UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): December 15, 2016
SEVCON, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 001-9789 | 04-2985631 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
155 Northboro Road, Southborough, MA 01772 |
(Address of Principal Executive Offices) (Zip Code) |
(508) 281-5510
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On December 15, 2016 the Registrant issued a press release announcing financial results for the twelve months and fourth quarter of fiscal 2016 ended September 30, 2016. A copy of such press release is filed as Exhibit 99.1 hereto and is incorporated by reference herein in its entirety.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits 99.1 Press Release issued by the Registrant on December 15, 2016 is furnished herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SEVCON, INC. | ||
Date: December 15, 2016 | By: | /s/ Raymond J. Thibault Jr. |
Raymond J. Thibault Jr. | ||
Assistant Treasurer | ||
EXHIBIT INDEX
Exhibit |
| Description of Exhibit |
99.1 |
| Press Release issued by the Registrant on December 15, 2016 |
EXHIBIT 99.1
Sevcon Reports Fourth-Quarter and Full-Year Fiscal 2016 Financial Results
Strong On-Road Project Pipeline Continues to Expand; Six Significant Milestones on Major Projects Now Expected in Fiscal 2017
SOUTHBOROUGH, Mass., Dec. 15, 2016 (GLOBE NEWSWIRE) -- Sevcon, Inc. (Nasdaq:SEV) reported financial results for the fourth quarter and fiscal year ended September 30, 2016.
Management Comments
“During fiscal 2016 we expanded our extensive on-road project development pipeline, which we expect to result in significant future production opportunities and substantial revenue and profitability growth,” said Sevcon Chief Executive Officer Matt Boyle. “We have more projects in the pipeline than ever before and we expect that customer enthusiasm for Sevcon’s capabilities will continue. Two of the major projects in our pipeline are expected to go into production in 2017, one in 2019 and one in 2020. One manufacturer of luxury high-performance sports cars has nearly doubled the Sevcon content on its program scheduled for production in 2020. This demonstrates the success of our investments in engineering to provide high quality solutions for some of the world’s largest vehicle manufacturers. In the last fiscal year we added 42 more engineers globally, which represents an 82% increase in engineering headcount alone. We attract and retain engineering talent through successful delivery on projects, and we expect that momentum to continue as a result of our planned investments.
“In the fourth quarter, our on-road business increased by 16% from the same period last year, but we saw continued weakness on the industrial side of the business due to challenging macroeconomic conditions. Our fourth-quarter and annual results were negatively impacted by lower sales in our traditional, industrial market segments and the investments we have made for our future. We believe the payback for these investments, although a few years away, will be substantial.
“Our Bassi acquisition has performed above our expectations for 2016, having reported 26% revenue growth post-acquisition compared with the same eight-month period in the prior year. Adding Bassi’s state-of-the-art battery charging technology and power management capabilities to Sevcon’s advanced control technologies strengthens our ability to deliver the more integrated solutions that our markets and our customers are demanding. The Bassi organization was instrumental in winning the additional vehicle content from the manufacturer of high-performance sports cars referenced above.
“We are bullish about our prospects as we enter 2017. While we expect challenging conditions in traditional, industrial markets this year, we expect to see an uptick in our on-road business as a result of our strong project pipeline. In fact, we now have six milestones to accomplish on our major projects between now and the end of fiscal 2017, with the first targeted for the current quarter. As we look even further out, our project pipeline and the market demand for electrification solutions provides us with significant opportunity for growth,” concluded Boyle.
Fourth Quarter Fiscal 2016 Results Summary
Full Year Fiscal 2016 Results Summary
Fourth Quarter and Full Year Fiscal 2016 Conference Call Details
Sevcon has scheduled a conference call to review its results for the fourth quarter and fiscal 2016, today, December 15, 2016 at 5:00 p.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.
Fourth Quarter and Full Year Fiscal 2016 Income Statement
(In thousands, except per-share data)
Three months ended | Twelve months ended | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||
Revenues | $ | 13,592 | $ | 10,523 | $ | 49,801 | $ | 41,142 | ||||||||
Gross Profit | 3,118 | 3,076 | 16,108 | 15,834 | ||||||||||||
Selling, general and administrative expense and | ||||||||||||||||
research and development expense | (5,920 | ) | (2,399 | ) | (19,907 | ) | (13,940 | ) | ||||||||
Acquisition costs | (110 | ) | - | (1,535 | ) | - | ||||||||||
Operating (loss) income | (2,912 | ) | 677 | (5,334 | ) | 1,894 | ||||||||||
Interest expense | (152 | ) | (22 | ) | (423 | ) | (76 | ) | ||||||||
Interest income | - | 11 | 16 | 31 | ||||||||||||
Foreign currency gain (loss) | 274 | (140 | ) | (213 | ) | 118 | ||||||||||
Other income and expense | 87 | 46 | 87 | (22 | ) | |||||||||||
(Loss) income before income taxes | (2,703 | ) | 572 | (5,867 | ) | 1,945 | ||||||||||
Income taxes (provision) benefit | (138 | ) | (218 | ) | 1 | (406 | ) | |||||||||
Net (loss) income | (2,841 | ) | 354 | (5,866 | ) | 1,539 | ||||||||||
Net (income) loss attributable to non-controlling interest | (78 | ) | 5 | 53 | 36 | |||||||||||
Net (loss) income attributable to Sevcon, Inc. and subsidiaries | (2,919 | ) | 359 | (5,813 | ) | 1,575 | ||||||||||
Series A Preference Share dividends | (106 | ) | (105 | ) | (433 | ) | (440 | ) | ||||||||
Net (loss) income attributable to common stockholders | (3,025 | ) | 254 | (6,246 | ) | 1,135 | ||||||||||
Basic (loss) income per share | $ | (0.59 | ) | $ | 0.08 | $ | (1.51 | ) | $ | 0.33 | ||||||
Diluted (loss) income per share | $ | (0.59 | ) | $ | 0.07 | $ | (1.51 | ) | $ | 0.32 | ||||||
Average shares outstanding – Basic | 5,126 | 3,498 | 4,148 | 3,469 | ||||||||||||
Average shares outstanding – Diluted | 5,126 | 4,958 | 4,148 | 4,929 |
Summarized Balance Sheet Data
(Dollars in thousands)
(Unaudited)
September 30, 2016 | September 30, 2015 | |||||
Cash and cash equivalents | $ | 14,127 | $ | 8,048 | ||
Receivables | 12,193 | 9,462 | ||||
Inventories | 13,666 | 6,790 | ||||
Prepaid expenses and other current assets | 3,602 | 3,581 | ||||
Total current assets | 43,588 | 27,881 | ||||
Intangible assets | 9,185 | - | ||||
Goodwill | 7,794 | 1,435 | ||||
Other long-term assets | 8,406 | 6,300 | ||||
Total assets | $ | 68,973 | $ | 35,616 | ||
Current liabilities | $ | 16,118 | $ | 8,357 | ||
Liability for pension benefits | 11,511 | 10,963 | ||||
Other long-term liabilities | 19,573 | 500 | ||||
Stockholders’ equity | 21,739 | 15,712 | ||||
Non-controlling interest | 32 | 84 | ||||
Total liabilities and stockholders’ equity | $ | 68,973 | $ | 35,616 |
Reconciliation of GAAP to Non-GAAP Measures
(Dollars in thousands)
(Unaudited)
Three months ended | Twelve months ended | |||||||||||||||
(in thousands of dollars) | ||||||||||||||||
September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||
Net (loss) income | $ | (2,841 | ) | 354 | $ | (5,866 | ) | $ | 1,539 | |||||||
Interest expense | 152 | 22 | 423 | 76 | ||||||||||||
Interest income | - | (11 | ) | (16 | ) | (31 | ) | |||||||||
Income taxes | 138 | 218 | (1 | ) | 406 | |||||||||||
Depreciation | 175 | 167 | 732 | 637 | ||||||||||||
Amortization of Bassi intangible assets | 251 | - | 983 | - | ||||||||||||
Amortization of fair value adjustments arising on | ||||||||||||||||
acquisition of Bassi | 227 | - | 484 | - | ||||||||||||
EBITDA | $ | (1,898 | ) | $ | 750 | $ | (3,261 | ) | $ | 2,627 | ||||||
Bassi acquisition costs | 110 | - | 1,535 | - | ||||||||||||
Adjusted EBITDA | $ | (1,788 | ) | $ | 750 | $ | (1,726 | ) | $ | 2,627 | ||||||
Non-GAAP Financial Measures
Sevcon uses EBITDA and adjusted EBITDA, which are non-GAAP financial measures, in this news release. The Company reports these metrics because they are key measures used by its management and Board of Directors to evaluate the ongoing performance of the business and to develop short and long-term operational plans. Accordingly, the Company believes that EBITDA and adjusted EBITDA provide useful information to investors and others in understanding and evaluating Sevcon’s operating results in the same manner as its management and Board of Directors.
Forward-Looking Statements
Statements in this release about the Company’s anticipated financial results and growth, as well as those about the development of its products and markets, including without limitation, statements about the benefits that may be obtained from certain customer contracts, are forward-looking statements that are based on management’s present expectations and involve risks and uncertainties that could cause actual results to differ materially from those projected. Important factors that could cause these statements not to be realized include that we may not be able to successfully integrate and manage the Bassi business, the Bassi acquisition may not further our business strategy or results as we expect, we may not be able to successfully complete the development of the controllers contracted by particular customers, the manufacturers for whom we are performing development work may decide not to commence production or purchase from us, and the markets for the particular vehicles may not develop as the manufacturers hope. Additional important factors are set forth under “Risk Factors” and elsewhere in the Forms 10-K and 10-Q we file with the SEC.
About Sevcon, Inc.
Sevcon is a global supplier of control and power solutions for zero-emission, electric and hybrid vehicles. Its products control on- and off-road vehicle speed and movement, integrate specialized functions, optimize energy consumption and help reduce air pollution. Sevcon’s Bassi Division produces battery chargers for electric vehicles; power management and uninterrupted power source (UPS) systems for industrial, medical and telecom applications; and electronic instrumentation for battery laboratories. The company supplies customers from its operations in the U.S., U.K., France, Germany, Italy, China and the Asia Pacific region, as well as through an international dealer network. Visit www.sevcon.com and www.bassi-srl.eu.
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