Balancer segment sales focus throughout the
world on end-users, rebuilders and original equipment manufacturers
of grinding machines with the target geographic markets in North
America, Asia and Europe. Balancer segment sales increased
$509,521, or 32.6%, to $2,070,397 for the three months ended August
31, 2017 compared to $1,560,876 for the three months ended August
31, 2016, primarily due to stronger sales in all three of our
target markets – Europe, Asia and North America.
The Measurement segment product line consists of
Acuity® laser-based distance measurement and dimensional sizing
products and Xact® remote monitoring products for propane and
diesel tanks. Total Measurement segment sales decreased $318,405,
or 23.9%, to $1,013,251 for the three months ended August 31, 2017
compared to $1,331,656 for the three months ended August 31, 2016,
primarily due to decreases in sales in both the Xact and Acuity
product lines in addition to the impact on sales associated with
the phase out of the SMS® and Lasercheck® product lines.
Gross margin for the three months ended August
31, 2017 decreased to 45.4% as compared to 47.6% for the three
months ended August 31, 2016. The fluctuation in gross margin
in the three months period ended August 31, 2017 compared to the
same three month period in the prior fiscal year is primarily
influenced by shifts in the product sales mix involving our three
main product lines.
Operating expenses increased $53,285, or 3.6%,
to $1,544,801 for the three months ended August 31, 2017 as
compared to $1,491,516 for the three months ended August 31, 2016.
General, administrative and selling expenses increased $55,675, or
3.9%, for the three months ended August 31, 2017 as compared to the
same period in the prior year primarily due to an increase in
professional fees and other administrative expenses offset, in
part, by a reduction in sales commissions, sales-related travel and
trade show costs.
“We are encouraged by the results of our SBS
product line, which had another quarter with over $2 million in
sales and included growth in all of our target markets – North
America, Asia, and in particular Europe. The increases in
European sales are the direct result of the many years of hard work
and investment in building relationships with the European Original
Equipment Manufacturers,” commented David M. Hudson, President and
CEO of Schmitt Industries. “Net sales in our Measurement businesses
were down reflecting the withdrawal of our activity in the SMS and
Lasercheck lines. Xact product sales were lower as a result of
expected seasonal issues and some vendor delays. We expect the
sales activities for both the Acuity and Xact product lines to
strengthen as we move through the rest of Fiscal 2018,” Hudson
concluded.
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. For the
Measurement Segment, the Company designs, manufactures and sells
laser and white light sensors for distance, dimensional and area
measurement for a wide variety of commercial applications and
ultrasonic measurement products that accurately measure the fill
levels of tanks holding propane, diesel and other tank-based
liquids and transmit that data via satellite to a secure web site
for display. In addition, the Measurement segment includes the
Company’s laser-based microroughness measurement products for the
semiconductor wafer and hard disk drive industries and for other
industrial applications and the Company’s laser-based surface
analysis and measurement products that can be used for a variety of
scientific applications. 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.
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including
but not limited to remarks by David M. Hudson, 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 and currency fluctuations,
ability to reduce operating costs if sales decline, attracting and
retaining key management and qualified technical and sales
personnel, changes in effective tax rates, the increased costs due
to changes in securities laws and regulations, and protection of
intellectual property rights.
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. |
CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
|
|
|
|
|
|
August 31, 2017 |
|
May 31, 2017 |
ASSETS |
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
529,363 |
|
|
$ |
867,607 |
|
Accounts
receivable, net |
|
2,086,015 |
|
|
|
2,344,373 |
|
Inventories |
|
4,544,943 |
|
|
|
4,204,723 |
|
Prepaid expenses |
|
129,978 |
|
|
|
115,756 |
|
Income taxes receivable |
|
3,082 |
|
|
|
7,310 |
|
|
|
7,293,381 |
|
|
|
7,539,769 |
|
|
|
|
|
|
|
Property and equipment, net |
|
846,198 |
|
|
|
865,224 |
|
Other assets |
|
|
|
|
|
Intangible assets, net |
|
575,205 |
|
|
|
601,351 |
|
TOTAL ASSETS |
$ |
8,714,784 |
|
|
$ |
9,006,344 |
|
|
LIABILITIES & STOCKHOLDERS’
EQUITY |
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
1,055,690 |
|
|
$ |
1,101,066 |
|
Accrued commissions |
|
303,114 |
|
|
|
300,234 |
|
Accrued payroll liabilities |
|
217,385 |
|
|
|
360,239 |
|
Other accrued liabilities |
|
288,663 |
|
|
|
267,418 |
|
Total current
liabilities |
|
1,864,852 |
|
|
|
2,028,957 |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
Common stock, no par value, 20,000,000 shares |
|
|
|
|
|
|
|
authorized, 2,995,910 shares issued and
outstanding |
|
|
|
|
|
|
|
at August 31, 2017 and May 31, 2017 |
|
10,670,654 |
|
|
|
10,649,287 |
|
Accumulated other comprehensive loss |
|
(442,296 |
) |
|
|
(427,572 |
) |
Accumulated deficit |
|
(3,378,426 |
) |
|
|
(3,244,328 |
) |
Total stockholders’ equity |
|
6,849,932 |
|
|
|
6,977,387 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ |
8,714,784 |
|
|
$ |
9,006,344 |
|
|
|
|
|
|
|
SCHMITT INDUSTRIES, INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
FOR THE THREE MONTHS ENDED AUGUST 31, 2017 AND
2016 |
(UNAUDITED) |
|
|
|
|
|
|
|
Three Months Ended August 31, |
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
Net sales |
$ |
3,083,648 |
|
|
$ |
2,892,532 |
|
Cost of sales |
|
1,684,129 |
|
|
|
1,516,783 |
|
Gross
profit |
|
1,399,519 |
|
|
|
1,375,749 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
General,
administration and sales |
|
1,468,344 |
|
|
|
1,412,669 |
|
Research and
development |
|
76,457 |
|
|
|
78,847 |
|
Total
operating expenses |
|
1,544,801 |
|
|
|
1,491,516 |
|
|
|
|
|
|
|
Operating loss |
|
(145,282 |
) |
|
|
(115,767 |
) |
|
|
|
|
|
|
Other expense, net |
|
17,543 |
|
|
|
(1,833 |
) |
|
|
|
|
|
|
Loss before
income taxes |
|
(127,739 |
) |
|
|
(117,600 |
) |
|
|
|
|
|
|
Provision for income taxes |
|
6,359 |
|
|
|
8,029 |
|
|
|
|
|
|
|
Net loss |
$ |
(134,098 |
) |
|
$ |
(125,629 |
) |
|
|
|
|
|
|
Net loss per common share, basic |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
Weighted average
number of common shares, basic
|
|
2,995,910 |
|
|
|
2,995,910 |
|
|
|
|
|
|
|
Net loss per common share, diluted |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
Weighted average
number of common shares, diluted |
|
2,995,910 |
|
|
|
2,995,910 |
|
|
|
|
|
|
|
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