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| 8-K - LABARGE, INC. FORM 8K - LABARGE INC | a6596924.htm |
Exhibit 99.1
LaBarge, Inc. Reports Higher Sales and Earnings for Fiscal 2011 Second Quarter and First Half
Bookings of New Business Grow 16 Percent from Prior-Year Second Quarter
Net Sales Grow 18 Percent from Prior-Year Second Quarter
Net Earnings Increase 56 Percent from Prior-Year Second Quarter
Management Is Optimistic About Fiscal 2011 Business Outlook
ST. LOUIS--(BUSINESS WIRE)--February 3, 2011--LaBarge, Inc. (NYSE Amex: LB), a provider of electronics manufacturing services (EMS), today announced it achieved significant year-over-year increases in bookings, sales and earnings for its fiscal 2011 second quarter and six months ended January 2, 2011.
“The excellent year-over-year comparisons in fiscal 2011 second-quarter sales and earnings were the result of our outstanding operational execution and higher shipments to natural resources and industrial customers. Bookings of new business also continued to be strong with bookings from defense customers leading the way during the second quarter,” said Craig LaBarge, chairman of the board, chief executive officer and president.
Fiscal 2011 second-quarter net sales grew 18 percent to $81,441,000, compared with $69,000,000 in the fiscal 2010 second quarter. Fiscal 2011 second-quarter net earnings grew 56 percent to $4,412,000, or $0.28 per diluted share, compared with $2,837,000, or $0.18 per diluted share, in the comparable period a year earlier.
Net sales in the fiscal 2011 first half grew 26 percent to $166,889,000, compared with $132,155,000 in the fiscal 2010 first half. Net earnings in the fiscal 2011 first half increased 57 percent to $9,340,000, or $0.59 per diluted share, compared with $5,940,000, or $0.37 per diluted share, in the comparable period a year earlier. The fiscal 2011 first half was one week longer than the comparable period a year earlier due to the fiscal 2011 first quarter consisting of 14 weeks instead of the typical 13 weeks.
Gross margin in the fiscal 2011 second quarter increased 10 basis points to 20.0 percent, compared with 19.9 percent in the fiscal 2010 second quarter.
Selling, general and administrative (SG&A) expense was $9,031,000, or 11.1 percent of sales, in the fiscal 2011 second quarter, compared with $8,858,000, or 12.8 percent of sales, in the fiscal 2010 second quarter.
Operating income in the fiscal 2011 second quarter was $7,250,000, or 8.9 percent of sales, up 50 percent from $4,842,000, or 7 percent of sales, in the fiscal 2010 second quarter.
Interest expense in the fiscal 2011 second quarter was $340,000, compared with $421,000 in the fiscal 2010 second quarter, reflecting lower average debt levels in the current-year period.
Income tax expense in the fiscal 2011 second quarter was $2,505,000, compared with $1,569,000 in the fiscal 2010 second quarter.
Net cash from operating activities in the fiscal 2011 second quarter was $6,507,000 versus $6,405,000 in the fiscal 2010 second quarter.
Total debt at January 2, 2011, was $30,267,000, down 19 percent from $37,327,000 at June 27, 2010, and down 9 percent from $33,335,000 at October 3, 2010. Stockholders’ equity at January 2, 2011, was $125,406,000, up 8 percent from $115,640,000 at June 27, 2010. On December 31, 2010, the Company amended its senior loan agreement to extend the final maturity date to December 31, 2013. The new agreement also included an interest rate reduction to current market levels.
Business Overview
Shipments to customers in the defense, industrial, natural resources and medical market sectors comprised approximately 96 percent of LaBarge’s fiscal 2011 second-quarter net sales.
Shipments to defense customers represented the largest portion of fiscal 2011 second-quarter net sales at 34 percent, compared with 43 percent in the fiscal 2010 second quarter. In actual dollars, fiscal 2011 second-quarter net sales from the defense market sector decreased 7 percent from the comparable period a year earlier.
Shipments to industrial customers represented 24 percent of fiscal 2011 second-quarter net sales, versus 21 percent in the fiscal 2010 second quarter. In actual dollars, fiscal 2011 second-quarter net sales from the industrial market sector increased 31 percent from the comparable period a year earlier, due to increased shipments across a wide range of industrial customers.
Shipments to natural resources customers represented 27 percent of fiscal 2011 second-quarter net sales versus 20 percent in the fiscal 2010 second quarter. In actual dollars, fiscal 2011 second-quarter net sales from the natural resources market sector increased 61 percent from the comparable period a year earlier, largely due to much higher shipments of electronic assemblies and systems to oil-and-gas and wind-power customers.
Shipments to medical customers represented 11 percent of fiscal 2011 second-quarter net sales, versus 10 percent in the fiscal 2010 second quarter. In actual dollars, fiscal 2011 second-quarter net sales from the medical sector grew 25 percent from the comparable period a year earlier. The growth in medical sales from the prior year was the result of increased shipments to several medical sector customers.
Commentary and Outlook
“Our bookings environment continues to be robust, as evidenced by the strong order activity in the fiscal 2011 second quarter, during which bookings increased to $90,194,000, up 16 percent from the comparable period a year earlier. As expected, orders in the defense market sector led the way with second-quarter defense bookings growing 61 percent from the same period a year earlier,” said Mr. LaBarge. “Strong bookings during the current-year second fiscal quarter resulted in backlog at January 2, 2011, increasing to $235,628,000, up 19 percent from $198,727,000 at June 27, 2010, and up 31 percent from $180,528,000 at the end of the fiscal 2010 second quarter. Approximately 81 percent of backlog at January 2, 2011, was scheduled to ship in the following 12 months.
“The overall outlook for our 2011 fiscal year remains positive, with significant year-over-year growth from last year’s record sales and earnings. Based on the mix of business currently scheduled to ship during the balance of the fiscal year, we now expect net sales of $330 million to $337 million, and diluted earnings per share of $1.13 to $1.17. This compares with net sales of $289.3 million and diluted earnings per share of $0.93 in the 2010 fiscal year. For the fiscal 2011 third quarter, we believe results will be similar to the second-quarter results announced today. We anticipate strong order activity to continue throughout the balance of the current fiscal year, led largely by customers in the defense and natural resources market sectors,” said Mr. LaBarge.
Today's Conference Call Webcast
Today, at 10 a.m. ET (9 a.m. CT), LaBarge will host a live audio webcast of its discussion with the investment community regarding financial results for the Company’s fiscal 2011 second quarter. The webcast can be accessed on the Internet through http://viavid.net/dce.aspx?sid=00008036 and the investor relations calendar area of http://www.labarge.com. Following the live discussion, a replay of the webcast will be available at the same locations on the Internet. Any financial or statistical information presented during the call, including any non-GAAP financial measures, the most directly comparable GAAP measures and reconciliation to GAAP results, can be accessed via the news and events area of http://www.labarge.com.
About LaBarge, Inc.
LaBarge, Inc. is a broad-based provider of electronics to technology-driven companies in diverse industrial markets. The Company provides its customers with sophisticated electronic and electromechanical products through contract design and manufacturing services. Headquartered in St. Louis, LaBarge has operations in Arkansas, Missouri, Oklahoma, Pennsylvania, Texas and Wisconsin. The Company’s Web site address is http://www.labarge.com.
(Financial tables follow.)
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LaBarge, Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(amounts in thousands, except share and per-share amounts) |
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Three Months Ended |
Six Months Ended |
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January 2, 2011 |
December 27, 2009 |
January 2, 2011 |
December 27, 2009 |
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| Net sales | $ | 81,441 | $ | 69,000 | $ | 166,889 | $ | 132,155 | ||||||||||
| Cost of sales | 65,160 | 55,300 | 133,177 | 106,225 | ||||||||||||||
| Gross profit | 16,281 | 13,700 | 33,712 | 25,930 | ||||||||||||||
| Selling and administrative expense | 9,031 | 8,858 | 18,432 | 16,948 | ||||||||||||||
| Operating income | 7,250 | 4,842 | 15,280 | 8,982 | ||||||||||||||
| Interest expense | 340 | 421 | 738 | 929 | ||||||||||||||
| Other (income) expense, net | (7 | ) | 15 | (13 | ) | 39 | ||||||||||||
| Earnings before income taxes | 6,917 | 4,406 | 14,555 | 8,014 | ||||||||||||||
| Income tax expense | 2,505 | 1,569 | 5,215 | 2,074 | ||||||||||||||
| Net earnings | $ | 4,412 | $ | 2,837 | $ | 9,340 | $ | 5,940 | ||||||||||
| Basic net earnings per common share | $ | 0.28 | $ | 0.18 | $ | 0.60 | $ | 0.38 | ||||||||||
| Average basic common shares outstanding | 15,695 | 15,756 | 15,690 | 15,750 | ||||||||||||||
| Diluted net earnings per common share | $ | 0.28 | $ | 0.18 | $ | 0.59 | $ | 0.37 | ||||||||||
| Average diluted common shares outstanding | 15,943 | 16,041 | 15,925 | 16,047 | ||||||||||||||
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LaBarge, Inc. CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per-share amounts) |
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January 2, 2011 |
June 27, 2010 |
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| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 2,443 | $ | 2,301 | ||||||
| Accounts and other receivables, net | 42,104 | 46,807 | ||||||||
| Inventories | 71,826 | 64,536 | ||||||||
| Prepaid expenses | 1,380 | 1,062 | ||||||||
| Deferred tax assets, net | 3,666 | 3,655 | ||||||||
| Total current assets | 121,419 | 118,361 | ||||||||
| Property, plant and equipment, net of accumulated depreciation of $38,517 at January 2, 2011, and $35,704 at June 27, 2010 | 27,710 | 28,536 | ||||||||
| Intangible assets, net | 8,026 | 9,076 | ||||||||
| Goodwill | 43,424 | 43,424 | ||||||||
| Other assets | 5,083 | 5,125 | ||||||||
| Total assets | $ | 205,662 | $ | 204,522 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Current maturities of long-term debt | $ | 10,217 | $ | 12,069 | ||||||
| Trade accounts payable | 25,010 | 26,538 | ||||||||
| Accrued employee compensation | 13,706 | 14,625 | ||||||||
| Other accrued liabilities | 2,981 | 3,712 | ||||||||
| Cash advances from customers | 4,333 | 2,921 | ||||||||
| Total current liabilities | 56,247 | 59,865 | ||||||||
| Long-term advances from customers for purchase of materials | 307 | 46 | ||||||||
| Deferred tax liabilities, net | 2,733 | 2,494 | ||||||||
| Deferred gain on sale of real estate and other liabilities | 919 | 1,219 | ||||||||
| Long-term debt | 20,050 | 25,258 | ||||||||
| Stockholders’ equity: | ||||||||||
| Common stock, $0.01 par value. Authorized 40,000,000 shares; 15,958,839 issued at both January 2, 2011, and June 27, 2010, including shares in treasury | 160 | 160 | ||||||||
| Additional paid-in capital | 13,896 | 14,582 | ||||||||
| Retained earnings | 113,167 | 103,827 | ||||||||
| Accumulated other comprehensive loss | (192 | ) | (222 | ) | ||||||
| Less cost of common stock in treasury shares of 139,351 at January 2, 2011, and 234,651 at June 27, 2010 | (1,625 | ) | (2,707 | ) | ||||||
| Total stockholders’ equity | 125,406 | 115,640 | ||||||||
| Total liabilities and stockholders’ equity | $ | 205,662 | $ | 204,522 | ||||||
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LaBarge, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(amounts in thousands) |
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| Six Months Ended | ||||||||||
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January 2, 2011 |
December 27, 2009 |
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| Cash flows from operating activities: | ||||||||||
| Net earnings | $ | 9,340 | $ | 5,940 | ||||||
| Adjustments to reconcile net cash provided by operating activities: | ||||||||||
| Loss on disposal of property, plant and equipment | — | 44 | ||||||||
| Depreciation and amortization | 4,269 | 4,516 | ||||||||
| Amortization of deferred gain on sale of real estate | (240 | ) | (240 | ) | ||||||
| Share-based compensation | 730 | 703 | ||||||||
| Deferred taxes | 196 | 576 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts and other receivables, net | 4,703 | 2,735 | ||||||||
| Inventories | (7,290 | ) | (2,698 | ) | ||||||
| Prepaid expenses | (193 | ) | (79 | ) | ||||||
| Trade accounts payable | (2,022 | ) | 3,472 | |||||||
| Accrued liabilities | (1,622 | ) | 1,570 | |||||||
| Cash advances from customers | 1,673 | (3,872 | ) | |||||||
| Net cash provided by operating activities | 9,544 | 12,667 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Additions to property, plant and equipment | (1,766 | ) | (2,612 | ) | ||||||
| Proceeds from disposal of property, equipment and other assets | 15 | 14 | ||||||||
| Additions to other assets | (106 | ) | (487 | ) | ||||||
| Net cash used by investing activities | (1,857 | ) | (3,085 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Borrowings on revolving credit facility | 21,150 | 850 | ||||||||
| Payments of revolving credit facility | (21,150 | ) | (850 | ) | ||||||
| Repayments of long-term debt | (7,060 | ) | (4,080 | ) | ||||||
| Transaction costs related to bank financing | (125 | ) | — | |||||||
| Excess tax benefits from stock option exercises | 36 | 387 | ||||||||
| Remittance of minimum taxes withheld as part of a net share settlement of stock option exercises | (562 | ) | (841 | ) | ||||||
| Issuance of treasury stock | 166 | 140 | ||||||||
| Purchase of treasury stock | — | (686 | ) | |||||||
| Net cash used by financing activities | (7,545 | ) | (5,080 | ) | ||||||
| Net increase in cash and cash equivalents | 142 | 4,502 | ||||||||
| Cash and cash equivalents at beginning of period | 2,301 | 4,297 | ||||||||
| Cash and cash equivalents at end of period | $ | 2,443 | $ | 8,799 | ||||||
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Actual results may differ materially from such statements due to a variety of factors that could adversely affect LaBarge, Inc.’s operating results. These risks and factors are set forth in documents LaBarge, Inc. files with the Securities and Exchange Commission, specifically in the Company’s most recent Annual Report on Form 10-K and other reports it files from time to time. These forward-looking statements speak only as of the date such statements were made, or as of the date of the report or document in which they are contained, and the Company undertakes no obligation to update such information.
CONTACT:
LaBarge, Inc.
Colleen Clements, 314-812-9409
colleen.clements@labarge.com