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BEI Technologies, Inc. Reports Fourth Quarter Earnings and Record
2004 Revenues
SAN FRANCISCO, Nov. 10 /PRNewswire-FirstCall/ -- BEI Technologies, Inc.
(NASDAQ:BEIQ), an established manufacturer of electronic sensors and motion
control products announces fourth quarter 2004 earnings and record 2004
revenues.
Fiscal 2004 Fourth Quarter compared with Fiscal 2003 Fourth Quarter:
-- Revenues increased 28.0% to $70.1 million with automotive revenue of
$43.6 million, an increase of 37.9%
-- Net income increased 22.8% to $2.764 million from $2.250 million
-- EPS increased 18.8% to $0.19 including the $0.07 charge noted below,
from $0.16
Total Fiscal 2004 Results compared with Fiscal 2003 Results:
-- Total revenue increased 31.6% to $281.3 million
-- Net income increased 109% to $11.643 million from $5.565 million
-- EPS increased 105% to $0.80 from $0.39
Quarterly Results
Charles Crocker, Chairman and Chief Executive Officer stated, "Net sales for
the fourth quarter increased by $15.4 million compared with the prior year
fourth quarter due primarily to a $12.1 million increase in automotive sensor
sales, largely GyroChip(R) sensor shipments. Sales of industrial sensors,
actuators and motors increased in the quarter to $21.2 million from $18.2
million in the prior year fourth quarter, as a result of the improving
manufacturing sector environment and higher quartz product sales to commercial
aviation customers. Government aerospace and defense sales increased to $5.3
million compared with $5.0 million in the prior year fourth quarter. Gross
margin decreased to 22.3% in the fiscal 2004 fourth quarter from 24.0% in the
prior year fourth quarter primarily due to the settlement charge noted below
offset by reduced cost of sales associated with royalty payments on quartz
products."
On November 9th, after year-end, management met with a customer to review a
claim that certain BEI industrial products did not perform properly in a
specific hostile environment. After review, management determined to negotiate
a settlement agreement with this customer, subject to confidentiality
provisions, and the Company has taken a charge of $1.6 million, or $0.07 per
share, in accordance with GAAP. The agreement is subject to final approval of
documentation by both parties. BEI management believes the settlement is
consistent with our corporate commitment to the quality and reputation of our
products.
SG&A spending increased in the fourth quarter to $7.7 million compared with the
prior year fourth quarter of $5.7 million. A legal fee recovery of $3.5 million
associated with our patent infringement litigation settlement partially offset
spending in the prior year fourth quarter. Research and development expense in
the fourth quarter remained constant at $4.2 million.
Crocker continued, "We shipped a record 1.1 million automotive GyroChip sensors
for the quarter, utilizing surge capacity and all available shifts. While we
met our customer's demand, our operating efficiency suffered. Our Systron
Donner Automotive Division faced higher overtime, freight and training costs
and increased yield loss associated with the significant launch and ramp-up of
roll stability control (RSC) units to various platforms."
Cash flow for the 2004 fourth quarter was a negative $3.3 million, primarily
due to increased working capital requirements. The Company's cash balance at
fiscal year end was $8.2 million, with no outstanding balance on the Company's
$25.0 million line of credit. Purchase of property, plant and equipment for
the quarter was $3.98 million mostly to increase GyroChip production capacity
at Systron Donner Automotive.
Full Year Results
Revenue increased during fiscal year 2004 by $67.6 million primarily due to a
43.9% increase in automotive revenue to $171.5 million compared with $119.1
million in fiscal 2003. Automotive revenue increased primarily due to increased
GyroChip sensor shipments to our largest customer. Industrial revenue
increased by 18% to $85.8 million from the prior year level of $72.7 million
due largely to stronger demand for potentiometers used in heavy equipment,
industrial encoders and quartz products for commercial aviation. Government
aerospace and defense sales increased 10% to $24.0 million from $21.8 million
due to higher sales to space and military encoder programs.
Crocker concluded, "2004 was a record year for revenue. Many new automotive
platforms were launched with GyroChip products in both the U. S. and Europe.
Our largest customer announced further platforms transitioning to our newest
technology in roll-stability. We are working hard to get the ramp- up issues
behind us. We are pleased that there is increased favorable regulatory review
of stability control for rollover prevention in the U.S. and compelling
evidence of accident prevention through stability control. The new
manufacturing facility in Mexico experienced significant growth. Product lines
from both Kimco and Duncan are now manufactured and shipped directly from
Mexico for further cost effectiveness. After year end, we completed the
acquisition of UK-based Newall Measurement Systems to broaden our portfolio of
products to include digital readouts (DROs) and digital linear encoders. Most
importantly, during the year we completed our long-term strategic agreement
with our largest customer which we believe will reduce our revenue and cash
flow variability, reduce our market and manufacturing risk and reduce our
infrastructure and working capital requirements."
Guidance for 2005
We anticipate that the increasing market acceptance of electronic stability
control in North America will drive automotive GyroChip unit shipments to in
excess of 5.0 million units in fiscal 2005. There should be an increasing mix
of RSC units and sensor modules.
BEI Technologies, Inc. (the "Company" or "Technologies") is an established
manufacturer of electronic sensors, motors, actuators, rotary optical encoders,
linear encoders with associated digital readouts (DROs), 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 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 2004 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,
inertial navigation systems, and other devices used in transportation systems.
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)
Oct. 2, Sept. 27,
2004 2003 *
(Unaudited)
ASSETS
Cash and cash equivalents $8,218 $9,211
Investments 4,299 5,185
Trade receivables, net 45,482 37,271
Inventories, net 29,897 24,190
Other current assets 19,537 12,915
Total current assets 107,433 88,772
Property, plant and equipment, net 40,970 37,123
Acquired technology 297 542
Goodwill 1,612 1,612
Other assets, net 3,686 5,404
$153,998 $133,453
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $33,698 $15,680
Accrued expenses and other liabilities 25,450 27,503
Income tax payable -- 689
Current portion of long-term debt 7,263 7,117
Total current liabilities 66,411 50,989
Long-term debt, less current portion 10,639 17,494
Other liabilities 4,053 6,329
Stockholders' equity 72,895 58,641
$153,998 $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)
Quarter Ended Twelve Months Ended
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003*
(Unaudited)(Unaudited) (Unaudited)
Net sales $70,137 $54,768 $281,300 $213,674
Cost of sales 54,501 41,601 214,848 161,215
15,636 13,167 66,452 52,459
Selling, general and
administrative expenses 7,717 5,697 33,667 31,383
Research, development and
related expenses 4,240 4,216 14,607 16,510
Income from operations 3,679 3,254 18,178 4,566
Interest expense 310 383 1,326 1,855
Other income 374 466 983 5,862
Income before income taxes 3,743 3,337 17,835 8,573
Provision for income taxes 979 1,087 6,192 3,008
Net income $2,764 $2,250 $11,643 $5,565
BASIC EARNINGS PER
COMMON SHARE
Net income per common
share $0.19 $0.16 $0.81 $0.39
Weighted average shares
outstanding 14,458 14,170 14,295 14,119
DILUTED EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
Net income per common and
common equivalent share
$0.19 $0.16 $0.80 $0.39
Weighted average shares
outstanding 14,777 14,368 14,638 14,291
* 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 CASH FLOWS
(dollars in thousands)
Quarter Ended Twelve Months Ended
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003*
(Unaudited) (Unaudited) (Unaudited)
Net Income $2,764 $2,250 $11,643 $5,565
Adjustments to
reconcile net
income to net cash
provided by operating
activities:
Depreciation and
amortization 2,251 3,045 10,102 10,833
Other (4,591) 3,465 (5,091) 6,096
Net cash provided
by operating activities 424 8,760 16,654 22,494
Net cash used in
investing activities (3,620) (1,144) (10,110) (9,274)
Net cash provided by
(used in) financing
activities (109) (2,360) (7,537) (8,427)
Net increase
(decrease) in
cash and cash
equivalents (3,305) 5,256 (993) 4,793
Cash and cash
equivalents at
beginning of period 11,523 3,955 9,211 4,418
Cash and cash
equivalents at
end of period $8,218 $9,211 $8,218 $9,211
* Based on audited information included on Form 10-K for fiscal year
ended September 27, 2003
DATASOURCE: BEI Technologies, Inc.
CONTACT: John LaBoskey, Senior Vice President/CFO of BEI Technologies,
+1-415-956-4477
Web site: http://www.bei-tech.com/