Woodhead (NASDAQ:WDHD)
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Woodhead Industries, Inc., (NASDAQ:WDHD) today announced
financial results for its fiscal fourth quarter and full year ended
October 1, 2005. It is important to note that as a result of the
Company being on a statistical calendar, the 2005 fiscal fourth
quarter had one less week of operations than the same period in 2004.
This has reduced all reported revenue comparisons shown below by 7.7
points for the quarter and 2.0 points for the year. Highlights for the
2005 fourth quarter and fiscal year include:
-- Revenue increased 6.6% for the year.
-- North American Connectivity sales improved 15.5% for the
quarter, and 17.2% for the year.
-- Income from operations increased 18.2% for the quarter, and
17.3% for the year.
Philippe Lemaitre, Woodhead Industries' Chairman and Chief
Executive Officer, commented, "Our North American Connectivity
business continues to benefit from the growth initiatives implemented
in 2004. Connectivity revenues from this region were robust during the
fourth quarter, climbing 16% year over year. Unfortunately, this
strong performance was partially offset by lower revenue from our
European markets, which declined 17%. This weakness was most
pronounced in Italy and the U.K., which continue to be affected by
challenging economic conditions. However, end-market demand for our
products has begun to increase in Europe, and we expect top-line
growth to improve during fiscal 2006."
Fourth Quarter Results
Revenues for the 2005 fiscal fourth quarter totaled $53.0 million,
equal to the same period last year. Income from operations was $3.4
million, up $0.5 million from the fourth quarter of 2004. Net income
totaled $2.7 million, or $0.22 a share for the quarter, compared to
net income of $3.4 million and $0.28 a share for the same period in
2004. Non-operating items (primarily foreign exchange gains and tax
rates) totaled $0.06 per share in the 2005 fourth quarter, compared to
$0.16 per share for the same period last year. Income from operations
grew 18.2% year over year after absorbing $1.1 million, or $0.06 per
share, of costs related to Sarbanes-Oxley (SOX).
In the Connectivity segment, fourth quarter sales were $39.7
million, flat with that reported in the 2004 fourth quarter. Income
from operations totaled $3.6 million, up $1.6 million or 77%, from
$2.0 million for the same period last year due to lower operating
expenses and improved gross margins.
Revenue in the Electrical segment totaled $13.4 million, equal to
the same period last year. Income from operations was $1.2 million,
down $0.3 million from $1.5 million in the same period last year. The
decline in operating margin is primarily the result of higher LIFO
costs and product mix.
Fiscal 2005 Results
Revenues for the 2005 fiscal year were $215.0 million, an increase
of 6.6% compared to $201.7 million in 2004. Income from operations
increased to $11.6 million, up 17.3% from $9.9 million in 2004. Net
income was $8.4 million, or $0.68 per share, compared to $8.0 million,
or $0.66 per share for the 2004 fiscal year. Non-operating items
(primarily product line divestitures, foreign exchange gains, and tax
rates) totaled $0.16 per share in 2005, compared to $0.26 in 2004.
Additionally, 2005 full year SOX costs were an incremental $2.4
million, or $0.13 per share.
Connectivity Segment sales were $162.3 million in fiscal 2005
versus $147.0 million in 2004, an increase of 10.4%. Income from
operations was $9.7 million, more than doubling the $4.6 million
realized last year due to the higher revenue, better plant utilization
and improved margins.
Electrical Segment sales in fiscal 2005 were $52.7 million,
compared to sales of $54.7 million for the 2004 fiscal year,
representing a decrease of 3.6%. Income from operations was $4.8
million in 2005, compared to $6.6 million in 2004. Sales for this
segment were lower on a year-over-year basis primarily because of
several large, non-recurring government shipments, worth $3.1 million,
that occurred in the second and third quarters of 2004. Margins were
affected primarily by product mix and operational issues that occurred
during the 2005 first quarter. While substantial progress was made on
these issues over the course of the year, their impact adversely
affected full year results.
Outlook
Philippe Lemaitre explained, "As we begin our 2006 fiscal year, we
expect our North American operations to continue producing robust
growth. However, our overall growth rate will be tempered slightly by
the expected persistence of near-term weakness in Europe. As a result,
we are currently forecasting revenue growth of 8 to 10% for the 2006
fiscal year. However, we expect improved margin performance to drive
earnings growth at a meaningfully higher rate."
Lemaitre added, "We expect first half revenue to be $113 to $115
million, and earnings per share between $0.42 and $0.45. For the
second half of our 2006 fiscal year, we expect revenue of $118 to $120
million, and earnings per share between $0.47 and $0.50. The first
half estimate includes $0.07 per share of profit associated with a
recently announced legal settlement. The full year estimate also
includes $0.04 per share of incremental cost related to stock award
expensing."
This press release contains statements that are forward-looking.
These statements are based on current expectations that are subject to
risks and uncertainties. In particular, such risks include future
actions, prospective products, future performance or results of
current or anticipated products, sales efforts, expenses, the outcome
of contingencies such as legal proceedings, general economic and
business conditions, competition, and other issues discussed in our
Form 10-K and other SEC filings.
Conference Call
Woodhead Industries, Inc., will host a conference call today,
November 18, 2005, at 11:00 AM Eastern Time to discuss performance and
financial results for the fiscal fourth quarter and full year. To
access a live internet webcast of the conference call, visit the
Company's website at www.woodhead.com and select the webcast icon. The
dial-in phone number is 800-500-3792 or 719-457-2734. The Access code
is 9429215. A replay of the conference call will be archived and
available on the Company's website following the live event.
About Woodhead Industries, Inc.
Woodhead Industries (NASDAQ:WDHD) develops, manufactures and
markets network and electrical infrastructure products engineered for
performance in harsh, demanding, and hazardous industrial
environments. Woodhead is known in the global industrial market by its
recognized brands which include Brad Harrison(R), BradPower(TM),
BradControl(TM), SST(TM), Daniel Woodhead(R), mPm(R), applicom(R),
Aero-Motive(R) and RJ-Lnxx(R). Our expertise extends from mechanical,
electrical, and electronics to communication software products and
technologies. Woodhead operates from 21 locations in 10 countries
spanning North America, Europe and Asia/Pacific.
For further information, contact: Robert Fisher, Vice President,
Finance and CFO, 847-317-2400, e-mail: rfisher@woodhead.com.
(Tables to Follow)
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WOODHEAD INDUSTRIES, INC. Consolidated Balance Sheet
(Amounts in thousands)
----------------------
Assets 10/1/2005 10/2/2004
----------------------
Current Assets
Cash and short-term investments $13,887 $16,709
Accounts receivable 39,040 35,759
Inventories 21,173 19,106
Prepaid expenses 5,785 4,948
Refundable income taxes 2,097 2,863
Deferred income taxes 2,164 3,043
----------------------------------------------------------------------
Total current assets 84,146 82,428
Property, plant and equipment, net 54,758 58,289
Goodwill, net 35,730 36,769
Deferred income taxes 2,746 2,427
Other Assets 1,000 1,151
----------------------------------------------------------------------
Total Assets $178,380 $181,064
----------------------------------------------------------------------
Liabilities and Stockholders' Investment
Current Liabilities
Accounts payable $11,080 $9,423
Accrued expenses 11,531 13,245
Income taxes payable 1,053 1,272
Current portion of long-term debt 5,700 5,700
----------------------------------------------------------------------
Total current liabilities 29,364 29,640
Long-term debt 19,500 25,200
Deferred income taxes 4,698 4,451
Other liabilities 4,139 4,339
----------------------------------------------------------------------
Total Liabilities 57,701 63,630
Stockholders' investment:
Common stock at par (shares issued: 12,260
at 10/1/05, 12,147 at 10/2/04) 12,260 12,147
Additional paid-in capital 21,596 20,236
Deferred stock compensation (397) (552)
Accumulated other comprehensive income 4,726 6,602
Retained earnings 82,494 79,001
----------------------------------------------------------------------
Total stockholders' investment 120,679 117,434
----------------------------------------------------------------------
Total Liabilities and Stockholders' Investment $178,380 $181,064
----------------------------------------------------------------------
WOODHEAD INDUSTRIES, INC. Consolidated Income Statement
(Amounts in thousands, except per share data)
Quarter Ended: Twelve Months Ended
-------------------- ------- -------------------- -------
% %
10/1/2005 10/2/2004 Change 10/1/2005 10/2/2004 Change
-------------------- ------- -------------------- -------
Net Sales $53,009 $53,097 (0.2%) $215,036 $201,735 6.6%
Cost of
Sales 32,887 33,077 (0.6%) 135,400 125,665 7.7%
-------------------- --------------------
Gross Profit 20,122 20,020 0.5% 79,636 76,070 4.7%
% of Net
Sales 38.0% 37.7% 37.0% 37.7%
Operating
Expenses 16,746 17,275 (3.1%) 68,036 65,088 4.5%
Restructuring
and Other
Related
Charges - (112) - 1,093
-------------------- --------------------
Total
Operating
Expense 16,746 17,163 (2.4%) 68,036 66,181 2.8%
% of Net
Sales 31.6% 32.3% 31.6% 32.8%
Income From
Operations 3,376 2,857 18.2% 11,600 9,889 17.3%
-------------------- --------------------
% of Net
Sales 6.4% 5.4% 5.4% 4.9%
Other
Expenses
Interest
Expense 208 571 (63.6%) 1,644 2,337 (29.7%)
Other
(Income)/
Expenses,
Net (313) (1,283) (1,421) (2,304)
-------------------- --------------------
Other
(Income)/
Expenses (105) (712) 223 33
Income Before
Taxes 3,481 3,569 (2.5%) 11,377 9,856 15.4%
% of Net
Sales 6.6% 6.7% 5.3% 4.9%
Provision For
Income Taxes 811 155 423.2% 2,991 1,818 64.5%
-------------------- --------------------
Net Income $2,670 $3,414 (21.8%) $8,386 $8,038 4.3%
% of Net
Sales 5.0% 6.4% 3.9% 4.0%
==================== ====================
Earnings per
share
Diluted $0.22 $0.28 (21.4%) $0.68 $0.66 3.0%
Weighted-
average
common
shares
outstanding
Diluted 12,309 12,205 0.9% 12,266 12,202 0.5%
==================== ====================
Dividends Per
Share $0.10 $0.10 0.0% $0.40 $0.40 0.0%
==================== ====================
SEGMENT DATA Quarter Ended: Twelve Months Ended
-------------------- ------- -------------------- -------
% %
10/1/2005 10/2/2004 Change 10/1/2005 10/2/2004 Change
-------------------- ------- -------------------- -------
Net Sales
---------
Connectivity $39,658 $39,693 (0.1%) $162,291 $147,036 10.4%
Electrical 13,351 13,404 (0.4%) 52,745 54,699 (3.6%)
-------------------- --------------------
Total $53,009 $53,097 (0.2%) $215,036 $201,735 6.6%
==================== ====================
Income From
Operations
-----------
Connectivity $3,557 $2,007 77.2% $9,696 $4,575 111.9%
Electrical 1,168 1,524 (23.4%) 4,812 6,551 (26.5%)
Corporate and
Other (1,349) (674) (2,908) (1,237)
-------------------- --------------------
Total $3,376 $2,857 18.2% $11,600 $9,889 17.3%
==================== ====================
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