-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FEU9iDtUYqyz6iA58RMEkY1zPy5qtJUluzrdYvkGwHdcNCSwuNj0oeZnfoMH+Eok BehCDiUBtLQr4RdTlok07A== 0001275287-05-002242.txt : 20050616 0001275287-05-002242.hdr.sgml : 20050615 20050616161013 ACCESSION NUMBER: 0001275287-05-002242 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050616 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050616 DATE AS OF CHANGE: 20050616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRUM CONTROL INC CENTRAL INDEX KEY: 0000092769 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 251196447 STATE OF INCORPORATION: PA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08796 FILM NUMBER: 05900468 BUSINESS ADDRESS: STREET 1: 8031 AVONIA ROAD CITY: FAIRVIEW STATE: PA ZIP: 16415 BUSINESS PHONE: 8144744310 MAIL ADDRESS: STREET 1: 8031 AVONIA ROAD CITY: FAIRVIEW STATE: PA ZIP: 16415 8-K 1 sp2936.txt ================================================================================ 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) June 16, 2005 SPECTRUM CONTROL, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Pennsylvania 0-8796 25-1196447 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) 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): [ ] 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 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 June 16, 2005, Spectrum Control, Inc. issued an earnings release announcing its financial results for the second quarter ended May 31, 2005. A copy of the earnings release is attached as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits (c) Exhibits - 99.1 Press Release of Spectrum Control, Inc. dated June 16, 2005 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: June 16, 2005 By: /s/ John P. Freeman ------------------------------ (Signature) Senior Vice President and Chief Financial Officer EX-99.1 2 sp2936ex991.txt Exhibit 99.1 SPECTRUM CONTROL REPORTS SECOND QUARTER PROFIT Revenues Increase 20% from a Year Ago Strong Growth in RF and Microwave Components and Systems Spectrum Control, Inc. (SPEC) (Numbers in Thousands, Except Per Share Data) 2nd Quarter 2nd Quarter Ended Ended 5/31/2005 YTD 5/31/2004 YTD ------------ ------------ ------------ ------------ Sales $ 25,882 $ 47,024 $ 21,484 $ 38,609 Net Income $ 1,322 $ 1,929 $ 1,528 $ 2,140 Average Shares 13,161 13,158 13,176 13,163 EPS $ 0.10 $ 0.15 $ 0.12 $ 0.16 Fairview, PA, June 16, 2005 ----- Spectrum Control, Inc. (NASDAQ: SPEC), a leading designer and manufacturer of electronic control products and systems, today reported results for the second quarter ended May 31, 2005. For the second quarter of fiscal 2005, the Company reported net income of $1,322,000 or 10 cents per share on sales of $25,882,000, compared to net income of $1,528,000 or 12 cents per share on sales of $21,484,000 for the same period last year. For the first half of fiscal 2005, the Company had net income of $1,929,000 or 15 cents per share on sales of $47,024,000. For the comparable period of 2004, the Company had net income of $2,140,000 or 16 cents per share on sales of $38,609,000. Dick Southworth, the Company's President and Chief Executive Officer, commented, "During the second quarter of fiscal 2005, our sales increased by $4.4 million or 20.5% from the same period last year. In addition to $6.0 million of shipments being generated by the impact of our two recent acquisitions (Amplifonix, Inc. in February 2005 and the Components Business Unit of REMEC, Inc. in October 2004), sales of RF and microwave components and systems grew by approximately $600,000 from a year ago. Demand for these products in military/aerospace applications remains strong. Sales of our power management systems increased in the second quarter of 2005 by $1.4 million compared to the same period last year. These advanced systems (which we developed internally and began introducing to the marketplace during the last few years) are primarily used in infrastructure equipment for telecommunications, computer networks, and certain military applications. Shipments of our signal and power integrity products were down $3.6 million from a year ago, reflecting poor market conditions throughout the passive electronic components industry. The strength of our RF and Microwave Components and Systems Business, as well as our Power Management Systems Business, reaffirms our strategic plan of product expansion and market diversification. Accordingly, we are very confident that our Company is well-positioned for continued sales growth and greater profitability". Quarter Highlights o Second quarter 2005 sales were up $4.7 million or 22.4% from the first quarter of 2005, and net income was up $715,000 or nearly 118.0% from the current year first quarter. o In the second quarter of 2005, our gross margin was 25.3% of sales compared to 30.5% of sales for the same quarter last year. This decline in gross margin percentage primarily reflects additional manufacturing overhead costs from: the ongoing integration and consolidation of our recent acquisitions; poor absorption of fixed manufacturing overhead resulting from the decline in revenue of our signal and power integrity components business; and expenses incurred to support the current and planned future growth of our RF and microwave components and systems business. While these factors are negatively impacting our current gross margins, as we further integrate our recent business acquisitions, we expect to improve operating efficiencies and reduce costs through better manufacturing capacity utilization. o Despite additional working capital requirements, we generated $1.1 million of net operating cash flow during the first half of fiscal 2005. After expending $10.4 million of cash in February 2005 for the acquisition of Amplifonix, our cash and cash equivalents were $6.7 million at May 31, 2005, our current ratio was 5.68 to 1.00, our total borrowed funds were only $1.7 million, and our total debt to equity was 0.17 to 1.00. o Total customer orders received in the second quarter of 2005 amounted to $27.1 million, an increase of $5.3 million or approximately 24.0% from both a year ago and the first quarter of fiscal 2005. o The book-to-bill ratio in the second quarter of 2005 was 1.05 to 1.00. BUSINESS SEGMENT DISCUSSION Our operations are currently conducted in three reportable segments: signal and power integrity components; RF and microwave components and systems; and power management systems. Our Signal and Power Integrity Components Business designs and manufactures a broad range of products including low pass electromagnetic interference ("EMI") filters, filter plates, filtered connectors, specialty ceramic capacitors, power entry modules, power line filters, and our recently developed motor line feed thru ("MLFT") filters. Sales of signal and power integrity components for the second quarter and first half of fiscal 2005 were $13.6 million and $25.8 million, respectively, compared to the second quarter and first half of fiscal 2004 sales of $17.2 million and $31.9 million, respectively. In fiscal 2005, product sales for this business segment have been negatively impacted by the overall weak market conditions throughout the passive electronic components industry. Although these market conditions have recently demonstrated some signs of improvement, the current business environment for passive components remains unpredictable. Our RF and Microwave Components and Systems Business (formerly known as our Frequency Control Products Group) designs and manufactures ceramic resonators and bandpass filters, ceramic patch antennas, duplexers, lumped element filters, cavity filters, waveguides, amplifiers, frequency mixers, oscillators, synthesizers, multiple channel filter banks, and related products and systems. Sales for this business segment were $10.2 million in the current quarter, up $6.6 million from the same period last year. Of this $6.6 million increase, $6.0 million was generated by the impact of our two recent acquisitions. Although our RF and microwave components and systems are used in numerous industries and applications, sales in the military/aerospace sector have been particularly strong throughout fiscal 2005. Our Power Management Systems Business designs and manufactures circuit breaker panels, custom power outlet strips, and our Smart Start power management systems. Sales of these products amounted to $2.1 million in the second quarter of 2005, compared to $699,000 in the second quarter of 2004. For the first half of fiscal 2005, sales of our power management systems were $3.5 million, up $2.2 million from a year ago. These advanced systems are used in various infrastructure equipment including wireless base stations, optical networks, IT hubs, data centers, and certain military applications. Since the introduction of these products a few years ago, we have begun to gain customer recognition and market share. CURRENT BUSINESS OUTLOOK Mr. Southworth stated, "Overall market conditions remain unpredictable, with extremely short lead times and limited visibility from customers. Based on our current assessment of customer demand and our existing customer order backlog, we presently expect our 2005 third quarter sales to be $26.0 to $26.5 million. If this shipment level is attained in the third quarter, we would expect our profitability to be approximately 10 to 11 cents per share. For the third quarter last year, we had total consolidated sales of $20.2 million and earnings of eight cents per share. On a long-term basis, we firmly believe that the Company is strategically positioned for dynamic growth and enhanced shareholder value," he concluded. 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 second quarter results on Thursday, June 16, 2005, 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 June 17, 2005 at 877-660-6853, access account 286, conference 156826, or for 30 days over the Internet at the Company's website. ABOUT SPECTRUM CONTROL Spectrum Control, Inc. designs and manufacturers a wide range of components and systems used to condition, regulate, transmit, receive, or govern electronic performance. Although Spectrum Control products are used in many industries worldwide, the Company's largest markets are telecommunications equipment and military/aerospace. 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 SPECTRUM CONTROL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollar Amounts in Thousands) May 31, November 30, 2005 2004 ------------ ------------ ASSETS Current assets Cash and cash equivalents $ 6,670 $ 17,535 Accounts receivable, net 17,479 15,484 Inventories 16,918 15,372 Prepaid expenses and other current assets 2,962 2,471 ------------ ------------ Total current assets 44,029 50,862 Property, plant and equipment, net 17,955 15,966 Noncurrent assets Goodwill 26,702 22,019 Other 4,036 2,502 ------------ ------------ Total assets $ 92,722 $ 91,349 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 4,726 $ 4,238 Accrued liabilities 2,641 3,943 Current portion of long-term debt 390 390 ------------ ------------ Total current liabilities 7,757 8,571 Long-term debt 1,346 1,716 Deferred income taxes 4,632 4,220 Stockholders' equity 78,987 76,842 ------------ ------------ Total liabilities and stockholders' equity $ 92,722 $ 91,349 ============ ============ SPECTRUM CONTROL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Amounts in Thousands Except Per Share Data)
Three Months Ended Six Months Ended May 31, May 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Net sales $ 25,882 $ 21,484 $ 47,024 $ 38,609 Cost of products sold 19,340 14,933 35,559 27,658 ---------- ---------- ---------- ---------- Gross margin 6,542 6,551 11,465 10,951 Selling, general and administrative expense 4,442 4,100 8,399 7,536 ---------- ---------- ---------- ---------- Income from operations 2,100 2,451 3,066 3,415 Other income (expense) Interest expense (38) (28) (76) (57) Other income and expense, net 111 45 182 97 ---------- ---------- ---------- ---------- 73 17 106 40 ---------- ---------- ---------- ---------- Income before provision for income taxes 2,173 2,468 3,172 3,455 Provision for income taxes 851 940 1,243 1,315 ---------- ---------- ---------- ---------- Net income $ 1,322 $ 1,528 $ 1,929 $ 2,140 ========== ========== ========== ========== Earnings per common share : Basic $ 0.10 $ 0.12 $ 0.15 $ 0.16 ========== ========== ========== ========== Diluted $ 0.10 $ 0.12 $ 0.15 $ 0.16 ========== ========== ========== ========== Average number of common shares outstanding : Basic 13,059 13,013 13,047 12,996 ========== ========== ========== ========== Diluted 13,161 13,176 13,158 13,163 ========== ========== ========== ==========
SPECTRUM CONTROL, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (Unaudited)
Three Months Ended Six Months Ended May 31, May 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Selected Financial Data, as a Percentage of Net Sales : Net sales 100.0% 100.0% 100.0% 100.0% Cost of products sold 74.7 69.5 75.6 71.6 ---------- ---------- ---------- ---------- Gross margin 25.3 30.5 24.4 28.4 Selling, general and administrative expense 17.2 19.1 17.9 19.5 ---------- ---------- ---------- ---------- Income from operations 8.1 11.4 6.5 8.9 Other income (expense) Interest expense (0.1) (0.1) (0.2) (0.2) Other income and expense, net 0.4 0.2 0.4 0.2 ---------- ---------- ---------- ---------- Income before provision for income taxes 8.4 11.5 6.7 8.9 Provision for income taxes 3.3 4.4 2.6 3.4 ---------- ---------- ---------- ---------- Net income 5.1% 7.1% 4.1% 5.5% ========== ========== ========== ========== Selected Operating Segment Data : (Dollar Amounts in Thousands) Signal and power integrity components : Customer orders received $ 13,210 $ 17,871 $ 24,675 $ 32,117 Net sales 13,589 17,189 25,830 31,854 RF and microwave components and systems : Customer orders received 11,782 3,417 19,920 5,591 Net sales 10,159 3,596 17,702 5,440 Power management systems : Customer orders received 2,131 583 4,302 1,378 Net sales 2,134 699 3,492 1,315
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