Scientific Technologies (NASDAQ:STIZ)
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Scientific Technologies Incorporated (NASDAQ:STIZ), a
leading North American provider of automation safeguarding products,
announced today the results of operations for the three months ended
March 31, 2006. Sales for the first quarter of 2006 increased 12% to
$15,962,000, compared to sales of $14,298,000 for the same quarter of
2006.
Net income for the first quarter of 2006 was $494,000 or $.05 per
common and diluted share, compared to net income of $20,000 or $.00
per share for the first quarter of 2005.
Commenting on the results, Joseph J. Lazzara, President and Chief
Executive Officer stated, "We are very pleased to report sales and
profit improvements over the first quarter of 2005. The profit
improvement was achieved in spite of the recognition of approximately
$200,000 in banking and legal expenses associated with our recently
announced intent to merge with Omron Corporation."
On April 25, 2006 STI announced that it had entered into a
definitive agreement with Omron Corporation ("Omron") whereby Omron
will acquire the Safety Products Group ("SPG") of STI. STI also
separately entered into an agreement to sell its Automation Products
Group ("APG") to a new company formed by members of the Lazzara family
who currently serve as officers and directors of STI. The estimated
value of the transaction is comprised of $94 million for SPG, $6
million for APG, plus an estimate for certain corporate assets,
including cash net of certain liabilities and estimated transaction
related expenses. In total, STI estimates that the transactions would
value the equity of the company at approximately $107 million, or
approximately $10.76 per basic share.
About Scientific Technologies Inc.
Scientific Technologies, Inc. (STI) is a North American leading
provider of automation safeguarding products and services through its
Safety Products Group. STI's Optical Sensor Division (OSD) provides
safety products that are used to protect workers around machinery,
automated equipment and industrial robots. Our products serve a wide
variety of applications and markets, including semiconductor,
automotive, electronics manufacturing, packaging and consumer markets.
STI's Machine Services Division (MSD) provides safety services such as
safeguarding equipment installations, machine safety assessments, and
the design and custom fabrication of guarding solutions. MSD
specializes in machinery services including the repair, relocation,
installation and service of fabricating machinery. MSD serves
customers in a variety of industries, including metal fabrication,
aerospace, electronics, building materials, automotive and food
processing. Our web site is located at www.sti.com
STI's Automation Products Group serves the factory automation,
semiconductor, transportation, oil and gas, consumer and food
processing industries with a diversified offering of sensing
technologies. Products include level, flow, pressure sensing,
positioning transducers, vehicle separation, profiling and ultrasonic
sensors and controls. Further information is available at the Group's
web sites: www.automationsensors.com, and www.stiscanners.com.
About Omron Corporation
Omron Corporation, headquartered in Kyoto, Japan, is a global
leader in the field of automation with approximately $6 billion in
annual revenues. Established in 1933 and headed by President and CEO
Hisao Sakuta, Omron has more than 26,000 employees in 35 countries
working to provide products and services to customers in a variety of
fields including industrial automation, electronic components, social
systems (ticket gate machines, ticket vending machines and traffic
control) and healthcare. Further information on Omron is located at
www.omron.com.
Forward-Looking Statements
Certain statements in this press release, including statements
regarding the estimated value of certain transactions and of the
Company, are forward-looking statements that are subject to risks and
uncertainties. These risks and uncertainties, which could cause STI's
results to differ materially from the forward-looking statements,
include: economic and political conditions in domestic and
international markets; declining market demand for industrial safety
and security products generally; introduction of or increased demand
for alternative products; potential errors, defects, design flaws or
other problems with our products; changes in regulations relating to
industrial safety and security products; and the other risks detailed
from time to time in STI's Securities and Exchange Commission filings
and reports, including STI's annual report filed on Form 10-K and
quarterly reports filed on Form 10-Q. STI disclaims any obligation to
update information contained in any forward-looking statement.
Additional Information and Where to Find It
STI intends to file a proxy statement in connection with the
proposed transactions, a copy of which will be mailed to the
shareholders of STI. STI's Shareholders are urged to read the proxy
statement and other relevant materials when they become available
because they will contain important information about the proposed
transactions. Investors and security holders may obtain free copies of
these documents (when they are available) and other documents filed
with the Securities and Exchange Commission (the "SEC") at the SEC's
web site at www.sec.gov. In addition, investors and security holders
may obtain free copies of the documents filed with the SEC by STI by
going to STI's Investor Relations page on its corporate website at
www.sti.com/financial/index.htm, by contacting STI in writing at 6550
Dumbarton Circle, Fremont, California 94555 or by calling STI at (510)
608-3400. In addition to the proxy statement, STI files annual,
quarterly and current reports, proxy statements and other information
with the SEC. A copy any such reports, statements or other information
filed by the Company are available at the SEC public reference rooms.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The Company's SEC filings are also available
to the public from commercial document-retrieval services and at the
website maintained by the SEC at http://www.sec.gov.
In addition, STI and its officers and directors may be deemed to
be participants in the solicitation of proxies from STI's shareholders
with respect to the proposed transactions. A description of any
interests that STI's officers and directors have in the acquisition
will be available in the proxy statement. Information concerning STI's
directors and executive officers is set forth in STI's Annual Report
on Form 10-K, as amended, filed with the SEC on May 1, 2006. Updated
information about STI's directors and executive officers will be
included in the proxy statement that STI intends to file in connection
with this transaction.
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SCIENTIFIC TECHNOLOGIES INCORPORATED
Condensed Consolidated Income Statement
(Amounts in thousands except per share data)
(Unaudited)
Three months ended
March 31,
2006 2005
-----------------
Sales $15,962 $14,298
Cost of sales 9,218 8,820
-------- --------
Gross profit 6,744 5,478
Operating expenses 6,107 5,509
-------- --------
Operating income (loss) 637 (31)
Interest and other income 147 62
-------- --------
Income before taxes 784 31
Provision for income taxes 290 11
-------- --------
Net income $494 $20
======== ========
Basic and diluted net income per Share $.05 $.00
======== ========
Shares used to compute net income per share
Basic 9,791 9,768
Diluted 9,932 9,787
======== ========
Condensed Consolidated
Balance Sheet
(Amounts in thousands)
Unaudited
---------
March Dec.
31, 31,
2006 2005
--------- -------
Assets
Current assets:
Cash and cash equivalents $5,910 $4,773
Short-term investments 2,524 2,480
Accounts receivable 9,385 9,085
Inventories 8,350 8,414
Other assets 2,483 2,640
-------- --------
Total current assets 28,652 27,392
Property, plant and equipment, net 3,275 3,224
Goodwill, intangibles and other assets 5,070 5,106
-------- --------
Total assets $36,997 $35,722
======== ========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $2,950 $2,481
Accrued expenses 3,950 3,662
Current portion of capital lease with Parent 68 68
-------- --------
Total current liabilities 6,968 6,211
Capital lease with Parent 11 28
Deferred income tax liability 708 708
-------- --------
Total liabilities 7,687 6,947
Shareholders' equity 29,310 28,775
-------- --------
Total liabilities and shareholders' equity $36,997 $35,722
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