Measurement Specialties Announces Third Quarter Results FAIRFIELD,
N.J., Feb. 8 /PRNewswire-FirstCall/ -- Measurement Specialties,
Inc. (AMEX:MSS), a designer and manufacturer of sensors and
sensor-based consumer products, today reported financial results
for the three and nine months ended December 31, 2004. The Company
reported income from continuing operations for the three months
ended December 31, 2004 of $3.6 million, or $0.25 per diluted
share, as compared to $0.9 million, or $0.06 per diluted share for
the same period last year. Proforma Non-GAAP income from continuing
operations for the three months ended December 31, 2003 (which
excludes a charge for non-cash equity based compensation,
litigation expense, restructuring costs and includes an adjustment
to the income tax provision to present the income on a fully taxed
basis) was $3.7 million, or $0.26 per diluted share. For the nine
months ended December 31, 2004, the Company reported income from
continuing operations of $11.0 million, or $0.78 per diluted share,
as compared to $6.3 million, or $0.45 per diluted share for the
same period last year. Proforma Non-GAAP income from continuing
operations for the nine months period ended December 31, 2003 was
$9.3 million, or $0.66 per diluted share. Please refer to the notes
and reconciliation regarding Non-GAAP financial measures contained
in this release. Mr. Frank Guidone, Company CEO commented, "We've
made tremendous progress in the sensor division this quarter, both
in terms of integration of previous acquisitions and new
transactions. With the recent acquisitions of Humirel, MWS Sensorik
and the Polaron pressure business, we have expanded our footprint
in Europe and enhanced our technology portfolio. Equally important,
we have built our management bench strength by rounding out our
leadership team with a number of talented industry veterans.
Looking forward, our attention has turned from acquisition to
integration of the new companies, specifically in the areas of
accounting/IT, operations and sales/marketing." Mr. Guidone
continued, "For the fiscal year, we anticipate sales of
approximately $140 million: $92 million in the Sensor Division and
$48 million from the Consumer Division. On a consolidated basis, we
expect earnings to be approximately $1.05 per diluted share for
FY05. Strong growth in sensor sales, given the full year effect of
the acquisitions and synergies from integration, should drive
earnings growth of 35% in FY06." Three months Ended December 31,
2004 For the three months ended December 31, 2004, net sales
increased 13.0% to $36.0 million, as compared to $31.9 million for
the three months ended December 31, 2003. For the three months
ended December 31, 2004, net sales in the Sensor division increased
55.5% to $23.0 million, as compared to $14.8 million for the three
months ended December 31, 2003, while net sales in the Consumer
Products division decreased 23.7% to $13.1 million for the current
fiscal quarter, as compared to $17.1 million for the three months
ended December 31, 2003. Excluding sales from recent acquisitions,
net sales increased $2.4 million or 16.3%. For the three months
ended December 31, 2004, gross profit increased $1.1 million to
$15.1 million from $14.0 million for the three months ended
December 31, 2003. For the three months ended December 31, 2004,
the Company reported consolidated gross margin of 42.0%, as
compared to 44.1% for the same period last year. The decrease in
gross margin occurred as a result of an overall mix shift to lower
margin business, both in terms of the organic growth (automotive
and non-automotive business) as well as growth through acquisitions
(some of the acquired businesses operate at gross margins lower
than the historical base sensor business). For Consumer Products
division, lower tire gauge sales, which contribute a higher margin
than the scale business, has also contributed to the decrease in
gross margin. Additionally, as a result of the Conair transaction,
the entire scale business is now realizing OEM margins, which are
historically lower than retail margins. Also contributing to the
lower margins was the effect of lower pricing and higher cost of
sales in certain of our bath scale lines. Operating expenses were
$9.9 million for the three months ended December 31, 2004, as
compared to $12.9 million for the three months ended December 31,
2003. Operating expenses for the current period reflect additional
expenses associated with the recent acquisitions as well as
additional costs associated with the implementation of
Sarbanes-Oxley, deferred financing costs and early loan termination
fees. Included in the operating expense for the three months ended
December 31, 2003 is a $3.0 million charge for non-cash equity
compensation, $0.4 million for litigation expense and $0.5 million
for restructuring costs. Please refer to the notes and
reconciliation's relating to non-GAAP financial measures contained
in this press release for further discussion of these items. The
current quarter also includes a decrease in accruals associated
with the employee profit sharing plan. Nine months Ended December
31, 2004 For the nine months ended December 31, 2004, net sales
increased 15.9% to $100.2 million, as compared to $86.5 million for
the nine months ended December 31, 2003. For the nine months ended
December 31, 2004, net sales in the Sensor division increased 45.4%
to $63.6 million, as compared to $43.8 million for the nine months
ended December 31, 2003, while net sales in the Consumer Products
division decreased 14.3% to $36.6 million, as compared to $42.7
million for the nine months ended December 31, 2003. Excluding
sales from recent acquisitions, net sales increased $9.4 million or
21.5% for the period. For the nine months ended December 31, 2004,
gross profit increased $3.9 million to $42.8 million from $38.9
million for the nine months ended December 31, 2003. For the nine
months ended December 31, 2004, the Company reported consolidated
gross margin of 42.7%, as compared to 45.0% for the same period
last year. The decrease in current year-to-date gross margin
compared to the same period last year is largely due to the same
reasons noted in the three months discussion above. After
considering the Proforma Non-GAAP adjustments to the prior year
detailed below, income from continued operations increased $1.7
million to $11.0 million. Operating expenses were $27.1 million for
the nine months ended December 31, 2004, as compared to $31.5
million for the nine months ended December 31, 2003. Included in
the operating expense for the nine months ended December 31, 2003
is a $5.0 million charge for non-cash equity compensation, $0.4
million for litigation expense and $0.5 million for restructuring
costs. The Company will host an investor conference call on
Wednesday, February 9, 2005 beginning at 11:00 AM EST to answer
questions regarding the quarterly results reported in our Form 10Q
for the three and nine months ended December 31, 2004. To
participate, please dial 800-762-4758 prior to the start time.
International callers should dial (480) 629-9035. A recording of
the call will be available for 90 days by dialing (800) 475-6701
and entering access code 769837. The call will be simultaneously
broadcast over the Internet and available for 90 days thereafter at
http://www.vcall.com/ and on the Company's website at
http://www.msiusa.com/. COMPANY CONTACT: FRANK GUIDONE, CEO -
757-766-4400 INVESTOR/MEDIA CONTACT: AIMEE BOUTCHER - 973 239-2878
About MSI Measurement Specialties, Inc. designs and manufactures
sensors and sensor- based consumer products. The Sensor division,
also known as MSI Sensors, produces a wide variety of sensors and
transducers to measure precise ranges of physical characteristics
such as pressure, force, vibration, position, tilt, flow and
humidity. MSI Sensors uses multiple advanced technologies -
including piezoresistive, electro-optic, electro-magnetic,
capacitive, application specific integrated circuits (ASICs),
micro-electromechanical systems (MEMS), piezoelectric polymers and
strain gauges -- to engineer sensors that operate precisely and
cost effectively. The Consumer division produces OEM bathroom
scales, Accutire(R) brand tire pressure gauges and other products.
Regulation G, "Conditions for Use of Non-GAAP Financial Measures",
promulgated under the Securities and Exchange Act of 1934, as
amended, define and prescribe the conditions for use of certain
non-GAAP financial information. We believe that certain of our
financial measures which meet the definition of a non-GAAP
financial measure are important supplemental information to
investors. The Company uses pro forma measures of operating income,
net income, and basic and diluted earnings per share. Typically,
these pro forma measures exclude non-cash equity based compensation
from the Company's statement of operations, as well as non-ordinary
items relating to litigation matters and restructuring charges, and
an adjustment to tax each period on a fully taxed basis. The
non-cash equity based compensation results from warrants issued to
Four Corners Capital Partners LP, a limited partnership of which
Mr. Guidone, our Chief Executive Officer, is a principal. Excluding
these items is useful for illustrating and explaining operating
results and comparisons to prior periods. These items are excluded
from our internal operating plans and measurement of financial
performance, and we believe this is an important measure for
investors to consider in order to better understand the trends in
our operating results. The warrants that comprise the non-cash
compensation have the same basic attributes of an incentive stock
option, for which the Company uses the intrinsic value method
allowed for under Financial Accounting Standards Board Statement
No. 148. Under the intrinsic value method, there is no charge to
the statement of operations for incentive stock options. Because of
the structure of the arrangement with Mr. Guidone, the Company was
not able to issue incentive stock options and, therefore, issued
warrants to Four Corners Capital Partners LP. Although the basic
attributes of the warrants issued are similar to those of incentive
stock options, the intrinsic value method is not acceptable under
generally accepted accounting principles for valuing warrants,
therefore resulting in the non-cash equity based compensation
charge. These non-GAAP financial measures are used in addition to
and in conjunction with the results presented in accordance with
GAAP. These non-GAAP financial measures should not be relied upon
to the exclusion of GAAP financial measures. These non-GAAP
financial measures provide an additional way of viewing aspects of
our operation that, when viewed with our GAAP results and the
accompanying reconciliation's to the corresponding GAAP financial
measures, provide an understanding of certain factors and trends
relating to our business. The company strongly encourages investors
to review our financial statements and publicly filed reports in
their entirety and to not rely on any single financial measure.
This release includes forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended,
including but not limited to, statements regarding non-recurring
expenses, and resolution of pending litigation. Forward looking
statements may be identified by such words or phases "should,"
"intends," "expects," "will," "continue," "anticipate,"
"estimated," "projected," "may," "we believe," "we remain
confident," "future prospects," or similar expressions. The
forward-looking statements above involve a number of risks and
uncertainties. Factors that might cause actual results to differ
include, but are not limited to, success of any reorganization;
ability to raise additional funds; conditions in the general
economy and in the markets served by the Company; competitive
factors, such as price pressures and the potential emergence of
rival technologies; interruptions of suppliers' operations
affecting availability of component materials at reasonable prices;
timely development and market acceptance, and warranty performance
of new products; success in integrating prior acquisitions; changes
in product mix, costs and yields, fluctuations in foreign currency
exchange rates; uncertainties related to doing business in Hong
Kong and China; and the risk factors listed from time to time in
the Company's SEC reports. The Company from time-to-time considers
acquiring or disposing of business or product lines.
Forward-looking statements do not include the impact of
acquisitions or dispositions of assets, which could affect results
in the near term. Actual results may differ materially. The Company
assumes no obligation to update the information in this issue.
MEASUREMENT SPECIALTIES, INC CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE
AMOUNTS) (UNAUDITED) For The Three Months For The Nine Months Ended
December 31, Ended December 31, 2004 2003 2004 2003 Net sales
$36,016 $31,869 $100,247 $86,469 Cost of goods sold 20,898 17,823
57,424 47,527 Gross profit 15,118 14,046 42,823 38,942 Operating
expenses (income): Selling, general and administrative 9,037 8,018
24,785 23,019 Litigation expense -- 400 -- 400 Non-cash equity
based compensation -- 3,046 -- 4,954 Research and development 919
850 2,576 2,610 Customer funded development (80) -- (218) --
Restructuring costs and other costs -- 545 -- 545 Total operating
expenses 9,876 12,859 27,143 31,528 Operating income 5,242 1,187
15,680 7,414 Interest expense, net 148 22 245 322 Other expense
(income) 78 51 144 46 Income from continuing operations before
income tax 5,016 1,114 15,291 7,046 Income tax 1,429 226 4,358 772
Income from continuing operations 3,587 888 10,933 6,274
Discontinued operations: Income from discontinued units -- -- --
112 Net income $ 3,587 $888 $10,933 $6,386 Income per common share
- Basic Income from continuing operations $0.27 $0.07 $0.82 $0.51
Income from discontinued units -- -- -- 0.01 Net income $0.27 $0.07
$0.82 $0.52 Income per common share - Diluted Income from
continuing operations $0.25 $0.06 $0.78 $0.45 Income from
discontinued units -- -- -- 0.01 Net income $0.25 $0.06 $0.78 $0.46
Weighted average shares outstanding - Basic 13,439,320 12,402,445
13,344,886 12,234,849 Weighted average shares outstanding - Diluted
14,204,853 14,004,490 14,089,032 13,905,942 MEASUREMENT
SPECIALTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN
THOUSANDS) (UNAUDITED) December 31, March 31, 2004 2004 ASSETS
Current assets: Cash and cash equivalents $7,480 $19,274 Accounts
receivable, trade, net of allowance for doubtful accounts of $1,104
and $327, respectively 19,671 14,010 Inventories, net 21,296 10,170
Deferred income taxes - current 6,728 6,317 Prepaid expenses and
other current assets 2,267 3,267 Total current assets 57,442 53,038
Property and equipment, net 14,254 10,628 Other assets: Goodwill
40,998 4,191 Intangibles 5,082 -- Deferred income taxes - long term
5,195 8,486 Other assets 1,846 657 53,121 13,334 Total assets
$124,817 $77,000 MEASUREMENT SPECIALTIES, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND
PER SHARE AMOUNTS) (UNAUDITED) December 31, March 31, 2004 2004
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current
portion of promissory notes payable $1,000 $-- Current portion of
deferred acquisition payments 1,400 -- Short-term debt 649 --
Current portion of long-term debt 2,000 -- Accounts payable 15,985
7,919 Accrued compensation 2,751 3,224 Accrued expenses and other
current liabilities 4,340 1,886 Accrued litigation expense
-Shareholders' Class Action -- 2,800 Accrued litigation
expenses-SEC -- 2,100 Deferred gain on sale of assets, current
2,925 2,830 Income taxes payable 787 -- Total current liabilities
31,837 20,759 Other liabilities: Deferred gain on sale of assets,
net of current portion 1,722 3,914 Promissory notes payable 1,750
-- Long-term debt, net of current portion 19,914 -- Deferred
acquisition payments 4,264 -- Other liabilities 1,210 1,487 Total
liabilities 60,697 26,160 Shareholders' equity Serial preferred
stock; 221,756 shares authorized; none outstanding Common stock, no
par; 20,000,000 shares authorized; 13,533,044 and 12,466,950 shares
issued and outstanding, respectively 5,502 5,502 Additional paid-in
capital 55,106 53,509 Retained earnings (Accumulated deficit) 2,836
(8,097) Accumulated other comprehensive income (loss) 676 (74)
Total shareholders' equity 64,120 50,840 Total Liabilities and
Shareholders' Equity $124,817 $77,000 The following table shows the
company's non-GAAP results reconciled to the Generally Accepted
Accounting Principles ("GAAP") Consolidated Statements of
Operations. The Company's non-GAAP results do not include non-cash
compensation (please refer to the note titled "Non-Cash
compensation" under the Critical Accounting Policies Sections of
the Management Discussion and Analysis). For The Three Months For
The Nine Months Ended December 31, Ended December 31, Non-GAAP
Income: 2004 2003 2004 2003 Reported Income (loss) from continuing
operations $3,587 $888 $10,933 $6,274 Non-GAAP Adjustments:
Non-cash equity-based compensation 3,046 4,954 Litigation expense
400 400 Restructuring costs 545 545 Tax provision adjustment (1)
(1,229) (2,917) Non-GAAP Income from continuing operations 3,587
3,650 10,933 9,256 Income from discontinued units 112 Non-GAAP net
income $3,587 $3,650 $ 10,933 $9,368 Non-GAAP Income(loss) per
common share-Basic: Non-GAAP Income (loss) from continuing
operations $0.27 $0.29 $0.82 $0.76 Income from discontinued units
0.01 Non-GAAP net income (loss) $0.27 $0.29 $0.82 $0.77 Non-GAAP
Income (loss) per common share-Diluted: Non-GAAP Income (loss) from
continuing operations $0.25 $0.26 $0.78 $0.66 Income (loss) from
discontinued units 0.01 Non-GAAP net income (loss) $0.25 $0.26
$0.78 $0.67 Weighted average shares outstanding - Basic 13,439,320
12,402,445 13,344,886 12,234,849 Weighted average shares
outstanding - Diluted 14,204,853 14,004,490 14,089,032 13,905,942
DATASOURCE: Measurement Specialties, Inc. CONTACT: Frank Guidone,
CEO of Measurement Specialties, Inc., +1-757-766-4400, or Aimee
Boutcher of Boutcher & Boutcher Investor Relations,
+1-973-239-2878, for Measurement Specialties, Inc. Web site:
http://www.msiusa.com/ http://www.vcall.com/
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