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Measurement Specialties Announces FY05-Q4 and Fiscal Year Results
HAMPTON, Va., June 13 /PRNewswire-FirstCall/ -- Measurement Specialties, Inc.
(AMEX:MSS), a designer and manufacturer of sensors and sensor-based consumer
products, announced results for the fourth quarter and fiscal year ended March
31, 2005.
The Company reported net income for the 12 months ended March 31, 2005 of $14.8
million, or $1.05 per diluted share, as compared to $21.6 million, or $1.54 per
diluted share for the same period last year. Pro forma net income from
continuing operations for the 12 months ended March 31, 2004 was $11.7 million,
or $0.83 per diluted share. FY04 pro forma net income, which is used in order
to be comparable with FY05 results, excludes one-time charges for non-cash
equity based compensation, legal settlement expenses, restructuring charges,
gain on the sale of assets and normalized tax provisions. The effect of
changes in tax planning strategies and the finalization of the year end
accounting for global tax accruals accounted for the improvement in FY05 net
income over previous guidance. Please refer to the notes and reconciliation
regarding Non-GAAP financial measures contained in this release.
Frank Guidone, Company CEO commented, "Last year we established a strategy to
aggressively grow our Sensor division and position the Company as a global
sensor solutions provider; our FY05 results were consistent with that strategy.
Organically, we grew our Sensor division 23% and completed six acquisitions
throughout the year that boosted total Sensor sales growth 53% over FY04.
Companywide, we grew sales and earnings 25% and 27% respectively as compared to
FY04 pro forma net income, and established a foundation for accelerated growth
in FY06. Consistent with our previous FY06 guidance, we anticipate growth in
sales and earnings of approximately 25% and 30%, respectively. We believe we
are well positioned in the market, and are pleased with the progress made in
FY05 toward our long-term vision and goals."
For the three months ended March 31, 2005, net sales increased 54.3% to $40.7
million, as compared to $26.3 million for the three months ended March 31,
2004. For the three months ended March 31, 2005, net sales in the Sensor
division increased 73.4% to $28.6 million, as compared to $16.5 million for the
three months ended March 31, 2004, and net sales in the Consumer Products
division increased 22.4% to $12.1 million for the current fiscal quarter, as
compared to $9.9 million for the three months ended March 31, 2004. Gross
margin for the three months ended March 31, 2005 declined to 40.8%, as compared
to 43.1% for the three months ended March 31, 2004. Gross margin in the Sensor
division declined to 47.2% for the three months ended March 31, 2005, as
compared to 51.6% for the same period last year, largely due to automotive
price concessions and sales mix shifting to lower margin products in automotive
and disposable medical markets. Gross margin in the Consumer Products division
declined to 25.2% for current fiscal quarter, as compared to 27% for the same
period last year.
For the fiscal year ended March 31, 2005, net sales increased 24.9% to $140.9
million, as compared to $112.8 million for the fiscal year ended March 31,
2004. For the fiscal year ended March 31, 2005, net sales in the Sensor
division increased 53.1% to $92.3 million, as compared to $60.2 million for the
fiscal year ended March 31, 2004, while net sales in the Consumer Products
division decreased 7.4% to $48.7 million for the fiscal year ended March 31,
2005, as compared to $52.6 million for the fiscal year ended March 31, 2004.
Gross margin for the fiscal period declined to 42.1% as compared to 44.6% for
the same period last year. Gross margin in the Sensor division declined to
50.3% as compared to 54% for fiscal 2004, while gross margin in the Consumer
Products division declined to 25.4% as compared to 32% for the same period last
year.
The Company anticipates filing its Form 10-K for the fiscal year ended March
31, 2005 on or before Tuesday, June 14th. Please refer to the Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Company's Form 10-K filed for a more complete discussion of
sales, margin and expenses.
The Company will host an investor conference call on June 14th at 2 pm EDT to
answer questions regarding the quarterly and yearly results reported in our
Annual Report on Form 10-K for fiscal year ended March 31, 2005. US dialers:
(866) 253-6505; International dialers: (703) 639-1207. Interested parties may
also listen via the Internet at: http://www.vcall.com/. The call will be
available for replay for 30 days through AT&T by dialing 800 475-6701 (US
dialers), and entering access code 784985, and on Vcall.
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.
Company Contact: Frank Guidone, CEO, (757) 766-4400
Investor Contact: Aimee Boutcher or Daniel Boutcher, (973) 239-2878
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; 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.
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. 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.
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.
MEASUREMENT SPECIALTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended March 31,
($ in thousands, except
per share amounts) 2005 2004 2003
Net sales
Sensor $92,268 $60,247 $52,326
Consumer 48,673 52,566 55,350
Net sales 140,941 112,813 107,676
Cost of goods sold 81,535 62,513 69,680
Gross profit 59,406 50,300 37,996
Operating expenses (income):
Selling, general and
administrative 35,796 30,448 34,245
Non-Cash Equity based
Compensation (Selling, general
and administrative) - 6,483 -
Litigation expense - 1,500 3,550
Research and development 3,468 3,468 3,594
Customer funded development (268) (4) (367)
Amortization of acquired
intangibles 774 30 30
Restructuring costs - 506 1,219
Total operating expenses 39,770 42,431 42,271
Operating income (loss) 19,636 7,869 (4,275)
Interest expense, net 637 323 2,057
Gain on sale of Assets - (1,424) (159)
Other expense (income) (77) (142) (333)
Income (loss) from continuing
operations before income taxes 19,076 9,112 (5,840)
Income tax 4,250 (12,262) 483
Income (loss) from continuing
operations 14,826 21,374 (6,323)
Discontinued operations:
Income (loss) from operations
of discontinued units (net
of income tax benefit) - 212 (3,910)
Gain on disposition of
discontinued units (net of
income tax benefit) - - 1,136
Income (loss) from discontinued
units - 212 (2,774)
Net income (loss) $14,826 $21,586 $(9,097)
Income (loss) per common share -
Basic
Income (loss) from
continuing operations $1.11 $1.73 $(0.53)
Income (loss) from
discontinued units - 0.02 (0.23)
Net income (loss) $1.11 $1.75 $(0.76)
Income (loss) per
common share - Diluted
Income (loss) from
continuing operations $1.05 $1.53 $(0.53)
Income (loss) from
discontinued units - 0.01 (0.23)
Net income (loss) $1.05 $1.54 $(0.76)
Weighted average shares
outstanding - Basic 13,392 12,333 11,911
Weighted average shares
outstanding - Diluted 14,095 13,997 11,911
MEASUREMENT SPECIALTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarter Ended March 31,
($ in thousands, except
per share amounts) 2005 2004 2003
Net sales
Sensor $28,564 $16,475 $12,192
Consumer 12,075 9,869 11,108
Net sales 40,639 26,344 23,300
Cost of goods sold 24,057 14,986 15,037
Gross profit 16,582 11,358 8,263
Operating expenses (income):
Selling, general and
administrative 11,011 7,429 7,638
Non-Cash Equity based
Compensation (Selling, general
and administrative) - 1,529 -
Litigation expense - 1,100 3,550
Research and development 892 858 1,030
Customer funded development (50) (4) (7)
Amortization of acquired
intangibles 579 8 8
Restructuring costs - (39) -
Total operating expenses 12,432 10,881 12,219
Operating income (loss) 4,150 477 (3,956)
Interest expense, net 392 1 286
Gain on sale of Assets - (1,424) (50)
Other expense (income) (26) (166) (372)
Income (loss) from continuing
operations before income taxes 3,784 2,066 (3,820)
Income tax (108) (13,034) 367
Income (loss) from
continuing operations 3,892 15,100 (4,187)
Discontinued operations:
Income (loss) from operations
of discontinued units (net of
income tax benefit) - 100 -
Gain on disposition of
discontinued units (net of
income tax benefit) - - 226
Income (loss) from
discontinued units -
Net income (loss) $3,892 $15,200 $(3,961)
Income (loss) per common
share - Basic
Income (loss) from
continuing operations $0.29 $1.19 $(0.35)
Income (loss) from
discontinued units - 0.01 -
Net income (loss) $0.29 $1.20 $0.02
Income (loss) per
common share - Diluted
Income (loss) from
continuing operations $0.27 $1.07 $(0.35)
Income (loss) from
discontinued units - 0.01 0.02
Net income (loss) $0.27 $1.08 $(0.33)
Weighted average shares
outstanding - Basic 13,532 12,620 11,917
Weighted average shares
outstanding - Diluted 14,277 14,069 11,917
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, legal settlement expenses, restructuring charge, gain on the sale
of assets and adjustments to the tax provision. Please refer to the notes to
the Consolidated financial Statements in the Annual Report on Form 10-K to be
filed with the Securities and Exchange Commission during the week June 13,
2005.
For Three Months For Twelve Months
Ended March 31, Ended March 31,
2005 2004 2005 2004
NET INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES $3,785 $2,066 $19,076 $9,112
Non-cash equity based
compensation - 1,529 - 6,483
SEC Settlement - - - 1,000
Class action settlement - 1,100 - 1,100
Hibernia litigation - - - (600)
Restructuring charges - (39) - 506
Gain on the sale of assets - (1,424) - (1,424)
NON-GAAP INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES $3,785 $3,232 $19,076 $16,177
For Three Months For Twelve Months
Ended March 31, Ended March 31,
2005 2004 2005 2004
NET INCOME $3,893 $15,200 $14,826 $21,586
Non-cash equity based
compensation - 1,529 - 6,483
SEC Settlement - - - 1,000
Class action settlement - 1,100 - 1,100
Hibernia litigation - - - (600)
Restructuring charges - (39) - 506
Gain on the sale of assets - (1,424) - (1,424)
Tax provision adjustment (1) - (14,037) - (16,987)
NON-GAAP NET INCOME BEFORE
DISCONTINUED OPERATIONS $3,893 $2,329 $14,826 $11,664
NON-GAAP INCOME PER
COMMON SHARE - BASIC:
Non-GAAP Income before
discontinued operations $0.29 $0.18 $1.11 $0.95
Income from discontinued units - 0.01 - $0.02
Non-GAAP Net income $0.29 $0.19 $1.11 $0.97
NON-GAAP INCOME PER
COMMON SHARE - DILUTED
Non-GAAP Income before
discontinued operations $0.27 $0.17 $1.05 $0.83
Income from discontinued units - 0.01 - 0.02
Non-GAAP Net income $0.27 $0.18 $1.05 $0.85
Weighted Average Share
Outstanding - Basic 13,532 12,620 13,392 12,333
Weighted Average Share
Outstanding - Diluted 14,277 14,069 14,095 13,997
Notes:
(1) This non-GAAP measure adjusts the Company's as reported tax credit for
fiscal year 2004 to provide for taxes at the expected effective rate
of 27.9% for fiscal 2005, and includes adjustment for discontinued
operations.
DATASOURCE: Measurement Specialties, Inc.
CONTACT: Frank Guidone, CEO of Measurement Specialties, Inc.,
+1-757-766-4400; or Investor: Aimee Boutcher or Daniel Boutcher, both of
Boutcher & Boutcher Investor Relations, +1-973-239-2878, for Measurement
Specialties, Inc.
Web site: http://www.msiusa.com/