Schmitt Industries Reports Q4 EPS of $(0.12)

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Schmitt Industries, Inc.
SMIT
today announced its operating results for the fourth quarter and the year ended May 31, 2013. Sales for the three months ended May 31, 2013 decreased $1,059,916, or 24.5%, to $3,272,899 compared to $4,332,815 for the same period last year. Net loss for the fourth quarter ended May 31, 2013 was $364,322, or $(.12) per diluted share, compared to net income of $5,948, or $.00 per diluted share, for the same period last year. Sales for the year ended May 31, 2013 decreased $1,984,770, or 13.7%, to $12,452,252 compared to $14,437,022 for the year ended May 31, 2012. Net loss for the year ended May 31, 2013 was $539,882, or $(.18) per diluted share, compared to a net income of $77,421, or $.03 per diluted share, for the year ended May 31, 2012. For the fourth quarter ended May 31, 2013, sales in the Balancer segment decreased $371,082, or 17.3%, to $1,779,519 from $2,150,601 in the fourth quarter of the prior year. For the year ended May 31, 2013, sales in the Balancer segment decreased $1,550,886, or 16.7%, to $7,714,122 compared to $9,265,008 for the year ended May 31, 2012. Sales of the Company's balancer products decreased primarily due to lower volumes of shipments into Asia and also to a lesser extent into North America. Sales in the Measurement segment decreased $688,834, or 31.6%, to $1,493,380 in the fourth quarter of Fiscal 2013 from $2,182,214 in the fourth quarter of the prior year. Sales in the Measurement segment decreased $433,884, or 8.4%, in the year ended May 31, 2013 to $4,738,130 compared to $5,172,014 in the year ended May 31, 2012. Measurement segment sales in both the fourth quarter of Fiscal 2013 and the year ended May 31, 2013 decreased from the related prior periods primarily as a result of lower volumes of sales of laser-based surface measurement products. Within the Measurement segment, revenues associated with the Xact® propane tank line decreased $113,592, or 26.7%, to $312,484 in the fourth quarter of Fiscal 2013 from $426,076 in the fourth quarter of the prior year. For the year ended May 31, 2013, Xact® revenues were $876,653 as compared to $580,882 for the prior period, an increase of $295,771, or 50.9%. Gross margin for the fourth quarter increased to 40.4% as compared to 37.6% in the fourth quarter of the prior year. Gross margin for the year ended May 31, 2013 increased to 48.9% as compared to 43.9% for the year ended May 31, 2012. This increase in gross margin for both the three months ended and the year ended May 31, 2013, as compared to the same periods in the prior year, is primarily due to the impact of lower sales volumes through the Asian distribution channels, which typically have higher discounts and lower margins, and as a result of the Company's efforts to reduce the material costs from certain key suppliers and a shift in the product sales mix towards higher margin products. Operating expenses increased $116,267, or 7.2%, to $1,722,385 for the three months ended May 31, 2013, as compared to $1,606,118 for the three months ended May 31, 2012. Operating expenses increased $371,720, or 5.9%, to $6,657,072 for the year ended May 31, 2013 as compared to $6,285,352 for the year ended May 31, 2012. This increase for the fiscal year is primarily due to higher sales and marketing expenses associated with the Company's participation in a large trade show and higher R&D expenses. “Our results for the fourth quarter and for Fiscal 2013 primarily reflect the impact of the decrease in sales of our SBS products into China due to the slowdown in the manufacturing sector of their economy, and to a lesser extent a decline in sales of our Acuity brand of laser-based distance and dimensional measurement sensors and our SMS surface measurement systems, as compared to the prior year,” commented Jim Fitzhenry, President and CEO of Schmitt Industries. “Our focus is on improving SBS sales, particularly in China and Europe, through a combination of new product development and sales channel development, and on capturing additional orders for our Acuity line of laser and white light sensors. In addition, while we are seeing growth in sales of our Xact® propane tank monitoring systems for the propane industry, we are expanding our sales focus to include Mexico, Central and South America as part of our strategy to accelerate that growth. We believe these efforts are essential to generating revenue growth and consistent profitability, and we remain committed to achieving these goals,” Fitzhenry concluded.
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Posted In: EarningsNews
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