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Elecsys Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 8, 2009 06:01PM
Elecsys Corp. (ESYS) filed Quarterly Report for the period ended 2009-07-31. Elecsys Corporation through its subsidiaries DCI Inc. and Airport Systems International Inc. is a designer and manufacturer ofelectronic sub-assemblies and systems and a provider of electronicmanufacturing services and custom liquid crystal displays. Elecsys Corp. has a market cap of $13.8 million; its shares were traded at around $3.98 with a P/E ratio of 13.3 and P/S ratio of 0.6.
Highlight of Business Operations:
Total consolidated backlog at July 31, 2009 was approximately $4,164,000, an increase of $1,097,000, or 35.8%, from a total backlog of $3,067,000 on April 30, 2009 and a decrease of approximately $3,805,000 from a total backlog of $7,969,000 on July 31, 2008. The backlog on July 31, 2008, contained an order for approximately $2.6 million of rugged hand held computer hardware and peripherals that was announced in July 2008 and subsequently delivered in October 2008. The amount of total consolidated backlog at July 31, 2009 includes purchase orders in place from our customers that are scheduled for shipment in future periods.
Selling, general and administrative (“SG&A”) expenses decreased a negligible $1,000, to $1,654,000 for the three-month period ended July 31, 2009 from $1,655,000 in the three-month period ended July 31, 2008. SG&A expenses were 45.7% of sales for the fiscal first quarter of 2010 as compared to 29.8% of sales for the comparable period for fiscal 2009. Corporate expenses increased approximately $47,000 from the comparable period of the prior year mainly due to higher professional fees for accounting services and investor relations efforts during the period. During the three-month period ended July 31, 2009, we recognized approximately $47,000 of expenses that were related to the MBBS acquisition. These costs include personnel, travel, operating costs, and other transaction expenses. These increases in SG&A costs were partially offset by decreases in personnel and personnel-related expenses during the period.
Interest expense was $112,000 and $117,000 for the three-month periods ended July 31, 2009 and 2008, respectively. The slight decrease of $5,000 was the result of the decrease in the total outstanding borrowings compared to the previous fiscal year period. During the three-month period ended July 31, 2009, there were no additional borrowings on the operating line of credit and $100,000 in payments that lowered the total amount outstanding to $3,900,000. There was an additional $3,364,000 in outstanding long-term borrowings at the end of the fiscal quarter. We plan to utilize the operating line of credit when necessary over the next few quarters and anticipate that the amount of outstanding borrowings will remain stable as our borrowings and payments will likely be very comparable.
As a result of the above factors, net loss was $396,000, or $0.12 per diluted share, for the three-month period ended July 31, 2009 as compared to net income of $109,000, or $0.03 per diluted share, reported for the three-month period ended July 31, 2008.
Operating activities. Our consolidated working capital decreased approximately $4,000 for the three-month period ended July 31, 2009. The decrease was the result of the total decrease in current assets offset with a comparable decrease in current liabilities. The reduction in current assets was due reductions in accounts receivable from collections and a decrease in inventories along with an increase in the current deferred tax asset. The decrease in current liabilities was due to payments for accounts payable and debt. Operating cash receipts totaled approximately $4,579,000 and $6,189,000 during the three-month periods ended July 31, 2009 and 2008, respectively. The decrease is the result of the decrease in sales for the current period in combination with the reduction in receivables as compared to the prior year. Total cash disbursements for operations which include purchases of inventory and operating expenses, were approximately $3,998,000 for the three-month period ended July 31, 2009 and $6,116,000 for the three-month period ended July 31, 2008. The Company utilizes its line of credit when necessary in order to pay suppliers and meet operating cash requirements.
month period ended July 31, 2008, financing activities included $25,000 of cash provided by the exercise of stock options, borrowings on the operating line of credit of $1,267,000 and total debt payments of $1,455,000. As of July 31, 2009, there were $3,900,000 borrowings outstanding on the operating line of credit.
Stocks Discussed: ESYS,