Sevcon Reports Financial Results for Second Quarter Fiscal 2014

Sevcon Reports Financial Results for Second Quarter Fiscal 2014

SOUTHBOROUGH, Mass., May 6, 2014 (GLOBE NEWSWIRE) -- Sevcon, Inc. (Nasdaq:SEV)
reported financial results for the second quarter of fiscal 2014 ended March
29, 2014.

Second-Quarter Fiscal 2014 Results Summary

  *Revenues increased to $9.2 million, from $8.0 million in the second
    quarter of fiscal 2013, reflecting improving conditions in the company's
    markets. Foreign currency fluctuations increased reported sales in the
    second fiscal quarter by $331,000, or 4%, mainly due to a weaker U.S.
    Dollar compared to both the British Pound and the Euro than in the prior
    year period.
  *Operating income was $196,000, compared with an operating loss of $463,000
    in the second quarter last year, which included a one-time restructuring
    charge of $605,000. In the second quarter of 2014 there was a foreign
    currency loss of $241,000 compared to a gain of $290,000 in the same
    period last year, mainly due to a weaker U.S. Dollar compared to the Euro
    and the British Pound than in the prior year period. Excluding the impact
    of foreign currency, operating income was $437,000, an increase of
    $900,000 compared to the prior year period.
  *There was an income tax benefit of $23,000 in the second quarter of fiscal
    2014, compared with a benefit of $638,000 in the year-earlier quarter.
  *Net income was $162,000, or $0.05 per diluted share, compared with net
    income of $62,000, or $0.02 per diluted share, a year earlier.

Six Month Fiscal 2014 Result Summary

  *Revenues were $18.2 million, compared with $14.7 million in the first six
    months of fiscal 2013. Foreign currency fluctuations increased reported
    sales in the first half year by $430,000, or 3%, mainly due to a weaker
    U.S. Dollar compared to both the British Pound and the Euro than in the
    prior year period.
  *Operating income was $906,000, compared with an operating loss of $1.6
    million in the first six months of last year, which included the
    aforementioned restructuring charge. In the first half of 2014 there was a
    foreign currency loss of $352,000 compared to a gain of $306,000 in the
    same period last year, mainly due to a weaker U.S. Dollar compared to the
    Euro and the British Pound in the first half of 2014 than in the prior
    year period. Excluding the impact of foreign currency, operating income
    was $1.3 million, an increase of $2.9 million compared to the prior year
    period.
  *There was an income tax charge of $98,000 in the second quarter of fiscal
    2014, compared with an income tax benefit of $746,000 in the prior year
    period.
  *Net income was $650,000, or $0.19 per diluted share, compared with a net
    loss of $1.2 million, or $(0.37) per share, for the first six months of
    fiscal 2013.

Management Comments

"Sevcon's revenue growth in the second quarter was driven by higher product
shipments across the majority of our markets and in all three of the
geographic regions we serve," said President and CEO Matt Boyle. "Sales for
the second quarter increased mid single digits year-over-year in both Europe
and the United States, reflecting demand growth in our traditional off-road
markets, primarily for fork-lift truck and aerial work platform applications.
This was a particularly strong quarter for us in Asia, where we posted high
double-digit sales growth, year-over-year. This growth continued to be driven
primarily by aerial work platform and fork lift truck demand in Japan and
China. In addition, we are beginning to benefit from our new business
initiatives in the on-road sector in Asia, primarily in China."

"The past three months marked Sevcon's fifth consecutive quarter of sequential
revenue growth and our third straight quarter of growth, year-over-year," said
Boyle. "We believe that underlying demand is slowly gathering strength in the
majority of our markets worldwide. Our lead times and order visibility are
continuing to improve, and our portfolio of customer relationships is
expanding. Although we are investing in Sevcon's future growth, our business
continues to benefit from having a low-cost, flexible manufacturing model. As
a result, we believe that Sevcon is positioned to deliver significant margin
leverage on incremental sales as conditions in our markets improve."

"We believe the market will begin a meaningful shift towards larger electric
and hybrid vehicles, and that inflection point may well be closer than many
people think. Our product roadmap has the potential to put us in the sweet
spot for this next phase of EV market growth. Our key strategic challenge is
scaling the business to capture this opportunity on a timely basis, which we
may accomplish organically or through acquisitions of other businesses, or
both. Meeting this challenge means that we will need a stronger balance sheet
to fuel accelerated growth. We are considering raising equity capital by means
of a rights offering or other approach, and we are developing a capital
allocation and investment strategy that will help us to achieve our goals,"
concluded Boyle.

Second-Quarter Fiscal 2014 Conference Call Details

Sevcon has scheduled a conference call to review its results for the second
quarter of fiscal 2014 tomorrow, May 7, 2014 at 9:00 a.m. ET. Those who wish
to listen to the conference call webcast should visit the investor relations
section of the company's website at www.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.

Second Quarter Fiscal 2014 Financial Highlights
(In thousands except per-share data)
                            Three months ended  Six months ended
                            (Unaudited)       (Unaudited)
                            March 29, March 30, March 29,      March 30,
                            2014      2013      2014           2013
                                                            
Net sales                    $9,170    $8,017    $18,219        $14,657
                                                            
Operating income (loss)     196       (463)     906            (1,648)
                                                            
Income (loss) before income  139       (576)     748            (1,986)
taxes
                                                            
Net income (loss)           162       $62     650            $(1,240)
                                                            
Basic income (loss) per      $0.05   $0.02   $0.19        $(0.37)
share
                                                            
Diluted income (loss) per    $0.05   $0.02   $0.19        $(0.37)
share
                                                            
Average shares outstanding   3,401     3,363     3,388          3,351
                                                            
Summarized Balance Sheet Data
                                                            
                                              (in thousands of dollars)
                                              March 29, 2014 September 30,
                                                                2013
                                                                (derived from
                                              (unaudited)    audited
                                                                statements)
                                                            
Cash and cash equivalents                      $1,450         $2,062
Receivables                                    7,721          7,103
Inventories                                    5,965          5,723
Prepaid expenses and other                     2,085          1,862
current assets
Total current assets                           17,221         16,750
Long-term assets                               6,921          6,610
Total assets                                   $24,142        $23,360
                                                            
Current liabilities                            $6,069         $6,060
Liability for pension                          8,255          8,354
benefits
Other long-term liabilities                    1,704          1,728
Stockholders' equity                           8,114          7,218
Total liabilities and                          $24,142        $23,360
stockholders' equity

About Sevcon, Inc.

Sevcon is a world leader in the design and manufacture of microprocessor based
controls for zero emission electric and hybrid vehicles. The controls are used
to vary the speed and movement of vehicles, to integrate specialized functions
and to optimize the energy consumption of the vehicle's power source. The
Company supplies customers throughout the world from its operations in the
USA, the U.K., France and the Asia Pacific region and through an international
dealer network. Sevcon's customers are manufacturers of on and off-road
vehicles including cars, trucks, buses, motorcycles, fork lift trucks, aerial
lifts, mining vehicles, airport tractors, sweepers and other electrically
powered vehicles. For more information visit www.sevcon.com.

Forward-Looking Statements

Statements in this release about Sevcon's future financial results are
forward-looking statements subject to risks and uncertainties that could cause
actual results to differ materially from those we anticipate. In particular:
capital markets are cyclical and weakness in the United States and
international economies may harm our business; global demand for electric
vehicles incorporating our products may not grow as much as we expect; our
customers' products may not be as successful as those of other entrants in the
electric vehicle market who are supplied by our competitors; we may not be
able to attract and retain the level of high quality engineering staff that we
need to develop the new and improved products we need to be successful; we are
dependent on a few key suppliers and subcontractors for most components,
sub-assemblies and finished products, and we may not be able to establish
alternative sources of supply in time if supplies are interrupted; we may not
be able to raise the capital we anticipate needing to grow our business; and
companies we acquire may be more costly to acquire and integrate, or may not
generate as much revenue and earnings, as we anticipate. Please see the
Company's most recent Forms 10-K and 10-Q on file with the SEC for further
information regarding Sevcon's risk factors.

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

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