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 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 Company's 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 Company's
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 Company's business, please refer to Schmitt's
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.
SCHMITT INDUSTRIES,
INC. |
CONSOLIDATED BALANCE
SHEETS |
(UNAUDITED) |
|
|
February 28, 2015 |
May 31, 2014 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 1,652,564 |
$ 1,510,565 |
Accounts receivable, net |
2,453,944 |
2,235,194 |
Inventories |
4,716,335 |
4,789,822 |
Prepaid expenses |
165,617 |
152,237 |
Income taxes receivable |
1,529 |
1,339 |
|
8,989,989 |
8,689,157 |
|
|
|
Property and equipment,
net |
1,099,892 |
1,191,591 |
|
|
|
Other assets |
|
|
Intangible assets, net |
852,294 |
943,643 |
TOTAL ASSETS |
$ 10,942,175 |
$ 10,824,391 |
|
|
|
LIABILITIES & STOCKHOLDERS'
EQUITY |
|
|
Current liabilities |
|
|
Accounts payable |
$ 602,745 |
$ 512,219 |
Accrued commissions |
242,565 |
204,772 |
Accrued payroll
liabilities |
134,306 |
127,035 |
Other accrued liabilities |
601,115 |
366,848 |
Income taxes payable |
-- |
210 |
Total current
liabilities |
1,580,731 |
1,211,084 |
|
|
|
Stockholders' equity |
|
|
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 |
10,488,463 |
10,438,750 |
Accumulated other comprehensive
loss |
(378,485) |
(263,337) |
Accumulated deficit |
(748,534) |
(562,106) |
Total stockholders'
equity |
9,361,444 |
9,613,307 |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ 10,942,175 |
$ 10,824,391 |
|
SCHMITT INDUSTRIES,
INC. |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
FOR THE THREE AND NINE
MONTHS ENDED FEBRUARY 28, 2015 AND 2014 |
(UNAUDITED) |
|
|
Three Months Ended
February 28, |
Nine Months Ended
February 28, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net sales |
$ 3,010,618 |
$ 3,066,163 |
$ 9,211,410 |
$ 9,108,662 |
Cost of sales |
1,660,256 |
1,608,233 |
4,843,303 |
4,851,742 |
Gross profit |
1,350,362 |
1,457,930 |
4,368,107 |
4,256,920 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
General, administration and
sales |
1,405,140 |
1,387,972 |
4,243,492 |
4,246,720 |
Research and development |
95,730 |
151,613 |
292,825 |
390,473 |
Total operating expenses |
1,500,870 |
1,539,585 |
4,536,317 |
4,637,193 |
|
|
|
|
|
Operating loss |
(150,508) |
(81,655) |
(168,210) |
(380,273) |
|
|
|
|
|
Other income (loss) |
(15,578) |
11,497 |
(11,181) |
5,404 |
|
|
|
|
|
Loss before income taxes |
(166,086) |
(70,158) |
(179,391) |
(374,869) |
|
|
|
|
|
Provision for income taxes |
2,285 |
1,949 |
7,037 |
6,998 |
|
|
|
|
|
Net loss |
$ (168,371) |
$ (72,107) |
$ (186,428) |
$ (381,867) |
|
|
|
|
|
Net loss per common
share, basic |
$ (0.06) |
$ (0.02) |
$ (0.06) |
$ (0.13) |
|
|
|
|
|
Weighted average number of
common shares, basic |
2,995,910 |
2,990,910 |
2,995,910 |
2,990,910 |
|
|
|
|
|
Net loss per common
share, diluted |
$ (0.06) |
$ (0.02) |
$ (0.06) |
$ (0.13) |
|
|
|
|
|
Weighted average number of
common shares, diluted |
2,995,910 |
2,990,910 |
2,995,910 |
2,990,910 |
CONTACT: For more information contact:
Ann M. Ferguson, CFO and Treasurer
(503) 227-7908 or visit our web site at www.schmitt-ind.com
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