Schmitt Industries Inc. (SMIT) filed Quarterly Report for the period ended 2009-08-31.
Schmitt Industries Inc. designs assembles and markets computer-controlled balancing equipment for use primarily by the machine toolindustry. Through its wholly owned subsidiary Schmitt Measurement SystemsInc. a Montana corporation the company designs manufactures andmarkets precision laser measurement systems. Schmitt Industries Inc. has a market cap of $11.3 million; its shares were traded at around $3.9301 with and P/S ratio of 1.2. Schmitt Industries Inc. had an annual average earning growth of 14.6% over the past 5 years.
Highlight of Business Operations:
For the three months ended August 31, 2009, total sales decreased $2.0 million, or 61.7%, to $1.2 million from $3.2 million in the three months ended August 31, 2008. Balancer segment sales primarily come from end-users, rebuilders and original equipment manufacturers of grinding machines with the target geographic markets of North America, Asia and Europe. Balancer segment sales decreased $1.4 million, or 61.7%, to $882,000 for the three months ended August 31, 2009 compared to $2.3 million for the three months ended August 31, 2008. The Measurement segment product line consists of both laser-based light-scatter and distance measurement and dimensional sizing products. Total Measurement segment sales decreased $550,000, or 61.7%, to $341,000 for the three months ended August 31, 2009 compared to $891,000 for the three months ended August 31, 2008.
In response to the significant decreases in revenues during the past year, the Company has been reducing its expenses across the entire Company. Operating expenses have decreased $436,000, or 27.8%, to $1.1 million for the three months ended August 31, 2009 from $1.6 million for the three months ended August 31, 2008. General, administration and sales expenses have decreased $362,000, or 27.4%, to $961,000 for the three months ended August 31, 2009 from $1.3 million for the same period in the prior year. Research and development expenses have decreased $74,000, or 30.0%, to $173,000 for the three months ended August 31, 2009 from $247,000 for the three months ended August 31, 2008. Net loss was $575,000, or $0.20 per fully diluted share, for the three months ended August 31, 2009 as compared to net income of $34,000, or $0.01 per fully diluted share, for the three months ended August 31, 2008.
Operating expenses – Operating expenses decreased $436,000, or 27.8%, to $1.1 million for the three months ended August 31, 2009 as compared to $1.6 million for the three months ended August 31, 2008. General, administrative and selling expenses decreased $362,000, or 27.4%, for the three months ended August 31, 2009 as compared to the same period in the prior year primarily due to lower commissions related to the decrease in sales, lower personnel costs resulting from both salary reductions and mandatory furloughs and lower stock based compensation. Research and development expenses decreased $74,000, or 30.0%, as compared to the same period in the prior year primarily due to lower material costs associated with new product development associated with technologies acquired from Xtero and new product development related to existing product lines and lower personnel costs associated with salary reductions.
Net income – Net income decreased $609,000 to a net loss of $575,000, or $0.20 per diluted share, for the three months ended August 31, 2009 as compared to net income of $34,000, or $0.01 per diluted share, for the three months ended August 31, 2008. Net income decreased due primarily to lower sales and related gross profit offset by lower general, administrative and selling expenses, lower research and development expenses and a lower effective tax rate during the three months ended August 31, 2009 and 2008.
The Company’s working capital decreased $510,000 to $8.2 million as of August 31, 2009 compared to $8.7 million as of May 31, 2009. Cash, cash equivalents and short term investments totaled $3.7 million and $4.2 million as of August 31, 2009 and May 31, 2009, respectively. As of August 31, 2009, the Company had $2.7 million in cash and cash equivalents on hand compared to $4.2 million at May 31, 2009. The Company had $1.0 million and $0 in short-term investments as of August 31, 2009 and May 31, 2009, respectively. The Company invested in $1.0 million of certificates of deposit during the first quarter of Fiscal 2010.
At August 31, 2009, the Company had accounts receivable of $922,000 as compared to $1.1 million at May 31, 2009. The decrease in accounts receivable of $189,000 was due to the decrease in sales in the first quarter of Fiscal 2010. At August 31, 2009, total current liabilities decreased $176,000 to $730,000 as compared to $906,000 at May 31, 2009. The decrease was primarily due to the timing of payments and decreases in the levels of inventories purchased as compared to the prior year.
Rate This Article: |
  |