WSI Industries Reports Improved Third Quarter Results
Declares Quarterly Dividend
MINNEAPOLIS, June 12, 2018 (GLOBE NEWSWIRE) -- WSI Industries, Inc. (Nasdaq:WSCI) today reported sales for its fiscal 2018 third quarter ending May 27, 2018 of $9,791,000 versus the prior year amount of $9,594,000, or an increase of 2%. Year-to-date sales for the period ended May 27, 2018 totaled $25,873,000 versus $22,237,000 in the prior year, or an increase of 16%.
The Company also reported net income in its fiscal 2018 third quarter of $466,000 or $.16 per diluted share versus a net loss of $220,000 or $(.08) per diluted share in the fiscal 2017 third quarter. Year-to-date, the Company has net income of $1,081,000 or $.36 per diluted share versus a net loss of $904,000 or $(.31) per diluted share in the prior year. Included in the fiscal 2018 year-to-date earnings is an income tax benefit of approximately $600,000 related to the revaluation of the Company’s net deferred tax liability due to the passage of H.R.1, known as the “Tax Cuts and Jobs Act”.
Michael Pudil, president and chief executive officer, commented: “We are pleased to report continued progress with net income of $.16 per diluted share in the fiscal 2018 third quarter versus a net loss in the prior year quarter of $(.08) per diluted share. Our overall third quarter sales were steady with the prior year, with our sales to our largest customer being down versus the prior year due to the one-time sale of inventory on a discontinued product line in the prior year quarter. Our diversified group, which includes energy, aerospace, defense and industrial markets, continued their growth with a 78% increase in sales versus the prior year third quarter and year-to-date sales have nearly doubled from the prior year.” Pudil continued: “We are also pleased to report that gross margins for the diversified business were in the mid 20% range for the quarter and gross margin percentage for the entire business was up 38% from the year ago quarter. Our new business sales and margin growth have come from improvements in all facets of our operation.”
Pudil concluded: “We have accomplished much in the last year and with credit and thanks going to the entire WSI team for making this happen. Our main goals will continue to be the profitable growth of our customer base and improvement in our manufacturing operations.”
The Company also announced today that its Board of Directors has declared a quarterly dividend of $.04 per share. This further demonstrates WSI’s financial strength and improved business outlook. The dividend will be payable July 10, 2018 to holders of record on June 26, 2018.
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 automotive, avionics and aerospace, energy, recreational vehicles, small engines, bioscience and the defense markets.
For additional information:
Michael J. Pudil (President & CEO) or Paul D. Sheely (CFO)
763-295-9202
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 OPERATIONS (Unaudited)
In thousands, except per share amounts
| Third quarter ended | Three quarters ended | |||||||||||||||
| May 27, | May 28, | May 27, | May 28, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net Sales | $ | 9,791 | $ | 9,594 | $ | 25,873 | $ | 22,237 | ||||||||
| Cost of products sold | 8,341 | 8,563 | 22,646 | 20,692 | ||||||||||||
| Gross margin | 1,450 | 1,031 | 3,227 | 1,545 | ||||||||||||
| Selling and administrative expense | 834 | 1,203 | 2,487 | 2,684 | ||||||||||||
| Interest and other income | (9 | ) | (7 | ) | (38 | ) | (10 | ) | ||||||||
| Interest and other expense | 81 | 220 | 229 | 354 | ||||||||||||
| Income (loss) from operations | ||||||||||||||||
| before income taxes | 544 | (385 | ) | 549 | (1483 | ) | ||||||||||
| Income tax expense (benefit) | 78 | (165 | ) | (532 | ) | (579 | ) | |||||||||
| Net income (loss) | $ | 466 | $ | (220 | ) | $ | 1,081 | $ | (904 | ) | ||||||
| Basic income (loss) per share | $ | 0.16 | $ | (0.08 | ) | $ | 0.37 | $ | (0.31 | ) | ||||||
| Diluted (loss) income per share | $ | 0.16 | $ | (0.08 | ) | $ | 0.36 | $ | (0.31 | ) | ||||||
| Weighted average number of common shares | 2,970 | 2,923 | 2,956 | 2,921 | ||||||||||||
| Weighted average number of diluted shares | 3,001 | 2,923 | 2,976 | 2,921 | ||||||||||||
CONDENSED BALANCE SHEETS (Unaudited)
In thousands
| May 27, | May 28, | |||||||
| 2018 | 2017 | |||||||
| Assets: | ||||||||
| Total Current Assets | $ | 12,235 | $ | 11,714 | ||||
| Property, Plant, and Equipment, net | 10,853 | 10,738 | ||||||
| Intangible Assets | 2,368 | 2,368 | ||||||
| Total Assets | $ | 25,456 | $ | 24,820 | ||||
| Liabilities and Shareholders' Equity: | ||||||||
| Total current liabilities | $ | 4,304 | $ | 4,935 | ||||
| Long-term debt | 6,133 | 5,796 | ||||||
| Deferred tax liabilities | 543 | 823 | ||||||
| Shareholders' equity | 14,476 | 13,266 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 25,456 | $ | 24,820 | ||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
In thousands
| Three quarters ended | ||||||||
| May 27, | May 28, | |||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities (1) | $ | 239 | $ | 2,469 | ||||
| Cash provided by (used in) investing activities | 172 | (786 | ) | |||||
| Cash provided by (used in) financing activities | (1,338 | ) | 166 | |||||
| Net increase (decrease) in cash and cash equivalents | (927 | ) | 1,849 | |||||
| Cash and cash equivalents at beginning of period | 5,847 | 3,739 | ||||||
| Cash and cash equivalents at end of period | $ | 4,920 | $ | 5,588 | ||||
(1) Cash flows from operating activities includes non-cash adjustments for depreciation and stock option compensation expense of $1,593 and $1,589 at May 27, 2018 and May 28, 2017, respectively.
