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WSI Industries Reports Fourth Quarter and Full Year Results

  WSI Industries Reports Fourth Quarter and Full Year Results

Business Wire

MINNEAPOLIS -- October 15, 2013

WSI Industries, Inc. (Nasdaq:WSCI) today reported annual sales for the fiscal
2013 year ending August 25, 2013 of $33,965,000, an increase of 5% over the
prior year’s sales of $32,456,000. The Company also reported full year net
income of $730,000, or $.25 per diluted share, versus $1,473,000, or $.51 per
diluted share, in fiscal 2012.

For the fiscal fourth quarter, the Company reported sales of $9,034,000 versus
the prior year’s quarter of $9,965,000. The Company’s net income in the fourth
quarter was $137,000, or $.05 per diluted share, versus the prior year’s
quarter of $600,000, or $.21 per diluted share.

Benjamin Rashleger, president and chief executive officer, commented: “With
our recently completed fiscal 2013, we experienced a small increase in sales
of 5% over the prior year while our net income declined year over year. Our
fiscal 2013 third and fourth quarters had particularly difficult year over
year net income comparisons as during the same quarters of fiscal 2012 we were
running at near full capacity. Since then we have invested in the business
with new machines and a building expansion, while simultaneously suffering a
reduction in our energy business, which resulted in volume and production
inefficiencies. Also in our current fiscal 2013 third and fourth quarters, we
were in the ramp-up phase with several new programs which added expense in
startup costs, mostly related to new programs in our recreational powersports
vehicle market as well as our new firearms business.”

Rashleger went on to say: “Fiscal 2013 was a year of investment for the future
of WSI Industries. Among our accomplishments were the following:

  *Completed a state of the art $3.8 million, 47,000 square foot expansion
    that doubled the Company’s manufacturing space.
  *Invested over $4.0 million in equipment in fiscal 2013 on top of a $3.7
    million investment in property and equipment during fiscal 2012.
  *Expanded our relationship with one of our key customers and launched
    several new programs with long term business potential.
  *Paid a cash dividend at an annualized rate of $.16 per share.
  *Entered the final stages of the certification process to receive our
    AS9100 aerospace quality certification.”

Rashleger continued with an outlook to fiscal 2014: “We continue to remain
optimistic about the future for WSI. In the past three years, we have
increased our sales by 80% and invested in a building expansion and new
equipment amounting to $13.3 million. We have positioned ourselves well for
future growth and new opportunities, and we anticipate that we will see
improved results in both sales and net income in fiscal 2014.” Rashleger
concluded: “We are fortunate that one of our key customers has recently
launched a major new product line that includes a key assembly that we
manufacture and will contribute to our anticipated growth. We also expect to
receive our AS9100 certification in fiscal 2014 that will enhance our ability
to secure new aerospace business, which we believe has a strong industry
outlook. While our energy business remains cyclical, we are seeing some signs
of stabilization and are hopeful for better results and recovery in fiscal
2014. And finally, from an operational perspective, we will continue to
emphasize manufacturing execution to maximize efficiencies and provide the
best value for our customer.”

The Company also announced today that its Board of Directors has declared a
quarterly dividend of $.04 per share. The dividend will be payable November
13, 2013 to holders of record on October 30, 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 market.

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
                                                                    
                       Quarter ended                 Year ended
                       August 25,     August 26,     August 25,     August 26,
                       2013           2012           2013           2012
Net Sales              $9,034         $9,965         $ 33,965       $32,456
Cost of products       8,037         8,099         29,785        26,692   
sold
Gross margin           997            1,866          4,180          5,764
                                                                    
Selling and
administrative         674            850            2,696          3,160
expense
Interest and other     (1      )      (1      )      (9       )     (14      )
income
Interest and other     110           80            353           316      
expense
Net Income before      214            937            1,140          2,302
taxes
                                                                    
Income tax expense     77            337           410           829      
Net income             $137          $600          $ 730         $1,473   
                                                                    
                                                                    
Basic earnings per     $0.05         $0.21         $ 0.25        $0.52    
share
                                                                    
Diluted earnings       $0.05         $0.21         $ 0.25        $0.51    
per share
                                                                    
Weighted average
number of common
shares outstanding     2,890          2,856          2,883          2,849
                                                                    
Weighted average
number of common
and
dilutive potential     2,943          2,913          2,943          2,903
common shares
                                                                             

                                                               
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
In thousands
                                                                    
                                                     August 25,     August 26,
                                                     2013           2012
Assets:
Total Current Assets                                 $10,933        $11,391
Property, Plant, and Equipment, Net                  15,299         9,315
Intangible Assets                                    2,387          2,368
Total Assets                                         $28,619        $23,074
                                                                    
Liabilities and Shareholders' Equity:
Total Current Liabilities                            $4,990         $4,974
Long-Term Debt                                       10,169         5,463
Deferred Tax Liabilities                             1,322          970
Shareholders' Equity                                 12,138         11,667
Total Liabilities and Shareholders' Equity           $28,619        $23,074
                                                                    

Contact:

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