Espey Mfg. & Electronics Corp (ESP, Financial) filed Quarterly Report for the period ended 2009-09-30.
ESPEY MFG. & ELECTRONICS is engaged principally in the development, design, production and sales of specialized electronic power conditioning apparatus (electronic power supplies), a wide variety of transformers and other types of iron-core components, and electronic systems. In some cases, the Company manufactures such products in accordance with pre-developed mechanical and electrical requirements not requiring environmental testing. The Company does not generally manufacture standardized components. Espey Mfg. & Electronics Corp has a market cap of $45.2 million; its shares were traded at around $19.5 with a P/E ratio of 14.9 and P/S ratio of 1.7. The dividend yield of Espey Mfg. & Electronics Corp stocks is 4.6%. Espey Mfg. & Electronics Corp had an annual average earning growth of 29.7% over the past 5 years.
$4.8 million, representing a 13.1% decrease from the amount of new orders
received in the first three months of fiscal 2009. These new orders are in line
with the Company's strategy of getting involved in long-term high quantity
military and industrial products and are predominately for follow-on production
of mature products. The Company's backlog was $37.0 million at September 30,
2009 which includes $19.1 million from two significant customers compared to
$44.2 million at September 30, 2008 which included $28.0 million from two
significant customers. The backlog for the Company represents the estimated
remaining sales value of work to be performed under firm contracts.
Net sales for the three months ended September 30, 2009 were $6,874,940 as
compared to $6,053,519 for the same period in 2008, representing a 13.6%
increase. The increase for the three months ended September 30, 2009 was due to
an overall increase in transformer shipments offset by a decrease in power
supply shipments.
For the three months ended September 30, 2009 and 2008 gross profits were
$2,058,202 and $1,151,275, respectively. Gross profit as a percentage of sales
was 29.9% and 19.0%, for the three months ended September 30, 2009 and 2008,
respectively. The primary factor in determining gross profit and net income is
product mix. The gross profits on mature products and build to print contracts
are higher as compared to products which are still in the engineering
development stage or in the early stages of production. In any given accounting
period the mix of product shipments between higher margin mature programs and
less mature programs, including loss contracts, has a significant impact on
gross profit and net income. The increased gross profit and gross profit
percentage in the three months ended September 30, 2009, as compared to
September 30, 2008, was primarily the result of favorable product mix with only
minor cost overruns related to loss contracts. For the three months ended
September 30, 2008 the Company had unexpected losses incurred on two programs
with significant engineering and production time required for design efforts.
These two programs experienced significant cost overruns due to extended product
qualification testing and difficulties moving the products from engineering
design into full production. Currently, one program has completed qualification
testing and has moved into full production. The other program is still in
qualification and has made significant progress towards completion. Management
continues to evaluate the Company's workforce to ensure that production and
overall execution of the backlog orders and additional anticipated orders are
successfully obtained and executed. Employment of full time equivalents at
September 30, 2009 was 166 compared to 169 people at September 30, 2008.
Net income for the three months ended September 30, 2009, was $992,763 or $.47
per share, both basic and diluted, compared to $398,296 or $.19 per share, both
basic and diluted, for the three months ended September 30, 2008. The increase
in net income per share was mainly due to higher gross profit on sales offset by
higher selling general and administrative expenses and decreased interest
income.
The Company's working capital as of September 30, 2009 was approximately $26.6
million. During the three months ended September 30, 2009 and 2008 the Company
repurchased 0 and 2,744 shares, respectively, of its common stock on the open
market for a total purchase price of $0 and $52,038, respectively. Under
existing authorizations from the Company's Board of Directors, as of September
30, 2009, management is authorized to purchase an additional $1,688,454 million
of Company stock.
During the three months ended September 30, 2009 and 2008, the Company expended
$147,308 and $125,755, respectively, for plant improvements and new equipment.
The Company has budgeted approximately $450,000 for new equipment and plant
improvements in fiscal 2010. Management anticipates that the funds required will
be available from current operations.
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ESPEY MFG. & ELECTRONICS is engaged principally in the development, design, production and sales of specialized electronic power conditioning apparatus (electronic power supplies), a wide variety of transformers and other types of iron-core components, and electronic systems. In some cases, the Company manufactures such products in accordance with pre-developed mechanical and electrical requirements not requiring environmental testing. The Company does not generally manufacture standardized components. Espey Mfg. & Electronics Corp has a market cap of $45.2 million; its shares were traded at around $19.5 with a P/E ratio of 14.9 and P/S ratio of 1.7. The dividend yield of Espey Mfg. & Electronics Corp stocks is 4.6%. Espey Mfg. & Electronics Corp had an annual average earning growth of 29.7% over the past 5 years.
Highlight of Business Operations:
New orders received in the first three months of fiscal 2010 were approximately$4.8 million, representing a 13.1% decrease from the amount of new orders
received in the first three months of fiscal 2009. These new orders are in line
with the Company's strategy of getting involved in long-term high quantity
military and industrial products and are predominately for follow-on production
of mature products. The Company's backlog was $37.0 million at September 30,
2009 which includes $19.1 million from two significant customers compared to
$44.2 million at September 30, 2008 which included $28.0 million from two
significant customers. The backlog for the Company represents the estimated
remaining sales value of work to be performed under firm contracts.
Net sales for the three months ended September 30, 2009 were $6,874,940 as
compared to $6,053,519 for the same period in 2008, representing a 13.6%
increase. The increase for the three months ended September 30, 2009 was due to
an overall increase in transformer shipments offset by a decrease in power
supply shipments.
For the three months ended September 30, 2009 and 2008 gross profits were
$2,058,202 and $1,151,275, respectively. Gross profit as a percentage of sales
was 29.9% and 19.0%, for the three months ended September 30, 2009 and 2008,
respectively. The primary factor in determining gross profit and net income is
product mix. The gross profits on mature products and build to print contracts
are higher as compared to products which are still in the engineering
development stage or in the early stages of production. In any given accounting
period the mix of product shipments between higher margin mature programs and
less mature programs, including loss contracts, has a significant impact on
gross profit and net income. The increased gross profit and gross profit
percentage in the three months ended September 30, 2009, as compared to
September 30, 2008, was primarily the result of favorable product mix with only
minor cost overruns related to loss contracts. For the three months ended
September 30, 2008 the Company had unexpected losses incurred on two programs
with significant engineering and production time required for design efforts.
These two programs experienced significant cost overruns due to extended product
qualification testing and difficulties moving the products from engineering
design into full production. Currently, one program has completed qualification
testing and has moved into full production. The other program is still in
qualification and has made significant progress towards completion. Management
continues to evaluate the Company's workforce to ensure that production and
overall execution of the backlog orders and additional anticipated orders are
successfully obtained and executed. Employment of full time equivalents at
September 30, 2009 was 166 compared to 169 people at September 30, 2008.
Net income for the three months ended September 30, 2009, was $992,763 or $.47
per share, both basic and diluted, compared to $398,296 or $.19 per share, both
basic and diluted, for the three months ended September 30, 2008. The increase
in net income per share was mainly due to higher gross profit on sales offset by
higher selling general and administrative expenses and decreased interest
income.
The Company's working capital as of September 30, 2009 was approximately $26.6
million. During the three months ended September 30, 2009 and 2008 the Company
repurchased 0 and 2,744 shares, respectively, of its common stock on the open
market for a total purchase price of $0 and $52,038, respectively. Under
existing authorizations from the Company's Board of Directors, as of September
30, 2009, management is authorized to purchase an additional $1,688,454 million
of Company stock.
During the three months ended September 30, 2009 and 2008, the Company expended
$147,308 and $125,755, respectively, for plant improvements and new equipment.
The Company has budgeted approximately $450,000 for new equipment and plant
improvements in fiscal 2010. Management anticipates that the funds required will
be available from current operations.
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