SUMX Summa Industries

Summa Reports 2nd Quarter Earnings TORRANCE, Calif., March 23 /PRNewswire-FirstCall/ -- Summa Industries (NASDAQ:SUMX) reports net income of $276,000, or $.07 per share, on sales of $29,197,000 for the three months ended February 28, 2005, versus net income of $453,000, or $.06 per share, on sales of $26,545,000 for the three months ended February 29, 2004. Three months ended Feb 28, 2005 Feb 29, 2004 Sales $29,197,000 $26,545,000 Net income $276,000 $453,000 Diluted earnings per share $.07 $.06 Earnings have been substantially impacted by costs directly related to two major relocation initiatives; the consolidation of three plants to a new facility in Reading, PA, which was substantially completed during the second quarter, and an ongoing relocation from Bensenville, IL to Pharr, TX. The Pharr relocation is expected to be completed in the fourth quarter of fiscal 2005. The relocation costs are expected to continue through the third quarter and decline sharply thereafter. For comparison, it is noted that earnings in the second quarter of fiscal 2004 were adversely impacted by a non-recurring charge to interest expense of $266,000 for term loan breakup fees and the write-off of unamortized bank fees in connection with a change in banks. The effects of the relocation expenses and financing expenses and the pro forma earnings, calculated as though the relocation expenses and financing expenses had not been incurred, are as follows: Three months ended Six months ended Feb 28, Feb 29, Feb 28, Feb 29, 2005 2004 2005 2004 Operating income $891,000 $1,251,000 $2,218,000 $2,802,000 Relocation expense $497,000 $77,000 $896,000 $129,000 Pro forma operating income $1,388,000 $1,328,000 $3,114,000 $2,931,000 Net income $276,000 $453,000 $886,000 $1,283,000 Tax-effected financing expenses -- $170,000 -- $170,000 Tax-effected relocation expense $318,000 $49,000 $573,000 $83,000 Pro forma net income $594,000 $672,000 $1,459,000 $1,536,000 Diluted EPS $0.07 $0.06 $0.22 $0.21 Pro forma diluted EPS $0.15 $0.11 $0.36 $0.27 Note that "pro forma" has no defined meaning under Generally Accepted Accounting Principles. The information presented above is for the purpose of drawing attention to two critical components of current performance. By providing this information, the Company does not assume the responsibility to provide such supplemental information in future releases of earnings. There are other components of current performance which are not highlighted in the above presentation. Investors are urged to read the Management's Discussion and Analysis section of the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2005, which is expected to be filed by April 15, 2005. A conference call to discuss the results will be held at 9:00 a.m., Pacific Time, Wednesday, March 23, 2005. The call-in number is (800) 776-0816 and the international call-in number is (913) 981-5505. The conference call will also be simulcast and archived by http://www.vcall.com/. Statements in this news release which relate to future plans, financial results, projections, events or performance, including without limitation expectations and beliefs regarding future events, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and fall under the safe harbor. These forward-looking statements include, but are not limited to, statements regarding the Company's expectations regarding the timing of completion of the ongoing Pharr relocation, and expectations that aggregate relocation costs will diminish steadily throughout the remainder of the fiscal year. Actual results may differ materially from those anticipated because of a number of factors, including, but not limited to, delays and/or cost overruns in the ongoing Pharr relocation, implementation of additional relocation projects not currently in process, and other risks and uncertainties described in detail under "Risk Factors" in Summa's Annual Report on Form 10-K for the fiscal year ended August 31, 2004. Summa Industries manufactures proprietary engineered plastic products for a broad spectrum of industrial and commercial markets. The Company has manufacturing facilities across North America. Products, many of which are unique or patented, are shipped to customers worldwide. For further information, contact Jim Swartwout, (310) 792-7024; Fax (310) 792-7079; http://www.summaindustries.com/; or . Summa Industries CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) February 29, August 31, February 28, ASSETS 2004 2004 2005 Current assets: Cash and cash equivalents $147,000 $1,248,000 $930,000 Accounts receivable 17,669,000 18,227,000 19,251,000 Inventories 13,828,000 14,749,000 15,213,000 Prepaid expenses and other 3,108,000 3,782,000 4,188,000 Total current assets 34,752,000 38,006,000 39,582,000 Property, plant and equipment, net 27,967,000 31,053,000 32,845,000 Goodwill and other assets, net 11,896,000 11,058,000 10,969,000 Total assets $74,615,000 $80,117,000 $83,396,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,871,000 $9,088,000 $8,793,000 Accrued liabilities 4,211,000 7,429,000 5,450,000 Current maturities of long-term debt 2,110,000 2,195,000 4,955,000 Total current liabilities 12,192,000 18,712,000 19,198,000 Long-term debt, net of current maturities 21,818,000 28,663,000 30,603,000 Other long-term liabilities 2,585,000 2,508,000 2,492,000 Manditorily redeemable convertible preferred stock 6,472,000 -- -- Minority interest in subsidiary 205,000 205,000 172,000 Total stockholders' equity 31,343,000 30,029,00 30,931,000 Total $74,615,000 $80,117,000 $83,396,000 Summa Industries CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) Three months ended Six months ended February 29 February 28 February 29 February 28 2004 2005 2004 2005 Net sales $26,545,000 $29,197,000 $52,471,000 $57,435,000 Cost of sales 20,256,000 23,410,000 39,811,000 45,203,000 Gross profit 6,289,000 5,787,000 12,660,000 12,232,000 Selling, general, administrative and other expenses 5,038,000 4,896,000 9,858,000 10,014,000 Operating income 1,251,000 891,000 2,802,000 2,218,000 Interest expense 584,000 471,000 889,000 838,000 Income before income taxes 667,000 420,000 1,913,000 1,380,000 Provision for income taxes 214,000 144,000 630,000 494,000 Net income $453,000 $276,000 $1,283,000 $886,000 Preferred stock accretion $185,000 -- $369,000 -- Net income available to common stockholders $268,000 $276,000 $914,000 $886,000 Earnings per common share Basic $.06 $.07 $.21 $.22 Diluted $.06 $.07 $.21 $.22 Weighted average common shares outstanding: Basic 4,370,000 4,002,000 4,328,000 3,993,000 Diluted 4,456,000 4,079,000 4,403,000 4,071,000 DATASOURCE: Summa Industries CONTACT: Jim Swartwout of Summa Industries, +1-310-792-7024, fax, +1-310-792-7079, Web site: http://www.summaindustries.com/

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