Sevcon Reports Financial Results for Third Quarter Fiscal 2014
SOUTHBOROUGH, Mass., Aug. 5, 2014 (GLOBE NEWSWIRE) -- Sevcon, Inc.
(Nasdaq:SEV) reported financial results for the third quarter of fiscal 2014
ended June 28, 2014.
Third-Quarter Fiscal 2014 Results Summary
*Revenues increased to $9.7 million, from $8.7 million in the third quarter
of fiscal 2013, reflecting continued improving conditions in the company's
markets and the startup of volume production with some new customers.
Foreign currency fluctuations increased reported sales in the third fiscal
quarter by $474,000, or 5%, 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 $213,000, compared with $293,000 in the third quarter
last year. In the third quarter of 2014 movements in foreign currency
rates reduced operating income by $94,000 compared to the prior year.
*There was an income tax benefit of $34,000 in the third quarter of fiscal
2014, compared with a charge of $47,000 in the year-earlier quarter.
*Net income was $222,000, or $0.06 per diluted share, compared with net
income of $124,000, or $0.04 per diluted share, a year earlier.
Nine Month Fiscal 2014 Result Summary
*Revenues were $27.9 million, compared with $23.3 million in the first nine
months of fiscal 2013. Foreign currency fluctuations increased reported
sales in the first nine months by $904,000, or 4%.
*Operating income was $1.1 million compared with an operating loss of $1.4
million in the first nine months of last year, which included a
restructuring charge of $605,000 in the second quarter of fiscal 2013. In
the first nine months of 2014 movements in foreign currency rates reduced
operating income by $446,000 compared to the prior year. This was mainly
due to the exchange rate impact on non-U.S. Dollar denominated cost of
sales and operating expenses of a weaker U.S. Dollar compared to the
British Pound and the Euro in the first nine months of 2014, than in the
prior year period. Excluding the impact of foreign currency, operating
income was $1.6 million, an increase of $3.0 million compared with the
prior year period.
*There was an income tax charge of $64,000 in the first nine months of
fiscal 2014, compared with an income tax benefit of $699,000 in the prior
*Net income was $872,000, or $0.25 per diluted share, compared with a net
loss of $1.1 million, or $(0.33) per share, for the first nine months of
"Our financial results continued to improve in the third quarter of fiscal
2014," said President and CEO Matt Boyle. "Sales were up 11% from the third
quarter of fiscal 2013, as our business generally tracked global economic
trends. We recorded double-digit sales growth year-over-year in both Asia and
the United States. Our growth in Asia was driven primarily by aerial work
platform and on-road vehicle demand in Japan and China, respectively. The
stronger sales in the United States largely reflected increased shipments in
the on-road sector for hybrid commercial vehicles. We also shipped significant
product volumes for four-wheel recreational vehicle applications into U.S.
markets. Sales were down slightly in Europe, year-over-year. This decline was
mainly as a consequence of lower aftermarket sales, reflecting our shift this
past year to a third-party distribution model in that region."
"Having recorded our sixth consecutive quarter of revenue growth and our
fourth straight quarter of growth year-over-year, we are entering the fourth
quarter of fiscal 2014 with strong momentum," Boyle said. "Our technology and
applications expertise positions us well to capitalize on the worldwide trend
toward electrification of drivetrains and ancillary systems, not only for
motor vehicles but in commercial and industrial traction and power
applications. Looking ahead to the fourth quarter of fiscal 2014, we believe
that underlying market conditions will continue supporting our growth. On the
bottom line, the commencement of shipments by our new joint venture company in
China will result in us recognizing our share of the related initial business
establishment costs, which we expect will reduce Sevcon's net income for the
fourth quarter by approximately $150,000, after tax."
"Our key strategic challenge is scaling the business to capture these
opportunities on a timely basis, whether organically or through acquisitions,
which requires us to strengthen our balance sheet," said Boyle. "As a
consequence, capital structure and capital allocation are key strategic
priorities for Sevcon at both the board and management levels. We are actively
executing against these priorities, as evidenced by our previously announced
rights offering of Series A Convertible Preferred Stock, which is currently
underway. Put simply, we believe that Sevcon's future is brighter than ever,
and we look forward to reporting further progress in the quarters ahead."
Third-Quarter Fiscal 2014 Conference Call Details
Sevcon has scheduled a conference call to review its results for the third
quarter of fiscal 2014 tomorrow, August 6, 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 http://ir.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.
Third Quarter Fiscal 2014 Financial Highlights
(in thousands except per share data)
Three months ended Nine months ended
June 28, June 29, June 28, June 29,
2014 2013 2014 2013
Net sales $9,657 $8,675 $27,876 $23,332
Operating income (loss) 213 293 1,119 (1,355)
Income (loss) before income taxes 188 171 936 (1,815)
Net income (loss) $222 $124 $872 $(1,116)
Basic income (loss) per share $0.07 $0.04 $0.26 $(0.33)
Diluted income (loss) per share $0.06 $0.04 $0.25 $(0.33)
Average shares outstanding 3,406 3,365 3,394 3,356
Summarized Balance Sheet Data
(in thousands of dollars)
June 28, 2014 September 30, 2013
(unaudited) (derived from audited
Cash and cash equivalents $1,303 $2,062
Receivables 8,054 7,103
Inventories 6,384 5,723
Prepaid expenses and other current assets 2,584 1,862
Total current assets 18,325 16,750
Long-term assets 7,143 6,610
Total assets $25,468 $23,360
Current liabilities $6,626 $6,060
Liability for pension benefits 8,320 8,354
Other long-term liabilities 1,700 1,728
Stockholders' equity 8,501 7,218
Non-controlling interests 321 --
Total stockholders' equity 8,822 7,218
Total liabilities and stockholders' equity $25,468 $23,360
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.
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
President and CEO
1 (508) 281 5503
Sevcon, Inc. Logo
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