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Tech/Ops Sevcon Inc (TO) filed Annual Report for the period ended 2011-09-30.
Tech/ops Sevcon Inc. has a market cap of $24 million; its shares were traded at around $0 with a P/E ratio of 89.4 and P/S ratio of 0.9.
This is the annual revenues and earnings per share of TO over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of TO.
Highlight of Business Operations:
In 2011, sales were $32,286,000, an increase of $6,233,000, or 24%, compared to 2010. In 2011, approximately 53% of the Company s sales were made outside the United States and were denominated in currencies other than the U.S. Dollar, principally the Euro and the British Pound; accordingly, those revenues are subject to fluctuation when translated into U.S. Dollars. In 2011, the average U.S. Dollar exchange rate was 3% higher compared to both the British Pound and the Euro, than in 2010. As a result, foreign currency sales denominated in British Pounds and Euros translated into more U.S. Dollars. The overall impact to 2011 was that reported sales increased by $541,000, or 2%, due to currency rate changes.In the capacitor business, reported sales to external customers increased by $628,000, or 39%, compared to 2010. Currency exchange rate changes increased sales by $64,000, or 4% and capacitor volumes shipped were $564,000, or 35%, higher than last year due principally to higher demand in the railway signaling market and the industrial sector.
Foreign currency fluctuations had a net unfavorable impact on gross profit of $98,000. This was due to the U.S. Dollar being marginally weaker in 2011 than in 2010 compared with the British Pound and the Euro, which had a favorable impact on sales of $541,000 but an unfavorable impact on cost of sales of $639,000. In the controls segment, gross profit of $10,191,000 or 34.0%, was $1,844,000 or 22% higher than last year which was due to the 21% increase in volumes shipped in 2011 compared to last year. In the capacitor segment gross profit of $1,108,000 was significantly higher than the 2010 gross profit of $773,000. The gross profit was 49% of sales in 2011 compared to 47% of sales in 2010. The increase in the capacitor business gross profit percentage was mainly due to an increase in the proportion of sales to higher margin industrial and railway signaling customers. The table below analyzes the year-to-year change in sales, cost of sales and gross profit.
Selling, research and administrative expenses, excluding a one-time gain of $447,000 on the sale of fixed assets in 2011 and a pension curtailment gain of $507,000 in 2010, increased by $1,378,000, or 15%, compared to 2010. Unfavorable foreign currency fluctuations increased reported operating expenses by $244,000, or 3%, due to the weaker U.S. Dollar in 2011 compared to both the British Pound and the Euro in the prior year. The increase in selling, research and administrative expenses was due largely to higher salary and fringe costs compared to the same period last year, due to the hiring of additional sales and marketing and engineering staff to support the current and future growth of the business and also the award of a general pay increase in the first quarter of 2011. The Company received U.K. government grants of $600,000 in the first two quarters of 2011 associated with research and development expense of $1,714,000 in the same period. The grants received were recorded as a reduction of research and development expense in the period. The Company also recorded in selling, research and administrative expenses in 2011, a one-time gain of $447,000 from the sale of fixed assets which included a gain of $451,000 on the sale of a surplus U.K. facility offset by a $4,000 write down of other fixed assets in the business.
There was operating income for the year of $1,070,000 compared to $329,000 in 2010, an improvement of $741,000. This was due to several factors including the significant increase in sales volumes shipped and the receipt of U.K. government grants, offset by higher operating expenses. The controls business reported operating income of $1,232,000 compared to $639,000 in 2010. Operating income in the capacitor business was $392,000 compared with $76,000 in 2010.
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