BEIQ Bei Technologies (MM)

BEI Technologies, Inc. Reports Fiscal 2004 Third Quarter Results SAN FRANCISCO, July 29 /PRNewswire-FirstCall/ -- BEI Technologies, Inc. (NASDAQ:BEIQ) reported consolidated after tax net income for the fiscal 2004 third quarter ended July 3, 2004 of $3,372,000, or $0.23 per share, compared with a consolidated after tax net income of $663,000, or $0.05 per share, for the third quarter of fiscal 2003. Net sales for the quarter increased to $68.8 million compared with $57.1 million in the same period last year, according to Charles Crocker, Chairman and Chief Executive Officer. Automotive revenues for the third quarter were $40.9 million compared with $32.4 million for the same quarter last year. This increase was a result of higher quantities of GyroChip(R) sensors shipped to BEI's customers. Industrial sales for the quarter were $21.9 million compared with $18.7 million in the same period last year due primarily to higher potentiometer revenue. Government sales remained level at $6.0 million. "With the advent of Hungary's membership in the European Union, BEI's Hungarian and Polish activities require an additional EU registration which BEI expects to complete in the fourth quarter. Negotiations with a major customer because of the new registration requirement resulted in lowering the selling price in the third quarter on some sensor module assemblies. Though revenue was reduced by $3.5 million due to the lowered selling price, the customer absorbed some third party assembly costs for the units, so profitability was not affected", Crocker commented. Gross margin remained at 24.9% for the current quarter compared with 24.9% for the same quarter in the prior year. Margins were unfavorably impacted by increased overtime, product expediting and approximately $0.8 million of inventory write downs. These impacts were offset by the favorable margin rates on the sensor module assemblies noted above. Selling, general, administrative and other (SG&A) spending as a percentage of sales decreased to 11.7% compared with the prior year third quarter of 14.8% primarily as a result of a higher sales base. The SG&A rate also decreased because of the reversal of previously booked expenses associated with an adverse lower court ruling in a dispute with a former landlord in Arkansas which an Appellate Court reversed. Research and development spending as a percentage of sales decreased to 5.4% compared with 7.0% in the prior year third quarter primarily as a result of higher sales and lower spending on silicon gyro development. Cash provided by operations for the quarter was positive with our cash balance increasing to $11.5 million. Equipment purchases for the quarter were $3.4 million. Inventory increased due to a build-up at Systron Donner Automotive of components awaiting parts for further assembly. NINE MONTH RESULTS For the nine month period ended July 3, 2004, BEI reported consolidated after tax net income of $8,879,000, or $0.61 per share, versus a net income of $3,315,000, or $0.23 per share, in the comparable period of fiscal 2003. Sales in the nine month period ended July 3, 2004 were $211.2 million, compared to $158.9 million reported in the comparable period of the prior year. Increased sales to automotive customers accounted for the majority of the increase. Selling, general, administrative and other spending for the nine-month period ended July 3, 2004 was $26.0 million, a slight increase from the previous year spending of $25.8 million. Increased SG&A spending to support higher sales levels was partially offset by a reduction in current year legal expenses associated with litigation. Development spending year to date decreased to $10.4 million from $12.2 million in the prior year to date period due to reduced silicon gyro spending. Crocker concluded, "Our previously announced GyroChip capacity expansion to 4.5 million units of annual capacity continues on plan. Most equipment is in place but "run-at-rate" validation on some equipment is not yet completed. We continue to run at surge capacity utilizing all available work shifts to supply demand. Operating efficiency is negatively affected by increased overtime, shipping costs and machinery wear. We expect this to continue in the fourth quarter as a result of GyroChip demand in excess of 1 million units." BEI Technologies, Inc. (the "Company" or "Technologies") is an established manufacturer of electronic sensors, motors, actuators, optical encoders and motion control products used for factory and office automation, medical equipment, military, aviation and space systems. In addition, sales to manufacturers of transportation equipment including automobiles, trucks and off-road equipment have become a significant addition to the Company's business in recent years. The Company's micromachined quartz yaw rate sensors are being used in advanced vehicle stability control systems and a significant increase in the production of those sensors had been in progress from the middle of 1998 to FY 2003 except for a decrease in production in fiscal 2002 due to increased competition. The Company is currently transitioning to its next generation of automotive inertial quartz-based sensor products, remotely mounted multi-sensor clusters with CAN bus and a multi-rate sensor package suitable for incorporation into electronic systems modules. The Company also manufactures electronic steering wheel position sensors, seat-memory modules, throttle position sensors, pressure sensors, and other devices used in transportation systems. GyroChip is registered trademarks of the Company. BEI Systron Donner Automotive is an operating division of BEI Technologies, Inc. Except for historical information, this news release may be deemed to contain forward-looking statements that involve risks and uncertainties, including statements with respect to future timely development, acceptance and pricing of new products; potential impact of competitive products and their price; the ability to manufacture products in sufficient volume on an efficient and timely basis; general economic conditions as they affect the Company's customers and strategic partners, as well as other risks detailed from time to time in the Company's reports to the Securities and Exchange Commission, including the Company's Form 10-K for fiscal 2003. BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) July 3, September 27, 2004 2003* (Unaudited) ASSETS Cash and cash equivalents $11,523 $9,211 Restricted investments 4,279 5,185 Trade receivables, net 34,978 37,271 Inventories, net 27,006 24,190 Other current assets 13,156 12,915 Total current assets 90,942 88,772 Property, plant and equipment, net 38,871 37,123 Acquired technology 306 542 Goodwill 1,612 1,612 Other assets, net 5,435 5,404 $137,166 $133,453 LIABILITIES AND STOCKHOLDERS' EQUITY Trade accounts payable $22,568 $15,680 Accrued expenses and other liabilities 24,712 27,503 Income tax payable -- 689 Current portion of long-term debt 7,260 7,117 Total current liabilities 54,540 50,989 Long-term debt, less current portion 10,688 17,494 Other liabilities 3,069 6,329 Stockholders' equity 68,869 58,641 $137,166 $133,453 * Based on audited information included on Form 10-K for fiscal year ended September 27, 2003 BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands except per share amounts) Unaudited Quarter Ended Nine Months Ended July 3, June 28, July 3, June 28, 2004 2003 2004 2003 Net sales $68,827 $57,103 $211,163 $158,906 Cost of sales 51,726 42,898 160,347 119,629 17,101 14,205 50,816 39,277 Selling, general, administrative and other expenses 8,062 8,458 25,950 25,756 Research, development and related expenses 3,717 3,987 10,367 12,209 Income from operations 5,322 1,760 14,499 1,312 Interest expense 295 462 1,016 1,472 Other income (expense) 328 (231) 609 5,396 Income before income taxes 5,355 1,067 14,092 5,236 Provision for income taxes 1,983 404 5,213 1,921 Net income $3,372 $663 $8,879 $3,315 BASIC EARNINGS PER COMMON SHARE Net income per common share $0.24 $0.05 $0.62 $0.23 Weighted average shares outstanding 14,338 14,141 14,291 14,117 DILUTED EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Net income per common and common equivalent share $0.23 $0.05 $0.61 $0.23 Weighted average shares outstanding 14,709 14,224 14,641 14,246 BEI TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) Unaudited Quarter Ended Nine Months Ended July 3, June 28, July 3, June 28, 2004 2003 2004 2003 Net income $3,372 $663 $8,879 $3,315 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,308 2,645 7,851 7,808 Other (2,312) 1,958 (500) 1,756 Net cash provided by operating activities 3,368 5,266 16,230 12,879 Net cash used in investing activities (2,014) (1,530) (6,490) (8,149) Net cash provided by (used in) financing activities 45 (3,778) (7,428) (5,193) Net increase (decrease) in cash and cash equivalents 1,399 (42) 2,312 (463) Cash and cash equivalents at beginning of period 10,124 3,997 9,211 4,418 Cash and cash equivalents at end of period $11,523 $3,955 $11,523 $3,955 DATASOURCE: BEI Technologies, Inc. CONTACT: John LaBoskey, Senior Vice President/CFO of BEI Technologies, Inc., +1-415-956-4477 Web site: http://www.bei-tech.com/

Copyright