Outlook Group Reports Third Quarter Results
20 März 2006 - 11:34PM
Business Wire
Outlook Group Corp. (Nasdaq:OUTL) today reported sales and earnings
for the third quarter ended February 25, 2006. Third Quarter Fiscal
2006 Highlights -- Net sales for the third quarter of fiscal 2006
increased 7.4% to $18,411,000, from sales of $17,147,000 for the
same period in the prior year. -- Net earnings were $4,000 or $0.00
per diluted share for the third quarter of fiscal 2006, compared to
earnings of $570,000 or $0.17 per diluted share for the third
quarter of fiscal 2005. -- Net earnings for the third quarter of
fiscal 2005 included an after-tax business interruption insurance
recovery of $108,000, related to a fire in a company manufacturing
plant in a prior period. First Nine Months Fiscal 2006 Highlights
-- Net sales for the first nine months of fiscal 2006 were
$63,426,000, a 17.8% increase from sales of $53,828,000 for the
same period in the prior year. -- Net earnings for the first nine
months of fiscal 2006 were $1,860,000 or $0.54 per diluted share,
compared to earnings of $2,551,000 or $0.74 per diluted share for
the comparable period in fiscal 2005. -- The net earnings for the
first nine months of fiscal 2005 included after-tax recovery of a
prior period bad debt of $728,000 or $0.21 per diluted share.
Operations Review "Although we are pleased with the increase in
sales, the breakeven bottom line in the third quarter did not meet
our expectations. This was due to a number of factors, including
the installation of new equipment, the project mix and a shorter
holiday selling season," said Joseph J. Baksha, president and chief
executive officer of Outlook Group. "During the quarter, we
incurred start-up costs and manufacturing disruptions related to
the installation of two new pieces of custom collating equipment.
The largest collator, a one-of-a-kind intelligent collator, was
installed as part of a recently announced long-term contract. In
addition, the project mix in the third quarter trended toward
lower-margin projects. Shipments of a number of higher-margin
orders were delayed into the fourth quarter due to the timing of
the holiday calendar, which had significantly fewer selling days
than a typical holiday season," said Baksha. "The third quarter
also included substantial expenses relating to the acquisition
transaction we announced today, in which Outlook Group has signed
an agreement to be acquired by Vista Group Holdings, LLC, a
financial investor," said Baksha. Additional information on the
transaction is included in a separate news release issued today,
March 20, 2006. "The third quarter is historically our weakest
period. We are encouraged by a very strong start in March and are
optimistic that we will achieve improved performance for the fourth
quarter and a solid fiscal 2006 overall," he added. About Outlook
Group Outlook Group Corp. is a printing, packaging and direct
marketing company offering a variety of related services to clients
in markets including contract packaging, collateral information
management and distribution, direct marketing components and
services, packaging components and materials and specialty print
related services. The company leverages its core competencies by
cross-selling services to provide a single-source solution for its
clients. Outlook Group has signed an agreement to be acquired by
Vista Group Holdings, LLC, a financial investor. The discussions of
potential future occurrences and operations, and other statements
in the future tense or using terms such as "believe," "expect," or
"anticipate," in this press release are "forward-looking
statements" intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to certain risks
and uncertainties which could cause actual results to differ
materially from those anticipated. Completion of the acquisition
transaction is subject to numerous contingencies and cannot be
assured. Outlook's periodic filings with the Securities and
Exchange Commission discuss a number of other factors which may
affect Outlook's future operations, including: possible changes in
customer relationships and sales volumes; financing needs to
support our relationships; possible termination of contracts,
including long-term contracts; consumer demand for our customers'
products; the need to complete the transitions to the new customer
contracts, and the need to achieve and maintain satisfactory
performance thereunder; potential inability to achieve expected
cost savings or delays in their achievement; changes in project
mix, timing and volume; increases in costs of raw materials; the
effects of industry competition, overcapacity and acquisition
activity; slowdowns in general market and economic conditions, and
changes in other world and national conditions; and the possible
need for future capital investments or equipment enhancements, and
related financing. Readers are urged to consider these factors
carefully in evaluating the forward-looking statements. -0- *T
OUTLOOK GROUP CORP. AND SUBSIDIARIES Condensed Consolidated
Statements of Operations (Unaudited)
----------------------------------------------------------- (in
thousands, except share and per share amounts) Three-Month Period
Nine-Month Period Ended Ended ----------------------
----------------------- Feb. 25, Feb. 26, Feb. 25, Feb. 26, 2006
2005 2006 2005 ---------- ----------- ----------- ----------- Net
sales $18,411 $17,147 $63,426 $53,828 Cost of goods sold 15,471
13,436 51,525 42,671 ---------- ----------- ----------- -----------
Gross profit 2,940 3,711 11,901 11,157 Recovery of bad debt - - -
(1,214) Selling, general and administrative expenses 2,828 2,772
8,549 8,121 ---------- ----------- ----------- -----------
Operating profit 112 939 3,352 4,250 Other income (expense):
Interest expense (132) (46) (316) (152) Interest and other income
27 34 64 50 ---------- ----------- ----------- ----------- Earnings
from operations before income taxes 7 927 3,100 4,148 Income tax
expense 3 357 1,240 1,597 ---------- ----------- -----------
----------- Net earnings $4 $570 $1,860 $2,551 ==========
=========== =========== =========== Earnings per common share:
Basic $0.00 $0.17 $0.55 $0.75 ========== =========== ===========
=========== Diluted $0.00 $0.17 $0.54 $0.74 ========== ===========
=========== =========== Weighted average number of shares
outstanding: Basic 3,395,860 3,385,477 3,393,125 3,385,477
========== =========== =========== =========== Diluted 3,472,577
3,441,778 3,470,427 3,430,507 ========== =========== ===========
=========== Selected Consolidated Balance Sheet Data (Unaudited)
---------------------------------------------------- (Dollars in
thousands) February 25, 2006 February 26, 2005 ------------------
------------------ Ratio Analysis -------------- Total current
assets $24,419 $21,975 Total current liabilities $14,100 $6,863
Total long term debt (including current maturities) $6,800 $3,500
Shareholders' equity $34,614 $32,835 Current ratio 1.73 3.20
Long-term debt to total capitalization 16.4% 9.6% *T
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