BEI Technologies, Inc. Reports Record Second Quarter 2005 Revenue
and Earnings SAN FRANCISCO, May 3 /PRNewswire-FirstCall/ -- BEI
Technologies, Inc. (NASDAQ:BEIQ), an established manufacturer of
electronic sensors and motion control products, announces record
second quarter 2005 revenue and earnings. Fiscal 2005 Second
Quarter compared with Fiscal 2004 Second Quarter: -- Revenues
increased 19.5% to $87.8 million with automotive revenue of $54.2
million, an increase of 22.0% -- Net income increased 33.5% to
$4.679 million from $3.504 million -- EPS increased 33.3% to $0.32
from $0.24 per share Quarterly Results Charles Crocker, Chairman
and Chief Executive Officer stated, "Revenue for the quarter
increased by $14.3 million compared with the prior year second
quarter with increases in all market sectors. Automotive revenue
increased to $54.2 million with GyroChip(R) sensor shipments of
1.57 million units and the recognition of $2.3 million of
previously deferred revenue. Revenue from industrial sensors,
actuators and motors increased in the quarter to $26.5 million from
$23.7 million in the prior year second quarter primarily due to the
inclusion of Newall linear encoders partly offsetting lower
actuator sales. Government, Aerospace and Defense revenue increased
to $7.1 million compared with $5.4 million in the prior year second
quarter." Gross margin increased to 27.7% in the fiscal 2005 second
quarter from 25.3% in the prior year second quarter. Average gross
margin percentages improved in automotive products and aerospace
and defense products compared to the prior year quarter. Automotive
margins increased due to improved operating efficiency and the
increase of nugget shipments associated with the new contract. The
prior year second quarter was favorably impacted by vendor scrap
recovery. Selling, general and administrative (SG&A) expense
increased in the second quarter 2005 to $12.4 million compared with
the prior year second quarter of $9.6 million. The inclusion of
Newall SG&A added approximately $1.3 million in spending not in
the prior year. The second quarter 2005 spending also included
accruals associated with Sarbanes-Oxley Section 404 compliance of
approximately $0.9 million. Research and development expense in the
second quarter increased to $4.3 million compared with $3.4 million
in the prior year second quarter due to the inclusion of Newall
spending and increased spending associated with the quartz gyro
development. Also, during the quarter we included approximately
$450,000 of legal, accounting and other costs in SG&A related
to a potential acquisition that we are no longer pursuing. During
the second quarter 2005 our operations generated $9.3 million in
cash. Cash generated from operations resulted primarily from net
income of $4.7 million, a decrease in accounts receivable of $1.6
million and a $3.4 million increase in accruals including the
amounts related to the Company's preparation for fiscal year 2005
Sarbanes-Oxley Section 404 reporting. Purchases of property, plant
and equipment of $7.1 million, primarily to increase GyroChip
production at Systron Donner Automotive, were major factors in a
$6.2 million use of cash from investing activities. Cash used for
financing of $2.1 million was affected primarily by changes in the
Company's line of credit during the quarter. The Company's cash
balance at second quarter end was $5.9 million, with an outstanding
balance on the Company's $35.0 million line of credit of $12.2
million. Crocker continued, "Systron Donner Automotive continues to
successfully meet customer demand and increase its capacity. As
previously stated we have reached our goal of 6.0 million units of
annual capacity for sensors and in coordination with our customers,
we are working toward production capacity of 10 million nuggets
annually by September 2005." Six Months Results For the six month
period ended April 2, 2005, the Company reported consolidated after
tax net income of $8.3 million, or $0.56 per share, versus $5.5
million, or $0.38 per share, in the comparable period of fiscal
2004. Revenue in the six month period ended April 2, 2005 was
$164.8 million, compared to $142.3 million reported in the
comparable period of the prior year. Automotive revenue increased
16.8% to $101.6 million and Industrial revenue increased 18.4% to
$50.5 million. Gross margin increased to 27.6% from 23.7% in the
prior year period with higher revenue and improved operating
efficiency. SG&A spending for the six month period ended April
2, 2005 was $23.1 million, above the previous year spending of
$17.9 million with higher activity levels and the inclusion of
Newell and Sarbanes-Oxley Section 404 compliance costs. Research
and development spending year to date of $8.5 million increased
from $6.7 million in the prior year period as a result of higher
spending associated with quartz gyro development and
commercializing licensed technologies, and the inclusion of Newall
spending. Crocker concluded, "Automotive production in both Europe
and North America softened during the second quarter of 2005 but
the market trend for penetration of stability control systems into
additional platforms continues to increase. The resulting increased
quantities are now transitioning to the new contract and the
corresponding core technology nugget sale with lower associated
selling prices. We adjusted our backlog in the second quarter to
reflect this transition." Guidance for Third Quarter 2005 The
Company's GyroChip automotive sensor shipments guidance continues
to be at least 5.6 million units for the 12 month period ending
September 2005. As the Company begins the transition to nugget
sales for the GyroChip, the Company expects that the average
selling price will reduce and automotive revenue will step down
accordingly. The Company does not expect that sensor unit
profitability will be affected. The Company expects that revenue
for the third quarter will be in the mid to high $70 million range.
About BEI Technologies, Inc. BEI Technologies, Inc. (the "Company"
or "Technologies") is an established manufacturer of electronic
sensors, motors, actuators, rotary optical encoders, linear
encoders with associated digital readouts (DROs), and motion
control products used for factory and office automation, medical
equipment, military, aviation and space systems. In addition, sales
to manufacturers of transportation equipment, including
automobiles, trucks and off-road equipment, have become a
significant addition to the Company's business in recent years. The
Company's micromachined quartz rate sensors are being used in
advanced vehicle stability control systems and a significant
increase in the production of those sensors had been in progress
from the middle of 1998 to fiscal year 2005 except for a decrease
in production in fiscal 2002 due to increased competition. The
Company also manufactures electronic steering wheel position
sensors, seat-memory modules, throttle position sensors, inertial
navigation systems, and other devices used in transportation
systems. Except for historical information, this news release may
be deemed to contain forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ
materially from those discussed in this release. Factors that could
cause or contribute to such differences include, but are not
limited to, the Risk Factors discussed from time to time in the
Company's reports to the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K for fiscal 2004.
BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (dollars in thousands) April 2, 2005 October 2,*
(Unaudited) 2004 ASSETS Cash and cash equivalents $5,937 $8,218
Investments 4,387 4,299 Trade receivables, net 49,277 45,482
Inventories, net 29,373 29,897 Other current assets 15,624 17,147
Total current assets 104,598 105,043 Property, plant and equipment,
net 47,770 39,905 Goodwill 9,268 1,612 Other assets, net 10,285
6,008 $171,921 $152,568 LIABILITIES AND STOCKHOLDERS' EQUITY Trade
accounts payable $25,475 $33,698 Accrued expenses and other
liabilities 26,613 25,450 Current portion of long-term debt 7,271
7,263 Total current liabilities 59,359 66,411 Long-term debt, less
current portion 27,796 10,639 Other liabilities 2,606 2,783
Stockholders' equity 82,160 72,735 $171,921 $152,568 * Based on
audited information included on Form 10-K for fiscal year ended
October 2, 2004 BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands except
per share amounts) Unaudited Quarter Ended Six Months Ended April
2, April 3, April 2, April 3, 2005 2004 2005 2004 Net sales $87,839
$73,531 $164,763 $142,336 Cost of sales 63,549 54,963 119,329
108,621 24,290 18,568 45,434 33,715 Selling, general and
administrative expenses 12,356 9,560 23,115 17,888 Research,
development and related expenses 4,331 3,390 8,532 6,650 Income
from operations 7,603 5,618 13,787 9,177 Other income 273 291 398
281 Interest expense (450) (353) (891) (721) Income before taxes
7,426 5,556 13,294 8,737 Provision for income taxes 2,747 2,052
4,967 3,230 Net income $4,679 $3,504 $8,327 $5,507 BASIC EARNINGS
PER COMMON SHARE Net income per common share $0.32 $0.25 $0.57
$0.39 Weighted average shares outstanding 14,556 14,295 14,485
14,259 DILUTED EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Net
income per common and common equivalent share $0.32 $0.24 $0.56
$0.38 Weighted average shares outstanding 14,809 14,610 14,780
14,572 BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands)
Unaudited Quarter Ended Six Months Ended April 2, April 3, April 2,
April 3, 2005 2004 2005 2004 Net income $4,679 $3,504 $8,327 $5,507
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 2,393 2,951
4,997 5,550 Other 2,193 1,529 (8,648) 1,805 Net cash provided by
operating activities 9,265 7,984 4,676 12,862 Net cash used by
investing activities (6,223) (2,361) (23,628) (4,476) Net cash
provided (used) by financing activities (2,100) (1,149) 16,671
(7,473) Net increase (decrease) in cash and cash equivalents 942
4,474 (2,281) 913 Cash and cash equivalents at beginning of period
4,995 5,650 8,218 9,211 Cash and cash equivalents at end of period
$5,937 $10,124 $5,937 $10,124 DATASOURCE: BEI Technologies, Inc.
CONTACT: John LaBoskey, Senior Vice President/CFO of BEI
Technologies, Inc., +1-415-956-4477 Web site:
http://www.bei-tech.com/
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