Scientific Technologies Incorporated (Nasdaq:STIZ), a leading North
American provider of automation safeguarding products, announced
today the results of operations for the three and six months ended
June 30, 2006. Sales for the second quarter of 2006 increased 15%
to $17,188,000, compared to sales of $14,941,000 for the same
quarter of 2005. Year to date sales increased 13% to $33,150,000,
compared to sales of $29,239,000 for the same period of 2005. Net
income for the second quarter of 2006 was $156,000 or $.02 per
common and diluted share, compared to net income of $510,000 or
$.05 per common and diluted share for the second quarter of 2005.
Net income for the first six months of 2006 was $650,000 or $.07
per common and diluted share, compared to net income of $529,000 or
$.05 per common and diluted share for the first six months of 2005.
Commenting on the results, Joseph J. Lazzara, President and Chief
Executive Officer, stated, "We are very pleased to report double
digit sales growth for the second quarter and first six months of
2006. Second quarter and year to date net income was negatively
impacted by the recognition of approximately $1,088,000 in expenses
associated with our recently announced intent to merge with Omron
Corporation." On April 25, 2006, STI announced that it had entered
into a definitive agreement with Omron Corporation ("Omron")
whereby Omron will acquire the Safety Products Group ("SPG") of
STI. STI also separately entered into an agreement to sell its
Automation Products Group ("APG") to a new company formed by
members of the Lazzara family who currently serve as officers and
directors of STI. The estimated value of the transaction is
comprised of $94 million for SPG, $6 million for APG, plus an
estimate for certain corporate assets, including cash net of
certain liabilities and estimated transaction related expenses. We
expect that the proposed transaction will close during the third
quarter of 2006. About Scientific Technologies Inc. Scientific
Technologies, Inc. (STI) is a North American leading provider of
automation safeguarding products and services through its Safety
Products Group. STI's Optical Sensor Division (OSD) provides safety
products that are used to protect workers around machinery,
automated equipment and industrial robots. Our products serve a
wide variety of applications and markets, including semiconductor,
automotive, electronics manufacturing, packaging and consumer
markets. STI's Machine Services Division (MSD) provides safety
services such as safeguarding equipment installations, machine
safety assessments, and the design and custom fabrication of
guarding solutions. MSD specializes in machinery services,
including the repair, relocation, installation and service of
fabricating machinery. MSD serves customers in a variety of
industries, including metal fabrication, aerospace, electronics,
building materials, automotive and food processing. Our web site is
located at www.sti.com. STI's Automation Products Group serves the
factory automation, semiconductor, transportation, oil and gas,
consumer and food processing industries with a diversified offering
of sensing technologies. Products include level, flow, pressure
sensing, positioning transducers, vehicle separation, profiling and
ultrasonic sensors and controls. Further information is available
at the Group's web sites: www.automationsensors.com and
www.stiscanners.com. About Omron Corporation Omron Corporation,
headquartered in Kyoto, Japan, is a global leader in the field of
automation with approximately $6 billion in annual revenues.
Established in 1933 and headed by President and CEO Hisao Sakuta,
Omron has more than 26,000 employees in 35 countries working to
provide products and services to customers in a variety of fields,
including industrial automation, electronic components, social
systems (ticket gate machines, ticket vending machines and traffic
control) and healthcare. Further information on Omron is located at
www.omron.com. Forward-Looking Statements Certain statements in
this press release, including statements regarding the expected
closing of the merger with Omron and the sale of APG, are
forward-looking statements that are subject to risks and
uncertainties. These risks and uncertainties, which could cause
STI's results to differ materially from the forward-looking
statements, include: economic and political conditions in domestic
and international markets; declining market demand for industrial
safety and security products generally; introduction of or
increased demand for alternative products; potential errors,
defects, design flaws or other problems with our products; changes
in regulations relating to industrial safety and security products;
and the other risks detailed from time to time in STI's Securities
and Exchange Commission filings and reports, including STI's annual
report filed on Form 10-K and quarterly reports filed on Form 10-Q.
STI disclaims any obligation to update information contained in any
forward-looking statement. Additional Information and Where to Find
It STI intends to file a definitive proxy statement in connection
with the proposed transactions, a copy of which will be mailed to
the shareholders of STI. STI's shareholders are urged to read the
definitive proxy statement and other relevant materials when they
become available because they will contain important information
about the proposed transactions. Investors and security holders may
obtain free copies of these documents (when they are available) and
other documents filed with the Securities and Exchange Commission
(the "SEC") at the SEC's web site at www.sec.gov. In addition,
investors and security holders may obtain free copies of the
documents filed with the SEC by STI by going to STI's Investor
Relations page on its corporate website at
www.sti.com/financial/index.htm, by contacting STI in writing at
6550 Dumbarton Circle, Fremont, California 94555 or by calling STI
at 510-608-3400. In addition to the proxy statement, STI files
annual, quarterly and current reports, proxy statements and other
information with the SEC. A copy of any such reports, statements or
other information filed by the Company are available at the SEC
public reference rooms. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The Company's
SEC filings are also available to the public from commercial
document-retrieval services and at the website maintained by the
SEC at http://www.sec.gov. In addition, STI and its officers and
directors may be deemed to be participants in the solicitation of
proxies from STI's shareholders with respect to the proposed
transactions. A description of any interests that STI's officers
and directors have in the acquisition will be available in the
definitive proxy statement. Information concerning STI's directors
and executive officers is set forth in STI's Annual Report on Form
10-K, as amended, filed with the SEC on May 1, 2006. Updated
information about STI's directors and executive officers will be
included in the definitive proxy statement that STI intends to file
in connection with this transaction. -0- *T SCIENTIFIC TECHNOLOGIES
INCORPORATED Condensed Consolidated Income Statement (Amounts in
thousands except per share data) (Unaudited) Three months ended Six
months ended June 30, June 30, 2006 2005 2006 2005 ---------------
---------------- Sales $17,188 $14,941 $33,150 $29,239 Cost of
sales 10,015 8,771 19,233 17,591 ------- ------- ------- -------
Gross profit 7,173 6,170 13,917 11,648 Operating expenses 7,075
5,509 13,181 11,017 ------- ------- ------- ------- Operating
income 98 661 736 631 Interest and other income 184 89 331 150
------- ------- ------- ------- Income before taxes 282 750 1,067
781 Provision for income taxes 126 240 417 252 ------- -------
------- ------- Net income $ 156 $ 510 $ 650 $ 529 ======= =======
======= ======= Basic and diluted net income per share $ .02 $ .05
$ .07 $ .05 ======= ======= ======= ======= Shares used to compute
net income per share Basic 9,795 9,772 9,788 9,770 ======= =======
======= ======= Diluted 10,053 9,772 9,993 9,774 ======= =======
======= ======= Condensed Consolidated Balance Sheet (Amounts in
thousands) Unaudited June 30, December 31, 2006 2005 ---------
------------ Assets Current assets: Cash and cash equivalents $
6,356 $ 4,773 Short-term investments 2,478 2,480 Accounts
receivable 9,157 9,085 Inventories 8,900 8,414 Other assets 2,623
2,640 ------- ------- Total current assets 29,514 27,392 Property,
plant and equipment, net 3,444 3,224 Goodwill, intangibles and
other assets 5,059 5,106 ------- ------- Total assets $38,017
$35,722 ======= ======= Liabilities and shareholders' equity
Current liabilities: Accounts payable $ 3,646 $ 2,481 Accrued
expenses 4,077 3,662 Current portion of capital lease with Parent
-- 68 ------- ------- Total current liabilities 7,723 6,211 Capital
lease with Parent -- 28 Deferred income tax liability 708 708
------- ------- Total liabilities 8,431 6,947 Shareholders' equity
29,586 28,775 ------- ------- Total liabilities and shareholders'
equity $38,017 $35,722 ======= ======= *T
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