Schmitt Industries, Inc. (Nasdaq:SMIT) today announced its
operating results for the three and six months ended November 30,
2014. For the three months ended November 30, 2014, total sales
increased $8,452, or 0.3%, to $3,151,504 from $3,143,052 in the
three months ended November 30, 2013. Net loss was $69,840, or
$(0.02) per fully diluted share, for the three months ended
November 30, 2014 as compared to net loss of $163,201, or $(0.05)
per fully diluted share, for the three months ended November 30,
2013. For the six months ended November 30, 2014, total sales
increased $158,293, or 2.6%, to $6,200,792 from $6,042,499 in the
six months ended November 30, 2013. Net loss was $18,057, or
$(0.01) per fully diluted share, for the six months ended November
30, 2014 as compared to net loss of $309,760, or $(0.10) per fully
diluted share, for the six months ended November 30, 2013.
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 $43,073,
or 2.2%, to $1,922,849 for the three months ended November 30, 2014
compared to $1,965,922 for the three months ended November 30,
2013. The decrease is primarily attributed to softer sales in
North America, offset in part by increased sales in Asia and Europe
for the quarter.
Balancer segment sales decreased $104,719, or 2.7%, to
$3,763,019 for the six months ended November 30, 2014 compared to
$3,867,738 for the six months ended November 30, 2013. The
decrease is primarily attributed to softer sales in North America,
offset in part by increased sales in Asia for the first half of the
fiscal year.
The Measurement segment product line consists of laser-based
light-scatter, distance measurement and dimensional sizing products
and ultrasonic-based remote tank monitoring products. Total
Measurement segment sales increased $51,525, or 4.4%, to $1,228,655
for the three months ended November 30, 2014 compared to $1,177,130
for the three months ended November 30, 2013, driven by an increase
in revenues associated with the sales of remote tank monitoring
products and related monitoring services, offset by decreased sales
of light-scatter laser-based surface measurement
products. Xact® revenues increased $127,296, or 57.6%, to
$348,454 during the second quarter of Fiscal 2015 as compared to
$221,158 for the same period in the prior year.
Measurement segment sales increased $263,012, or 12.1%, to
$2,437,773 for the six months ended November 30, 2014 compared to
$2,174,761 for the six months ended November 30, 2013, driven by
the delivery and acceptance of one of our CASI® (Complete Angle
Scatter Instrument) Scatterometer products during the first quarter
of Fiscal 2015 and an increase in revenues associated with the
sales of remote tank monitoring products and related monitoring
services. Xact® revenues increased $142,061, or 26.7%, to
$673,745 during the first half of Fiscal 2015 as compared to
$531,684 during the first half of Fiscal 2014.
Gross margin for the three months ended November 30, 2014
increased to 49.3% as compared to 46.7% for the three months ended
November 30, 2013. Gross margin for the six months ended
November 30, 2014 increased to 48.7% as compared to 46.3% for the
six months ended November 30, 2013. The overall increase in
gross margin in both the three and six month periods ended November
30, 2014 compared to the three and six month periods in the prior
fiscal year is primarily influenced by shifts in product sales mix
involving our five product lines.
Operating expenses increased $5,837, or 0.4%, to $1,624,979 for
the three months ended November 30, 2014 as compared to $1,619,142
for the three months ended November 30, 2013. General,
administrative and selling expenses decreased $6,718, or 0.4%, for
the three months ended November 30, 2014 as compared to the same
period in the prior year due in part to increases in trade show
expenses offset by reductions in professional fees and general
office and utilities costs. Research and development expenses
increased $12,555, or 11.2%, for the second quarter of Fiscal 2015
as compared to the same period in the prior year based on the
several new development projects within our existing product lines
occurring during the latter part of the second quarter of Fiscal
2015.
Operating expenses decreased $62,161, or 2.0%, to $3,035,447 for
the six months ended November 30, 2014 as compared to $3,097,608
for the six months ended November 30, 2013. General,
administrative and selling expenses decreased $20,396, or 0.7%, for
the six months ended November 30, 2014 as compared to the same
period in the prior year as a result of increases in trade show
expenses offset by reductions in professional fees and general
office and utilities costs. Research and development expenses
decreased $41,765, or 17.5%, for the first half of Fiscal 2015 as
compared to the same period in the prior year due to the completion
of development projects within our existing product lines in the
first quarter offset by an increase in costs associated with
several new development projects occurring during the later part of
the second quarter of Fiscal 2015.
"The second quarter saw several positive developments,"
commented James A. Fitzhenry, President and CEO of Schmitt
Industries. "We had two successful trade shows – the IMTS 2014
show in Chicago, which showcased our family of SBS® products for
balancing and process control of machine tools including our new
ExactControl™ process control card and the 27th World LP Gas Forum
and 29th AIGLP Congress held in Miami, which showcased our Xact®
product line for the remote monitoring of propane and diesel tanks.
We are encouraged by the continued development of our
Xact® product line, which posted another quarter over quarter
increase in overall revenues."
"In addition, our SBS sales into Asia and Europe continue to
show positive trends, and we are pleased with the recent activity
in our laser-based light-scatter surface measurement product line
with the delivery of a CASI® Scatterometer during the first quarter
and delivery of a TMS (Texture Measurement System) unit during the
second quarter. We anticipate making continued progress as we
enter the second half of our fiscal year." 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) |
|
|
|
|
|
|
|
November 30, 2014 |
May 31, 2014 |
ASSETS |
Current assets |
|
|
Cash and cash equivalents |
$ 1,707,481 |
$ 1,510,565 |
Accounts receivable, net |
2,540,227 |
2,235,194 |
Inventories |
4,793,479 |
4,789,822 |
Prepaid expenses |
110,870 |
152,237 |
Income taxes receivable |
1,726 |
1,339 |
|
9,153,783 |
8,689,157 |
|
|
|
Property and equipment,
net |
1,128,160 |
1,191,591 |
|
|
|
Other assets |
|
|
Intangible assets, net |
880,177 |
943,643 |
TOTAL ASSETS |
$ 11,162,120 |
$ 10,824,391 |
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY |
Current liabilities |
|
|
Accounts payable |
$ 674,097 |
$ 512,219 |
Accrued commissions |
269,530 |
204,772 |
Accrued payroll
liabilities |
121,023 |
127,035 |
Other accrued liabilities |
554,656 |
366,848 |
Income taxes payable |
-- |
210 |
Total current
liabilities |
1,619,306 |
1,211,084 |
|
|
|
Stockholders' equity |
|
|
Common stock, no par value,
20,000,000 shares authorized, 2,995,910 shares issued and
outstanding at November 30, 2014 and May 31, 2014 |
10,465,223 |
10,438,750 |
Accumulated other comprehensive
loss |
(342,246) |
(263,337) |
Accumulated deficit |
(580,163) |
(562,106) |
Total stockholders'
equity |
9,542,814 |
9,613,307 |
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ 11,162,120 |
$ 10,824,391 |
|
|
|
|
|
|
SCHMITT INDUSTRIES,
INC. |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
FOR THE THREE AND SIX
MONTHS ENDED NOVEMBER 30, 2014 AND 2013 |
(UNAUDITED) |
|
|
|
|
|
|
Three Months
Ended November 30, |
Six Months
Ended November 30, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Net sales |
$ 3,151,504 |
$ 3,143,052 |
$ 6,200,792 |
$ 6,042,499 |
Cost of sales |
1,597,326 |
1,675,184 |
3,183,047 |
3,243,509 |
Gross profit |
1,554,178 |
1,467,868 |
3,017,745 |
2,798,990 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
General, administration and
sales |
1,500,328 |
1,507,046 |
2,838,352 |
2,858,748 |
Research and development |
124,651 |
112,096 |
197,095 |
238,860 |
Total operating expenses |
1,624,979 |
1,619,142 |
3,035,447 |
3,097,608 |
|
|
|
|
|
Operating loss |
(70,801) |
(151,274) |
(17,702) |
(298,618) |
|
|
|
|
|
Other income (loss) |
3,336 |
(9,546) |
4,397 |
(6,093) |
|
|
|
|
|
Loss before income taxes |
(67,465) |
(160,820) |
(13,305) |
(304,711) |
|
|
|
|
|
Provision for income taxes |
2,375 |
2,381 |
4,752 |
5,049 |
|
|
|
|
|
Net loss |
$ (69,840) |
$ (163,201) |
$ (18,057) |
$ (309,760) |
|
|
|
|
|
Net loss per common
share, basic |
$ (0.02) |
$ (0.05) |
$ (0.01) |
$ (0.10) |
|
|
|
|
|
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 |
$ (0.02) |
$ (0.05) |
$ (0.01) |
$ (0.10) |
|
|
|
|
|
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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