Summa (NASDAQ:SUMX)
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Summa Reports 2nd Quarter Earnings
TORRANCE, Calif., March 23 /PRNewswire-FirstCall/ -- Summa Industries
(NASDAQ:SUMX) reports net income of $276,000, or $.07 per share, on sales of
$29,197,000 for the three months ended February 28, 2005, versus net income of
$453,000, or $.06 per share, on sales of $26,545,000 for the three months ended
February 29, 2004.
Three months ended
Feb 28, 2005 Feb 29, 2004
Sales $29,197,000 $26,545,000
Net income $276,000 $453,000
Diluted earnings per share $.07 $.06
Earnings have been substantially impacted by costs directly related to two
major relocation initiatives; the consolidation of three plants to a new
facility in Reading, PA, which was substantially completed during the second
quarter, and an ongoing relocation from Bensenville, IL to Pharr, TX. The
Pharr relocation is expected to be completed in the fourth quarter of fiscal
2005. The relocation costs are expected to continue through the third quarter
and decline sharply thereafter. For comparison, it is noted that earnings in
the second quarter of fiscal 2004 were adversely impacted by a non-recurring
charge to interest expense of $266,000 for term loan breakup fees and the
write-off of unamortized bank fees in connection with a change in banks. The
effects of the relocation expenses and financing expenses and the pro forma
earnings, calculated as though the relocation expenses and financing expenses
had not been incurred, are as follows:
Three months ended Six months ended
Feb 28, Feb 29, Feb 28, Feb 29,
2005 2004 2005 2004
Operating income $891,000 $1,251,000 $2,218,000 $2,802,000
Relocation expense $497,000 $77,000 $896,000 $129,000
Pro forma operating
income $1,388,000 $1,328,000 $3,114,000 $2,931,000
Net income $276,000 $453,000 $886,000 $1,283,000
Tax-effected
financing expenses -- $170,000 -- $170,000
Tax-effected
relocation expense $318,000 $49,000 $573,000 $83,000
Pro forma net income $594,000 $672,000 $1,459,000 $1,536,000
Diluted EPS $0.07 $0.06 $0.22 $0.21
Pro forma diluted EPS $0.15 $0.11 $0.36 $0.27
Note that "pro forma" has no defined meaning under Generally Accepted
Accounting Principles. The information presented above is for the purpose of
drawing attention to two critical components of current performance. By
providing this information, the Company does not assume the responsibility to
provide such supplemental information in future releases of earnings. There
are other components of current performance which are not highlighted in the
above presentation. Investors are urged to read the Management's Discussion
and Analysis section of the Company's Quarterly Report on Form 10-Q for the
period ended February 28, 2005, which is expected to be filed by April 15,
2005.
A conference call to discuss the results will be held at 9:00 a.m., Pacific
Time, Wednesday, March 23, 2005. The call-in number is (800) 776-0816 and the
international call-in number is (913) 981-5505. The conference call will also
be simulcast and archived by http://www.vcall.com/.
Statements in this news release which relate to future plans, financial
results, projections, events or performance, including without limitation
expectations and beliefs regarding future events, are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
and fall under the safe harbor. These forward-looking statements include, but
are not limited to, statements regarding the Company's expectations regarding
the timing of completion of the ongoing Pharr relocation, and expectations that
aggregate relocation costs will diminish steadily throughout the remainder of
the fiscal year. Actual results may differ materially from those anticipated
because of a number of factors, including, but not limited to, delays and/or
cost overruns in the ongoing Pharr relocation, implementation of additional
relocation projects not currently in process, and other risks and uncertainties
described in detail under "Risk Factors" in Summa's Annual Report on Form 10-K
for the fiscal year ended August 31, 2004.
Summa Industries manufactures proprietary engineered plastic products for a
broad spectrum of industrial and commercial markets. The Company has
manufacturing facilities across North America. Products, many of which are
unique or patented, are shipped to customers worldwide.
For further information, contact Jim Swartwout, (310) 792-7024; Fax (310)
792-7079; http://www.summaindustries.com/; or .
Summa Industries
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
February 29, August 31, February 28,
ASSETS 2004 2004 2005
Current assets:
Cash and cash equivalents $147,000 $1,248,000 $930,000
Accounts receivable 17,669,000 18,227,000 19,251,000
Inventories 13,828,000 14,749,000 15,213,000
Prepaid expenses and other 3,108,000 3,782,000 4,188,000
Total current assets 34,752,000 38,006,000 39,582,000
Property, plant and
equipment, net 27,967,000 31,053,000 32,845,000
Goodwill and other assets,
net 11,896,000 11,058,000 10,969,000
Total assets $74,615,000 $80,117,000 $83,396,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,871,000 $9,088,000 $8,793,000
Accrued liabilities 4,211,000 7,429,000 5,450,000
Current maturities of
long-term debt 2,110,000 2,195,000 4,955,000
Total current liabilities 12,192,000 18,712,000 19,198,000
Long-term debt, net of
current maturities 21,818,000 28,663,000 30,603,000
Other long-term liabilities 2,585,000 2,508,000 2,492,000
Manditorily redeemable
convertible preferred stock 6,472,000 -- --
Minority interest in
subsidiary 205,000 205,000 172,000
Total stockholders' equity 31,343,000 30,029,00 30,931,000
Total $74,615,000 $80,117,000 $83,396,000
Summa Industries
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
Three months ended Six months ended
February 29 February 28 February 29 February 28
2004 2005 2004 2005
Net sales $26,545,000 $29,197,000 $52,471,000 $57,435,000
Cost of sales 20,256,000 23,410,000 39,811,000 45,203,000
Gross profit 6,289,000 5,787,000 12,660,000 12,232,000
Selling, general,
administrative and
other expenses 5,038,000 4,896,000 9,858,000 10,014,000
Operating income 1,251,000 891,000 2,802,000 2,218,000
Interest expense 584,000 471,000 889,000 838,000
Income before income
taxes 667,000 420,000 1,913,000 1,380,000
Provision for income
taxes 214,000 144,000 630,000 494,000
Net income $453,000 $276,000 $1,283,000 $886,000
Preferred stock
accretion $185,000 -- $369,000 --
Net income available
to common
stockholders $268,000 $276,000 $914,000 $886,000
Earnings per common
share
Basic $.06 $.07 $.21 $.22
Diluted $.06 $.07 $.21 $.22
Weighted average
common shares
outstanding:
Basic 4,370,000 4,002,000 4,328,000 3,993,000
Diluted 4,456,000 4,079,000 4,403,000 4,071,000
DATASOURCE: Summa Industries
CONTACT: Jim Swartwout of Summa Industries, +1-310-792-7024, fax,
+1-310-792-7079,
Web site: http://www.summaindustries.com/