Sevcon Reports Financial Results for First Quarter Fiscal 2016
02 Fevereiro 2016 - 8:25PM
Sevcon, Inc. (Nasdaq:SEV) reported financial results for the first
quarter of fiscal 2016 ended January 2, 2016 and the acquisition of
Bassi S.r.l.
First-Quarter Fiscal 2016 Results
Summary
- Revenues decreased $0.8 million, or 8.2%, to $9.1 million, from
$9.9 million in the first quarter of fiscal 2015, reflecting
continued weakness on the industrials side of the business as a
result of macro-economic conditions, partially offset by growth in
the on-road and other EV categories. Foreign currency fluctuations
decreased reported sales by $312,000, or 3.1%, mainly due to a
stronger U.S. Dollar compared with the Euro and the British Pound
than in the first quarter of fiscal 2015.
- Gross profit was 45.2% in the first quarter of 2016 compared
with 35.3% in the same period last year. The improvement in the
gross profit percentage was largely the result of lower material
costs in 2016 than in the same period last year due to the stronger
U.S. Dollar in 2016 compared with the Euro and the British Pound
than in the first quarter of fiscal 2015.
- After a favorable impact of $277,000 due to foreign currency
and acquisition costs of $316,000 relating to Bassi S.r.l., the
Company reported operating income of $180,000, compared with
operating income of $282,000 in the first quarter last year.
Excluding acquisition costs, reported operating income would have
been $496,000, an increase of $214,000.
- The Company recorded an income tax charge of $11,000 in the
first quarter of fiscal 2016 compared with a charge of $40,000 in
the first quarter of fiscal 2015.
- After a preference share dividend of $111,000, net income
attributable to common stockholders was $11,000, or zero cents per
share, compared with net income of $171,000, or $0.05 per diluted
share, in the first quarter of fiscal 2015.
Subsequent Event: The Bassi Acquisition
As Sevcon announced on January 29, 2016, the
Company acquired all the outstanding shares of Bassi S.r.l., a
manufacturer of battery chargers located in Lugo, Italy.
The acquisition was funded with €10 million in
cash, 500,000 shares of Sevcon common stock, and a dividend
distribution of €3.38 million to be made over a three-year period.
Funding for the transaction was obtained under a five-year term
loan facility provided by the New York City branch of the Italian
bank Monte dei Paschi di Siena.
Management Comments
“We continued to see nice growth in the on-road
and other EV categories during the first quarter as we capitalize
on the trend toward electrification,” said Sevcon Chief Executive
Officer Matt Boyle. “However, this growth was more than offset by
ongoing weakness on the industrial side of the business as a result
of macro-economic conditions.
“In our on-road business, we continued to see
strong demand in the 2-wheel sector. In fact, we recorded the third
consecutive quarter of double-digit growth in this sector, with
sales up 47%. In the four-wheel sector, sales were down, although
they would have been up by 7% but for a large order in the first
quarter of the prior year. We expect to see four-wheel sales growth
for the remainder of the year. Looking forward, while the off-road
markets continue to be challenging, we are gaining excellent
traction in growing our reputation and our stable of clients in
on-road markets. We are encouraged by this progress and look
forward to reporting future successes to you as we capitalize on
many opportunities related to the global demand for
electrification.”
“On Monday we announced the acquisition of Bassi
S.r.l. Adding Bassi’s state-of-the-art battery charging technology
and power management capabilities to Sevcon’s advanced control
technologies will significantly strengthen the ability to deliver
the more integrated solutions that our markets and customers are
demanding. We also have opportunities to deploy Sevcon’s marketing
and sales resources to accelerate standalone sales of Bassi’s
products and solutions. Additionally, we will be able to pursue
opportunities to cross-sell both product lines in each company’s
respective markets. We have cooperated on a number of projects
recently. As is the case in the controller business, the
sales cycle in the charger markets is two to three years. At the
same time, we expect that with initiatives already underway at
Bassi, that, excluding transaction costs, the acquisition will be
accretive to earnings in the first year,” said Mr. Boyle.
First-Quarter Fiscal 2016 Conference
Call Details
Sevcon has scheduled a conference call to review
its results for the first quarter and discuss the Bassi acquisition
tomorrow, February 3, 2016 at 9:00 a.m. ET. Those who wish to
listen to the conference call webcast should visit the investor
relations section of the company’s website at http://ir.sevcon.com.
The live call also can be accessed by dialing (877) 407-5790 or
(201) 689-8328 prior to the start of the call. If you are unable to
listen to the live call, the webcast will be archived on the
company’s website.
First-Quarter Fiscal 2016 Financial
Highlights |
|
|
|
(In thousands except per-share data) |
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
January
2,2016(unaudited) |
|
January
3,2015(unaudited) |
Revenues |
$ |
9,115 |
|
|
$ |
9,933 |
|
Gross Profit |
|
4,116 |
|
|
|
3,509 |
|
Selling, general and
administrative and research and development expense |
|
(3,620 |
) |
|
|
(3,227 |
) |
Acquisition costs |
|
(316 |
) |
|
|
- |
|
Operating income |
|
180 |
|
|
|
282 |
|
Interest income |
|
8 |
|
|
|
5 |
|
Interest expense |
|
(22 |
) |
|
|
(26 |
) |
Foreign currency gain
(loss) |
|
(71 |
) |
|
|
44 |
|
Income before income
taxes |
|
95 |
|
|
|
305 |
|
Income taxes benefit
(provision) |
|
(11 |
) |
|
|
(40 |
) |
Net income |
|
84 |
|
|
|
265 |
|
Net loss attributable to
non-controlling interest |
|
38 |
|
|
|
17 |
|
Net income attributable to
Sevcon, Inc. and subsidiaries |
|
122 |
|
|
|
282 |
|
Series A Preference Share
dividends |
|
(111 |
) |
|
|
(111 |
) |
Net income attributable to
common stockholders |
|
11 |
|
|
|
171 |
|
Basic income per
share |
$ |
0.00 |
|
|
$ |
0.05 |
|
Diluted income per
share |
$ |
0.00 |
|
|
$ |
0.05 |
|
Average shares outstanding
- Basic |
|
3,429 |
|
|
|
3,427 |
|
Average shares outstanding
- Diluted |
|
4,889 |
|
|
|
4,895 |
|
Summarized Balance Sheet
Data |
|
|
|
(in thousands of dollars) |
|
January 2, 2016(unaudited) |
|
September 30, 2015(derived from audited statements) |
Cash and cash
equivalents |
$ |
6,787 |
|
|
$ |
8,048 |
Receivables |
|
8,700 |
|
|
|
9,462 |
Inventories |
|
8,198 |
|
|
|
6,790 |
Prepaid expenses and other
current assets |
|
2,526 |
|
|
|
3,581 |
Total current assets |
|
26,211 |
|
|
|
27,881 |
Long-term assets |
|
8,366 |
|
|
|
7,735 |
Total assets |
$ |
34,577 |
|
|
$ |
35,616 |
|
|
|
|
Current liabilities |
$ |
6,934 |
|
|
$ |
8,357 |
Liability for pension
benefits |
|
10,647 |
|
|
|
10,963 |
Other long-term
liabilities |
|
1,000 |
|
|
|
500 |
Stockholders’ equity |
|
15,950 |
|
|
|
15,712 |
Non-controlling
interest |
|
46 |
|
|
|
84 |
Total liabilities and
stockholders’ equity |
$ |
34,577 |
|
|
$ |
35,616 |
About Sevcon, Inc.
Sevcon is a world leader in the design and
manufacture of controls for zero emission electric and hybrid
vehicles. The controls are used to vary the speed and movement of
vehicles, to integrate specialized functions, and to optimize the
energy consumption of the vehicle's power source. Sevcon supplies
customers throughout the world from its operations in the USA, the
UK, France, Germany, Italy and the Asia Pacific region and through
an international dealer network. Sevcon's customers operate in
diverse markets and include manufacturers of electric motors, cars,
trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining
vehicles, agricultural tractors and implements, and other
electrically powered vehicles and systems. For more information,
visit www.sevcon.com.
Forward-Looking Statements
Statements in this release about Sevcon’s future
financial results are forward-looking statements subject to risks
and uncertainties that could cause actual results to differ
materially from those we anticipate. In particular: customers of
Bassi may not grow as predicted and demand for chargers may fall
short of forecasts; we may not be able to successfully integrate
the two companies’ operations and financial controls; we may not be
able to combine the two companies’ product lines as effectively as
we anticipate, and the market for the combined products may not be
as great as we believe; there are risks inherent in Bassi’s sole
source manufacturing that may hinder us from producing as much
Bassi product as we anticipate; capital markets are cyclical and
weakness in the United States and international economies may harm
our business; global demand for electric vehicles incorporating our
products may not grow as much as we expect; our customers’ products
may not be as successful as those of other entrants in the electric
vehicle market who are supplied by our competitors; we may not be
able to attract and retain the level of high quality engineering
staff that we need to develop the new and improved products we need
to be successful; we are dependent on a few key suppliers and
subcontractors for most components, sub-assemblies and finished
products, and we may not be able to establish alternative sources
of supply in time if supplies are interrupted; we may not be able
to raise the capital we anticipate needing to grow our business;
and companies we acquire may be more costly to acquire and
integrate, or may not generate as much revenue and earnings, as we
anticipate. Please see the Company’s most recent Forms 10-K and
10-Q on file with the SEC for further information regarding
Sevcon’s risk factors.
Contact:
David Calusdian
Sharon Merrill Associates
1 (617) 542 5300
SEV@InvestorRelations.com
Matt Boyle
President and CEO
1 (508) 281 5503
matt.boyle@Sevcon.com
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