HAMPTON, Va., Nov. 3, 2010 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS), a global designer and manufacturer of sensors and sensor-based systems, announces results for the three and six months ended September 30, 2010.
The Company reported an increase in consolidated net sales of $17.2 million or 36% to $65.2 million for the three months ended September 30, 2010, as compared to the corresponding period last year. Excluding sales from the recent Pressure Systems Inc. ("PSI") acquisition, organic sales increased $15.4 million or 32%. For the three months ended September 30, 2010, the Company reported income from continuing operations, net of income taxes, of $6.8 million, or $0.45 per diluted share, as compared to income from continuing operations, net of income taxes, of $0.1 million or less than $0.01 per diluted share, for the same period last year.
The Company reported an increase in consolidated net sales of $34.7 million or 38% to $126.3 million for the six months ended September 30, 2010, as compared to the corresponding period last year. For the six months ended September 30, 2010, the Company reported income from continuing operations, net of income taxes, of $12.3 million, or $0.82 per diluted share, as compared to a loss from continuing operations, net of income taxes, of $1.4 million, or $0.10 per diluted share, for the same period last year.
The overall increase in sales for the three and six months ended September 30, 2010 is largely attributable to improvements in overall global economic conditions, expanded share of existing and new customers from broader product adoptions and new programs, as well as sales from our recent acquisition of PSI. The increase in income from continuing operations for the three and six months ended September 30, 2010 primarily reflects the overall increase in sales, improved gross margins due to improved overhead absorption, partially offset by foreign currency exchange losses and the increase in income tax expense. The financial performance during the six months ended September 30, 2010 was adversely impacted by a non-cash, discrete tax adjustment of $0.3 million associated with an IRS audit and settlement, as well as the write-off of deferred financing costs of $0.6 million attributable to the Company's prior credit facility, which was replaced in June 2010. Together, the two items adversely impacted net income by approximately $0.06 per diluted share.
Frank Guidone, Company CEO commented, "We were very pleased with the operating performance this quarter. Not only did we post record results in terms of EPS and Adjusted EBITDA, perhaps more importantly, our Adjusted EBITDA margin for the quarter was 20%, which is unprecedented for MEAS. We have used 20% Adjusted EBITDA margin as the target earnings model for MEAS, and our first half performance certainly supports our ability to perform at this level. Free cash flow declined for the first half of FY11 as compared to the same period last year, driven by higher investment in working capital and equipment required to support the increased sales."
Guidone continued, "Excluding sales and bookings from PSI (acquired in September), book to bill was 1.04 for the quarter, signaling continued expansion in top line. While we remain cautious given general global economic conditions are mixed, at this point our indicators support continued quarter to quarter growth."
Bookings are orders the Company has accepted from customers and are supported by purchase orders. Billings are orders the Company has invoiced to the customer for which sales revenue is recognized. The book to bill ratio is the ratio of bookings to billings. Adjusted EBITDA is a non-GAAP financial measure. Please refer to the notes and reconciliation regarding Non-GAAP financial measures contained in this release.
On November 3, 2010, the Company filed its Form 10-Q for the three and six months ended September 30, 2010. Please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Form 10-Q filed for a more complete discussion of sales, margin and expenses.
The Company will host an investor conference call on Thursday, November 4, 2010 at 11:00 AM Eastern to answer questions regarding the fiscal year results reported in our Form 10-Q for quarter and six months ended September 30, 2010. US dialers: (877) 407-8035; International dialers (201) 689-8035. 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 replay pass code #286 and conference ID# 358727, 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 pressure, temperature, position, force, vibration, humidity and photo optics. MEAS uses multiple advanced technologies – piezo-resistive silicon sensors, application-specific integrated circuits, micro-electromechanical systems ("MEMS"), piezoelectric polymers, foil strain gauges, force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, electromagnetic displacement sensors, hygroscopic capacitive sensors, ultrasonic sensors, optical sensors, negative thermal coefficient ("NTC") ceramic sensors and mechanical resonators – 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.
Reconciliation of Non-GAAP Financial Measures (Unaudited):
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" and "Free Cash Flow." Adjusted EBITDA 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 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 and certain legal expenses to the Company's net income from continuing 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 this measure 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: Measurement Specialties, Inc. Mark Thomson, CFO (757) 766-4224