The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from GlobeNewswire (a Nasdaq OMX company)

Measurement Specialties Announces Results for the Fiscal Year Ended March 31, 2013

Wednesday, June 05, 2013

Measurement Specialties Announces Results for the Fiscal Year Ended March 31, 2013

13:00 EDT Wednesday, June 05, 2013

HAMPTON, Va., June 5, 2013 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS) (the "Company"), a global designer and manufacturer of sensors and sensor-based systems, announces results for the three and twelve months ended March 31, 2013.

The Company reported an increase in consolidated net sales of $33.8 million, or 10.8%, to $347.0 million for the twelve months ended March 31, 2013, as compared to the corresponding period of last year. For the twelve months ended March 31, 2013, the Company reported net income of $34.2 million, or $2.12 per diluted share, as compared to net income of $27.7 million, or $1.74 per diluted share, for the same period last year.

The Company reported an increase in consolidated net sales of $2.5 million, or 2.9%, to $89.0 million for the three months ended March 31, 2013, as compared to the corresponding period of last year. For the three months ended March 31, 2013, the Company reported net income of $9.1 million, or $0.56 per diluted share, as compared to net income of $8.3 million, or $0.52 per diluted share, for the same period last year.

As detailed in the attached Reconciliation of Non-GAAP Financial Measures and in our SEC Form 10-K, there were several items recorded during the twelve months ended March 31, 2013 impacting our net income, including gains relating to the fair value adjustments to acquisition earn-outs, restructuring charges, and impairment of asset held for sale. The net impact to earnings after income taxes for the year ended March 31, 2013 for these adjustments was an increase of $1.6 million or approximately $0.11 per diluted share.

Frank Guidone, Company CEO commented, "We had a solid finish to another challenging year. We began fiscal 2013 with a strong first half, but similar to fiscal 2012, weak macro conditions created a situation where many customers cut their outlook resulting in inventory contraction in the supply chain and soft sales in our second half. Global demand increased in the fourth quarter as evidenced by our strong bookings and solid book-to-bill which gave us some recovery in sales; however, not back to first half levels. With strong 4th quarter bookings, momentum on development programs and contribution from both the RTD and Spectrum acquisitions, we believe we are well positioned to deliver against our adjusted sales guidance of $400 to $405 million for fiscal 2014 and target Adjusted EBITDA margin of 20%+. Increasing our first quarter sales guidance for the Spectrum acquisition yields a target of $98 million. While we remain cautious given the tepid macro-economic environment, we are confident in our long term growth strategy and ability to drive shareholder value."

On June 5, 2013, the Company filed its Form 10-K for the twelve months ended March 31, 2013. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-K for a more complete discussion of sales, margin and expenses.

The Company will host an investor conference call on Thursday, June 6, 2013 at 11:00 AM Eastern to answer questions regarding the results reported in our Form 10-K for the three and twelve months ended March 31, 2013.  US dialers: (877) 407-9210; International dialers (201) 689-8049.  Interested parties may also listen via the Internet at: www.investorcalendar.com.  The call will be available for replay for 30 days by dialing (877) 660-6853 (US dialers); (201) 612-7415 (International dialers), and entering the conference ID# 415496, and on Investorcalendar.com.

About Measurement Specialties: Measurement Specialties, Inc. (MEAS) designs and manufactures sensors and sensor-based systems to measure precise ranges of physical characteristics such as measuring pressure, linear/rotary position, force, torque, piezoelectric polymer film sensors, custom microstructures, load cells, vibrations and acceleration, optical absorption, humidity, gas concentration, gas flow rate, temperature, fluid properties and fluid level. MEAS uses multiple advanced technologies - piezoresistive silicon, polymer and ceramic piezoelectric materials, application specific integrated circuits, micro-electromechanical systems ("MEMS"), foil strain gauges, electromagnetic force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, anisotropic magneto-resistive devices, electromagnetic displacement sensors, hygroscopic capacitive structures, ultrasonic measurement systems, optical measurement systems, negative thermal coefficient ("NTC") ceramic sensors, 3-6 DOF (degree of freedom) force/torque structures, complex mechanical resonators, magnetic reed switches, high frequency multipoint scanning algorithms, and high precision submersible hydrostatic level detection – to engineer sensors that operate precisely and cost effectively. 

This release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.  Forward looking statements may be identified by such words or phrases  as "should," "intends," " is subject to," "expects," "will," "continue," "anticipate," "estimated," "projected," "may," " believe," "future prospects," or similar expressions.  Factors that might cause actual results to differ materially from the expected results described in or underlying our forward-looking statements include: Conditions in the general economy, including risks associated with the current financial crisis and worldwide economic conditions and reduced demand for products that incorporate our products; Competitive factors, such as price pressures and the potential emergence of rival technologies; Compliance with export control laws and regulations; Fluctuations in foreign currency exchange and interest rates; Interruptions of suppliers' operations or the refusal of our suppliers to provide us with component materials, particularly in light of the current economic conditions and potential for suppliers to fail; Timely development, market acceptance and warranty performance of new products; Changes in product mix, costs and yields; Uncertainties related to doing business in Europe and China; Legislative initiatives, including tax legislation and other changes in the Company's tax position; Legal proceedings; Compliance with debt covenants, including events beyond our control; Conditions in the credit markets, including our ability to raise additional funds or refinance our existing credit facility; Adverse developments in the automotive industry and other markets served by us; and risk factors listed from time to time in the reports we file with the SEC.  The Company from time-to-time considers acquiring or disposing of business or product lines. Forward-looking statements do not include the impact of acquisitions or dispositions of assets, which could affect results in the near term.  Actual results may differ materially.  The Company assumes no obligation to update the information in this release.

 
 
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
         
  Three Months Ended Twelve Months Ended
  March 31,  March 31,
  (Unaudited)    
(Amounts in thousands, except per share amounts ) 2013 2012 2013 2012
Net sales   $ 88,969  $ 86,436  $ 346,968  $ 313,204
Cost of goods sold  53,159  51,874  204,879  187,323
 Gross profit  35,810  34,562  142,089  125,881
Selling, general, and administrative expenses  25,944  23,681  101,537  89,963
 Operating income  9,866  10,881  40,552  35,918
Interest expense, net  621  642  2,693  2,574
Foreign currency exchange loss (gain)  (345)  (222)  (110)  (175)
Equity income in unconsolidated joint venture  (122)  (194)  (656)  (806)
Impairment of asset held for sale  --   400  489  400
Acquisition earn-out adjustment  (662)  --   (4,384)  -- 
Other expense (income)  49  27  (19)  68
Income before income taxes  10,325  10,228  42,539  33,857
 Income tax expense  1,202  1,883  8,346  6,153
Net income  $ 9,123  $ 8,345  $ 34,193  $ 27,704
         
         
Earnings per common share - Basic:        
 Net income - Basic  $ 0.59  $ 0.55  $ 2.22  $ 1.84
 Net income - Diluted  $ 0.56  $ 0.52  $ 2.12  $ 1.74
         
Weighted average shares outstanding - Basic  15,481  15,167  15,381  15,086
Weighted average shares outstanding - Diluted  16,259  16,024  16,158  15,936
 
MEASUREMENT SPECIALTIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
 
 
     
     
  March 31, March 31,
(Amounts in thousands) 2013 2012
     
ASSETS    
     
Current assets:    
 Cash and cash equivalents  $ 36,028  $ 32,725
 Accounts receivable trade, net of allowance for doubtful accounts of $1,040 and $766, respectively  56,134  49,315
 Inventories, net  55,984  57,704
 Deferred income taxes, net  1,919  1,626
 Prepaid expenses and other current assets  4,593  5,229
 Other receivables  1,532  2,967
 Asset held for sale  940  1,429
 Total current assets  157,130  150,995
     
 Property, plant and equipment, net  64,329  60,484
 Goodwill  153,924  144,455
 Acquired intangible assets, net  56,017  49,378
 Deferred income taxes, net  3,781  3,613
 Investment in unconsolidated joint venture  2,657  3,038
 Other assets  7,704  6,244
 Total assets  $ 445,542  $ 418,207
 
 
MEASUREMENT SPECIALTIES, INC.
CONSOLIDATED BALANCE SHEETS
 
     
  March 31, March 31,
(Amounts in thousands, except share amounts) 2013 2012
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
 Short-term debt  $ --   $ 1,867
 Current portion of long-term debt  224  123
 Current portion of capital lease obligations  21  30
 Current portion of earn-out contingencies  1,122  -- 
 Current portion of deferred acquisition payment  1,500  -- 
 Accounts payable  26,601  31,879
 Accrued expenses  6,579  5,116
 Accrued compensation  10,315  8,755
 Income taxes payable  313  3,124
 Deferred income taxes, net  263  375
 Restructuring liabilities  396  -- 
 Other current liabilities  3,255  3,201
 Total current liabilities  50,589  54,470
     
 Revolver  78,000  80,251
 Long-term debt, net of current portion  20,064  20,711
 Capital lease obligations, net of current portion  7  30
 Acquisition earn-out contingencies  --   4,317
 Deferred income taxes, net  11,267  10,184
 Other liabilities  5,291  5,227
 Total liabilities  165,218  175,190
     
Equity:    
 Serial preferred stock; 221,756 shares authorized; none outstanding  --   -- 
 Common stock, no par; 25,000,000 shares authorized; 15,553,677 shares and 15,297,151 shares issued and outstanding  --   -- 
 Additional paid-in capital  108,287  101,435
 Retained earnings  163,206  129,013
 Accumulated other comprehensive income  8,831  12,569
 Total equity  280,324  243,017
Total liabilities and shareholders' equity  $ 445,542  $ 418,207
 
MEASUREMENT SPECIALTIES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS 
     
     
  Years ended March 31,
(Amounts in thousands) 2013 2012
Cash flows from operating activities:    
Net income  $ 34,193  $ 27,704
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization  17,870  16,735
Non-cash equity based compensation  4,733  4,264
Acquisition earn-out adjustment   (4,384)  -- 
Impairment of asset held for sale  489  400
Deferred income taxes  770  (713)
Research tax credits  (1,449)  (1,551)
Equity income in unconsolidated joint venture  (656)  (806)
Unconsolidated joint venture distributions  828  582
Net change in operating assets and liabilities, excluding the effects of acquisitions:    
Accounts receivable, trade  (5,023)  (1,506)
Inventories  2,790  (1,326)
Prepaid expenses, other current assets and other receivables  1,879  (712)
Other assets  (171)  (1,855)
Accounts payable  (4,377)  7,804
Accrued expenses, accrued compensation, restructuring, other current and other liabilities  3,911  (3,034)
Income taxes payable  (3,697)  (3,366)
Net cash provided by operating activities  47,706  42,620
Cash flows from investing activities:    
Purchases of property and equipment (12,998) (20,655)
Acquisition of business, net of cash acquired, and acquired intangible assets  (28,058)  (46,575)
Net cash used in investing activities  (41,056)  (67,230)
Cash flows from financing activities:    
Borrowings from revolver and short-term debt  25,797  64,193
Repayments of revolver and capital leases  (29,883)  (30,764)
Repayments of long-term debt  (547)  (186)
Payment of deferred financing costs  (231)  (353)
 Purchase of treasury stock  (7,000)  (6,500)
Proceeds from exercise of options and employee stock purchase plan  7,790  8,973
Excess tax benefit from exercise of stock options  1,329  1,090
Net cash provided by (used in) financing activities (2,745) 36,453
     
Net change in cash and cash equivalents 3,905 11,843
Effect of exchange rate changes on cash (602) 22
Cash, beginning of year 32,725 20,860
Cash, end of period  $ 36,028  $ 32,725
     

Reconciliations of Non-GAAP Financial Measures (Unaudited):

  Three Months Ended Twelve Months Ended
  March 31, March 31,
  2013 2012 2013 2012
(In thousands, except percentages)        
Net income   $ 9,123  $ 8,345  $ 34,193  $ 27,704
         
Add Back:        
 Interest  621  642  2,693  2,574
 Provision for income taxes  1,202  1,883  8,346  6,153
 Depreciation and amortization  4,659  4,787  17,870  16,735
 Foreign currency exchange gain  (345)  (222)  (110)  (175)
 Non-cash equity based compensation  989  602  4,733  4,264
 Gain on fair value adjustments for earn-outs  (662)  --   (4,384)  -- 
 Impairment of asset held for sale  --   400  489  400
 Restructuring costs  396  --   758  -- 
 ITAR legal fees and acquisition related costs  185  188  401  988
Adjusted EBITDA  $ 16,168  $ 16,625  $ 64,989  $ 58,643
 As % of Net Sales 18.2% 19.2% 18.7% 18.7%
         
Free Cash Flow        
Capital expenditures for new French and Chinese facilities   $ (83)  $ (5,657)  $ (1,122)  $ (8,375)
Purchases of property and equipment, excluding new facilities  (1,671)  (5,239)  (11,876)  (12,280)
Purchases of property and equipment  (1,754)  (10,896)  (12,998)  (20,655)
Net cash provided by operating activities  12,921  15,426  47,706  42,620
Free Cash Flow  $ 11,167  $ 4,530  $ 34,708  $ 21,965
         
    Three Months Ended   Twelve Months Ended
(Amount in thousands, except per share amounts)   March 31, 2013   March 31, 2013
         
Net income     $ 9,123    $ 34,193
         
Adjustments:        
Impairment of asset held for sale, after income taxes    --     303
Acquisition earn-out fair value gain, after income taxes    (464)    (3,047)
Restructuring in Scotland and with Cosense, after income taxes    305    529
Swiss income tax claw-back    (529)    324
Acquisition related professional fees, after income taxes    115    249
Total adjustments    (573)    (1,642)
Adjusted Net Income    $ 8,550    $ 32,551
         
Net income per diluted share    $ 0.56    $ 2.12
Adjusted Net Income per diluted share    $ 0.53    $ 2.01
         
Weighted average shares outstanding - Diluted    16,259    16,158
         
         
    Three Months Ended   Twelve Months Ended
(Amount in thousands, except per share amounts)   March 31, 2012   March 31, 2012
         
Net income     $ 8,345    $ 27,704
         
Adjustments:        
Impairment of asset held for sale, after income taxes    248    248
Acquisition related professional fees, after income taxes    117    613
Adjusted Net Income    $ 8,462    $ 28,317
         
Net income per diluted share    $ 0.52    $ 1.74
Adjusted Net Income per diluted share    $ 0.53    $ 1.78
         
Weighted average shares outstanding - Diluted    16,024    15,936
         

Regulation G, "Conditions for Use of Non-GAAP Financial Measures," promulgated under the Securities and Exchange Act of 1934, as amended, defines and prescribes the conditions for use of certain non-GAAP financial information. We believe that certain of our financial measures which meet the definition of non-GAAP financial measures provide important supplemental information to investors.

The financial information accompanying this press release includes the Company's earnings before interest, income taxes, depreciation, amortization, foreign currency transaction gains/losses, non-cash equity based compensation and certain legal expenses, or "Adjusted EBITDA," "Adjusted Net Income" and "Free Cash Flow." Adjusted EBITDA, Adjusted Net Income and Free Cash Flow are non-GAAP measures that are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from Adjusted EBITDA, Adjusted Net Income and Free Cash Flow measures used by other companies. Adjusted EBITDA is derived by adding interest, taxes, depreciation, amortization, foreign currency transaction gains/losses, non-cash equity based compensation, certain legal expenses related to International Traffic in Arms Regulation (ITAR) matters and certain restructuring costs related to site consolidation to the Company's Adjusted Net Income from continuing operations and professional fees related to acquisitions. Adjusted Net Income is derived by taking net income and removing the impact of adjustments recorded for the gains on fair value of adjustments to earn-outs, impairment of asset held for sale and non-cash discrete income tax expense for the Company's Swiss operations. Free Cash Flow is derived by taking net cash provided by operating activities from continuing operations and subtracting capital expenditures (purchases of property and equipment). The Company believes that Adjusted EBITDA is important to investors because it provides a financial measure that is more representative of the Company's cash flow (prior to taking into account the effects of changes in working capital and purchases of property and equipment), excluding non-cash expenses and items such as foreign currency transaction gains/losses, income taxes, interest and certain legal expenses, which vary greatly period to period. Legal expenses relate to the Company's previously announced investigation into certain export compliance issues. The Company believes that Adjusted EBITDA is important to investors because it more accurately represents the leverage effect of fixed expenses. The Company believes Free Cash Flow is also important to investors as it provides useful information about the amount of cash generated by the business after the purchase of property, buildings and equipment, which can then be used to, among other things, invest in the Company's business, make strategic acquisitions and strengthen the balance sheet, and because it is a significant measure used in determining the enterprise value of the Company. A limitation on the use of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period or the residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions.

These non-GAAP financial measures are used by management in addition to and in conjunction with the results presented in accordance with GAAP.   These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. Non-GAAP financial measures provide an additional way of viewing aspects of our operation that, when viewed with our GAAP results and the accompanying reconciliations to the corresponding GAAP financial measures, provide an understanding of certain factors and trends relating to our business.   The Company strongly encourages investors to review our financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.

CONTACT: Mark Thomson, CFO
(757) 766-4224

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections