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 and six months
ended June 30, 2006. Sales for the second quarter of 2006 increased
15% to $17,188,000, compared to sales of $14,941,000 for the same
quarter of 2005. Year to date sales increased 13% to $33,150,000,
compared to sales of $29,239,000 for the same period of 2005.
Net income for the second quarter of 2006 was $156,000 or $.02 per
common and diluted share, compared to net income of $510,000 or $.05
per common and diluted share for the second quarter of 2005. Net
income for the first six months of 2006 was $650,000 or $.07 per
common and diluted share, compared to net income of $529,000 or $.05
per common and diluted share for the first six months of 2005.
Commenting on the results, Joseph J. Lazzara, President and Chief
Executive Officer, stated, "We are very pleased to report double digit
sales growth for the second quarter and first six months of 2006.
Second quarter and year to date net income was negatively impacted by
the recognition of approximately $1,088,000 in 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. We expect that the proposed transaction will close
during the third quarter of 2006.
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 expected closing of the merger with Omron and the sale
of APG, 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 definitive 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
definitive 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 of 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 definitive 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 definitive 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 Six months ended
June 30, June 30,
2006 2005 2006 2005
--------------- ----------------
Sales $17,188 $14,941 $33,150 $29,239
Cost of sales 10,015 8,771 19,233 17,591
------- ------- ------- -------
Gross profit 7,173 6,170 13,917 11,648
Operating expenses 7,075 5,509 13,181 11,017
------- ------- ------- -------
Operating income 98 661 736 631
Interest and other income 184 89 331 150
------- ------- ------- -------
Income before taxes 282 750 1,067 781
Provision for income taxes 126 240 417 252
------- ------- ------- -------
Net income $ 156 $ 510 $ 650 $ 529
======= ======= ======= =======
Basic and diluted net income
per share $ .02 $ .05 $ .07 $ .05
======= ======= ======= =======
Shares used to compute net income
per share
Basic 9,795 9,772 9,788 9,770
======= ======= ======= =======
Diluted 10,053 9,772 9,993 9,774
======= ======= ======= =======
Condensed Consolidated Balance Sheet
(Amounts in thousands)
Unaudited
June 30, December 31,
2006 2005
--------- ------------
Assets
Current assets:
Cash and cash equivalents $ 6,356 $ 4,773
Short-term investments 2,478 2,480
Accounts receivable 9,157 9,085
Inventories 8,900 8,414
Other assets 2,623 2,640
------- -------
Total current assets 29,514 27,392
Property, plant and equipment, net 3,444 3,224
Goodwill, intangibles and other assets 5,059 5,106
------- -------
Total assets $38,017 $35,722
======= =======
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 3,646 $ 2,481
Accrued expenses 4,077 3,662
Current portion of capital lease
with Parent -- 68
------- -------
Total current liabilities 7,723 6,211
Capital lease with Parent -- 28
Deferred income tax liability 708 708
------- -------
Total liabilities 8,431 6,947
Shareholders' equity 29,586 28,775
------- -------
Total liabilities and
shareholders' equity $38,017 $35,722
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