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Tech/Ops Sevcon Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 10, 2012 07:49AM
Tech/Ops Sevcon Inc (TO) filed Quarterly Report for the period ended 2011-12-31.
Highlight of Business Operations:Sales in the first quarter of 2012 increased by $1,632,000, or 24%, to $8,515,000, compared to $6,883,000 in the same quarter last year. This increase reflected increased shipment volumes due mainly to sales of the Company s Gen4 AC product to new applications. Foreign currency exchange rates were similar to last year and had little effect on reported sales.
In the controls business segment, volumes shipped were 26% higher than in the same quarter last year; shipments to Europe and the Far East increased by 70% and 27% respectively and there was a 3% increase in volume shipped in the United States, compared to the first quarter last year. The increase in sales volume is partly due to continued customer gains in a range of on-road electric vehicle (“EV”) applications. In addition, the Company s traditional markets of industrial applications for construction, distribution, mining, airport ground support and utility applications have steadily recovered from the significant reduction in customer demand experienced in the recent recession. In the capacitor business, volumes shipped were 11% lower than during the first quarter last year, which was largely due to reduced demand from customers in the railway signaling sector.
Gross profit of $2,982,000 was 35% of sales in the first quarter, compared to $2,368,000 or 34.4% of sales in the same quarter last year. The increase in the gross profit percentage compared to the prior year was largely due to fixed overhead costs being a lower percentage of sales as sales volumes increased.
Selling, research and administrative expense in the first quarter of 2012 was $2,730,000, an increase of $395,000, or 17%, compared to the same period last year. In the first quarter of 2011 the Company received $217,000 of U.K. government grant income to accelerate the development of two new projects which was recorded as a reduction of research and development expense. Excluding the impact of grant income, selling, research and administrative expense increased 7% compared to the first quarter of 2011 largely due to salary increases and additional sales and marketing resources.
In the first three months of fiscal 2012, operating activities used $1,355,000 of cash. Excluding the impact of currency fluctuations, receivables increased by $907,000, payables decreased by $246,000, and inventories increased by $336,000 in the quarter. The increase in inventories was largely due to the receipt of finished goods which will ship in the second quarter of 2012. The number of days sales in receivables increased marginally in the first three months of 2012 from 62 days at September 30, 2011 to 63 days at December 31, 2011. Capital expenditures in the first three months were $104,000. Exchange rate changes decreased reported cash by $22,000 in the first three months of 2012.