Sparton Corp. (SPA, Financial) filed Quarterly Report for the period ended 2012-09-30.
Sparton Corporation has a market cap of $138.6 million; its shares were traded at around $13.8 with a P/E ratio of 14.7 and P/S ratio of 0.6.
Excluding an increase in intercompany sales of $1.1 million, CS sales to external customers for the three months ended September 30, 2012 decreased $1.3 million as compared with the same quarter last year, primarily reflecting decreased sales to one customer, which delayed certain of its orders into future quarters. CS intercompany sales result primarily from the production of circuit boards that are then utilized in DSS product sales. These intercompany sales are eliminated in consolidation. CS backlog was approximately $37.3 million at September 30, 2012. Commercial orders, in general, may be rescheduled or cancelled without significant penalty, and, as a result, may not be a meaningful measure of future sales. A majority of the September 30, 2012 CS backlog is currently expected to be realized in the next 12 months.
DSS sales decreased approximately $2.1 million in the three months ended September 30, 2012 as compared with the same quarter last year, reflecting the anticipated decreased sonobuoy sales to foreign governments, partially offset by increased U.S. Navy sonobuoy production and engineering sales and increased digital compass sales in the current year quarter. The Company had two sonobuoy lots fail at the Navy test range in the final weeks of September 2012. While these lot failures unfavorably impacted current year first quarter revenues by approximately $3.5 million, it is anticipated that these lots will pass in the Companys fiscal 2013 second quarter with revenues recognized at that time. Total sales to the U.S. Navy in the three months ended September 30, 2012 and 2011 was approximately $12.2 million and $5.9 million, or 25% and 11%, respectively, of consolidated Company net sales for those periods. Sonobuoy sales to foreign governments were $0.1 million and $9.3 million in the three months ended September 30, 2012 and 2011, respectively. DSS backlog was approximately $77.9 million at September 30, 2012. A majority of the September 30, 2012 DSS backlog is currently expected to be realized within the next 12 to 16 months.
The gross profit percentage on DSS sales decreased to 14.6% for the three months ended September 30, 2012 compared to 23.8% for the three months ended September 30, 2011. Gross profit percentage was unfavorable affected in the current year quarter by a significant decrease in foreign sonobuoy sales, partially offset by the positive impact from increased digital compass sales as compared to the prior year quarter.
Cash flows used in financing activities in the three months ended September 30, 2012 and 2011 totaled $0.2 million and less than $0.1 million, respectively. The three months ended September 30, 2012 reflect the use of cash of $0.2 million to satisfy income tax withholding requirements in relation to the vesting of executives restricted stock in exchange for the surrender of a portion of the vesting shares. Each of the three months ended September 30, 2012 and 2011 also reflect repayments on the Companys outstanding industrial revenue bonds with the state of Ohio of less than $0.1 million. Additionally, the Company received $0.1 million from the exercise of stock options during the first three months of fiscal 2013.
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Sparton Corporation has a market cap of $138.6 million; its shares were traded at around $13.8 with a P/E ratio of 14.7 and P/S ratio of 0.6.
Highlight of Business Operations:
Medical sales increased approximately $0.6 million in the three months ended September 30, 2012 as compared with the same quarter last year. Reflected within the increase is $3.2 million of increased sales to this business units largest customer due to expanded demand for its programs and additional refurbishment service revenue which began in the second half of fiscal 2012. Additionally reflected is $1.4 million of increased sales to another customer to meet increased demand for its product in both the U.S. and Japan. Partially offsetting these increases were decreased sales to three customers totaling $4.0 million. Decreased sales to one customer reflect the dual sourcing of certain of its programs with the Company during fiscal 2012. Decreased sales to the remaining two customers reflect these customers disengagements during fiscal 2012. Medical sales are dependent on a small number of key strategic customers. Fenwal Blood Technologies contributed 22% and 15% of consolidated company net sales during the three months ended September 30, 2012 and 2011, respectively. Medical backlog was approximately $40.9 million at September 30, 2012. Commercial orders, in general, may be rescheduled or cancelled without significant penalty, and, as a result, may not be a meaningful measure of future sales. A majority of the September 30, 2012 Medical backlog is currently expected to be realized in the next 12 months.Excluding an increase in intercompany sales of $1.1 million, CS sales to external customers for the three months ended September 30, 2012 decreased $1.3 million as compared with the same quarter last year, primarily reflecting decreased sales to one customer, which delayed certain of its orders into future quarters. CS intercompany sales result primarily from the production of circuit boards that are then utilized in DSS product sales. These intercompany sales are eliminated in consolidation. CS backlog was approximately $37.3 million at September 30, 2012. Commercial orders, in general, may be rescheduled or cancelled without significant penalty, and, as a result, may not be a meaningful measure of future sales. A majority of the September 30, 2012 CS backlog is currently expected to be realized in the next 12 months.
DSS sales decreased approximately $2.1 million in the three months ended September 30, 2012 as compared with the same quarter last year, reflecting the anticipated decreased sonobuoy sales to foreign governments, partially offset by increased U.S. Navy sonobuoy production and engineering sales and increased digital compass sales in the current year quarter. The Company had two sonobuoy lots fail at the Navy test range in the final weeks of September 2012. While these lot failures unfavorably impacted current year first quarter revenues by approximately $3.5 million, it is anticipated that these lots will pass in the Companys fiscal 2013 second quarter with revenues recognized at that time. Total sales to the U.S. Navy in the three months ended September 30, 2012 and 2011 was approximately $12.2 million and $5.9 million, or 25% and 11%, respectively, of consolidated Company net sales for those periods. Sonobuoy sales to foreign governments were $0.1 million and $9.3 million in the three months ended September 30, 2012 and 2011, respectively. DSS backlog was approximately $77.9 million at September 30, 2012. A majority of the September 30, 2012 DSS backlog is currently expected to be realized within the next 12 to 16 months.
The gross profit percentage on DSS sales decreased to 14.6% for the three months ended September 30, 2012 compared to 23.8% for the three months ended September 30, 2011. Gross profit percentage was unfavorable affected in the current year quarter by a significant decrease in foreign sonobuoy sales, partially offset by the positive impact from increased digital compass sales as compared to the prior year quarter.
Cash flows used in financing activities in the three months ended September 30, 2012 and 2011 totaled $0.2 million and less than $0.1 million, respectively. The three months ended September 30, 2012 reflect the use of cash of $0.2 million to satisfy income tax withholding requirements in relation to the vesting of executives restricted stock in exchange for the surrender of a portion of the vesting shares. Each of the three months ended September 30, 2012 and 2011 also reflect repayments on the Companys outstanding industrial revenue bonds with the state of Ohio of less than $0.1 million. Additionally, the Company received $0.1 million from the exercise of stock options during the first three months of fiscal 2013.
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