Stocker & Yale, Inc. is a diversified manufacturing company engaged primarily in the production of specialized illumination and photonics products for measuring and inspection equipment in the microscopy, machine vision and telecommunications component manufacturing markets. In addition, the company manufactures machine tool components and accessories for the automotive and related industries. The company operates in a company-owned facility in Salem, New Hampshire and in three leased spaces, in Roseville, Michigan, Singapore and, Saint-Laurent, Quebec. Stockeryale Inc. has a market cap of $4.71 million; its shares were traded at around $0.13 with and P/S ratio of 0.15. Stockeryale Inc. had an annual average earning growth of 0.4% over the past 10 years.
Highlight of Business Operations:Net sales were $2.3 million for the three months ended September 30, 2009, a 37% decrease from $3.7 million for the third quarter of 2008. Adjusted for the impact of foreign currency translation, the decrease in sales was 30%. The decrease in sales was due to decreased demand from the LED segment (46%) and Photonic Products segment (31%). The decrease also includes the negative impact of foreign currency translation of approximately $252,000 of which $174,000 is related to the decline in the British Pound (“GBP”) from the prior year.
Operating expenses totaled $1.5 million for the third quarter of 2009, decreasing 41% from $2.5 million for the third quarter of 2008. The decrease in expenses from the prior year result from lower costs in 2009 due to cost reduction initiatives of approximately $426,000, one-time expense of acquisition costs of $452,000 in 2008 relating to an acquisition transaction that did not close and a favorable foreign currency impact in 2009 of approximately $122,000.
Net loss including discontinued operations was $1.5 million or $0.03 per share. This compares to net loss of $3.1 million or $0.08 per share for the third quarter of 2008
Other expenses, which are comprised primarily of non-cash debt discount and financing costs, showed an expense of $0.5 million for the nine months ended September 30, 2009, versus an expense of $3.1 million during the nine months ended September 30, 2008. The change in expense was mainly from one-time expenses in 2008 of approximately $961,000 relating to a acquisition transaction that did not close, a gain due to the weakening of the U.S. dollar against the British Pound (GBP), and the Euro of approximately $2.0 million, a gain on the valuation of the warrant liability of approximately $92,000, offset by an decrease in cost of financing expenses of approximately $642,000.
Net loss including discontinued operations was $3.8 million or $0.09 per share. This compares to net loss of $7.5 million or $0.20 per share for the first nine months of 2008.
As a result of the sale of substantially all North American assets of the Company on October 13, 2009, the Company s management believes it has adequate funds to sustain current operations. Proceeds from the sale amounted to $15,000,000 from which approximately $9,700,000 was used to repay loans, pay expenses associated with the sale, and other settlements and obligations. In addition, $750,000 of the proceeds is held in escrow for a period of one year from the date of sale. The cash balance was $6.3 million, including $750,000 held in escrow, on October 31, 2009, after the payment of loans, transaction expenses and other obligations.
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