Tech/Ops Sevcon Inc (TO, Financial) filed Quarterly Report for the period ended 2010-07-03.
Tech/ops Sevcon Inc has a market cap of $14.8 million; its shares were traded at around $4.44 with and P/S ratio of 0.8.
In the controls business segment, sales were higher in all regions in which the Company operates. In the Far East, sales were $1,324,000 compared to $262,000 in the third quarter of fiscal 2009, an increase of $1,062,000, or 405%. Of the increase of $1,062,000, one third arose from increased demand in the Company s traditional industrial market and two thirds arose from demand for the Company s new range of electric vehicle products. In North America, sales were $3,260,000 compared to $2,310,000, an increase of 41%, and in Europe, sales increased 34% from $1,093,000 in 2009 to $1,460,000 in the third quarter of fiscal 2010. The Company believes its traditional markets have stabilized at the lower sales levels seen during the worldwide recession of late 2008 and calendar 2009. The improvement in demand for the Company s products compared to the same period last year has been driven by new markets for the Company s products. Continued new product introduction has led to customer gains in both on-road and off-road vehicle applications since the beginning of the third quarter of fiscal 2009; however, there cannot yet be any assurance that these gains will continue to translate into increased sales.
Gross profit of $2,260,000 was 34.8% of sales in the third quarter compared to $1,481,000 or 36.5% of sales in the same quarter last year. Higher volumes shipped increased reported gross profit, although this was offset by increases in raw material costs associated with the short supply of some components and higher start up costs with certain new customers. The net increase in reported gross profit from higher shipment volume offset by the lower gross profit margin was $722,000. Foreign currency fluctuations increased reported gross profit by $57,000 compared to the same period last year.
Selling, research and administrative expenses in the third quarter of 2010 were $2,322,000, an increase of $272,000, or 13%. Foreign currency fluctuations reduced reported operating expense by $61,000 or 3%, compared with the same quarter last year. Excluding the favorable effect of foreign currency fluctuations, selling, research and administrative expenses were $333,000, or 16%, higher in the third quarter compared to the same period last year. The increase in expense was due largely to higher pension expense, additional employment costs associated with the reversal of a voluntary 10% salary sacrifice last year, higher numbers of engineers, particularly in research and development, and prototype costs following the significant increase in demand from new customers and applications as compared with the same period last year. In the third quarter, an amount of $91,000 of U.K. governmental grant was offset against new product development costs.
There was an operating loss in the third quarter of $62,000, which was an improvement of $507,000 compared with the reported operating loss of $569,000 in the same period last year. The reduction in the operating loss was due to a combination of significantly higher demand for the Company s products offset by a modest increase in operating expense, which together contributed to a $388,000 reduction in the operating loss compared to the prior year period. In addition, favorable foreign currency fluctuations further reduced the reported operating loss by $119,000. In the capacitor business segment, there was an operating profit of $30,000 compared to an operating profit of $7,000 in the third quarter last year, the increase being due to the 16% increase in sales volume compared to the prior year s third quarter.
The Company recorded a profit before income taxes of $137,000 in the quarter compared to a loss before income taxes of $496,000 in the same period last year. There was a net profit for the quarter of $119,000 or $.03 per share compared to a net loss of $300,000 or a loss of $.09 per share in the third quarter of fiscal 2009.
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Tech/ops Sevcon Inc has a market cap of $14.8 million; its shares were traded at around $4.44 with and P/S ratio of 0.8.
Highlight of Business Operations:
Sales in the third quarter ended July 3, 2010 increased by $2,430,000, or 60%, to $6,490,000 compared to $4,060,000 in the same quarter last year. Volumes shipped were 63% higher and foreign currency fluctuations reduced sales by $117,000, or 3%, mainly due to a stronger U.S. Dollar against both the British Pound and the Euro in this period compared to the same period last year. Shipment volumes were $2,547,000 higher than in the same quarter last year despite shortages of some key electrical components which continue to be in short supply globally. The main reason for the increase in volumes shipped was greater demand from new customers and shipments into new applications. Demand within the Company s traditional industrial markets also improved slightly overall.In the controls business segment, sales were higher in all regions in which the Company operates. In the Far East, sales were $1,324,000 compared to $262,000 in the third quarter of fiscal 2009, an increase of $1,062,000, or 405%. Of the increase of $1,062,000, one third arose from increased demand in the Company s traditional industrial market and two thirds arose from demand for the Company s new range of electric vehicle products. In North America, sales were $3,260,000 compared to $2,310,000, an increase of 41%, and in Europe, sales increased 34% from $1,093,000 in 2009 to $1,460,000 in the third quarter of fiscal 2010. The Company believes its traditional markets have stabilized at the lower sales levels seen during the worldwide recession of late 2008 and calendar 2009. The improvement in demand for the Company s products compared to the same period last year has been driven by new markets for the Company s products. Continued new product introduction has led to customer gains in both on-road and off-road vehicle applications since the beginning of the third quarter of fiscal 2009; however, there cannot yet be any assurance that these gains will continue to translate into increased sales.
Gross profit of $2,260,000 was 34.8% of sales in the third quarter compared to $1,481,000 or 36.5% of sales in the same quarter last year. Higher volumes shipped increased reported gross profit, although this was offset by increases in raw material costs associated with the short supply of some components and higher start up costs with certain new customers. The net increase in reported gross profit from higher shipment volume offset by the lower gross profit margin was $722,000. Foreign currency fluctuations increased reported gross profit by $57,000 compared to the same period last year.
Selling, research and administrative expenses in the third quarter of 2010 were $2,322,000, an increase of $272,000, or 13%. Foreign currency fluctuations reduced reported operating expense by $61,000 or 3%, compared with the same quarter last year. Excluding the favorable effect of foreign currency fluctuations, selling, research and administrative expenses were $333,000, or 16%, higher in the third quarter compared to the same period last year. The increase in expense was due largely to higher pension expense, additional employment costs associated with the reversal of a voluntary 10% salary sacrifice last year, higher numbers of engineers, particularly in research and development, and prototype costs following the significant increase in demand from new customers and applications as compared with the same period last year. In the third quarter, an amount of $91,000 of U.K. governmental grant was offset against new product development costs.
There was an operating loss in the third quarter of $62,000, which was an improvement of $507,000 compared with the reported operating loss of $569,000 in the same period last year. The reduction in the operating loss was due to a combination of significantly higher demand for the Company s products offset by a modest increase in operating expense, which together contributed to a $388,000 reduction in the operating loss compared to the prior year period. In addition, favorable foreign currency fluctuations further reduced the reported operating loss by $119,000. In the capacitor business segment, there was an operating profit of $30,000 compared to an operating profit of $7,000 in the third quarter last year, the increase being due to the 16% increase in sales volume compared to the prior year s third quarter.
The Company recorded a profit before income taxes of $137,000 in the quarter compared to a loss before income taxes of $496,000 in the same period last year. There was a net profit for the quarter of $119,000 or $.03 per share compared to a net loss of $300,000 or a loss of $.09 per share in the third quarter of fiscal 2009.
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