Measurement Specialties Inc. (MEAS, Financial) filed Annual Report for the period ended 2012-03-31.
Measuremnt Spcl has a market cap of $482.9 million; its shares were traded at around $32.5 with a P/E ratio of 18.3 and P/S ratio of 1.8. Measuremnt Spcl had an annual average earning growth of 11.5% over the past 5 years.
Gross margin: Gross margin (gross profit as a percent of net sales) decreased to approximately 40.2% from approximately 41.8%. The decrease in gross margin is mainly due to product sales mix, increases in material costs and wages, higher scrap and the appreciation of the RMB. The Company sold a larger proportion of products with lower gross margin as compared to the prior year, mainly reflecting the increase in sales to Sensata and other engine and vehicle related sales, as well as the decrease in piezo sales. In comparing fiscal 2012 to 2011, the RMB appreciated approximately 3.6% relative to the U.S. dollar. This translates to an annualized decrease in profits of approximately $960 based on an estimate decrease in our operating income of approximately $2,667 for every 10% appreciation of the RMB against the U.S. dollar.
Partially offsetting the increase in sales was a translation decrease in sales resulting from changes in foreign currency exchange rates. If the average U.S. dollar / Euro exchange rate had not changed during the twelve months ended March 31, 2011 as compared to the twelve months ended March 31, 2010, the Company’s net sales would have been higher by approximately $4,967. Since a portion of the Company’s sales were denominated in Euros and translated into U.S. dollars, there could have been a translation decrease or a translation increase in the Company’s net sales depending on changes in exchange rates. The U.S. dollar appreciated relative to the Euro in comparing average exchange rates for the twelve months ended March 31, 2011 to the twelve months ended March 31, 2010. For example, €1,000 was translated to $1,321 based on the twelve month average exchange rate ended March 31, 2011, but the same €1,000 was translated to $1,412 using twelve month average exchange rate ended March 31, 2010.
Gross margin: Gross margin (gross profit as a percent of net sales) increased to approximately 41.8% from approximately 38.4%. The increase in margin was mainly due to higher volumes of production and sales and the resulting improvement in leverage and overhead absorption. As with all manufacturers, our gross margins were sensitive to overall volume of business in that certain costs are fixed, and when volumes increase, our margins are higher. Additionally, margins were favorably impacted by improved product sales mix. However, partially offsetting the increase in gross margins was the appreciation of the RMB, and the increase in China wages. During fiscal 2011, the RMB appreciated approximately 4.0% relative to the U.S. dollar as compared to the corresponding period last year. This translated to a decrease in profits of approximately $800 based on an estimate decrease in our operating income of approximately $200 for every 1% appreciation of the RMB against the U.S. dollar.
A key source of the Company’s liquidity is its ability to generate positive operating cash flows. Cash flows provided by operating activities increased $8,714 to $42,620. The increase in operating cash flows is mainly due to the $22,109 increase in cash flows from operating working capital (net changes in trade accounts receivable, inventory and accounts payable). In comparing cash flows generated from operating working capital for the year ended March 31, 2012 to the prior year, the largest drivers of the increase in cash flows from operating working capital were the favorable trends with trade receivables, inventory and account payable. The current period net change in accounts receivable was an increase or use of cash flows of $1,506, as compared to an increase or a use of cash flows of $10,351 last year. The improvement in the change in trade receivables mainly reflects continued positive collection trends and the relative level of sales toward the end of the fourth quarter of fiscal 2012, as the number of days sales outstanding (DSO) remained relatively stable at approximately 51 days. DSO is a non-GAAP financial measure and is calculated as follows: ((trade receivables/fourth quarter net sales annualized)*360) or (($49,315 / ($86,436 X 4))*360). The net increases in inventory for the current and prior periods were $1,326 and $7,627, respectively. The improvement in the change in inventory balances for operating cash flows is largely due to efforts to closely manage inventory levels. The number of inventory turns improved slightly to 3.7 from 3.5 annually. The number of inventory turns is also a non-GAAP financial measure and is calculated as follows: (fourth quarter cost of goods sold annualized / inventory) or (($51,874 X 4) / $56,306). Operating cash flows from accounts payable fluctuated favorably by $6,963, reflecting among other factors, the relative level of purchases toward the end of the fiscal year. The decrease in income tax payable mainly reflects higher tax payments, and the increase in income tax payments during the current period as compared to the same period last year is due to higher levels of taxable income.
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Measuremnt Spcl has a market cap of $482.9 million; its shares were traded at around $32.5 with a P/E ratio of 18.3 and P/S ratio of 1.8. Measuremnt Spcl had an annual average earning growth of 11.5% over the past 5 years.
Highlight of Business Operations:
Total selling, general and administrative expenses (“Total SG&A”) as a percentage of net sales were higher in fiscal 2012 as compared to the prior year, mainly reflecting increases in acquisition related expenses and amortization of acquire intangible assets, as well as higher research and development costs. Long-term, the Company plans to continue to control costs and leverage our SG&A expenses by growing sales at a higher rate than SG&A expenses. As a percent of sales, Total SG&A was approximately 28.7%, 28.6% and 34.1% in fiscal years 2012, 2011 and 2010, respectively. In 2013, we expect a decrease in our SG&A as a percentage of net sales, assuming no new acquisitions, mainly due to higher sales, which we expect to be partially offset by continued investment in R&D for new programs and increased amortization expense from recent acquisitions.Gross margin: Gross margin (gross profit as a percent of net sales) decreased to approximately 40.2% from approximately 41.8%. The decrease in gross margin is mainly due to product sales mix, increases in material costs and wages, higher scrap and the appreciation of the RMB. The Company sold a larger proportion of products with lower gross margin as compared to the prior year, mainly reflecting the increase in sales to Sensata and other engine and vehicle related sales, as well as the decrease in piezo sales. In comparing fiscal 2012 to 2011, the RMB appreciated approximately 3.6% relative to the U.S. dollar. This translates to an annualized decrease in profits of approximately $960 based on an estimate decrease in our operating income of approximately $2,667 for every 10% appreciation of the RMB against the U.S. dollar.
Partially offsetting the increase in sales was a translation decrease in sales resulting from changes in foreign currency exchange rates. If the average U.S. dollar / Euro exchange rate had not changed during the twelve months ended March 31, 2011 as compared to the twelve months ended March 31, 2010, the Company’s net sales would have been higher by approximately $4,967. Since a portion of the Company’s sales were denominated in Euros and translated into U.S. dollars, there could have been a translation decrease or a translation increase in the Company’s net sales depending on changes in exchange rates. The U.S. dollar appreciated relative to the Euro in comparing average exchange rates for the twelve months ended March 31, 2011 to the twelve months ended March 31, 2010. For example, €1,000 was translated to $1,321 based on the twelve month average exchange rate ended March 31, 2011, but the same €1,000 was translated to $1,412 using twelve month average exchange rate ended March 31, 2010.
Gross margin: Gross margin (gross profit as a percent of net sales) increased to approximately 41.8% from approximately 38.4%. The increase in margin was mainly due to higher volumes of production and sales and the resulting improvement in leverage and overhead absorption. As with all manufacturers, our gross margins were sensitive to overall volume of business in that certain costs are fixed, and when volumes increase, our margins are higher. Additionally, margins were favorably impacted by improved product sales mix. However, partially offsetting the increase in gross margins was the appreciation of the RMB, and the increase in China wages. During fiscal 2011, the RMB appreciated approximately 4.0% relative to the U.S. dollar as compared to the corresponding period last year. This translated to a decrease in profits of approximately $800 based on an estimate decrease in our operating income of approximately $200 for every 1% appreciation of the RMB against the U.S. dollar.
A key source of the Company’s liquidity is its ability to generate positive operating cash flows. Cash flows provided by operating activities increased $8,714 to $42,620. The increase in operating cash flows is mainly due to the $22,109 increase in cash flows from operating working capital (net changes in trade accounts receivable, inventory and accounts payable). In comparing cash flows generated from operating working capital for the year ended March 31, 2012 to the prior year, the largest drivers of the increase in cash flows from operating working capital were the favorable trends with trade receivables, inventory and account payable. The current period net change in accounts receivable was an increase or use of cash flows of $1,506, as compared to an increase or a use of cash flows of $10,351 last year. The improvement in the change in trade receivables mainly reflects continued positive collection trends and the relative level of sales toward the end of the fourth quarter of fiscal 2012, as the number of days sales outstanding (DSO) remained relatively stable at approximately 51 days. DSO is a non-GAAP financial measure and is calculated as follows: ((trade receivables/fourth quarter net sales annualized)*360) or (($49,315 / ($86,436 X 4))*360). The net increases in inventory for the current and prior periods were $1,326 and $7,627, respectively. The improvement in the change in inventory balances for operating cash flows is largely due to efforts to closely manage inventory levels. The number of inventory turns improved slightly to 3.7 from 3.5 annually. The number of inventory turns is also a non-GAAP financial measure and is calculated as follows: (fourth quarter cost of goods sold annualized / inventory) or (($51,874 X 4) / $56,306). Operating cash flows from accounts payable fluctuated favorably by $6,963, reflecting among other factors, the relative level of purchases toward the end of the fiscal year. The decrease in income tax payable mainly reflects higher tax payments, and the increase in income tax payments during the current period as compared to the same period last year is due to higher levels of taxable income.
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