EX-99.1 2 woodhead045577_ex99-1.txt EXHIBIT 99.1 WOODHEAD INDUSTRIES REPORTS STRONG 2004 FISCAL FOURTH QUARTER AND FULL YEAR RESULTS Net Income Up 307% in the Fiscal Fourth Quarter; Up 22% for the Fiscal Year DEERFIELD, Ill.--November 19, 2004 -- Woodhead Industries, Inc., (Nasdaq: WDHD) today announced financial results for the fourth quarter and full fiscal year ended October 2, 2004. Highlights include: >> Revenue increased 19.9% for the quarter and 12.7% for the year >> Connectivity Segment sales increased 23.8% for the quarter and 16.4% for the year >> Income from operations increased 22.4% for the quarter and 7.6% for the year >> Gross margin for the fiscal year improved to 37.7%, up from 36.9% in the prior year >> Fourth quarter revenues were in line with guidance and net income exceeded expectations due to lower income taxes and exchange rate fluctuations Philippe Lemaitre, Woodhead Industries' Chairman and Chief Executive Officer, commented, "We are pleased to report a strong finish to fiscal year 2004. Revenues grew at a healthy rate in both our Connectivity and Electrical segments. On the bottom-line, our fourth quarter profitability was significantly enhanced from lower taxes and the strengthening of foreign currencies. We feel we are well positioned to leverage even higher revenues as we head into our 2005 fiscal year and to deliver stronger financial results for our shareholders." FOURTH QUARTER RESULTS Revenues for the 2004 fiscal fourth quarter were $53.1 million, up 19.9% compared to $44.3 million in the same quarter last year. Income from operations for the quarter was $2.9 million, up 22.4% over the fiscal fourth quarter of 2003. Net income for the quarter was $3.4 million, or $0.28 per share, compared to $838 thousand, or $0.07 per share, last year. In the 2004 fourth quarter, lower taxes improved net income by $0.07 per share and foreign exchange rate fluctuations, mostly the strengthening of the Canadian dollar, positively affected net income by $0.09 per share. In the Connectivity Segment, fourth quarter sales increased 23.8% to $39.7 million, versus $32.1 million in the same period last year. Income from operations was $2.0 million, or 5.6% higher than last year. Low operating leverage this quarter was expected and reflects the increased costs associated with the incremental investment in sales, marketing and engineering initiatives to generate future growth. Fourth quarter sales in the Electrical Segment were $13.4 million compared to $12.2 million during the same period in 2003. Income from operations was $1.5 million versus $1.3 million in the fourth quarter of 2003. Gross margin in the fourth quarter was 37.7%, a slight decrease from 37.9% last year. Improvement from higher plant utilization was offset by increases in commodity prices and inefficiencies related to the integration of Aero-Motive product into Juarez, Mexico. Robert Fisher, Vice President Finance and Chief Financial Officer, stated, "True to our 2004 plan, we delivered strong revenue growth in all regions of the world this quarter. In local currencies, Asia was up 80%, Europe was up 22%, and North America was up 10% despite the sale of two Aero-Motive product lines. Our growth initiatives first announced last November are proving successful and will provide even greater value going forward. " He also commented, "Gross margins and operating margins should improve as revenue continues to increase and our efficiencies get back on track." FISCAL 2004 RESULTS Revenues for the 2004 fiscal year were $201.7 million, up 12.7% compared to $179.0 million in 2003. Foreign exchange rate changes were responsible for 5 points of the increase in revenues. Income from operations increased to $9.9 million from $9.2 million last year. For the full year, net income was $8.0 million, or $0.66 per share, up from $6.6 million, or $0.55 per share last year. During the 2004 and 2003 fiscal years there were several unusual items that impacted the Company's earnings. These items are detailed below: Impact On Earnings Per Share ---------------------------- 2003 2004 ---- ---- Miscellaneous Income (Foreign Exchange) $ 0.18 $ 0.08 Income Taxes and Mexican VAT Taxes (0.06) 0.08 Sale of AKAPP subsidiary 0.06 -- Aero-Motive Restructuring (0.11) (0.06) Aero-Motive Product Line Sales 0.06 0.10 Change in Retiree Medical 0.08 0.04 Connectivity Segment sales were $147.0 million in fiscal 2004 versus $126.3 million in 2003, an increase of 16.4%. Income from operations was $4.6 million, compared to $5.1 million last year, as costs associated with our planned growth investments more than offset the increased gross profit from higher revenues. Electrical Segment sales in fiscal 2004 were $54.7 million and income from operations was $6.6 million compared to sales of $52.7 million and income from operations of $4.8 million during the previous year. Increased revenues and lower restructuring charges accounted for the majority of the income improvement. The company paid off $5.7 million of long-term debt during 2004 and finished the year with cash on hand of $16.7 million. OUTLOOK Philippe Lemaitre explained, "At this time last year, we discussed the implementation of several important sales, marketing, and engineering initiatives that would drive our success in 2004 and beyond. We are happy to report that these initiatives have been effectively implemented and are starting to show their worth. With these initiatives up and running, we are well positioned to realize solid growth going forward. Therefore, our goal in 2005 is to aggressively pursue new product opportunities, while maintaining strong focus on the profitability of our core products." Lemaitre added, "As fiscal 2005 has begun to unfold, we have already seen signs of solid growth in our businesses, including a $3 million increase in backlog since the end of September. With this encouraging backdrop we expect first half 2005 revenues to be 10% to 12% higher than last year's first half, and we expect first half earnings to be in the range of $0.26 to $0.28 per share. We anticipate second half earnings of approximately $0.51 to $0.55 per share. For the full year 2005 we project revenue will be 12% to 15% higher than 2004." 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 19, 2004, 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 web cast of the conference call, visit the Company's website at www.woodhead.com and select the web cast icon. The dial-in phone number is 800-474-8920 or 719-457-2727. The Access code is 883931. If you are unable to participate during the live web cast, a replay of the call will be available at www.woodhead.com. The replay dial-in phone number is 888-203-1112 or 719-457-0820. The Access code is 883931. ABOUT WOODHEAD INDUSTRIES, INC. Woodhead Industries develops, manufactures and markets Network and Electrical Infrastructure products engineered for performance in harsh, demanding, and hazardous industrial environments. We are known in the global industrial market by our recognized brands that include Brad Harrison(R), SST(TM), Daniel Woodhead(R), mPm(R), applicom(R), Aero-Motive(R) and RJ-Lnxx(R). Our expertise ranges from mechanical, electrical, and electronics to communication software products and technologies. Woodhead operates from 21 locations in 10 countries spanning North America, Europe and Asia/Pacific. For further information, contact Robert Fisher, Vice President Finance and CFO, (847) 317-2400, email: rfisher@woodhead.com. [TABLES TO FOLLOW] WOODHEAD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEET (Amounts in thousands)
--------------------------- ASSETS 10/2/2004 9/27/2003 --------------------------- CURRENT ASSETS Cash and short-term investments $ 16,709 $ 22,547 Accounts receivable 35,759 31,017 Inventories 19,106 13,020 Prepaid expenses 4,838 4,816 Refundable income taxes 2,863 2,479 Deferred income taxes 3,043 3,390 ------------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 82,318 77,269 Property, plant and equipment, net 58,289 60,391 Goodwill, net 36,769 32,290 Deferred income taxes 2,427 2,584 Other Assets 1,151 1,322 ------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 180,954 $ 173,856 ------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities Accounts payable $ 9,423 $ 8,343 Accrued expenses 14,427 13,586 Income taxes payable 1,272 1,393 Current portion of long-term debt 5,700 5,700 ------------------------------------------------------------------------------------------------------------ TOTAL CURRENT LIABILITIES 30,822 29,022 Long-term debt 25,200 30,900 Deferred income taxes 4,575 3,049 Other liabilities 2,693 2,435 ------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 63,290 65,406 STOCKHOLDERS' INVESTMENT: Common stock at par (shares issued: 12,147 at 10/2/04, 12,011 at 9/27/03) 12,147 12,011 Additional paid-in capital 20,236 18,578 Deferred stock compensation (552) (773) Accumulated other comprehensive income 6,832 2,832 Retained earnings 79,001 75,802 ------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' INVESTMENT 117,664 108,450 ------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 180,954 $ 173,856 ------------------------------------------------------------------------------------------------------------
WOODHEAD INDUSTRIES, INC. CONSOLIDATED INCOME STATEMENT (Amounts in thousands, except per share data)
QUARTER ENDED: TWELVE MONTHS ENDED: --------------------- --------- ---------------------- ---------- 10/2/2004 9/27/2003 % CHANGE 10/2/2004 9/27/2003 % CHANGE --------------------- --------- ---------------------- ---------- NET SALES $ 53,097 $ 44,302 19.9% $201,735 $ 179,038 12.7% Cost of Sales 33,077 27,522 20.2% 125,665 112,991 11.2% --------------------- ---------------------- GROSS PROFIT 20,020 16,780 19.3% 76,070 66,047 15.2% % of Net Sales 37.7% 37.9% 37.7% 36.9% OPERATING EXPENSES 17,275 13,536 27.6% 65,088 54,790 18.8% RESTRUCTURING AND OTHER RELATED CHARGES (112) 910 1,093 2,065 --------------------- ---------------------- TOTAL OPERATING EXPENSE 17,163 14,446 18.8% 66,181 56,855 16.4% % of Net Sales 32.3% 32.6% 32.8% 31.8% INCOME FROM OPERATIONS 2,857 2,334 22.4% 9,889 9,192 7.6% --------------------- ---------------------- % of Net Sales 5.4% 5.3% 4.9% 5.1% OTHER EXPENSES Interest Expense 571 560 2.0% 2,337 2,862 (18.3%) Other (Income)/Expenses, Net (1,283) (291) (2,304) (2,901) --------------------- ---------------------- OTHER (INCOME)/EXPENSES (712) 269 33 (39) INCOME BEFORE TAXES AND DISCONTINUED OPERATIONS 3,569 2,065 72.8% 9,856 9,231 6.8% % of Net Sales 6.7% 4.7% 4.9% 5.2% PROVISION FOR INCOME TAXES 155 1,227 (87.4%) 1,818 3,392 (46.4%) --------------------- ---------------------- INCOME FROM CONTINUING OPERATIONS $ 3,414 $ 838 307.4% $ 8,038 $ 5,839 37.7% % of Net Sales 6.4% 1.9% 4.0% 3.3% --------------------- ---------------------- 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 $ 3,414 $ 838 307.4% $ 8,038 $ 6,569 22.4% % of Net Sales 6.4% 1.9% 4.0% 3.7% ===================== ====================== EARNINGS PER SHARE, DILUTED From continued operations $ 0.28 $ 0.07 300.0% $ 0.66 $ 0.49 34.7% As reported $ 0.28 $ 0.07 300.0% $ 0.66 $ 0.55 20.0% WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING Diluted 12,205 12,085 1.0% 12,202 11,930 2.3% ===================== ====================== DIVIDENDS PER SHARE $ 0.10 $ 0.09 11.1% $ 0.40 $ 0.36 11.1% ===================== ====================== SEGMENT DATA QUARTER ENDED: TWELVE MONTHS ENDED: --------------------- --------- ---------------------- ---------- 10/2/2004 9/27/2003 % CHANGE 10/2/2004 9/27/2003 % CHANGE --------------------- --------- ---------------------- ---------- Net Sales --------- CONNECTIVITY $ 39,693 $ 32,060 23.8% $147,036 $ 126,315 16.4% ELECTRICAL 13,404 12,242 9.5% 54,699 52,723 3.7% --------------------- ---------------------- TOTAL $ 53,097 $ 44,302 19.9% $201,735 $ 179,038 12.7% ===================== ====================== Income From Operations ---------------------- CONNECTIVITY $ 2,007 $ 1,900 5.6% $ 4,575 $ 5,098 (10.3%) ELECTRICAL 1,524 1,267 20.3% 6,551 4,772 37.3% CORPORATE AND OTHER (674) (833) (1,237) (678) --------------------- ---------------------- TOTAL $ 2,857 $ 2,334 22.4% $ 9,889 $ 9,192 7.6% ===================== ======================