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BEI Technologies, Inc. Reports Fiscal 2004 Third Quarter Results
SAN FRANCISCO, July 29 /PRNewswire-FirstCall/ -- BEI Technologies, Inc.
(NASDAQ:BEIQ) reported consolidated after tax net income for the fiscal 2004
third quarter ended July 3, 2004 of $3,372,000, or $0.23 per share, compared
with a consolidated after tax net income of $663,000, or $0.05 per share, for
the third quarter of fiscal 2003. Net sales for the quarter increased to $68.8
million compared with $57.1 million in the same period last year, according to
Charles Crocker, Chairman and Chief Executive Officer.
Automotive revenues for the third quarter were $40.9 million compared with
$32.4 million for the same quarter last year. This increase was a result of
higher quantities of GyroChip(R) sensors shipped to BEI's customers. Industrial
sales for the quarter were $21.9 million compared with $18.7 million in the
same period last year due primarily to higher potentiometer revenue.
Government sales remained level at $6.0 million.
"With the advent of Hungary's membership in the European Union, BEI's Hungarian
and Polish activities require an additional EU registration which BEI expects
to complete in the fourth quarter. Negotiations with a major customer because
of the new registration requirement resulted in lowering the selling price in
the third quarter on some sensor module assemblies. Though revenue was reduced
by $3.5 million due to the lowered selling price, the customer absorbed some
third party assembly costs for the units, so profitability was not affected",
Crocker commented.
Gross margin remained at 24.9% for the current quarter compared with 24.9% for
the same quarter in the prior year. Margins were unfavorably impacted by
increased overtime, product expediting and approximately $0.8 million of
inventory write downs. These impacts were offset by the favorable margin rates
on the sensor module assemblies noted above. Selling, general, administrative
and other (SG&A) spending as a percentage of sales decreased to 11.7% compared
with the prior year third quarter of 14.8% primarily as a result of a higher
sales base. The SG&A rate also decreased because of the reversal of previously
booked expenses associated with an adverse lower court ruling in a dispute with
a former landlord in Arkansas which an Appellate Court reversed. Research and
development spending as a percentage of sales decreased to 5.4% compared with
7.0% in the prior year third quarter primarily as a result of higher sales and
lower spending on silicon gyro development.
Cash provided by operations for the quarter was positive with our cash balance
increasing to $11.5 million. Equipment purchases for the quarter were $3.4
million. Inventory increased due to a build-up at Systron Donner Automotive of
components awaiting parts for further assembly.
NINE MONTH RESULTS
For the nine month period ended July 3, 2004, BEI reported consolidated after
tax net income of $8,879,000, or $0.61 per share, versus a net income of
$3,315,000, or $0.23 per share, in the comparable period of fiscal 2003. Sales
in the nine month period ended July 3, 2004 were $211.2 million, compared to
$158.9 million reported in the comparable period of the prior year. Increased
sales to automotive customers accounted for the majority of the increase.
Selling, general, administrative and other spending for the nine-month period
ended July 3, 2004 was $26.0 million, a slight increase from the previous year
spending of $25.8 million. Increased SG&A spending to support higher sales
levels was partially offset by a reduction in current year legal expenses
associated with litigation. Development spending year to date decreased to
$10.4 million from $12.2 million in the prior year to date period due to
reduced silicon gyro spending.
Crocker concluded, "Our previously announced GyroChip capacity expansion to 4.5
million units of annual capacity continues on plan. Most equipment is in place
but "run-at-rate" validation on some equipment is not yet completed. We
continue to run at surge capacity utilizing all available work shifts to supply
demand. Operating efficiency is negatively affected by increased overtime,
shipping costs and machinery wear. We expect this to continue in the fourth
quarter as a result of GyroChip demand in excess of 1 million units."
BEI Technologies, Inc. (the "Company" or "Technologies") is an established
manufacturer of electronic sensors, motors, actuators, optical encoders and
motion control products used for factory and office automation, medical
equipment, military, aviation and space systems. In addition, sales to
manufacturers of transportation equipment including automobiles, trucks and
off-road equipment have become a significant addition to the Company's business
in recent years. The Company's micromachined quartz yaw rate sensors are being
used in advanced vehicle stability control systems and a significant increase
in the production of those sensors had been in progress from the middle of 1998
to FY 2003 except for a decrease in production in fiscal 2002 due to increased
competition. The Company is currently transitioning to its next generation of
automotive inertial quartz-based sensor products, remotely mounted multi-sensor
clusters with CAN bus and a multi-rate sensor package suitable for
incorporation into electronic systems modules. The Company also manufactures
electronic steering wheel position sensors, seat-memory modules, throttle
position sensors, pressure sensors, and other devices used in transportation
systems. GyroChip is registered trademarks of the Company. BEI Systron Donner
Automotive is an operating division of BEI Technologies, Inc.
Except for historical information, this news release may be deemed to contain
forward-looking statements that involve risks and uncertainties, including
statements with respect to future timely development, acceptance and pricing of
new products; potential impact of competitive products and their price; the
ability to manufacture products in sufficient volume on an efficient and timely
basis; general economic conditions as they affect the Company's customers and
strategic partners, as well as other risks detailed from time to time in the
Company's reports to the Securities and Exchange Commission, including the
Company's Form 10-K for fiscal 2003.
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
July 3, September 27,
2004 2003*
(Unaudited)
ASSETS
Cash and cash equivalents $11,523 $9,211
Restricted investments 4,279 5,185
Trade receivables, net 34,978 37,271
Inventories, net 27,006 24,190
Other current assets 13,156 12,915
Total current assets 90,942 88,772
Property, plant and equipment, net 38,871 37,123
Acquired technology 306 542
Goodwill 1,612 1,612
Other assets, net 5,435 5,404
$137,166 $133,453
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $22,568 $15,680
Accrued expenses and other liabilities 24,712 27,503
Income tax payable -- 689
Current portion of long-term debt 7,260 7,117
Total current liabilities 54,540 50,989
Long-term debt, less current portion 10,688 17,494
Other liabilities 3,069 6,329
Stockholders' equity 68,869 58,641
$137,166 $133,453
* Based on audited information included on Form 10-K for fiscal year ended
September 27, 2003
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except per share amounts)
Unaudited
Quarter Ended Nine Months Ended
July 3, June 28, July 3, June 28,
2004 2003 2004 2003
Net sales $68,827 $57,103 $211,163 $158,906
Cost of sales 51,726 42,898 160,347 119,629
17,101 14,205 50,816 39,277
Selling, general, administrative
and other expenses 8,062 8,458 25,950 25,756
Research, development and related
expenses 3,717 3,987 10,367 12,209
Income from operations 5,322 1,760 14,499 1,312
Interest expense 295 462 1,016 1,472
Other income (expense) 328 (231) 609 5,396
Income before income taxes 5,355 1,067 14,092 5,236
Provision for income taxes 1,983 404 5,213 1,921
Net income $3,372 $663 $8,879 $3,315
BASIC EARNINGS PER COMMON SHARE
Net income per common share $0.24 $0.05 $0.62 $0.23
Weighted average shares outstanding 14,338 14,141 14,291 14,117
DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
Net income per common and common
equivalent share $0.23 $0.05 $0.61 $0.23
Weighted average shares outstanding 14,709 14,224 14,641 14,246
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
Quarter Ended Nine Months Ended
July 3, June 28, July 3, June 28,
2004 2003 2004 2003
Net income $3,372 $663 $8,879 $3,315
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,308 2,645 7,851 7,808
Other (2,312) 1,958 (500) 1,756
Net cash provided by operating
activities 3,368 5,266 16,230 12,879
Net cash used in investing
activities (2,014) (1,530) (6,490) (8,149)
Net cash provided by (used in)
financing activities 45 (3,778) (7,428) (5,193)
Net increase (decrease) in cash
and cash equivalents 1,399 (42) 2,312 (463)
Cash and cash equivalents at
beginning of period 10,124 3,997 9,211 4,418
Cash and cash equivalents at
end of period $11,523 $3,955 $11,523 $3,955
DATASOURCE: BEI Technologies, Inc.
CONTACT: John LaBoskey, Senior Vice President/CFO of BEI Technologies,
Inc., +1-415-956-4477
Web site: http://www.bei-tech.com/