EX-99.1 3 woodhead035030_ex99-1.txt EXHIBIT 99.1 WOODHEAD INDUSTRIES REPORTS NET INCOME UP 15% IN THE 2003 FISCAL FOURTH QUARTER AND UP 158% FOR THE FULL FISCAL YEAR DEERFIELD, Ill.--November 14, 2003 -- Woodhead Industries, Inc., (Nasdaq: WDHD) today announced financial results for the fourth quarter and full fiscal year ended September 27, 2003. Highlights include: >> Fiscal 2003 revenue increased 5.2% >> Fiscal 2003 Connectivity Segment sales increased 12.6% >> Income from operations increased 15.7% for the year >> Income from operations increased 17.0% for the fourth quarter >> Gross margin in the fourth quarter was 37.9%, an increase from 34.4% last year Philippe Lemaitre, Woodhead Industries' Chairman and Chief Executive Officer, commented, "Our company has performed well considering the economic difficulties over the past few years. During the past year we have taken the necessary steps to strategically position our company for growth in 2004 and beyond. Cash flow from operations continued to be very strong this year and we ended fiscal 2003 with $22.5 million in cash. There are now signs that a manufacturing recovery could be forthcoming, as we saw an improvement in order activity in September and October and we expect large projects to be freed up in the second half of 2004." FOURTH QUARTER RESULTS Revenues for the 2003 fiscal fourth quarter were $44.3 million, up 2.1% compared to $43.4 million in the same quarter last year. Exchange rate changes increased revenue by $2.2 million and the sale of the AKAPP operation in the fiscal first quarter reduced revenue by $1.6 million compared to the prior year. Income from operations for the quarter was $2.3 million, up 17.0% when compared to $2.0 million for the same period last year. Net income for the quarter was $0.8 million or $0.07 per share, compared to $0.7 million or $0.06 per share in the fourth quarter of 2002. In the fourth quarter, the company expensed $0.9 million for the previously announced migration of products from its Aero-Motive subsidiary (AMCO) in Kalamazoo, Michigan to the company's Juarez, Mexico facility. The tax rate for the quarter was abnormally high and changes in foreign currencies also negatively affected profits. Offsetting these items were the benefit from the sale of AMCO's workstation product line, a gain of $0.8 million, and changes in retiree medical benefits, which increased profits by $0.7 million. In the Connectivity Segment, fourth quarter sales increased 12.9% to $32.1 million, versus $28.4 million in the same period last year. Half of the increase was due to exchange rate changes. Income from operations was $1.9 million, up substantially from $81,000 in the fiscal 2003 fourth quarter due to increased volume and lower obsolescence costs. Fourth quarter sales in the Electrical Segment were $12.2 million compared to $15.0 million in the prior year's fourth quarter. Half of this decrease was related to the sale of the AKAPP operations. Income from operations was $1.3 million versus $2.0 million earned in the 2002 fourth quarter. The decrease was primarily due to the AMCO restructuring charges of $0.9 million. Gross margin in the fourth quarter was 37.9%, an increase from 34.4% last year. The increase was driven by the on-going migration of products to the company's Juarez, Mexico plant, efforts to improve efficiencies in all locations and lower obsolescence costs. Robert Fisher, Vice President Finance and Chief Financial Officer, stated, "Our diverse international presence continued to benefit us this quarter. We experienced especially strong results in the UK, Germany, Italy, and Japan." He also commented, "Fulfilling our commitment to our long-term strategic plan regarding AMCO, we were pleased to successfully complete the sale of our workstation product line during the quarter. We remain on track to sell another AMCO product line in the first quarter of fiscal 2004." FISCAL 2003 RESULTS Revenues for the 2003 fiscal year were $179.0 million, up 5.2% compared to $170.2 million in 2002. Most of the increase was due to exchange rate changes. Total income from operations increased 15.7% to $9.2 million from $7.9 million last year. For the full year, net income was $6.6 million, up from $2.5 million in the previous year. Connectivity Segment sales were $126.3 million in fiscal 2003 versus $112.2 million in 2002, an increase of 12.6%. Income from operations was $5.1 million, compared to $2.9 million last year. Electrical Segment sales in fiscal 2003 were $52.7 million and income from operations was $4.8 million compared to sales of $58.0 million and income from operations of $5.8 million during the previous year. At year-end, the company had cash on hand of $22.5 million after the repayment of $4.2 million of debt. This is up $9.4 million from a year ago due to strong cash flow from operations, the sale of the AKAPP business and the AMCO product line. Cash flow from operations was $17.5 million for fiscal 2003 compared to $24.5 last year. Backlog at the end of the year was $16.0 million, up 11.9% from $14.3 million one year ago. OUTLOOK Philippe Lemaitre explained, "Although there have been positive signs that the manufacturing sector is improving, we continue to be cautious in our short-term revenue plans as customers are still hesitant to commit to large scale projects. Also, while we will continue to drive the operational and engineering programs started over the last three years, we will be increasing our investment in sales and marketing beginning in the first quarter of fiscal 2004 to capture worldwide market share. These new initiatives, which will cost about $0.25 per share for the year, will set the stage for incremental growth in the second half of 2004." Lemaitre added, "We currently expect first quarter 2004 revenues to be 3% to 5% higher than last year's first quarter. We expect first half earnings, including the sales and marketing investments, continued restructuring expenses and the sale of the second AMCO product line, to be in the range of $0.20 to $0.24 per share. The second half of the fiscal year should produce earnings of approximately $0.40 per share as our new programs and initiatives gain traction and drive revenue increases. Overall, we anticipate full year 2004 revenue to be 10% to 13% higher than 2003." This press release contains statements that are forward-looking. These statements are based on current expectations that are subject to risks and uncertainties. In particular, such risks include future actions, prospective products, future performance or results of current or anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, general economic and business conditions, competition, and other issues discussed in our Form 10-K and other SEC filings. Conference Call Woodhead Industries, Inc., will host a conference call today, November 14, 2003, at 11:00 am Eastern Standard Time to discuss performance and financial results for the fiscal fourth quarter and full year. To access a live internet webcast of the conference call, visit the Company's website at www.woodhead.com and select the webcast icon. A replay of the conference call will be archived and available on the Company's website following the live event. About Woodhead Industries, Inc. Woodhead Industries, Inc. develops, manufactures and markets electronic and industrial communications products, primarily serving the global automation and control market with connectivity solutions and specialty electrical products. Through its connectivity group, Woodhead provides the industrial automation industry with a single, worldwide source for industrial communications and connectivity solutions. Its product lines, comprised of five recognized industry-leading brands: SST(TM), Brad Harrison(R), mPm(R), RJ Lnxx(R), and applicom(R) make Woodhead the premier supplier of application-specific connectivity solutions. [TABLES TO FOLLOW] EXHIBIT 99.1 WOODHEAD INDUSTRIES, INC. CONSOLIDATED INCOME STATEMENT (Amounts in thousands, except per share data)
QUARTER ENDED TWELVE MONTHS ENDED 9/27/2003 9/28/2002 % CHANGE 9/27/2003 9/28/2002 % CHANGE ------------------------------- ------------------------------- NET SALES $ 44,302 $ 43,376 2.1% $179,038 $ 170,179 5.2% Cost of Sales 27,522 28,474 (3.3%) 112,991 107,770 4.8% --------------------- -------------------- GROSS PROFIT 16,780 14,902 12.6% 66,047 62,409 5.8% % of Net Sales 37.9% 34.4% 36.9% 36.7% OPERATING EXPENSES 13,536 12,907 4.9% 54,790 53,451 2.5% RESTRUCTURING AND OTHER RELATED CHARGES 910 - 2,065 1,015 --------------------- -------------------- TOTAL OPERATING EXPENSE 14,446 12,907 11.9% 56,855 54,466 4.4% % of Net Sales 32.6% 29.8% 31.8% 32.0% INCOME FROM OPERATIONS 2,334 1,995 17.0% 9,192 7,943 15.7% --------------------- -------------------- % of Net Sales 5.3% 4.6% 5.1% 4.7% OTHER EXPENSES Interest Expense 560 590 (5.1%) 2,862 2,895 (1.1%) Other (Income)/Expenses, Net (291) (328) (2,901) (75) --------------------- -------------------- OTHER EXPENSES 269 262 2.7% (39) 2,820 --------------------- -------------------- INCOME BEFORE TAXES AND DISCONTINUED OPERATIONS 2,065 1,733 19.2% 9,231 5,123 80.2% % of Net Sales 4.7% 4.0% 5.2% 3.0% PROVISION FOR INCOME TAXES 1,227 1,002 22.5% 3,392 2,578 31.6% --------------------- -------------------- INCOME FROM CONTINUING OPERATIONS $ 838 $ 731 14.6% $ 5,839 $ 2,545 129.4% % of Net Sales 1.9% 1.7% 3.3% 1.5% --------------------- -------------------- DISCONTINUED OPERATIONS Income From Discontinued AKAPP Operations (Including Gain on Disposal of $725) - - 733 - Income Tax Expense - - 3 - --------------------- -------------------- INCOME FROM DISCONTINUED OPERATIONS - - 730 - --------------------- -------------------- NET INCOME $ 838 $ 731 14.6% $ 6,569 $ 2,545 158.1% % of Net Sales 1.9% 1.7% 3.7% 1.5% ===================== ==================== EARNINGS PER SHARE, DILUTED From continuing operations $ 0.07 $ 0.06 16.7% $ 0.49 $ 0.22 122.7% As reported $ 0.07 $ 0.06 16.7% $ 0.55 $ 0.22 150.0% WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING Diluted 12,085 11,920 1.4% 11,930 11,829 0.9% ===================== ==================== DIVIDENDS PER SHARE $ 0.09 $ 0.09 0.0% $ 0.36 $ 0.36 0.0% ===================== ==================== SEGMENT DATA QUARTER ENDED: TWELVE MONTHS ENDED 9/27/2003 9/28/2002 % CHANGE 9/27/2003 9/28/2002 % CHANGE ------------------------------- ------------------------------- NET SALES CONNECTIVITY $ 32,060 $ 28,386 12.9% $126,315 $ 112,171 12.6% ELECTRICAL 12,242 14,990 (18.3%) 52,723 58,008 (9.1%) --------------------- -------------------- TOTAL $ 44,302 $ 43,376 2.1% $179,038 $ 170,179 5.2% ===================== ==================== INCOME FROM OPERATIONS CONNECTIVITY $ 1,900 $ 81 $ 5,098 $ 2,901 75.7% ELECTRICAL 1,267 2,029 (37.6%) 4,772 5,769 (17.3%) CORPORATE AND OTHER (833) (115) (678) (727) --------------------- -------------------- TOTAL $ 2,334 $ 1,995 17.0% $ 9,192 $ 7,943 15.7% ===================== ====================
WOODHEAD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEET (Amounts in thousands)
ASSETS 9/27/2003 9/28/2002 --------------------------- CURRENT ASSETS Cash and short-term investments $ 22,547 $ 13,152 Accounts receivable 31,017 30,770 Inventories 13,020 14,825 Prepaid expenses 4,816 2,870 Refundable income taxes 1,625 1,971 Deferred income taxes 2,403 3,119 ------------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 75,428 66,707 Property, plant and equipment, net 60,391 64,053 Goodwill, net 32,290 28,757 Deferred income taxes 3,018 3,339 Other Assets 1,322 3,795 ------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 172,449 $ 166,651 ------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities Accounts payable $ 8,343 $ 9,119 Accrued expenses 13,586 12,785 Income taxes payable 539 1,640 Current portion of long-term debt 5,700 4,200 ------------------------------------------------------------------------------------------------------------ TOTAL CURRENT LIABILITIES 28,168 27,744 Long-term debt 30,900 36,600 Deferred income taxes 2,496 1,771 Other Liabilities 2,435 3,191 ------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 63,999 69,306 STOCKHOLDERS' INVESTMENT: Common stock at par (shares issued: 12,011, at 9/27/03, 11,817 at 9/28/02) 12,011 11,817 Additional paid-in capital 18,578 16,526 Deferred stock compensation (773) (218) Accumulated other comprehensive income / (loss) 2,832 (4,292) Retained earnings 75,802 73,512 ------------------------------------------------------------------------------------------------------------ Total stockholders' investment 108,450 97,345 ------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 172,449 $ 166,651 ------------------------------------------------------------------------------------------------------------