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BEI Technologies, Inc. Reports Record Second Quarter 2005 Revenue
and Earnings
SAN FRANCISCO, May 3 /PRNewswire-FirstCall/ -- BEI Technologies, Inc.
(NASDAQ:BEIQ), an established manufacturer of electronic sensors and motion
control products, announces record second quarter 2005 revenue and earnings.
Fiscal 2005 Second Quarter compared with Fiscal 2004 Second Quarter:
-- Revenues increased 19.5% to $87.8 million with automotive revenue of
$54.2 million, an increase of 22.0%
-- Net income increased 33.5% to $4.679 million from $3.504 million
-- EPS increased 33.3% to $0.32 from $0.24 per share
Quarterly Results
Charles Crocker, Chairman and Chief Executive Officer stated, "Revenue for the
quarter increased by $14.3 million compared with the prior year second quarter
with increases in all market sectors. Automotive revenue increased to $54.2
million with GyroChip(R) sensor shipments of 1.57 million units and the
recognition of $2.3 million of previously deferred revenue. Revenue from
industrial sensors, actuators and motors increased in the quarter to $26.5
million from $23.7 million in the prior year second quarter primarily due to
the inclusion of Newall linear encoders partly offsetting lower actuator sales.
Government, Aerospace and Defense revenue increased to $7.1 million compared
with $5.4 million in the prior year second quarter."
Gross margin increased to 27.7% in the fiscal 2005 second quarter from 25.3% in
the prior year second quarter. Average gross margin percentages improved in
automotive products and aerospace and defense products compared to the prior
year quarter. Automotive margins increased due to improved operating efficiency
and the increase of nugget shipments associated with the new contract. The
prior year second quarter was favorably impacted by vendor scrap recovery.
Selling, general and administrative (SG&A) expense increased in the second
quarter 2005 to $12.4 million compared with the prior year second quarter of
$9.6 million. The inclusion of Newall SG&A added approximately $1.3 million in
spending not in the prior year. The second quarter 2005 spending also included
accruals associated with Sarbanes-Oxley Section 404 compliance of approximately
$0.9 million. Research and development expense in the second quarter increased
to $4.3 million compared with $3.4 million in the prior year second quarter due
to the inclusion of Newall spending and increased spending associated with the
quartz gyro development. Also, during the quarter we included approximately
$450,000 of legal, accounting and other costs in SG&A related to a potential
acquisition that we are no longer pursuing.
During the second quarter 2005 our operations generated $9.3 million in cash.
Cash generated from operations resulted primarily from net income of $4.7
million, a decrease in accounts receivable of $1.6 million and a $3.4 million
increase in accruals including the amounts related to the Company's preparation
for fiscal year 2005 Sarbanes-Oxley Section 404 reporting. Purchases of
property, plant and equipment of $7.1 million, primarily to increase GyroChip
production at Systron Donner Automotive, were major factors in a $6.2 million
use of cash from investing activities. Cash used for financing of $2.1 million
was affected primarily by changes in the Company's line of credit during the
quarter. The Company's cash balance at second quarter end was $5.9 million,
with an outstanding balance on the Company's $35.0 million line of credit of
$12.2 million.
Crocker continued, "Systron Donner Automotive continues to successfully meet
customer demand and increase its capacity. As previously stated we have
reached our goal of 6.0 million units of annual capacity for sensors and in
coordination with our customers, we are working toward production capacity of
10 million nuggets annually by September 2005."
Six Months Results
For the six month period ended April 2, 2005, the Company reported consolidated
after tax net income of $8.3 million, or $0.56 per share, versus $5.5 million,
or $0.38 per share, in the comparable period of fiscal 2004. Revenue in the six
month period ended April 2, 2005 was $164.8 million, compared to $142.3 million
reported in the comparable period of the prior year. Automotive revenue
increased 16.8% to $101.6 million and Industrial revenue increased 18.4% to
$50.5 million.
Gross margin increased to 27.6% from 23.7% in the prior year period with higher
revenue and improved operating efficiency. SG&A spending for the six month
period ended April 2, 2005 was $23.1 million, above the previous year spending
of $17.9 million with higher activity levels and the inclusion of Newell and
Sarbanes-Oxley Section 404 compliance costs. Research and development spending
year to date of $8.5 million increased from $6.7 million in the prior year
period as a result of higher spending associated with quartz gyro development
and commercializing licensed technologies, and the inclusion of Newall
spending.
Crocker concluded, "Automotive production in both Europe and North America
softened during the second quarter of 2005 but the market trend for penetration
of stability control systems into additional platforms continues to increase.
The resulting increased quantities are now transitioning to the new contract
and the corresponding core technology nugget sale with lower associated selling
prices. We adjusted our backlog in the second quarter to reflect this
transition."
Guidance for Third Quarter 2005
The Company's GyroChip automotive sensor shipments guidance continues to be at
least 5.6 million units for the 12 month period ending September 2005. As the
Company begins the transition to nugget sales for the GyroChip, the Company
expects that the average selling price will reduce and automotive revenue will
step down accordingly. The Company does not expect that sensor unit
profitability will be affected. The Company expects that revenue for the third
quarter will be in the mid to high $70 million range.
About BEI Technologies, Inc.
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 fiscal year
2005 except for a decrease in production in fiscal 2002 due to increased
competition. 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. The Company's
actual results could differ materially from those discussed in this release.
Factors that could cause or contribute to such differences include, but are not
limited to, the Risk Factors discussed from time to time in the Company's
reports to the Securities and Exchange Commission, including the Company's
Annual Report on Form 10-K for fiscal 2004.
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
April 2,
2005 October 2,*
(Unaudited) 2004
ASSETS
Cash and cash equivalents $5,937 $8,218
Investments 4,387 4,299
Trade receivables, net 49,277 45,482
Inventories, net 29,373 29,897
Other current assets 15,624 17,147
Total current assets 104,598 105,043
Property, plant and equipment, net 47,770 39,905
Goodwill 9,268 1,612
Other assets, net 10,285 6,008
$171,921 $152,568
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $25,475 $33,698
Accrued expenses and other liabilities 26,613 25,450
Current portion of long-term debt 7,271 7,263
Total current liabilities 59,359 66,411
Long-term debt, less current portion 27,796 10,639
Other liabilities 2,606 2,783
Stockholders' equity 82,160 72,735
$171,921 $152,568
* Based on audited information included on Form 10-K for fiscal year ended
October 2, 2004
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except per share amounts)
Unaudited
Quarter Ended Six Months Ended
April 2, April 3, April 2, April 3,
2005 2004 2005 2004
Net sales $87,839 $73,531 $164,763 $142,336
Cost of sales 63,549 54,963 119,329 108,621
24,290 18,568 45,434 33,715
Selling, general and
administrative expenses 12,356 9,560 23,115 17,888
Research, development and
related expenses 4,331 3,390 8,532 6,650
Income from operations 7,603 5,618 13,787 9,177
Other income 273 291 398 281
Interest expense (450) (353) (891) (721)
Income before taxes 7,426 5,556 13,294 8,737
Provision for income taxes 2,747 2,052 4,967 3,230
Net income $4,679 $3,504 $8,327 $5,507
BASIC EARNINGS PER COMMON SHARE
Net income per common share $0.32 $0.25 $0.57 $0.39
Weighted average shares outstanding 14,556 14,295 14,485 14,259
DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
Net income per common and common
equivalent share $0.32 $0.24 $0.56 $0.38
Weighted average shares
outstanding 14,809 14,610 14,780 14,572
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
Quarter Ended Six Months Ended
April 2, April 3, April 2, April 3,
2005 2004 2005 2004
Net income $4,679 $3,504 $8,327 $5,507
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,393 2,951 4,997 5,550
Other 2,193 1,529 (8,648) 1,805
Net cash provided by operating
activities 9,265 7,984 4,676 12,862
Net cash used by investing activities (6,223) (2,361) (23,628) (4,476)
Net cash provided (used) by financing
activities (2,100) (1,149) 16,671 (7,473)
Net increase (decrease) in cash and
cash equivalents 942 4,474 (2,281) 913
Cash and cash equivalents at beginning
of period 4,995 5,650 8,218 9,211
Cash and cash equivalents at end
of period $5,937 $10,124 $5,937 $10,124
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/