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Elecsys Corp. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: July 30, 2012 09:16AM
Elecsys Corp. (ESYS) filed Annual Report for the period ended 2012-04-30.
Highlight of Business Operations:Sales of our mobile data acquisition solutions, including our Radix handheld computer hardware, peripherals, maintenance contract revenues, and our eXtremeTAG RFID solutions, were approximately $2,278,000 for the year ended April 30, 2012. Total sales decreased approximately $667,000, or 22.6%, as compared to the previous fiscal year reported revenues of approximately $2,945,000. We made fewer shipments of Radix computer hardware and eXtremeTAG RFID tags during the fiscal year-to-date period which led to a sales decrease of approximately $454,000. Overall poor international economic conditions adversely impacted sales to many of our largest international Radix customers during the current fiscal year. However, we expect sales of the Radix FW950/960, its related peripherals and product enhancements, which have been positively received by the market, and our eXtremeTAG RFID solutions to increase over the next few quarters. We are aggressively marketing the Radix computer hardware and our eXtremeTAG RFID solutions in both domestic and international markets. Recurring maintenance contract revenues posted a decrease for the fiscal year ended April 30, 2012 of approximately $253,000, or 22.8%, as a result of fewer Radix units covered under maintenance contracts that were largely the result of continuing budgetary constraints at many of our municipal customers that led them to discontinue their maintenance plans. Although we forecast an increase in sales of mobile data acquisition products during the next fiscal year, we expect maintenance contract revenues to decrease due to continued budgetary constraints in our current municipal government customer base.
EMS. Sales for the EMS business segment were approximately $13,162,000, a decrease of $645,000, or 4.7%, from $13,807,000 in the prior fiscal year. The decrease was the result of reduced sales to some existing customers due to the stagnant economy and continued uncertain business conditions, combined with our elimination of certain lower margin customers stemming from our focus on improving the business segment gross margins. The success of these actions is evident with the increase shown in EMS gross margins for the year-to-date period even as revenues decreased. Based on recent levels of EMS bookings and feedback from existing customers, it is our expectation EMS revenues are likely to decline slightly in the near term as compared to sales levels over the last few quarters. We further anticipate that our EMS sales and marketing efforts and our focus on adding customers that can benefit from our proprietary technologies, will lead to moderate growth in EMS sales and margins over the longer term. It should be noted that continued uncertainty regarding future economic conditions could adversely impact sales over the next few quarters as well as future bookings.
Gross margin for fiscal 2012 was 36.3% of sales, or $8,395,000, compared to 33.5% of sales, or $7,880,000, for fiscal 2011. This was an increase in gross margin of $515,000, or 6.5%, from the prior fiscal year.
Gross margin for the proprietary products business segment was approximately $5,158,000, or 51.9% of sales, for fiscal 2012 as compared to $4,911,000, or 50.4% of sales, for fiscal 2011. The increase in gross margin for proprietary products and services of approximately $247,000 was due to the overall increase in proprietary product sales as well as the specific product mix.
Selling, general and administrative (“SG&A”) expenses totaled approximately $6,275,000 for the 2012 fiscal year. This was an increase of $26,000, or 0.4%, from total SG&A expenses of $6,249,000 for the year ended April 30, 2011. SG&A expenses were 27.2% of sales for the year-to-date period as compared to 26.5% of sales for fiscal 2011.
Stocks Discussed: ESYS,