Schmitt Industries, Inc. (NASDAQ:SMIT) today announced its
operating results for the three and nine months ended February 28,
2018. For the three months ended February 28, 2018, total
sales increased $39,736, or 1.2%, to $3,238,858 from $3,199,122 in
the three months ended February 28, 2017. Net income was $15,553,
or $0.00 per fully diluted share, for the three months ended
February 28, 2018 as compared to net loss of $131,333, or $(0.04)
per fully diluted share, for the three months ended February 28,
2017.
For the nine months ended February 28, 2018,
total sales increased $1,346,171, or 15.4%, to $10,093,386 from
$8,747,215 in the nine months ended February 28, 2017. For
the nine months ended February 28, 2018, net loss was $15,397, or
$(0.00) per fully diluted share, as compared to net loss of
$639,432, or $(0.21) per fully diluted share for the nine months
ended February 28, 2017.
Balancer segment sales focus throughout the
world on end-users, rebuilders and original equipment manufacturers
of grinding machines with the target geographic markets in North
America, Asia and Europe. Balancer segment sales increased
$288,156, or 15.6%, to $2,137,811 for the three months ended
February 28, 2018 compared to $1,849,655 for the three months ended
February 28, 2017. Balancer segment sales increased $1,630,857, or
33.9%, to $6,439,054 for the nine months ended February 28, 2018
compared to $4,808,197 for the nine months ended February 28,
2017.
The Measurement segment product line consists of
laser and white light sensor distance measurement and dimensional
sizing products and remote tank monitoring products for propane,
diesel and other tank-based liquids. Total Measurement segment
sales decreased $248,420, or 18.4%, to $1,101,047 for the three
months ended February 28, 2018 compared to $1,349,467 for the three
months ended February 28, 2017. Total Measurement segment sales
decreased $284,686, or 7.2%, to $3,654,332 for the nine months
ended February 28, 2018 compared to $3,939,018 for the nine months
ended February 28, 2017.
Gross margin for the three months ended February
28, 2018 increased to 40.8% as compared to 38.0% for the three
months ended February 28, 2017. Gross margin for the nine
months ended February 28, 2018 increased to 44.1% as compared to
41.4% for the nine months ended February 28, 2017.
Operating expenses increased $49,268, or 3.8%,
to $1,362,508 for the three months ended February 28, 2018 as
compared to $1,313,240 for the three months ended February 28,
2017. General, administrative and selling expenses increased
$23,189, or 1.8%, to $1,286,718 for the three months ended February
28, 2018 as compared to $1,263,529 for the same period in the prior
year. For the nine months ended February 28, 2018, operating
expenses increased $342,804, or 8.2%, to $4,532,512 as compared to
$4,189,708 for the nine months ended February 28, 2017. General,
administrative and selling expenses increased $278,632, or 7.0%, to
$4,279,505 for the nine months ended February 28, 2018 as compared
to $4,000,873 for the same period in the prior year.
As previously announced, the Company completed its Rights
Offering in December 2017 which provided net proceeds of
$2,386,029.
"This quarter’s results reflect our continued
focus on both the revenue and expense aspects of our business. The
results from our Balancing Segment were encouraging with sales over
$2 million for the fourth consecutive quarter,” commented David
Case, President and CEO of Schmitt Industries.
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 and
ultrasonic measurement products that accurately measure the fill
levels of tanks holding propane, diesel and other tank-based
liquids and transmit that data via satellite to a secure web site
for display. The Company also provides sales and service for Europe
and 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 David Case, 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, the ability to develop new products to satisfy
changes in consumer demands, the intensity of competition,
increased pricing pressure from both competitors and customers, 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 levels which may not be sufficient to fund
future growth, fluctuations in quarterly and annual operating
results, risks associated with operating a global business
including risks from international sales and currency fluctuations,
ability to reduce operating costs if sales decline, attracting and
retaining key management and qualified technical and sales
personnel, changes in effective tax rates, the increased costs due
to changes in securities laws and regulations, and protection of
intellectual property rights.
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.
For more
information contact: |
Ann M.
Ferguson, CFO and Treasurer |
|
(503)
227-7908 or visit our web site at www.schmitt-ind.com |
|
SCHMITT INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
|
|
|
|
February 28, 2018 |
|
May 31, 2017 |
|
|
|
|
|
|
|
|
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|
ASSETS |
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,985,928 |
|
|
$ |
867,607 |
|
|
Restricted cash |
|
61,042 |
|
|
|
- |
|
|
Accounts receivable, net |
|
2,086,706 |
|
|
|
2,344,373 |
|
|
Inventories |
|
5,449,808 |
|
|
|
4,204,723 |
|
|
Prepaid expenses |
|
149,334 |
|
|
|
115,756 |
|
|
Income taxes receivable |
|
- |
|
|
|
7,310 |
|
|
|
|
9,732,818 |
|
|
|
7,539,769 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
793,683 |
|
|
|
865,224 |
|
|
Other assets |
|
|
|
|
|
|
Intangible assets, net |
|
522,913 |
|
|
|
601,351 |
|
|
TOTAL ASSETS |
$ |
11,049,414 |
|
|
$ |
9,006,344 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS’
EQUITY |
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
842,976 |
|
|
$ |
1,101,066 |
|
|
Accrued commissions |
|
197,707 |
|
|
|
300,234 |
|
|
Accrued payroll liabilities |
|
282,664 |
|
|
|
360,239 |
|
|
Other accrued liabilities |
|
383,859 |
|
|
|
267,418 |
|
|
Income taxes payable |
|
3,465 |
|
|
|
- |
|
|
Total current liabilities |
|
1,710,671 |
|
|
|
2,028,957 |
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Common stock, no par value, 20,000,000 shares authorized, |
|
|
|
|
|
|
3,994,545 shares issued and outstanding at February 28, 2018
and |
|
|
|
|
|
|
2,995,910 shares issued and outstanding at November 30, 2017 |
|
13,077,483 |
|
|
|
10,649,287 |
|
|
Accumulated other comprehensive loss |
|
(479,115 |
) |
|
|
(427,572 |
) |
|
Accumulated deficit |
|
(3,259,625 |
) |
|
|
(3,244,328 |
) |
|
Total stockholders’ equity |
|
9,338,743 |
|
|
|
6,977,387 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
11,049,414 |
|
|
$ |
9,006,344 |
|
|
|
|
|
|
|
|
|
SCHMITT INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2018 AND 2017
(UNAUDITED) |
|
|
|
|
|
|
Three Months Ended February 28, |
|
Nine Months Ended February 28, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
3,238,858 |
|
|
$ |
3,199,122 |
|
|
$ |
10,093,386 |
|
|
$ |
8,747,215 |
|
|
Cost of
sales |
|
1,916,345 |
|
|
|
1,984,580 |
|
|
|
5,645,372 |
|
|
|
5,124,514 |
|
|
|
Gross profit |
|
1,322,513 |
|
|
|
1,214,542 |
|
|
|
4,448,014 |
|
|
|
3,622,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
General, administration and sales |
|
1,286,718 |
|
|
|
1,263,529 |
|
|
|
4,279,505 |
|
|
|
4,000,873 |
|
|
|
Research and development |
|
75,790 |
|
|
|
49,711 |
|
|
|
253,007 |
|
|
|
188,835 |
|
|
|
|
Total
operating expenses |
|
1,362,508 |
|
|
|
1,313,240 |
|
|
|
4,532,512 |
|
|
|
4,189,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(39,995 |
) |
|
|
(98,698 |
) |
|
|
(84,498 |
) |
|
|
(567,007 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
61,815 |
|
|
|
(25,642 |
) |
|
|
88,436 |
|
|
|
(51,053 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
21,820 |
|
|
|
(124,340 |
) |
|
|
3,938 |
|
|
|
(618,060 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
6,267 |
|
|
|
6,993 |
|
|
|
19,235 |
|
|
|
21,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
15,553 |
|
|
$ |
(131,333 |
) |
|
$ |
(15,297 |
) |
|
$ |
(639,432 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share,
basic |
$ |
0.00 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares, basic |
|
3,994,545 |
|
|
|
2,995,910 |
|
|
|
3,994,545 |
|
|
|
2,995,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share,
diluted |
$ |
0.00 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares, diluted |
|
3,769,814 |
|
|
|
2,995,910 |
|
|
|
3,994,545 |
|
|
|
2,995,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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