Sevcon Reports Financial Results for Second Quarter Fiscal 2015
07 May 2015 - 9:13AM
Sevcon, Inc. (Nasdaq:SEV) reported financial results for the second
quarter of fiscal 2015 ended April 4, 2015.
Second-Quarter Fiscal 2015 Results Summary
- Revenues increased to $10.34 million, from $9.17 million in the
second quarter of fiscal 2014, a 13% increase that reflected
increased customer demand for products in the on-road sector.
Foreign currency fluctuations decreased reported sales in the
second fiscal quarter by $833,000, or 9%, mainly due to a stronger
U.S. Dollar compared with both the British Pound and the Euro than
in the prior-year period. Excluding the impact of foreign currency,
revenues would have been 22% higher than the prior-year period.
- Operating income was $674,000, compared with operating income
of $196,000 in the second quarter last year. Excluding the net
favorable impact of foreign currency, operating income would have
been $186,000.
- There was a charge to consolidated income in the second quarter
of $200,000 to record the change in the fair value of foreign
exchange contracts accounted for as cash flow hedges.
- There was an income tax charge of $65,000 in the second quarter
of fiscal 2015, compared with a benefit of $23,000 in the
year-earlier quarter.
- Net income attributable to common stockholders was $539,000, or
$0.16 per share, after a preference share dividend of $114,000 or
$0.02 per share, compared with net income of $162,000, or $0.05 per
share, a year earlier. Excluding the $159,000 after-tax impact of
the charge for the change in the value of derivative contracts, net
income for the quarter would have been $698,000, or $0.20 per
share.
Six Month Fiscal 2015 Result Summary
- Revenues were $20.27 million, compared with $18.22 million in
the first six months of fiscal 2014. Foreign currency fluctuations
decreased reported sales in the first half of the year by $1.1
million, or 6%, mainly due to a stronger U.S. Dollar compared with
both the British Pound and the Euro than in the prior-year period.
Excluding the impact of foreign currency, revenues would have been
17% higher than the prior-year period.
- Operating income was $956,000, compared with operating income
of $906,000 in the first six months of last year. Excluding the net
favorable impact of foreign currency in the period, operating
income in the first six months of 2015 would have been $232,000.
- There was a charge to consolidated income in first six months
of fiscal 2015 of $200,000 to record the change in the fair value
of foreign currency contracts accounted for as cash flow hedges.
- There was an income tax charge of $105,000 in the second
quarter of fiscal 2015, compared with an income tax charge of
$98,000 in the prior-year period.
- Net income attributable to common stockholders was $710,000, or
$0.21 per share, after a preference share dividend of $225,000 or
$0.05 per share, compared with net income of $650,000, or $0.19 per
share, for the first six months of fiscal 2014. Excluding the
$159,000 after-tax impact of the charge for the change in the value
of derivative contracts, net income for the period would have been
$869,000, or $0.25 per share.
Management Comments
"The second quarter saw us continue to build momentum in our
markets," said President and CEO Matt Boyle. "Sales were up 13%
from the second quarter of fiscal 2014. Foreign exchange was a
major factor, which decreased both reported revenues and expenses.
Nearly all of our growth this quarter was driven by increased
customer demand for the flexible and easily adaptable power train
solutions we have been developing for an expanding range of on-road
applications. Although the majority of our incremental Q2 on-road
sales were for electric and hybrid vehicle applications, we see
growing demand for our next generation of products in other
electrification applications such as hybridisation for improved
performance and efficiency. We see the operating results that
Sevcon delivered in the second quarter as an indicator of the
performance we can expect for the foreseeable future," added
Boyle.
"We believe that our traditional off-road industrial markets
will continue to be a proxy for global economic trends, and we have
initiatives underway to accelerate our growth in those sectors
against that backdrop. In the on-road sector, our higher investment
in our engineering and technical innovation has enabled us to forge
strong partnerships with some of the largest companies in the
world. We have the opportunity to write the next chapter of
Sevcon's growth by capitalizing on the opportunities we see
emerging in electrification. We believe that our core technology
platforms can be applied and sold across multiple, higher-growth
markets as the world transitions to electrification. Sevcon's
flexible, adaptable solutions strategy creates a wide variety of
customer-specific products that can lower our production costs
through larger volumes, protect our present margins, and create
opportunities for organic growth."
Second-Quarter Fiscal 2015 Conference Call
Details
Sevcon has scheduled a conference call to review its results for
the second quarter of fiscal 2015 tomorrow, May 7, 2015 at 9:00
a.m. ET. Those who wish to listen to the conference call webcast
should visit the investor relations section of the company's
website at www.sevcon.com. The live call also can be accessed by
dialing (877) 407-5790 or (201) 689-8328 prior to the start of the
call. If you are unable to listen to the live call, the webcast
will be archived on the company's website.
|
Second Quarter Fiscal
2015 Financial Highlights |
(In thousands except
per-share data) |
|
Three months ended |
Six months ended |
|
(Unaudited) |
(Unaudited) |
|
April 4, 2015 |
March 29, 2014 |
April 4, 2015 |
March 29, 2014 |
Revenues |
$ 10,340 |
$ 9,170 |
$ 20,273 |
$ 18,219 |
Operating income |
674 |
196 |
956 |
906 |
Interest income |
11 |
1 |
16 |
1 |
Interest expense |
(14) |
(19) |
(40) |
(35) |
Foreign currency gain (loss) |
235 |
(39) |
279 |
(124) |
Change in fair value of cash flow hedges |
(200) |
-- |
(200) |
-- |
Income before income taxes |
706 |
139 |
1,011 |
748 |
Income taxes (provision) benefit |
(65) |
23 |
(105) |
(98) |
Net income |
641 |
162 |
906 |
650 |
Net loss attributable to non-controlling
interest |
12 |
-- |
29 |
-- |
Net income attributable to Sevcon, Inc. and
subsidiaries |
653 |
162 |
935 |
650 |
Series A Preference Share dividends |
(114) |
-- |
(225) |
-- |
Net income attributable to common
stockholders |
539 |
162 |
710 |
650 |
Basic income per share |
$ 0.16 |
$ 0.05 |
$ 0.21 |
$ 0.19 |
Diluted income per share |
$ 0.14 |
$ 0.05 |
$ 0.19 |
$ 0.19 |
Average shares outstanding - Basic |
3,466 |
3,401 |
3,446 |
3,388 |
Average shares outstanding - Diluted |
4,912 |
3,491 |
4,903 |
3,452 |
|
|
|
Summarized Balance Sheet
Data |
|
|
|
(in thousands of dollars) |
|
April 4, 2015 |
September 30, 2014 |
|
(unaudited) |
(derived from audited
statements) |
Cash and cash equivalents |
$ 8,645 |
$ 11,238 |
Receivables |
7,235 |
6,877 |
Inventories |
6,438 |
6,258 |
Prepaid expenses and other current
assets |
2,471 |
1,747 |
Total current assets |
24,789 |
26,120 |
Long-term assets |
6,949 |
7,847 |
Total assets |
$ 31,738 |
$ 33,967 |
|
|
|
Current liabilities |
$ 6,181 |
$ 6,276 |
Liability for pension benefits |
8,406 |
9,529 |
Other long-term liabilities |
-- |
1,700 |
Stockholders' equity |
17,061 |
16,342 |
Non-controlling interest |
90 |
120 |
Total liabilities and stockholders'
equity |
$ 31,738 |
$ 33,967 |
About Sevcon, Inc.
Sevcon is a world leader in the design and manufacture of
controls for zero emission electric and hybrid vehicles. The
controls are used to vary the speed and movement of vehicles, to
integrate specialized functions, and to optimize the energy
consumption of the vehicle's power source. Sevcon supplies
customers throughout the world from its operations in the USA, the
UK, France, Germany, Italy and the Asia Pacific region and through
an international dealer network. Sevcon's customers operate in
diverse markets and include manufacturers of electric motors, cars,
trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining
vehicles, agricultural tractors and implements, and other
electrically powered vehicles and systems. For more information,
visit www.sevcon.com.
Forward-Looking Statements
Statements in this release about Sevcon's future financial
results are forward-looking statements subject to risks and
uncertainties that could cause actual results to differ materially
from those we anticipate. In particular: capital markets are
cyclical and weakness in the United States and international
economies may harm our business; global demand for electric
vehicles incorporating our products may not grow as much as we
expect; our customers' products may not be as successful as those
of other entrants in the electric vehicle market who are supplied
by our competitors; we may not be able to attract and retain the
level of high quality engineering staff that we need to develop the
new and improved products we need to be successful; we are
dependent on a few key suppliers and subcontractors for most
components, sub-assemblies and finished products, and we may not be
able to establish alternative sources of supply in time if supplies
are interrupted; we may not be able to raise the capital we
anticipate needing to grow our business; and companies we acquire
may be more costly to acquire and integrate, or may not generate as
much revenue and earnings, as we anticipate. Please see the
Company's most recent Forms 10-K and 10-Q on file with the SEC for
further information regarding Sevcon's risk factors.
CONTACT: David Calusdian
Sharon Merrill Associates
1 (617) 542 5300
SEV@InvestorRelations.com
Matt Boyle
President and CEO
1 (508) 281 5503
matt.boyle@Sevcon.com
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