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Share Name | Share Symbol | Market | Type |
---|---|---|---|
L S Starrett Company (PK) | USOTC:SCXLB | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.50 | 15.25 | 16.45 | 0.00 | 01:00:00 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended | September 30, 2022 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from | to | ||||||||||
Commission file number | 1-367 |
THE L. S. STARRETT COMPANY | ||
(Exact name of registrant as specified in its charter) |
Massachusetts | 04-1866480 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
121 Crescent Street, Athol, Massachusetts | 01331-1915 | ||||
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | 978-249-3551 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Class A Common - $1.00 Per Share Par Value | SCX | New York Stock Exchange | ||||||
Class B Common - $1.00 Per Share Par Value | Not applicable | Not applicable |
Common Shares outstanding as of | October 26, 2022 | ||||||||||
Class A Common Shares | 6,787,025 | ||||||||||
Class B Common Shares | 595,381 |
Page No. | |||||||||||
Consolidated Balance Sheets – September 30, 2022 (unaudited) and June 30, 2022 | |||||||||||
Consolidated Statements of Operations (unaudited)– three months ended September 30, 2022 and September 30, 2021 | |||||||||||
Consolidated Statements of Comprehensive Income (Loss) (unaudited) – three months ended September 30, 2022 and September 30, 2021 | |||||||||||
Consolidated Statements of Stockholders' Equity (unaudited) – three months ended September 30, 2022 and September 30, 2021 | |||||||||||
Consolidated Statements of Cash Flows (unaudited) - three months ended September 30, 2022 and September 30, 2021 | |||||||||||
9-18 | |||||||||||
9/30/2022 | 6/30/2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash | $ | 11,902 | $ | 14,523 | |||||||
Accounts receivable (less allowance for credit losses of $770 and $796, respectively) | 38,062 | 42,961 | |||||||||
Inventories | 70,085 | 66,900 | |||||||||
Prepaid expenses and other current assets | 10,142 | 8,669 | |||||||||
Total current assets | 130,191 | 133,053 | |||||||||
Property, plant and equipment, net | 36,178 | 37,116 | |||||||||
Right of use assets | 5,026 | 5,540 | |||||||||
Deferred tax assets, net | 14,351 | 14,924 | |||||||||
Intangible assets, net | 4,506 | 4,640 | |||||||||
Goodwill | 1,015 | 1,015 | |||||||||
Other assets | 3,162 | 3,266 | |||||||||
Total assets | $ | 194,429 | $ | 199,554 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current maturities of debt | $ | 5,384 | $ | 6,547 | |||||||
Current lease liability | 1,432 | 1,530 | |||||||||
Accounts payable | 15,748 | 14,624 | |||||||||
Accrued expenses | 10,429 | 11,776 | |||||||||
Accrued compensation | 5,521 | 6,703 | |||||||||
Total current liabilities | 38,514 | 41,180 | |||||||||
Other tax obligations | 2,839 | 2,936 | |||||||||
Long-term lease liability | 3,777 | 4,166 | |||||||||
Long-term debt, net of current portion | 24,007 | 24,905 | |||||||||
Postretirement benefit and pension obligations | 23,459 | 23,938 | |||||||||
Total liabilities | 92,596 | 97,125 | |||||||||
Stockholders' equity: | |||||||||||
Class A Common stock $1 par (20,000,000 shares authorized; 6,770,681 outstanding at September 30, 2022 and 6,682,521 outstanding at June 30, 2022) | 6,771 | 6,683 | |||||||||
Class B Common stock $1 par (10,000,000 shares authorized; 596,903 outstanding at September 30, 2022 and 610,087 outstanding at June 30, 2022 | 597 | 610 | |||||||||
Additional paid-in capital | 57,247 | 57,143 | |||||||||
Retained earnings | 91,115 | 89,059 | |||||||||
Accumulated other comprehensive loss | (53,897) | (51,066) | |||||||||
Total stockholders' equity | 101,833 | 102,429 | |||||||||
Total liabilities and stockholders’ equity | $ | 194,429 | $ | 199,554 | |||||||
Three Months Ended | |||||||||||
9/30/2022 | 9/30/2021 | ||||||||||
Net sales | $ | 60,461 | $ | 61,514 | |||||||
Cost of goods sold | 40,261 | 41,369 | |||||||||
Gross profit | 20,200 | 20,145 | |||||||||
% of Net sales | 33.4 | % | 32.7 | % | |||||||
Restructuring charges | 190 | — | |||||||||
Selling, general and administrative expenses | 16,294 | 16,012 | |||||||||
Operating income | 3,716 | 4,133 | |||||||||
Other (expense) income | (676) | 226 | |||||||||
Income before income taxes | 3,040 | 4,359 | |||||||||
Income tax expense | 984 | 1,127 | |||||||||
Net income | $ | 2,056 | $ | 3,232 | |||||||
Basic income per share | $ | 0.28 | $ | 0.45 | |||||||
Diluted income per share | $ | 0.27 | $ | 0.44 | |||||||
Weighted average outstanding shares used in per share calculations: | |||||||||||
Basic | 7,304 | 7,126 | |||||||||
Diluted | 7,505 | 7,396 |
Three Months Ended | |||||||||||
9/30/2022 | 9/30/2021 | ||||||||||
Net income | $ | 2,056 | $ | 3,232 | |||||||
Other comprehensive (loss): | |||||||||||
Currency translation (loss), net of tax | (2,806) | (3,611) | |||||||||
Pension and postretirement plans, net of tax | (25) | (66) | |||||||||
Other comprehensive (loss) | (2,831) | (3,677) | |||||||||
Total comprehensive (loss) income | $ | (775) | $ | (445) |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2022 | $ | 6,683 | $ | 610 | $ | 57,143 | $ | 89,059 | $ | (51,066) | $ | 102,429 | |||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | 2,056 | (2,831) | (775) | |||||||||||||||||||||||||||||
Repurchase of shares | — | (1) | (5) | — | — | (6) | |||||||||||||||||||||||||||||
Stock-based compensation | 76 | — | 109 | — | — | 185 | |||||||||||||||||||||||||||||
Conversion | 12 | (12) | — | — | — | — | |||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | 6,771 | $ | 597 | $ | 57,247 | $ | 91,115 | $ | (53,897) | $ | 101,833 | |||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | (62,881) | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | 8,984 | ||||||||||||||||||||||||||||||||||
$ | (53,897) |
Common Stock Outstanding | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||
Class A | Class B | ||||||||||||||||||||||||||||||||||
Balance June 30, 2021 | $ | 6,475 | $ | 634 | $ | 56,507 | $ | 74,181 | $ | (54,262) | $ | 83,535 | |||||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | 3,232 | (3,677) | (445) | |||||||||||||||||||||||||||||
Repurchase of shares | — | (2) | (14) | — | — | (16) | |||||||||||||||||||||||||||||
Stock-based compensation | 119 | — | 55 | — | — | 174 | |||||||||||||||||||||||||||||
Conversion | 25 | (25) | — | — | — | — | |||||||||||||||||||||||||||||
Balance September 30, 2021 | $ | 6,619 | $ | 607 | $ | 56,548 | $ | 77,413 | $ | (57,939) | $ | 83,248 | |||||||||||||||||||||||
Accumulated balance consists of: | |||||||||||||||||||||||||||||||||||
Translation loss | $ | (59,657) | |||||||||||||||||||||||||||||||||
Pension and postretirement plans, net of taxes | 1,718 | ||||||||||||||||||||||||||||||||||
$ | (57,939) |
Three Months Ended | |||||||||||
9/30/2022 | 9/30/2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 2,056 | $ | 3,232 | |||||||
Non-cash operating activities: | |||||||||||
Depreciation | 1,288 | 1,262 | |||||||||
Amortization | 363 | 335 | |||||||||
Stock-based compensation | 185 | 174 | |||||||||
Net long-term tax obligations | 18 | 38 | |||||||||
Deferred taxes | 356 | 193 | |||||||||
Postretirement benefit and pension obligations | 162 | (353) | |||||||||
Working capital changes: | |||||||||||
Accounts receivable | 3,135 | (5,797) | |||||||||
Inventories | (5,022) | (2,887) | |||||||||
Other current assets | (1,740) | (1,888) | |||||||||
Other current liabilities | 31 | 104 | |||||||||
Prepaid pension expense | (263) | (288) | |||||||||
Other | 59 | 34 | |||||||||
Net cash provided by (used in) operating activities | 628 | (5,841) | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant and equipment | (960) | (2,334) | |||||||||
Software development | (202) | (290) | |||||||||
Net cash (used in) investing activities | (1,162) | (2,624) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowing | 575 | 13,767 | |||||||||
Debt repayments | (2,663) | (8,040) | |||||||||
Shares repurchased | (6) | (16) | |||||||||
Net cash provided (used in) by financing activities | (2,094) | 5,711 | |||||||||
Effect of exchange rate changes on cash | 7 | 276 | |||||||||
Net decrease in cash | (2,621) | (2,478) | |||||||||
Cash, beginning of period | 14,523 | 9,105 | |||||||||
Cash, end of period | $ | 11,902 | $ | 6,627 | |||||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | 374 | $ | 224 | |||||||
Income taxes paid, net | 2,244 | 1,116 |
North American Operations | International Operations | Unallocated | Total | ||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||
Sales1 | $ | 36,484 | $ | 23,977 | $ | — | $ | 60,461 | |||||||||||||||
Operating Income (Loss) | $ | 3,198 | $ | 2,836 | $ | (2,318) | $ | 3,716 | |||||||||||||||
Three Months Ended September 30, 2021 | |||||||||||||||||||||||
Sales2 | $ | 33,809 | $ | 27,705 | $ | — | $ | 61,514 | |||||||||||||||
Operating Income (Loss) | $ | 2,501 | $ | 3,583 | $ | (1,951) | $ | 4,133 |
Three Months Ended | ||||||||||||||
9/30/2022 | 9/30/2021 | |||||||||||||
North America | ||||||||||||||
United States | $ | 34,272 | $ | 32,020 | ||||||||||
Canada & Mexico | 2,212 | 1,789 | ||||||||||||
36,484 | 33,809 | |||||||||||||
International | ||||||||||||||
Brazil | 17,248 | 19,203 | ||||||||||||
United Kingdom | 3,201 | 4,968 | ||||||||||||
China | 1,686 | 1,618 | ||||||||||||
Australia & New Zealand | 1,842 | 1,916 | ||||||||||||
23,977 | 27,705 | |||||||||||||
Total Sales | $ | 60,461 | $ | 61,514 |
Right-of-Use Assets | Operating Lease Obligations | Remaining Cash Commitment | |||||||||||||||
Operating leases | 5,026 | $ | 5,209 | $ | 6,637 |
9/30/2022 | 6/30/2022 | ||||||||||
Raw material and supplies | $ | 36,668 | $ | 35,752 | |||||||
Goods in process and finished parts | 23,205 | 22,268 | |||||||||
Finished goods | 36,212 | 35,589 | |||||||||
96,085 | 93,609 | ||||||||||
LIFO Reserve | (26,000) | (26,709) | |||||||||
$ | 70,085 | $ | 66,900 |
9/30/2022 | 6/30/2022 | ||||||||||
Trademarks and trade names | 2,070 | 2,070 | |||||||||
Completed technology | — | — | |||||||||
Customer relationships | 630 | 630 | |||||||||
Software development | 11,471 | 11,269 | |||||||||
Gross intangible assets | 14,171 | 13,969 | |||||||||
Accumulated amortization and impairment | (9,665) | (9,329) | |||||||||
Net intangible assets | $ | 4,506 | $ | 4,640 |
09/30/2022 | 06/30/2022 | ||||||||||
Sales related programs (commissions, rebates, distributor programs, warranty and related) | $ | 2,868 | $ | 2,733 | |||||||
Income taxes | 614 | 2,420 | |||||||||
Professional fees | 1,669 | 1,758 | |||||||||
Other | 1,562 | 1,463 | |||||||||
Current portion pension cost | 1,297 | 1,289 | |||||||||
Taxes other than income tax | 1,058 | 1,243 | |||||||||
Workers compensation and employee deposits | 558 | 518 | |||||||||
Freight | 803 | 352 | |||||||||
Total | $ | 10,429 | $ | 11,776 |
Three Months Ended | ||||||||||||||
9/30/2022 | 9/30/2021 | |||||||||||||
Interest cost | 1,482 | 1,033 | ||||||||||||
Expected return on plan assets | (1,032) | (1,100) | ||||||||||||
Amortization of net loss | 10 | 14 | ||||||||||||
$ | 460 | $ | (53) |
Three Months Ended | ||||||||||||||
9/30/2022 | 9/30/2021 | |||||||||||||
Service cost | $ | 6 | $ | 9 | ||||||||||
Interest cost | 18 | 12 | ||||||||||||
Amortization of prior service credit | (369) | (368) | ||||||||||||
Amortization of net loss | 44 | 47 | ||||||||||||
$ | (301) | $ | (300) |
9/30/2022 | 6/30/2022 | ||||||||||
Short-term and current maturities | |||||||||||
Loan and Security Agreement (Term loan) | 1,495 | 1,495 | |||||||||
Brazil Loans | 3,889 | 5,052 | |||||||||
5,384 | 6,547 | ||||||||||
Long-term debt (net of current portion) | |||||||||||
Loan and Security Agreement (Term Loan) | 9,878 | 10,252 | |||||||||
Loan and Security Agreement (Line of Credit) | 11,397 | 11,397 | |||||||||
Brazil Loans | 3,220 | 3,771 | |||||||||
Debt Reacquisition Cost | (488) | (515) | |||||||||
24,007 | 24,905 | ||||||||||
Total Debt | $ | 29,391 | $ | 31,452 |
Lending Institution | Interest Rate | Beginning Date | Ending Date | Outstanding Balance | |||||||||||||||||||
Itau | 4.52 | % | October 2021 | September 2024 | $ | 4,000 | |||||||||||||||||
Santander | 2.71 | % | December 2021 | December 2022 | 275 | ||||||||||||||||||
Bradesco | 2.52 | % | January 2022 | January 2023 | 443 | ||||||||||||||||||
Itau | 4.98 | % | February 2022 | February 2024 | 1,828 | ||||||||||||||||||
Brasil | 4.95 | % | August 2022 | July 2025 | 401 | ||||||||||||||||||
Brasil | 3.80 | % | September 2022 | August 2024 | 115 | ||||||||||||||||||
Brasil | 4.18 | % | September 2022 | September 2023 | 48 | ||||||||||||||||||
$ | 7,110 |
Three Months Ended | |||||||||||||||||
(Amounts in thousands) | 9/30/2022 | 09/30/2021 | $ Change favorable (unfavorable) | % Change | |||||||||||||
Net sales | $ | 60,461 | $ | 61,514 | $ | (1,053) | (1.7) | % | |||||||||
Gross profit | 20,200 | 20,145 | 55 | 0.3 | % | ||||||||||||
% of net sales | 33.4 | % | 32.7 | % | |||||||||||||
Restructuring charges | 190 | — | (190) | (100.0) | % | ||||||||||||
Selling, general and administrative expenses | 16,294 | 16,012 | (282) | (1.8) | % | ||||||||||||
% of net sales | 26.9 | % | 26.0 | % | |||||||||||||
Operating income | 3,716 | 4,133 | (417) | (10.1) | % | ||||||||||||
Other income (expense), net | (676) | 226 | (902) | (399.1) | % | ||||||||||||
Income before income taxes | 3,040 | 4,359 | (1,319) | (30.3) | % | ||||||||||||
Income tax expense (benefit) | 984 | 1,127 | 143 | 12.7 | % | ||||||||||||
Net income | $ | 2,056 | $ | 3,232 | (1,176) | (36.4) | % |
Three Months Ended September 2022 | Three Months Ended September 2021 | ||||||||||||||||||||||||||||
(Amounts in thousands) | North America | International | Corporate | Total | North America | International | Corporate | Total | |||||||||||||||||||||
Net sales | $ | 36,484 | $ | 23,977 | $ | — | $ | 60,461 | $ | 33,809 | $ | 27,705 | $ | — | $ | 61,514 | |||||||||||||
Gross profit | 10,932 | 9,268 | — | 20,200 | 9,535 | 10,610 | — | 20,145 | |||||||||||||||||||||
% of net sales | 30.0 | % | 38.7 | % | 33.4 | % | 28.2 | % | 38.3 | % | 32.7 | % | |||||||||||||||||
Restructuring charges | — | 190 | — | 190 | — | — | — | — | |||||||||||||||||||||
Selling, general and administrative expenses | 8,101 | 6,242 | 1,951 | 16,294 | 7,262 | 7,027 | 1,723 | 16,012 | |||||||||||||||||||||
% of net sales | 22.2 | % | 26.0 | % | 26.9 | % | 21.5 | % | 25.4 | % | 26.0 | % | |||||||||||||||||
Operating income | 2,831 | 2,836 | (1,951) | 3,716 | 2,273 | 3,583 | (1,723) | 4,133 | |||||||||||||||||||||
% of net sales | 7.8 | % | 11.8 | % | 6.1 | % | 6.7 | % | 12.9 | % | 6.7 | % |
Cash flows (in thousands) | Three Months Ended | ||||||||||
9/30/2022 | 9/30/2021 | ||||||||||
Cash provided by (used in) operating activities | $ | 628 | $ | (5,841) | |||||||
Cash (used in) investing activities | (1,162) | (2,624) | |||||||||
Cash (used in) financing activities | (2,094) | 5,711 | |||||||||
Effect of exchange rate changes on cash | 7 | 276 | |||||||||
Net (decrease) in cash | $ | (2,621) | $ | (2,478) |
31.1* | |||||
31.2 * | |||||
32.2+ | |||||
101 | The following materials from The L. S. Starrett Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (I) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statement of Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
THE L. S. STARRETT COMPANY (Registrant) | |||||||||||
Date | November 3, 2022 | /S/ Douglas A. Starrett | |||||||||
Douglas A. Starrett - President and CEO (Principal Executive Officer) | |||||||||||
Date | November 3, 2022 | /S/ John C. Tripp | |||||||||
John C. Tripp - CFO and Treasurer (Principal Accounting Officer) |
1 Year L S Starrett (PK) Chart |
1 Month L S Starrett (PK) Chart |
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