8-K

EFFECTIVE AUGUST 23RD, 2004

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) November 30, 2009

Spectrum Control, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-8796	25-1196447
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
8031 Avonia Road;  Fairview, Pennsylvania		16415
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (814) 474-2207

(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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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

The following information is being furnished pursuant to Item 2.02.  This information, including the exhibits attached hereto, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except as may be expressly set forth by specific reference in such a filing.

On January 11, 2010, Spectrum Control, Inc. issued an earnings release announcing its financial results for the fourth quarter and fiscal year ended November 30, 2009.  A copy of the earnings release is attached as Exhibit 99.1.

Item 9.01        Financial Statements and Exhibits

 (d)   Exhibits – 99.1 Press Release of Spectrum Control, Inc. dated January 11, 2010

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 hereto duly authorized.

SPECTRUM CONTROL, INC.

(Registrant)

Date:  January 11, 2010	By:	/s/ John P. Freeman
		(Signature)
		Senior Vice President
		and Chief Financial Officer

EX-99.1

Spectrum Control Reports Fourth Quarter and Annual Profit

Fourth Quarter Pretax Profits Up 13% From Third Quarter;

Record Annual Operating Cash Flows

Fairview, PA – January 11, 2010 – Spectrum Control, Inc. (NASDAQ: SPEC), a leading designer and manufacturer of custom electronic products and systems, today reported results for the fourth quarter and fiscal year ended November 30, 2009.

For the fourth quarter of fiscal 2009, the Company reported net income of $2.1 million or 17 cents per share on sales of $34.1 million, compared to net income of $2.5 million or 20 cents per share on sales of $33.8 million for the same period last year.

For the fiscal year 2009, the Company had net income of $8.6 million or 67 cents per diluted share on sales of $132.3 million. In fiscal year 2008, the Company had net income of $8.9 million or 67 cents per diluted share on sales of $130.7 million.

Dick Southworth, the Company’s President and Chief Executive Officer, commented, “We are very pleased to report fourth quarter financial results that are consistent with our previous guidance, with current quarter revenues up $2.6 million or 8% and pretax profits up 13% from the third quarter of this year. Our military and defense business continues to grow, generating $20.5 million or 60% of our overall revenues during the fourth quarter, an increase of $3.4 million or 20% from the same period a year ago. We firmly believe that we are well-positioned for significant growth and enhanced shareholder value, as applications for our products in military and defense remain strong and the commercial markets begin to rebound.”

Financial Highlights

Key Acquisition

On November 30, 2009, we acquired substantially all of the assets and assumed certain liabilities of Micro Networks Corporation (“Micro Networks”), a subsidiary of Integrated Device Technology, Inc. (NASDAQ: IDTI). Micro Networks, with operations in Worcester, MA and Auburn, NY designs and manufactures high-performance data conversion products, custom modules, and a broad line of filters, oscillators, and delay lines based on surface acoustic wave (“SAW”) technology. This acquisition reflects our continued commitment to product and technology expansion. Micro Networks’ products include integrated microwave assemblies with hybrid circuit design, precision bulk acoustic wave (“BAW”) delay lines and synthesizers. These complex products and related SAW technology are a natural complement and extension to our Microwave Components and Systems Business. Substantially all of Micro Network’s products are used in defense and aerospace applications, including radar systems, missile defense systems, and secure communications. Recent annual revenues of Micro Networks have approximated $14 million. The aggregate cash purchase price for Micro Networks was $12.9 million.

SPECTRUM CONTROL, INC. 8031 Avonia Road, Fairview, PA 16415, Phone: (814) 474-2207, Fax: (814) 474-2208

Improved Gross Margin

In the current quarter our gross margin was $9.4 million or 27.6% of sales, compared to $7.7 million or 24.6% of sales in the preceding quarter. Despite the global recession and its impact on virtually all commercial markets, we have strategically maintained certain production capacity and infrastructure to enable us to quickly and efficiently respond to our customers. Accordingly, as sales volumes begin to grow, we do not need to add any significant production capacity, allowing us to leverage our fixed manufacturing overhead and enhance our operating margins.

Record Annual Operating Cash Flow

In the current quarter, net cash provided by operating activities amounted to $5.3 million, an increase of $2.9 million from the comparable quarter of last year. For the fiscal year ended November 30, 2009, net cash provided by operating activities was over $19 million. This record level of operating cash flow reflects improved accounts receivable turnover rates and other reductions in working capital requirements. As a result of this strong cash generation in fiscal year 2009, we were able to expend nearly $4 million in capital equipment additions, repay $3.5 million in bank indebtedness, as well as support the $12.9 million aggregate cash purchase price for Micro Networks. With our cash flow capabilities, a borrowed funds-to-equity ratio of only 0.07 to 1.00, and a book value of $8.96 per share, we believe our liquidity and financial position provide a solid foundation for future growth.

Current Business Outlook

Mr. Southworth added, “With our acquisition of Micro Networks, and our current assessment of business conditions and customer demand, we presently anticipate our 2010 first quarter sales to be $38.0 to $39.0 million. Based on this shipment level, and as we integrate the Micro Networks business, we expect our 2010 first quarter earnings to be 19 to 20 cents per diluted share. If this operating performance is achieved, it would represent an increase of 15% to 18% in sales and 12% to 18% in earnings per diluted share from the comparable period of a year ago. Beyond the first quarter, we remain very optimistic about fiscal year 2010 and expect to build upon our first quarter performance.”

Forward-Looking Information

This press release contains statements that are forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors and risks discussed from time to time in the Company’s Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

Simultaneous Webcast and Teleconference Replay

Spectrum Control, Inc. will host a teleconference to discuss its fourth quarter and fiscal 2009 year-end results on Monday, January 11, 2010, at 4:45 p.m., Eastern Time. Internet users will be able to access a simultaneous webcast of the teleconference at www.spectrumcontrol.com or www.vcall.com. A taped replay of the call will be available through January 12, 2010, at 877-660-6853, access account 286, conference 340464, or for 30 days over the Internet at the Company’s website.

About Spectrum Control

Spectrum Control, Inc. is a leader in the design, development and manufacture of custom electronic products and systems for the defense, aerospace, communications, and medical industries worldwide. For more information about Spectrum Control and its products, please visit the Company’s website at www.spectrumcontrol.com.

Corporate Headquarters	Investor Relations
8031 Avonia Road	John P. Freeman, Senior Vice President
Fairview, PA 16415	and Chief Financial Officer
Phone: 814/474-2207	Spectrum Control, Inc.
Fax: 814/474-2208	Phone: 814/474-4310

Tables follow

Spectrum Control, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

( Unaudited )

	November 30,		November 30,
( Dollar Amounts in Thousands )	2009		2008
Assets
Current assets
Cash and cash equivalents	$	6,090	$	5,397
Accounts receivable, net		22,623		24,043
Inventories, net		34,223		30,638
Deferred income taxes		1,425		1,684
Prepaid expenses and other current assets		2,434		2,307
Total current assets		66,795		64,069
Property, plant and equipment, net		26,383		27,250
Other assets
Goodwill		44,995		36,811
Other		5,556		6,654
Total assets	$	143,729	$	134,784
Liabilities and Stockholders' Equity
Current liabilities
Short-term debt	$	7,000	$	10,000
Accounts payable		7,124		6,541
Income taxes payable		-		36
Accrued liabilities		5,366		4,415
Current portion of long-term debt		65		487
Total current liabilities		19,555		21,479
Long-term debt		480		545
Other liabilities		728		978
Deferred income taxes		9,542		8,491
Stockholders' equity		113,424		103,291
Total liabilities and stockholders' equity	$	143,729	$	134,784

Spectrum Control, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

( Unaudited )

(Amounts in Thousands, Except Per Share Data)

	For the Three Months Ended						For the Year Ended
	November 30,						November 30,
	2009			2008			2009			2008
Net sales	$	34,089		$	33,842		$	132,306		$	130,694
Cost of products sold		24,684			24,603			97,946			97,932
Gross margin		9,405			9,239			34,360			32,762
Selling, general and administrative expense		5,836			5,603			20,756			19,418
Income from operations		3,569			3,636			13,604			13,344
Other income ( expense ) :
Interest expense		16			(125	)		(190	)		(369	)
Other income and expense, net		(66	)		233			(26	)		505
		(50	)		108			(216	)		136
Income before provision for income taxes		3,519			3,744			13,388			13,480
Provision for income taxes		1,374			1,212			4,828			4,629
Net income	$	2,145		$	2,532		$	8,560		$	8,851
Earnings per common share :
Basic	$	0.17		$	0.20		$	0.68		$	0.68
Diluted	$	0.17		$	0.20		$	0.67		$	0.67
Average number of common shares outstanding :
Basic		12,660			12,699			12,604			13,069
Diluted		12,840			12,699			12,739			13,189

Spectrum Control, Inc. and Subsidiaries

Selected Financial Data

( Unaudited )

	For the Three Months Ended						For the Year Ended
	November 30,						November 30,
	2009			2008			2009			2008
Selected Financial Data, as a Percentage of Net Sales:
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		72.4			72.7			74.0			74.9
Gross margin		27.6			27.3			26.0			25.1
Selling, general and administrative expense		17.1			16.6			15.7			14.9
Income from operations		10.5			10.7			10.3			10.2
Other income ( expense ) :
Interest expense		-			(0.3	)		(0.2	)		(0.3	)
Other income and expense, net		(0.2	)		0.7			-			0.4
Income before provision for income taxes		10.3			11.1			10.1			10.3
Provision for income taxes		4.0			3.6			3.6			3.5
Net income		6.3	%		7.5	%		6.5	%		6.8	%
Selected Operating Segment Data:
( Dollar Amounts in Thousands )
Advanced specialty products:
Customer orders received	$	11,216		$	11,607		$	49,070		$	55,908
Net sales		10,877			12,020			42,001			52,060
Microwave components and systems:
Customer orders received		12,973			14,003			56,503			47,485
Net sales		15,332			13,712			60,069			45,942
Power management systems:
Customer orders received		4,591			2,722			10,822			10,534
Net sales		3,254			2,148			10,268			9,879
Sensors and controls:
Customer orders received		3,447			7,100			15,789			26,643
Net sales		4,626			5,962			19,968			22,813