Speizman (NASDAQ:SPZNC)
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Speizman Industries Announces First Quarter 2004 Financial Results
CHARLOTTE, N.C., Nov. 11 /PRNewswire-FirstCall/ -- Speizman Industries, Inc.
today reported a net loss for its first quarter ended September 27, 2003 of
$730,000 or $0.22 per basic and diluted share, compared to a net loss of
$127,000, or $0.04 per basic and diluted share for the quarter ended September
28, 2002.
Revenues decreased by 43% to $9.7 million for the first quarter fiscal 2004 from
$16.8 million in the first quarter fiscal 2003. Revenues for the textile
division decreased to $5.4 million for first quarter fiscal 2004 from $8.5
million in the first quarter fiscal 2003. The decrease in revenue was due
primarily to a 39% decrease in the sales of sock finishing equipment. Revenues
for the laundry division decreased to $4.3 million from $8.3 million for the
same period last year. The decline in revenue reflects that no large projects
were installed in the first quarter of fiscal 2004, resulting in a 55% reduction
in sales of new machines.
First quarter gross profit decreased to $1.3 million in fiscal 2004 from $2.6
million in first quarter fiscal 2003. As a percent of revenues, gross margins
decreased to 13.6% from 15.5% for the respective quarters in 2004 and 2003.
Gross margins decreased in the textile division from 18.1% in 2003 to 12.2% in
2004. The decrease was due to a reduction in sales of higher margin textile
equipment along with an increase of $60,000 for inventory reserves. Gross
margins for the quarters increased in the laundry division from 12.9% in 2003 to
15.5% in 2004. The increase was due to higher margin machine sales and improved
margins for parts and service sales. The first quarter of fiscal 2004 did not
include any large machinery sales projects. Larger projects have lower gross
margins due to the increased competition for those projects.
Selling expenses decreased 26.6% to $741,000 (7.7% of sales) in first quarter
2004 from $1.0 million (6.0% of sales) in the same period last year. The
decrease in selling expenses for the quarter reflects lower commissions due to
lower sales and lower travel expenses compared to prior year period. The
increase as a percentage of sales reflects the fixed nature of certain selling
expenses.
General and administrative expenses decreased 20.5% to $1.1 million (11.3% of
sales) in first quarter 2004 from $1.4 million (8.2% of sales) in the same
period last year. The reduction reflects management's continued emphasis on
cost control, primarily in payroll, professional services, travel and insurance.
The increase as a percentage of sales reflects the reduction in revenues and
the fixed nature of certain general and administrative expenses.
Interest expense increased $36,000 in the first quarter of fiscal 2004 compared
to first quarter of fiscal 2003 due to increased average borrowings on the
Company's revolving credit line and an increase in the interest rate charged on
the revolving line of credit.
Robert S. Speizman, President and Chief Executive Officer, commented, "We are
naturally disappointed with the reduction in revenues in both the textile and
laundry divisions and we expect weak sales to continue into the second quarter
of this year. Although we have seen some indications of an increase in
activity, sales of sock knitting machinery (primarily closed toe machines)
remain slow as domestic manufacturers continue to have concerns about the impact
of foreign made goods on the U.S. market. Sales of large projects in our
laundry division have also declined, reflecting the continued sluggishness of
the hospitality industry.
"Although our equipment backlog of firm commitments was $3.2 million at the end
of the first quarter compared to $10.2 million at the end of our first quarter
last year, it has increased to $7.7 million in the past month."
The Company will conduct a conference call to review its financial and operating
results. The conference call is scheduled for Tuesday, November 11, 2003, at
3:00 p.m. E.T. Interested parties can access the live call and replay via the
web at http://www.vcall.com/ .
Speizman Industries is a leader in the sale and distribution of specialized
industrial machinery, parts and equipment. The Company acts as distributor in
the United States, Canada, and Mexico for leading Italian manufacturers of
textile equipment and is a leading distributor in the United States of
industrial laundry equipment representing several United States manufacturers.
Certain matters within this press release are discussed using forward- looking
statements as specified in the 1995 Private Securities Litigation Reform Law.
These statements are based on management's current expectations about the
industry and the markets in which the Company operates. Such forward-looking
statements are not guarantees of future performance and involve known and
unknown risks, uncertainties or other factors that may cause the actual results,
performance or achievements of the Company to differ from those projected in the
forward-looking statement. From time to time, these risks are discussed in the
Company's filings with the Securities and Exchange Commission.
For additional information on Speizman Industries, please visit the Company's
web site at http://www.speizman.com/ . To receive Speizman Industries' latest
news release and other corporate documents, please contact Gail Gormly at
1-704-559-5777 or email .
Financial Tables to follow.
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
September 27, September 28,
2003 2002
(13 Weeks) (13 Weeks)
(unaudited) (unaudited)
REVENUES $9,665,000 $16,828,000
COST OF SALES 8,347,000 14,218,000
GROSS PROFIT 1,318,000 2,610,000
SELLING EXPENSES 741,000 1,010,000
GENERAL AND ADMINISTRATIVE EXPENSES 1,092,000 1,374,000
OPERATING LOSS (515,000) 226,000
NET INTEREST EXPENSE 436,000 400,000
LOSS BEFORE TAX BENEFIT (951,000) (174,000)
TAX BENEFIT (221,000) (47,000)
NET LOSS $(730,000) $(127,000)
Basic loss per share $(0.22) $(0.04)
Diluted loss per share $(0.22) $(0.04)
Weighted average shares Outstanding:
Basic 3,255,428 3,255,428
Diluted 3,255,428 3,255,428
CONDENSED CONSOLIDATED BALANCE SHEETS
September 27, June 28,
2003 2003
(unaudited)
Current assets $23,868,000 $26,016,000
Property, plant & equipment, net 5,943,000 6,092,000
Goodwill, net 3,790,000 3,790,000
Other long-term assets including deferred
taxes 2,298,000 2,505,000
Total assets $35,899,000 $38,403,000
Current liabilities excluding current
maturities of long-term debt $6,487,000 $10,132,000
Revolving line of credit 9,366,000 7,301,000
Current maturities of long-term debt 1,591,000 1,219,000
Long-term debt 2,992,000 3,520,000
Obligation under capital lease 4,201,000 4,239,000
Total liabilities 24,637,000 26,411,000
Stockholders' equity 11,262,000 11,992,000
Total liabilities and stockholders' equity $35,899,000 $38,403,000
DATASOURCE: Speizman Industries, Inc.
CONTACT: Paul R.M. Demmink, Chief Financial Officer of Speizman
Industries, Inc., +1-704-559-5777, or General Info., Marilynn Meek,
+1-212-445-8451, Analyst Info., Susan Garland, +1-212-445-8458, or Media
Info., Suzie Pileggi, +1-212-445-8454, all of Financial Relations Board
Web site: http://www.speizman.com/