UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 3, 2015
SCHMITT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Oregon |
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000-23996 |
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93-1151989 |
(State or other jurisdiction
of incorporation or organization) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification Number) |
2765 N.W. Nicolai Street
Portland, Oregon |
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97210-1818 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (503) 227-7908
Not Applicable
Former
name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On April 3, 2015, Schmitt Industries, Inc. issued a press release entitled Schmitt Industries Announces Third Quarter Fiscal 2015 Operating
Results. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information contained in this Current Report shall not be
deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended,
except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press release entitled Schmitt
Industries Announces Third Quarter Fiscal 2015 Operating Results.
Forward Looking Statements
Certain statements in this release, including but not limited to remarks by James A. Fitzhenry, are forward-looking statements. These statements
are based upon current expectations, estimates and projections about the Companys business that are based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and
uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic
conditions and global financial concerns, the volatility of the Companys primary markets, efforts to accelerate growth in sales of the Xact® tank monitoring systems and the ability to
satisfy expected demand, the ability to develop new products to satisfy changes in consumer demands, the intensity of competition, the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary
supplier increases the prices of raw materials or components, the ability to ramp up manufacturing to satisfy increasing demand, maintenance of a significant investment in inventories in anticipation of future sales, existing cash and credit
facilities level which may not be sufficient to fund future growth, fluctuations in quarterly and annual operating results, attracting and retaining key management and qualified technical and sales personnel, changes in effective tax rates, the
ability to reduce operating costs if sales decline, increased costs due to changes in securities laws and regulations, protection of intellectual property rights, and risks from international sales and currency fluctuations.
For further information regarding risks and uncertainties associated with the Companys business, please refer to Schmitts SEC filings, including,
but not limited to, its Forms 10-K, 10-Q and 8-K.
The forward-looking statements in this release speak only as of the date on which they were made, and
the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes to this document made by wire services or internet service providers.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SCHMITT INDUSTRIES, INC. |
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April 3, 2015 |
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By: |
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/s/ Ann M Ferguson |
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Name: Ann M Ferguson |
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Title: Chief Financial Officer and Treasurer |
Exhibit 99.1
IMMEDIATE NEWS RELEASE
Schmitt Industries Announces Third Quarter Fiscal 2015 Operating Results
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April 3, 2015 |
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NASDAQ: SMIT |
Portland, Oregon Schmitt Industries, Inc. (NASDAQ: SMIT) today announced its operating results for the three and nine
months ended February 28, 2015. For the three months ended February 28, 2015, total sales decreased $55,545, or 1.8%, to $3,010,618 from $3,066,163 in the three months ended February 28, 2014. Net loss was $168,371, or $(0.06) per
fully diluted share, for the three months ended February 28, 2015 as compared to net loss of $72,107, or $(0.02) per fully diluted share, for the three months ended February 28, 2014. For the nine months ended February 28, 2015, total
sales increased $102,748, or 1.1%, to $9,211,410 from $9,108,662 in the nine months ended February 28, 2014. Net loss was $186,428, or $(0.06) per fully diluted share, for the nine months ended February 28, 2015 as compared to net loss of
$381,867, or $(0.13) per fully diluted share, for the nine months ended February 28, 2014.
Balancer segment sales focus throughout the world on
end-users, rebuilders and original equipment manufacturers of grinding machines with the target geographic markets of North America, Asia, Europe and South America. Balancer segment sales decreased $66,379, or 3.4%, to $1,903,482 for the three
months ended February 28, 2015 compared to $1,969,861 for the three months ended February 28, 2014. The decrease is primarily attributed to softer sales in North America, offset in part by increased sales in Asia for the quarter.
Balancer segment sales decreased $171,098, or 2.9%, to $5,666,501 for the nine months ended February 28, 2015 compared to $5,837,599 for the nine months
ended February 28, 2014. The decrease is primarily attributed to softer sales in North America, offset in part by increased sales in Asia for the first three quarters of the fiscal year.
The Measurement segment product line consists of laser-based surface measurement and laser-based distance measurement and dimensional sizing products and
ultrasonic-based remote tank monitoring products. Total Measurement segment sales increased $10,834, or 1.0%, to $1,107,136 for the three months ended February 28, 2015 compared to $1,096,302 for the three months ended February 28, 2014,
driven by an increase in revenues associated with the sales of remote tank monitoring products and related monitoring services, offset by decreased sales of laser-based surface measurement and laser-based distance measurement products.
Measurement segment sales increased $273,846, or 8.4%, to $3,544,909 for the nine months ended February 28, 2015 compared to $3,271,063 for the nine
months ended February 28, 2014, driven by an increase in revenues associated with the sales of remote tank monitoring products and related monitoring services and an increase in sales of laser-based surface measurement products.
Gross margin for the three months ended February 28, 2015 decreased to 44.9% as compared to 47.5% for the three months ended February 28, 2014.
Gross margin for the nine months ended February 28, 2015 increased to 47.4% as compared to 46.7% for the nine months ended February 28, 2014. The fluctuations in gross margin in both the three and nine month periods ended February 28,
2015 compared to the three and nine month periods in the prior fiscal year is primarily influenced by shifts in product sales mix involving our five product lines.
Operating expenses decreased $38,715, or 2.5%, to $1,500,870 for the three months ended February 28, 2015 as compared to $1,539,585 for the three months
ended February 28, 2014. General, administrative and selling expenses increased $17,168, or 1.2%, for the three months ended February 28, 2015 as compared to the same period in the prior year due in
CORPORATE OFFICE: 2765 NW NICOLAI ST. PORTLAND, OREGON 97210 503/227-7908 FAX
503/223-1258
part to increases in personnel expenses offset by reductions in professional fees and depreciation expense. Research and development expenses decreased $55,883, or 36.9%, for the quarter ended
February 28, 2015 as compared to the same period in the prior year due to fewer development projects within our existing product lines occurring during the third quarter of Fiscal 2015 as compared to the third quarter of Fiscal 2014.
Operating expenses decreased $100,876, or 2.2%, to $4,536,317 for the nine months ended February 28, 2015 as compared to $4,637,193 for the nine months
ended February 28, 2014. General, administrative and selling expenses decreased $3,228, or 0.1%, for the nine months ended February 28, 2015 as compared to the same period in the prior year. Increases in personnel costs and marketing and
trade show expenses were offset by decreases in professional fees, depreciation expense and other general office and utility costs. Research and development expenses decreased $97,648, or 25.0%, for the first three quarters of Fiscal 2015 as
compared to the same period in the prior year due to fewer development projects within our existing product lines occurring during the first three quarters of Fiscal 2015 as compared to the same period of Fiscal 2014.
While our consolidated sales performance for the third quarter of Fiscal 2015 was consistent with prior quarters, the mix of products sold weighted more
toward our lower margin products, which resulted in the net loss recorded for the quarter, commented James A. Fitzhenry, President and CEO of Schmitt Industries.
We remain focused on executing on our sales strategies across our product lines and are encouraged by the development of our Xact® product line, which continues to record quarter-over-quarter growth, and we note that sales of SBS products into Asia continue to show positive trends. It is important to note that we are
EBITDA positive for the fiscal year to date, and we are generating cash from operations. We expect our fourth quarter to show sales growth and profitability and we are working to close out our fiscal year on a profitable
basis, Fitzhenry concluded.
About Schmitt Industries
Schmitt Industries, Inc. (the Company) designs, manufactures and sells high precision test and measurement products for two main business segments: the
Balancer Segment and the Measurement Segment. For the Balancer Segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems for the worldwide machine tool industry, particularly
for grinding machines. For the Measurement Segment, the Company designs, manufactures and sells laser and white light sensors for distance, dimensional and area measurement for a wide variety of commercial applications, laser-based microroughness
measurement products for the semiconductor wafer and hard disk drive industries and for other industrial applications, laser-based surface analysis and measurement products for a variety of scientific applications, and ultrasonic measurement
products that accurately measure the liquid levels of propane and diesel tanks and transmit that data via satellite to a secure web site for display. The Company also provides sales and service for Europe and parts of Asia through its wholly owned
subsidiary, Schmitt Europe Limited (SEL), located in Coventry, England and through its sales representative office located in Shanghai, China.
FORWARD-LOOKING STATEMENTS
Certain statements in
this release, including but not limited to remarks by James A. Fitzhenry, are forward-looking statements. These statements are based upon current expectations, estimates and projections about the Companys business that are based,
in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic conditions and global financial concerns, the volatility of the Companys primary markets, efforts to accelerate growth in
sales of the Xact® tank monitoring systems and the ability to satisfy expected demand, the ability to develop new products to satisfy changes in consumer demands, the intensity of competition,
the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary supplier
CORPORATE OFFICE: 2765 NW NICOLAI ST. PORTLAND, OREGON 97210 503/227-7908 FAX
503/223-1258
increases the prices of raw materials or components, the ability to ramp up manufacturing to satisfy increasing demand, maintenance of a significant investment in inventories in anticipation of
future sales, existing cash and credit facilities level which may not be sufficient to fund future growth, fluctuations in quarterly and annual operating results, attracting and retaining key management and qualified technical and sales personnel,
changes in effective tax rates, the ability to reduce operating costs if sales decline, increased costs due to changes in securities laws and regulations, protection of intellectual property rights, and risks from international sales and currency
fluctuations.
For further information regarding risks and uncertainties associated with the Companys business, please refer to Schmitts SEC
filings, including, but not limited to, its Forms 10-K, 10-Q and 8-K.
The forward-looking statements in this release speak only as of the date on which
they were made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes to this document made by wire services or internet service
providers.
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For more information contact: |
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Ann M. Ferguson, CFO and Treasurer
(503) 227-7908 or visit our web site at
www.schmitt-ind.com |
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CORPORATE OFFICE: 2765 NW NICOLAI ST. PORTLAND, OREGON 97210 503/227-7908 FAX
503/223-1258
SCHMITT INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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February 28, 2015 |
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May 31, 2014 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
1,652,564 |
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$ |
1,510,565 |
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Accounts receivable, net |
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2,453,944 |
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2,235,194 |
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Inventories |
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4,716,335 |
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4,789,822 |
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Prepaid expenses |
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165,617 |
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152,237 |
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Income taxes receivable |
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1,529 |
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1,339 |
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8,989,989 |
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8,689,157 |
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Property and equipment, net |
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1,099,892 |
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1,191,591 |
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Other assets |
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Intangible assets, net |
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852,294 |
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943,643 |
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TOTAL ASSETS |
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$ |
10,942,175 |
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$ |
10,824,391 |
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LIABILITIES & STOCKHOLDERS EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
602,745 |
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$ |
512,219 |
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Accrued commissions |
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242,565 |
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204,772 |
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Accrued payroll liabilities |
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134,306 |
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127,035 |
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Other accrued liabilities |
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601,115 |
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366,848 |
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Income taxes payable |
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210 |
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Total current liabilities |
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1,580,731 |
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1,211,084 |
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Stockholders equity |
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Common stock, no par value, 20,000,000 shares authorized, 2,995,910 shares issued and outstanding at February 28, 2015 and
May 31, 2014 |
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10,488,463 |
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10,438,750 |
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Accumulated other comprehensive loss |
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(378,485 |
) |
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(263,337 |
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Accumulated deficit |
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(748,534 |
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(562,106 |
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Total stockholders equity |
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9,361,444 |
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9,613,307 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
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$ |
10,942,175 |
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$ |
10,824,391 |
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SCHMITT INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2015 AND 2014
(UNAUDITED)
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Three Months Ended February 28, |
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Nine Months Ended February 28, |
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2015 |
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2014 |
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2015 |
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2014 |
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Net sales |
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$ |
3,010,618 |
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$ |
3,066,163 |
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$ |
9,211,410 |
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$ |
9,108,662 |
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Cost of sales |
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1,660,256 |
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1,608,233 |
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4,843,303 |
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4,851,742 |
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Gross profit |
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1,350,362 |
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1,457,930 |
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4,368,107 |
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4,256,920 |
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Operating expenses: |
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General, administration and sales |
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1,405,140 |
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1,387,972 |
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4,243,492 |
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4,246,720 |
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Research and development |
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95,730 |
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151,613 |
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292,825 |
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390,473 |
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Total operating expenses |
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1,500,870 |
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1,539,585 |
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4,536,317 |
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4,637,193 |
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Operating loss |
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(150,508 |
) |
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(81,655 |
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(168,210 |
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(380,273 |
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Other income (loss) |
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(15,578 |
) |
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11,497 |
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(11,181 |
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5,404 |
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Loss before income taxes |
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(166,086 |
) |
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(70,158 |
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(179,391 |
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(374,869 |
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Provision for income taxes |
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2,285 |
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1,949 |
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7,037 |
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6,998 |
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Net loss |
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$ |
(168,371 |
) |
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$ |
(72,107 |
) |
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$ |
(186,428 |
) |
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$ |
(381,867 |
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Net loss per common share, basic |
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$ |
(0.06 |
) |
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$ |
(0.02 |
) |
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$ |
(0.06 |
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$ |
(0.13 |
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Weighted average number of common shares, basic |
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2,995,910 |
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2,990,910 |
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2,995,910 |
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2,990,910 |
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Net loss per common share, diluted |
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$ |
(0.06 |
) |
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$ |
(0.02 |
) |
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$ |
(0.06 |
) |
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$ |
(0.13 |
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Weighted average number of common shares, diluted |
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2,995,910 |
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2,990,910 |
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2,995,910 |
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2,990,910 |
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