Sparton Corporation Releases Third Quarter Fiscal 2003 Results
JACKSON, Mich.--(BUSINESS WIRE)--May 6, 2003--Electronic Design and Manufacturing Service (EMS) provider, Sparton Corporation (NYSE:SPA) announces the financial results for the third quarter and nine months ended March 31, 2003.
Sales for the three months ended March 31, 2003 were $40,841,000, an increase of $5,871,000 (17%) over the same period a year ago. This increase reflects strong sales in homeland security related products, avionics, and medical markets. Sales in our other markets, including government, declined. The majority of the sales increase came from new customers or programs. Sales for the nine months ended March 31, 2003, were $120,889,000, an increase of $4,043,000 (3%) from last year. Sparton continues to see fluctuations with production schedules as customers react to these uncertain economic times. In this environment, we continue to closely monitor and control our own costs and expenses.
Operating income of $801,000 and $8,826,000 was reported for the three months and nine months ended March 31, 2003, respectively, compared to $742,000 and $2,621,000 for the same periods last year. Included in 2003 operating income for the nine months was the $5,500,000 recovery of certain remediation costs negotiated this year. It reflects Sparton's settlement with the United States Department of Energy and others regarding reimbursement of costs incurred at the Company's Sparton Technology, Inc. Coors Road EPA site.
The Company reported net income of $671,000 ($0.08 per share) and $6,427,000 ($0.80 per share) for the three months and nine months ended March 31, 2003, versus $534,000 ($0.07 per share) and $1,871,000 ($0.23 per share) for the corresponding periods last year. The aggregate government EMS backlog was approximately $60 million at March 31, 2003. We remain financially strong with no bank debt.
SPARTON CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
For the Three-Month and Nine-Month Periods
ended March 31, 2003 and 2002
Three-Month Periods Nine-Month Periods
2003 2002 2003 2002
Net sales $40,841,367 $34,970,080 $120,888,569 $116,845,979
Costs of goods
sold 36,701,515 31,241,349 107,219,388 104,572,461
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4,139,852 3,728,731 13,669,181 12,273,518
Selling and
administrative
(income) expense:
Selling and
administrative 3,332,782 2,855,790 10,066,411 9,221,208
EPA related
- net 6,242 130,787 (5,223,320) 431,260
----------- ----------- ------------ ------------
3,339,024 2,986,577 4,843,091 9,652,468
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Operating income 800,828 742,154 8,826,090 2,621,050
Other income (expense):
Interest and
investment income 188,192 82,967 489,849 325,935
Equity income (loss)
in investment 29,000 (71,250) (28,000) (213,750)
Other - net (60,490) 136,363 (107,141) 362,623
----------- ----------- ------------ ------------
156,702 148,080 354,708 474,808
----------- ----------- ------------ ------------
Income before
income taxes 957,530 890,234 9,180,798 3,095,858
Provision for
income taxes 287,000 356,000 2,754,000 1,225,000
----------- ----------- ------------ ------------
Net income $670,530 $534,234 $6,426,798 $1,870,858
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Basic and diluted
earnings per share $0.08 $0.07 $0.80 $0.23
=========== =========== ============ ============
Cash dividends $-0- $-0- $-0- $-0-
=========== =========== ============ ============
See accompanying notes.
Notes:
1. Financial information was taken from the Company's internal
records and is unaudited.
2. For the three-month and nine-month periods, average shares
outstanding were 7,901,456 and 7,674,388 in 2003, and 7,559,817
and 7,565,530 in 2002. Average shares outstanding include the
additional shares issued with respect to the 5% common stock
dividend declared January 10, 2003. 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.
3. The financial results for the nine month period ended March 31,
2003 include the impact ($5,500,000) of the previously announced
settlement with various governmental agencies, to recover costs
associated with its Coors Road remediation efforts in Albuquerque,
New Mexico.
SPARTON CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet as of March 31, 2003 (Unaudited)
Current assets $95,028,639
Miscellaneous receivables
and other assets 9,002,097
Property, plant, and equipment - net 8,632,884
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TOTAL ASSETS $112,663,620
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Current liabilities $ 17,145,545
Environmental remediation 7,092,887
Shareowners' equity:
Common stock - 7,943,671 shares outstanding 9,929,589
Capital in excess of par value 3,015,989
Accumulated other comprehensive income 181,941
Retained earnings 75,297,669
-------------
Total shareowners' equity 88,425,188
-------------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $112,663,620
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This news release 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," "anticipate," 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, 2003 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.