Sparton Corporation Releases Fiscal 2002 Third Quarter Results
JACKSON, Mich.--(BUSINESS WIRE)--May 10, 2002--Electronic Design and Manufacturing Service (EMS) provider, Sparton Corporation (NYSE:SPA) announced the financial results for its third quarter and nine months ended March 31, 2002.
Sparton's third quarter continued to be a challenge. The Company faced soft Electronic Manufacturing Services (EMS) commercial sales. Sales for the three-month period ended March 31, 2002, totaled $35.0 million down 25% from the same quarter last year. Sonobuoy sales during the period increased $5 million, while commercial EMS sales decreased $16.5 million.
Gross margins for the period improved over 1.5%. Margins on one of the sonobuoy contracts completed this quarter were higher than previously estimated. In addition, previously initiated cost saving measures continue to positively impact earnings. Selling and administrative expenses during the quarter were significantly below last year. The improvements in gross margin and reduction in the Company's selling and administrative expenses resulted in a net income of $.08 per share for the third quarter, the same as reported on higher sales, $41.1 million, for the second quarter of this fiscal year.
Sales for the nine-month period ended March 31, 2002, totaled $116.8 million. This was a decline of 14% from last year. For the nine-month period governmental sonobuoy sales increased 44%, while commercial EMS sales declined 29%. Again, operating profits for the nine-month period were higher due to gross margin improvement and a decline in selling and administrative costs. Financial results for the period were negatively affected by sales on several older sonobuoy contracts that carried no margin. These sales totaled $17.9 million. At March 31, 2002, the remaining backlog of these older sonobuoy contracts approximated $1.9 million.
During the quarter, the U.S. Navy announced awards totaling $23 million to Sparton for two sonobuoy production contracts. These contracts are for the governmental 2002 contract year and will be produced in our DeLeon Springs, FL facility after July 1, 2002. Total EMS governmental backlog at March 31, 2002, was $65.8 million.
Sparton Corporation (NYSE:SPA) now in its 102nd year, provides design engineering and electronics contract manufacturing services. Sparton utilizes six manufacturing locations encompassing over 700,000 sq. ft. along with eleven alliance partner facilities throughout North America and Europe. In addition to strong core surface mount technology (SMT) and plated through-hole (PTH), printed circuit board assembly (PCBA) and complete assembly manufacturing capabilities, Sparton offers a complete range of pre-manufacturing, post-manufacturing and engineering services. Pre-manufacturing services include product development, concurrent engineering, design for test (DFT), design for manufacturing (DFM), design for assembly (DFA), printed circuit board design and quick-turn prototyping. Post-manufacturing services range from repair depot, direct ship, distribution management to field support.
Sparton Corporation and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
For the Three-Month and Nine-Month Periods ended
March 31, 2002 and 2001
Three-Month Periods Nine-Month Periods
------------------- ------------------
2002 2001 2002 2001
---- ---- ---- ----
Net Sales $34,970,080 $46,457,914 $116,845,979 $135,696,592
Costs and
expenses:
Costs of goods
sold 31,241,349 42,359,755 104,572,461 123,903,060
Selling &
administrative 2,986,577 3,472,660 9,652,468 11,866,779
----------- ----------- ----------- -----------
34,227,926 45,832,415 114,224,929 135,769,839
----------- ----------- ----------- -----------
742,154 625,499 2,621,050 -73,247
Other income
(expense):
Interest &
investment income 82,967 154,785 325,935 383,037
Interest expense 0 0 -6,755 0
Other-net 136,363 119,786 369,378 21,783
----------- ----------- ----------- -----------
219,330 274,571 688,558 404,820
----------- ----------- ----------- -----------
Income before
income taxes 961,484 900,070 3,309,608 331,573
Provision for
income taxes 356,000 333,000 1,225,000 123,000
----------- ----------- ----------- -----------
Net income $ 605,484 $ 567,070 $ 2,084,608 $ 208,573
=========== =========== =========== ===========
Basic & diluted
earnings per
share $ .08 $ .08 $ .27 $ .03
=========== =========== =========== ===========
Dividends per
share of
common stock $ 0 $ 0 $ 0 $ 0
=========== =========== =========== ===========
Notes:
1. Financial information was taken from the Company's internal
records and is unaudited. The year to date consolidated statement
of operation for fiscal 2001 has been reclassified to be
consistent with the fiscal 2002 presentation.
2. Average shares outstanding were 7,559,817 and 7,670,090 for the
three-month periods; and 7,564,071 and 7,749,090 for the
nine-month periods, respectively in 2002 and 2001. Differences in
the weighted average number of shares outstanding for purposes of
computing diluted earnings per share were due to the inclusion of
employee incentive stock options. These differences in the
calculation of basic and diluted earnings per share were not
material and resulted in no differences in per share amounts.
This release of earnings contains certain forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words "expect", "believe", and similar expressions, and the negatives of such expressions, are intended to identify forward-looking statements. Although the Company believes that these statements are based upon reasonable assumptions, such statements involve risks, uncertainties, and assumptions, including but not limited to industry and economic conditions, customer actions, and the other factors discussed in the Company's Form 10-Q for the quarter ended March 31 2002, and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.