WSI Industries Reports Third Quarter Sales & Earnings

  WSI Industries Reports Third Quarter Sales & Earnings

Business Wire

MINNEAPOLIS -- June 18, 2013

WSI Industries, Inc. (Nasdaq: WSCI) today reported sales for its fiscal 2013
third quarter ending May 26, 2013 of $9,169,000 versus the prior year amount
of $9,483,000 or a decrease of 3% over the prior year quarter. Year-to-date
sales for the nine months ended May 26, 2013 totaled $24,931,000, an increase
of 11% versus $22,491,000 in the prior year.

The Company also reported net income of $106,000 or $.04 per diluted share for
the fiscal 2013 third quarter compared to $598,000 or $.21 per diluted share
in the prior year third quarter. Year-to-date income was $593,000 or $.20 per
diluted share versus $874,000 or $.30 per diluted share in the prior year.

Benjamin Rashleger, president and chief executive officer, commented: “This
was a particularly difficult year over year comparison for us. During last
year’s third quarter we were running at nearly full capacity in all of the
markets we serve. Since then we have suffered a reduction in our energy
business which has resulted in volume and production inefficiencies. Also in
our current fiscal 2013 third quarter, we experienced startup costs in new
programs in our recreational vehicle market as well as our new firearms
business.” Rashleger further stated: “While our energy business is down, we
have remained focused on managing our business around our long-term goals of
profitable revenue growth, along with diversification of our customers and
markets, and focusing on building a world-class level of excellence in our
operations. Our recently completed facility expansion and the purchase of
several machines in anticipation of new programs that will ramp up in
production over the coming quarters are examples of this and they are critical
requirements for us to meet our objectives.”

Rashleger continued: “Our business has and will be cyclical in nature.
However, we must drive the business by making decisions that best support our
long-term goal of profitably growing the business, which in turn will drive
increasing shareholder return. We are very confident in the potential that
exists for WSI and are excited about our potential looking forward. In the
coming year we expect new recreational products programs, in which we are
currently making investments, to reach full production. We also anticipate
that our energy market will begin to show signs of recovery and refill our
available capacity. Our new firearms program, which is a new customer and
market for WSI, should start to provide revenue over the coming year. And
finally, we expect to complete our AS9100 aerospace quality certification in
our fourth quarter of our fiscal 2013, which will enhance our ability to
secure new aerospace business, as well as offer diversification to our
business and the markets we serve.” Rashleger concluded: “Our backlog is
strong and we are confident in the potential for our business in both our
existing programs and the opportunities we are actively pursuing.”

The Company also announced today that its Board of Directors has declared a
quarterly dividend of $.04 per share. The dividend will be payable July 16,
2013 to holders of record on July 2, 2013.

WSI Industries, Inc. is a leading contract manufacturer that specializes in
the machining of complex, high-precision parts for a wide range of industries,
including avionics and aerospace, energy, recreational vehicles, small
engines, marine, firearms, bioscience and the defense markets.

The statements included herein which are not historical or current facts are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Reform Act of 1995. There are certain important factors
which could cause actual results to differ materially from those anticipated
by some of the statements made herein, including the Company’s ability to
retain current programs and obtain additional manufacturing programs, and
other factors detailed in the Company’s filings with the Securities and
Exchange Commission.


WSI INDUSTRIES, INC.
                                                               
CONSOLIDATED STATEMENT OF       (Unaudited)
OPERATIONS
In thousands, except per
share amounts
                                                                     
                                Third quarter ended      Three quarters ended
                                May 26        May 27     May 26      May 27
                                2013          2012       2013        2012
Net Sales                       $9,169        $9,483     $24,931     $22,491
Cost of products sold           8,241        7,561     21,749     18,594  
   Gross margin                 928           1,922      3,182       3,897
                                                                     
Selling and administrative      689           909        2,021       2,310
expense
Interest and other income       (6       )    (1     )   (8      )   (13     )
Interest and other expense      80           80        243        235     
Profit (loss) from operations
   before income taxes          165           934        926         1365
Income taxes (benefit)          59           336       333        491     
Net earnings (loss)             $106         $598      $593       $874    
                                                                     
                                                                     
Basic income (loss) per share   $0.04        $0.21     $0.21      $0.31   
                                                                     
Diluted income (loss) per       $0.04        $0.21     $0.20      $0.30   
share
                                                                     
Weighted average number of      2,889         2,854      2,881       2,847
common shares
                                                                     
Weighted average number of      2,942         2,907      2,943       2,900
diluted shares
                                                                     
                                                                     
                                                                     
CONDENSED BALANCE SHEETS
(Unaudited)
In thousands
                                                                     
                                                         May 26,     May 27,
                                                         2013        2012
Assets:
Total Current Assets                                     $10,779     $10,129
Property, Plant, and                                     13,729      8,467
Equipment, net
Intangible Assets                                        2,388      2,368   
   Total Assets                                          $26,896    $20,964 
                                                                     
Liabilities and Shareholders'
Equity:
Total current liabilities                                $4,342      $4,342
Long-term debt                                           9,236       4,802
Deferred tax liablities                                  1,240       691
Shareholders' equity                                     12,078     11,129  
   Total Liabilities and                                 $26,896    $20,964 
   Shareholders' Equity

Contact:

WSI Industries, Inc.
Benjamin Rashleger (President & CEO), 763-295-9202
or
Paul D. Sheely (CFO), 763-295-9202
 
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