HAMPTON, Va., Feb. 6 /PRNewswire-FirstCall/ -- Measurement Specialties, Inc. , a global designer and manufacturer of sensors and sensor- based systems, announced results for the three and nine months ended December 31, 2007. Unless otherwise stated, fiscal 2007 and 2008 results reflect continuing operations only.
The Company reported an increase in net sales of $6.2 million or 13% to $56 million for the three months ended December 31, 2007, as compared to the corresponding period last year. For the three months ended December 31, 2007, the Company reported an increase of $1.5 million in income from continuing operations to $4.9 million, or $0.33 per diluted share, as compared to $3.3 million or $0.23 per diluted share for the same period last year.
For the nine months ended December 31, 2007, net sales increased $19.7 million or 14% to $165.6 million as compared to the corresponding period last year. Income from continuing operations for the nine months ended December 31, 2007 increased $2.8 million to $11.9 million or $0.82 per diluted share, as compared to $9.1 million or $0.63 per diluted share last year. Adjusted income from continuing operations (which excludes the impact of deferred tax items associated with tax law changes) increased 39% to $12.7 million or $0.88 per diluted share. Please refer to the notes and reconciliation regarding non-GAAP financial measures contained in this release.
Frank Guidone, Company CEO commented, "Continued solid growth in sales and ongoing leverage of SGA helped to drive strong results in the quarter. Year to date sales increased 14% and adjusted income from continuing operations grew 39% over the same period last year."
Guidone continued, "We expect solid growth in fourth quarter sales will boost the full fiscal year to $227 to $228 million (including sales from Intersema). Due to upcoming changes in the tax laws in China, we are expecting a jump in our effective tax rate which will negatively impact our fourth quarter; however, due to better than expected results in Q3, we reiterate our EPS guidance of $1.15 to $1.20, excluding the impact of deferred tax items associated with tax law changes."
On February 6, 2008, the Company filed its Form 10-Q for the fiscal quarter ended December 31, 2007. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-Q filed for a more complete discussion of sales, margin and expenses.
The Company will host an investor conference call on Thursday, February 7, 2008 at 11:00 AM EST to answer questions regarding the third quarter results reported in our Form 10-Q for the three and nine months ended December 31, 2007. US dialers: (888) 639-6205; International dialers (703) 925-2608. Interested parties may also listen via the Internet at: http://www.investorcalendar.com/. The call will be available for replay for 30 days through AT&T by dialing (800) 475-6701 (US dialers); (320) 365-3844 (International dialers), and entering access code 909014, and on Investorcalendar.com
About Measurement Specialties. Measurement Specialties, Inc. (MEAS) designs and manufactures sensors and sensor-based systems to measure precise ranges of physical characteristics such as pressure, temperature, position, force, vibration, humidity and photo optics. MEAS 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.
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. Forward looking statements may be identified by such words or phrases "should", "intends", " is subject to", "expects", "will", "continue", "anticipate", "estimated", "projected", "may", "we believe", "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; changes in the Company's tax position; legislative initiatives, including tax legislation; 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.
Company Contact: Mark Thomson, CFO, (757) 766-4224 MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three months ended Nine months ended (Amounts in thousands, except per December 31, December 31, share amounts) 2007 2006 2007 2006 Net sales $55,991 $49,766 $165,604 $145,867 Cost of goods sold 32,522 28,113 95,888 82,396 Gross profit 23,469 21,653 69,716 63,471 Total operating expenses 15,949 15,935 48,629 46,666 Operating income 7,520 5,718 21,087 16,805 Interest expense, net 946 1,518 3,339 4,749 Foreign currency exchange and other expense 425 (12) 834 436 Income from continuing operations before minority interest and income taxes 6,149 4,212 16,914 11,620 Minority interest, net of income taxes 91 230 252 460 Income tax expense from continuing operations 1,205 648 4,747 2,019 Income from continuing operations 4,853 3,334 11,915 9,141 Discontinued operations: Income (loss) from discontinued operations before income taxes 42 (5) 98 (37) Income tax expense (benefit) from discontinued operations (9) (1) (3) (7) Income from discontinued operations 51 (4) 101 (30) Gain on disposition of discontinued operations (net of income taxes) - 2,156 - 2,156 Income (loss) from discontinued operations 51 2,152 101 2,126 Net income $4,904 $5,486 $12,016 $11,267 Net income per common share - Basic: Income from continuing operations $0.33 $0.24 $0.83 $0.65 Income from discontinued operations 0.01 - 0.01 - Gain from disposition of discontinued operations (net of income taxes) - 0.15 - 0.15 Net income per common share - Basic $0.34 $0.39 $0.84 $0.80 Net income per common share - Diluted: Income from continuing operations $0.33 $0.23 $0.82 $0.63 Income (loss) from discontinued operations 0.01 - 0.01 - Gain from disposition of discontinued operations (net of income taxes) - 0.15 - 0.15 Net income per common share - Diluted $0.34 $0.38 $0.83 $0.78 Weighted average shares outstanding - Basic 14,357 14,177 14,337 14,120 Weighted average shares outstanding - Diluted 14,535 14,401 14,512 14,411 MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, March 31, (Amounts in thousands) 2007 2007 ASSETS Current assets: Cash and cash equivalents $28,958 $7,709 Accounts receivable, trade, net of allowance for doubtful accounts of $624 and $516, respectively 34,960 34,774 Inventories, net 41,774 37,231 Deferred income taxes, net 4,956 4,718 Prepaid expenses and other current assets 3,662 3,057 Other receivables 847 420 Due from joint venture partner 1,622 1,456 Current portion of promissory note receivable 1,077 2,465 Total current assets 117,856 91,830 Property, plant and equipment, net 35,403 27,559 Goodwill 92,027 77,397 Acquired intangible assets, net 32,968 17,006 Deferred income taxes, net 2,989 8,360 Promissory note receivable, net of current portion - 851 Other assets 1,725 1,688 Total Assets $282,968 $224,691 MEASUREMENT SPECIALTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, March 31, (Amounts in thousands) 2007 2007 LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of promissory notes payable $2,177 $100 Current portion of deferred acquisition obligation - 1,973 Current portion of long-term debt 3,106 2,753 Current portion of capital lease obligation 798 811 Accounts payable 21,825 17,742 Accrued expenses 4,171 2,447 Accrued compensation 6,385 6,616 Income taxes payable 3,115 3,089 Other current liabilities 2,473 4,089 Accrued litigation settlement expenses - 1,275 Total current liabilities 44,050 40,895 Revolver 69,647 42,010 Long-term debt, net of current portion 15,914 17,561 Capital lease obligation, net of current portion 912 1,354 Promissory notes payable, net of current portion 6,531 - Other liabilities 542 606 Total liabilities 137,596 102,426 Minority Interest 1,690 1,628 Shareholders' equity: Serial preferred stock; 221,756 shares authorized; none outstanding - - Common stock, no par; 25,000,000 shares authorized; 14,375,546 and 14,280,364 shares issued and outstanding, respectively - - Additional paid-in capital 77,460 73,399 Retained earnings 57,513 45,497 Accumulated other comprehensive income 8,709 1,741 Total shareholders' equity 143,682 120,637 Total liabilities, minority interest and shareholders' equity $282,968 $224,691 Reconciliation for Non-GAAP Measures (Unaudited): Three months ended Nine months ended December 31, December 31, 2007 2006 2007 2006 Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock option) Income from Continuing Operations $4,853 $3,334 $11,915 $9,141 Add Back: Interest 946 1,518 3,339 4,749 Income Taxes 1,205 648 4,747 2,019 Depreciation and Amortization 2,273 2,516 6,784 7,207 Option Expense under SFAS 123R 860 782 2,493 1,985 Adjusted EBITDA $10,137 $8,798 $29,278 $25,101 As % of Net Sales 18.1% 17.7% 17.7% 17.2% Adjusted SG&A Reconciliation Reported Operating Expense $15,949 $15,935 $48,629 $46,666 Amortization of Acquired Intangibles 732 1,149 2,279 3,298 Option Expense under SFAS 123R 860 782 2,493 1,985 Adjusted Sales, General & Administrative (SG&A) $14,357 $14,004 $43,857 $41,383 As % of Net Sales 25.6% 28.1% 26.5% 28.4% Adjusted Income from Continuing Operations Income from continuing operations - reported $4,853 $3,334 $11,915 $9,141 Deferred income tax benefit associated with China tax law change $(175) $(175) Deferred income tax expense associated with German tax law change - - 997 - Adjusted Income from Continuing Operations $4,678 $3,334 $12,737 $9,141 Change from prior year 40% 39% Per diluted share $0.32 $0.23 $0.88 $0.63
Regulation G, "Conditions for Use of Non-GAAP Financial Measures," promulgated under the Securities and Exchange Act of 1934, as amended, defines and prescribes the conditions for use of certain non-GAAP financial information. We believe that certain of our financial measures which meet the definition of non-GAAP financial measures provide important supplemental information to investors.
The financial information accompanying this press release includes the Company's earnings before interest, taxes, depreciation, amortization and stock option expense, or "Adjusted EBITDA." This number is derived by adding interest, taxes, depreciation, amortization and stock option expense to the Company's income from continuing operations. The Company believes that this information is important to investors because is provides a financial measure that is more representative of the cash flow of the Company, excluding non- cash expenses and items such as taxes and interest, which vary greatly period to period The Company believes that this measure is important to investors because it more accurately represents the leverage effect of fixed expenses given our rapid growth in sales.
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. The Company believes that non-GAAP financial measures provide an additional way of viewing aspects of our operation that, when viewed with our GAAP results and the accompanying reconciliations 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.
