TIDMSOM
RNS Number : 9098P
Somero Enterprises Inc.
06 September 2017
Press Announcement
For immediate release
06 September 2017
Somero(R) Enterprises, Inc.
("Somero" or "the Company" or "the Group")
Interim Results for the six months ended June 30, 2017
Somero Enterprises, Inc. is pleased to report its interim
results for the six months ended June 30, 2017, which are in line
with management expectations.
Financial Highlights
H1 2017 H1 2016 % Increase
US$ US$
Revenue $ 42.4m $ 39.7m 7%
Adjusted EBITDA(1,2) $ 13.2m $ 12.1m 9%
Adjusted EBITDA margin(1,2) 31% 30%
Profits before tax $ 12.0m $ 10.4m 15%
Adjusted net income(1,3) $ 8.7m $ 7.3m 19%
Diluted adjusted net
income per share(1,3) $ 0.15 $ 0.13 15%
Interim dividend per
share $ 0.0275 $ 0.025 10%
-- Significant growth experienced led by strong trading in Europe and Latin America:
o 7% revenue increase -to US$ 42.4m (H1 2016: US$ 39.7m)
-- Efficient conversion of revenue increase to profits:
o Adjusted EBITDA increased by 9% ---to US$ 13.2m (H1 2016: US$
12.1m) (1,2)
o Adjusted EBITDA margin grew to 31% (H1 2016: 30%) (1,2)
o 15% increase in profits before tax to US$ 12.0m (H1 2016: US$
10.4m)
o Adjusted net income increased by 19% to US$ 8.7m (H1 2016: US$
7.3m) (1,3)
o Diluted adjusted net income per share grew to US$ 0.15 (H1
2016: US$ 0.13) (1,3,4)
-- Strong cash generation experienced, strengthening the balance sheet and increasing return to shareholders:
o Net cash flow from operations grew by 62% to US$ 9.4m (H1
2016: US$5.8m)
o Net cash position at June 30, 2017 was US$ 18.3m (December 31,
2016: US$ 20.2m) even with H1 2017 increases in dividend payments,
settlements of options and restricted stock units (RSUs) and debt
repayment (4)
o 10% increase in interim dividend declared compared to the
prior year - $0.0275 per share for payment on October 18, 2017
o $0.133 per share special dividend, totaling US $7.5m, paid to
shareholders August 14, 2017
Business Highlights
-- Broad-based geographic and product line growth:
o Three of six territories grew in H1 2017 led by Europe, Latin
America and the Rest of World countries
o H1 2017 trading in North America ended with June at the
highest levels of the year with market indicators pointing to solid
H2 2017 trading
o Ride-on Screed sales grew 29% vs. H1 2016
o 3-D Profiler System(R) revenues grew 30% vs. H1 2016
o Other revenues grew 14% vs. H1 2016 driven by sales of parts
and accessories and STS-11M Topping Spreaders
-- New products contributed meaningfully to sales growth:
o S-158C in China, the SP-16 Concrete Hose Line Pulling and
Placing System, and the next generation 3-D Profiler System
combined for US$ 1.4m in sales growth vs. H1 2016
-- Investments to support strategy and expansion:
o Completed construction of Somero Concrete Institute on Fort
Myers, Florida campus and held first classes in Q2 2017
o Completed designs to expand Fort Myers Headquarters with
targeted completion in Q2 2018 at a total cost of US$ 1.3m
Notes:
1. The Company uses non-US GAAP financial measures in order to
provide supplemental information regarding the Company's operating
performance. See further information regarding non-GAAP measures
below.
2. Adjusted EBITDA as used herein is a calculation of the
Company's net income plus tax provision, interest expense, interest
income, foreign exchange gain/(loss), other expense, depreciation,
amortization, and stock based compensation.
3. Adjusted net income as used herein is a calculation of net
income plus amortization of intangibles and excluding the tax
impact of stock option and RSU settlements and other special
items.
4. Net cash is defined as cash and cash equivalents less
borrowings under bank obligations.
Jack Cooney President and Chief Executive Officer of Somero
said:
"Somero's sales performance during H1 2017 experienced solid
momentum, prompting a 10% increase in our interim dividend
following the efficient conversion of revenues into profits and
cash flow. We are particularly pleased that our growth in H1 2017
came from a variety of territories and product lines, highlighting
Somero's diverse portfolio of markets and products. We have proven
our ability to extend our sales reach through product development
and our strengthened financial position will provide funding for
strategic investments so that we can build on the recent
opportunities created by our talented team. With the solid H1 2017
performance and healthy momentum carrying over into H2, the Board
expects Somero to deliver another successful year of growth in line
with current market expectations."
For further information, please contact:
Enquiries:
Somero Enterprises, Inc. www.somero.com
Jack Cooney, CEO +1 239 210 6500
John Yuncza, CFO
Howard Hohmann, EVP Sales
finnCap Ltd (NOMAD and Broker)
Matt Goode (Corporate Finance) +44 (0)20 7220
0500
Carl Holmes (Corporate Finance)
Tim Redfern (Corporate Broking)
Redleaf Communications Ltd (Financial PR Advisor)
somero@redleafpr.com
Elisabeth Cowell +44 (0)20 7382 4730
David Ison
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR").
Notes to Editors:
Somero Enterprises provides industry-leading concrete-leveling
equipment, training, education and support to customers in over 90
countries. The Company's cutting-edge technology allows its
customers to install high-quality horizontal concrete floors
faster, flatter and with fewer people. Somero equipment that
incorporates laser technology and wide-placement methods is used to
place and screed the concrete slab in all building types and has
been specified for use in a wide range of commercial construction
projects for numerous global blue-chip companies.
Somero pioneered the Laser Screed(R) market in 1986 and has
maintained its market-leading position by continuing to focus on
bringing new products to market and developing patent-protected
proprietary designs. In addition to its products, Somero offers
customers unparalleled global service, technical support, training
and education, reflecting the Company's emphasis on helping its
customers achieve their business and profitability goals, a key
differentiator to its peers.
For more information, visit www.somero.com
Chairman's and Chief Executive Officer's Statement
Overview
Somero is on track for another year of profitable growth in 2017
after a strong set of results for the first half of the year. The
highlights are a 7% growth in revenues, 9% growth in EBITDA, a US$
3.6m increase in cash flows from operations, and the declaration on
June 5, 2017 of a US$ 0.133 per share special dividend totaling US$
7.5m that was paid to shareholders on August 14, 2017. We are
pleased with this balanced performance and the healthy momentum of
the business that has carried over into the second half of the
year.
During the first half of the year, three of Somero's six markets
grew compared to H1 2016 led by strong performance in Europe, Latin
America and our Rest of World territories. On a product basis,
three of Somero's six product categories also grew compared to H1
2016 with sales of Ride-on Screeds increasing by a creditable 29%,
sales of 3-D Profiler Systems increasing 30%, and Other revenues,
which includes sales of parts and accessories increasing 14%. The
top-line growth converted efficiently into increased profit driven
by sound cost management and the benefits of price increases and
productivity gains. Gross margins improved to 56.8% compared to
56.2% in H1 2016 while EBITDA margin improved to 31% compared to
30% in H1 2016. Importantly, profit growth combined with sound
working capital management drove the increase in cash flows from
operations to US$ 9.4m, up from US$ 5.8m in H1 2016, an increase of
62%. The strong cash flows resulted in a healthy net cash position
of US$ 18.3m as of June 30, 2017 that adequately supports the US$
0.133 per share special dividend totaling US$ 7.5m that was paid on
August 14, 2017.(1)
Based on the strong performance in H1 2017 and the Board's
confidence in the Company's future, we are pleased to report that
the interim dividend for the six months ended June 30, 2017 was
increased to 2.75 US cents per share by the Board and will be
payable on October 18, 2017 to shareholders on the register at
September 29, 2017.
Market Review
The North American market remains healthy and our customers
continue to report extended project backlogs that span well into
2018. H1 2017 trading in North America ended with June at the
highest levels of the year as weather conditions across the country
improved and the heavy rains seen throughout H1 2017 began to
subside. While H1 2017 sales in North America were $ 28.4m,
marginally down from the US$ 29.8m in H1 2016, we are encouraged by
the high level of activity in the market that has carried forward
which supports our expectation for solid H2 2017 trading in the
US.
Our European market reported particularly strong performance in
H1 2017 with sales increasing to US$ 5.4m, up 108% from the US$
2.6m in H1 2016 as the recovery throughout Europe accelerated and
economic conditions have improved. European sales came from a broad
range of countries in H1 2017, with the most significant
contributions from the United Kingdom, Germany, and the Czech
Republic.
In China, the slow start to the year led to H1 2017 sales of US$
2.7m, down from US$ 3.8m in H1 2016. However, sales in China also
ended the first half on a positive note with June trading at the
highest level of the year. We expect to build on this momentum and
see improvement in H2 2017 driven by marketing, sales execution and
lead generation activities focused on both our existing and new
entry level products. In addition, experience with our China
long-term financing program remains positive and in line with our
previous reporting.
Latin American sales were also particularly strong during the
period, increasing to US$ 1.7m, up from US$ 0.2m in H1 2016 driven
by meaningful contributions from Mexico and Peru. In the Middle
East, while H1 2017 sales were US$ 0.8m, down from US$ 1.4m in H1
2016, we continue to see a high level of interest in our equipment
and have carried a solid pipeline of opportunities over into H2
2017. For our Rest of World territories, which include Australia,
Southeast Asia, Korea, India, Scandinavia and Russia, sales grew
79% to US$ 3.4m compared to US$ 1.9m in H1 2016, with Korea and
Scandinavia the most significant contributors to growth and with
Australia and India also reporting sales increases compared to the
previous year.
New product development
In H1 2017, Somero's revenue growth was in part driven by new
products introduced in late 2016 and early 2017, specifically the
S-158C in China, the SP-16 Concrete Line Pulling and Placing
System, and the next generation 3-D Profiler System. On a combined
basis, these products contributed US $1.4m in growth during H1
2017. Given the success associated with in-house innovation, Somero
continues to invest in its customer-driven product development
effort. Our hiring of a Global Business Development Manager in late
2016 has provided even more focus on identifying new market
opportunities and new market segments for our engineering team to
explore which will drive our product pipeline for years to
come.
Expansion Update
In April 2017, we completed construction of the hands-on
training facility located on the Fort Myers, Florida campus and
launched the Somero Concrete Institute by holding the first
training class through which American Concrete Institute (ACI)
certification was offered to attendees. The Somero Concrete
Institute is an important strategic investment that provides a
comprehensive educational opportunity for students from across the
globe to become certified in concrete placing and finishing. This
initiative is a testament to Somero's commitment to training and
education and will help address the growing shortage of skilled
labour in the North American concrete contractor industry.
Also, in June 2017, the Board approved plans to build a US $1.3m
expansion to the Company's Fort Myers headquarters to accommodate
planned future growth. The building project is on track to be
completed in H1 2018, with the majority of the spend to occur in Q1
2018. This investment is needed to support the future growth of the
business and the planned hiring of additional sales, customer
support, and product development personnel in 2017.
People
On behalf of the Board, we would like to thank all our global
employees for their continued dedication and passion for our
customers' success. Our employees are central to Somero's success
and to delivering these strong results for our shareholders. The
Board and management team remain committed to providing our
employees a rewarding and challenging working environment, full of
opportunity, so that each employee can realize their full
potential.
Current trading and outlook
The positive trading momentum experienced at the end of the
first half in North America has carried over into H2 2017,
reflecting the healthy state of the non-residential construction
market in the United States. We are pleased with the broad interest
ongoing across all our product lines, including our new products,
as well as in our customers' confidence in their project backlogs.
Together, these factors provide us with confidence in our
expectations for a solid performance in North America for the
remainder of 2017.
The trading activity in Europe accelerated in H1 2017 and we
anticipate this momentum will continue through the year with a
variety of countries contributing meaningfully to sales and with
demand being driven by replacement equipment, technology upgrades,
and interest in new products.
In China, we are encouraged by the improved trading in June and
expect to build off this platform through focused marketing, sales
execution and lead generation activities, and by gaining traction
with our entry level products, all of which we expect will result
in H2 2017 improvement.
In Latin America, we anticipate that H2 2017 will see a
continuation in the significant opportunities available to us,
while in the Middle East, where a number of opportunities carried
over into H2 2017, we also expect solid H2 2017 performance.
In our Rest of World territories, also building off the strong
performance in H1 2017, we expect to capitalize on a wide range of
opportunities across our broad portfolio of markets in H2 2017.
Overall, the Board is pleased with the performance of the
Company in the first half of 2017 and remains confident in
delivering another year of profitable growth for our shareholders
in line with current market expectations.
Larry Horsch
Non-Executive Chairman
Jack Cooney
President and Chief Executive Officer
September 6, 2017
Notes:
1. Net Cash is defined as cash and cash equivalents less total
borrowings under bank obligations.
Somero Enterprises Inc.
Business and Financial Review
For the six months
Summary of financial results ended June 30
* unaudited 2017 2016
US$ 000's US$ 000's
Except Except
per share per share
data data
----------- -----------
Revenue 42,436 39,711
Cost of sales 18,323 17,385
----------- -----------
Gross profit 24,113 22,326
Operating expenses
Selling, marketing and customer
support 5,354 5,167
Engineering and product development 749 538
General and administrative 6,400 6,275
Total operating expenses 12,503 11,980
------------------------------------------- ----------- -----------
Operating income 11,610 10,346
Other income (expense)
Interest expense (55) (43)
Interest income 128 125
Foreign exchange gain (loss) 295 (63)
Other 26 -
Income before income taxes 12,004 10,365
------------------------------------------- ----------- -----------
Provision for income taxes 2,426 3,658
Net income 9,578 6,707
-------------------------------------- --- ----------- -----------
Per Share Per Share
US$ US$
Basic earnings per share 0.17 0.12
Diluted earnings per share 0.17 0.12
Basic adjusted net income per
share (1,3,4) 0.16 0.13
Diluted adjusted net income
per share (1,3,4) 0.15 0.13
------------------------------------------- ----------- -----------
Other
data
Adjusted EBITDA (1,2,4) 13,212 12,052
Adjusted net income (1,3,4) 8,745 7,313
Depreciation expense 579 482
Amortization of intangibles 772 772
Capital expenditures 1,720 3,806
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements
of the Company's financial performance under US GAAP and should not
be considered as an alternative to net income, operating income or
any other performance measures derived in accordance with US GAAP
or as an alternative to US GAAP cash flow from operating activities
as a measure of profitability or liquidity. Adjusted EBITDA and
Adjusted net income are presented herein because management
believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA
is also used to determine pricing and covenant compliance under the
Company's credit facility and as a measurement for calculation of
management incentive compensation. The Company understands that
although Adjusted EBITDA is frequently used by securities analysts,
lenders, and others in their evaluation of companies, its
calculation of Adjusted EBITDA may not be comparable to other
similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of its net
income excluding tax provision, interest expense, interest income,
foreign exchange gain (loss), other expense, depreciation,
amortization, and stock based compensation.
3. Adjusted net income as used herein is a calculation of net
income plus amortization of intangibles and excluding the tax
impact of stock option and RSU settlements and other special
items.
4. The Company uses non-US GAAP financial measures in order to
provide supplemental information regarding the Company's operating
performance. The non-US GAAP financial measures presented herein
should not be considered in isolation from, or as a substitute to,
financial measures calculated in accordance with US GAAP. Investors
are cautioned that there are inherent limitations associated with
the use of each non-US GAAP financial measure. In particular,
non-US GAAP financial measures are not based on a comprehensive set
of accounting rules or principles, and many of the adjustments to
the US GAAP financial measures reflect the exclusion of items that
may have a material effect on the Company's financial results
calculated in accordance with US GAAP.
Somero Enterprises, Inc.
Net income to adjusted EBITDA reconciliation
and Adjusted net income reconciliation
* unaudited Six months ended
June 30
2017 2016
US$ 000's US$ 000's
----------- -----------
Adjusted EBITDA reconciliation
Net income 9,578 6,707
Tax provision 2,426 3,658
Interest expense 55 43
Interest income (128) (125)
Foreign exchange (gain) loss (295) 63
Other Expense (26) -
Depreciation 579 482
Amortization 772 772
Stock based compensation 251 452
------------------------------------ ----------- -----------
Adjusted EBITDA(1,2,4) 13,212 12,052
------------------------------------ ----------- -----------
Adjusted net income reconciliation
Net income 9,578 6,707
Amortization 772 772
Tax impact of stock option
& RSU settlements (1,605) (166)
------------------------------------ ----------- -----------
Adjusted net income reconciliation
(1,3,4) 8,745 7,313
------------------------------------ ----------- -----------
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements
of the Company's financial performance under US GAAP and should not
be considered as an alternative to net income, operating income or
any other performance measures derived in accordance with US GAAP
or as an alternative to US GAAP cash flow from operating activities
as a measure of profitability or liquidity. Adjusted EBITDA and
Adjusted net income are presented herein because management
believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA
is also used to determine pricing and covenant compliance under the
Company's credit facility and as a measurement for calculation of
management incentive compensation. The Company understands that
although Adjusted EBITDA is frequently used by securities analysts,
lenders, and others in their evaluation of companies, its
calculation of Adjusted EBITDA may not be comparable to other
similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of its net
income plus tax provision, interest expense, interest income,
foreign exchange gain (loss), other expense, depreciation,
amortization, and stock based compensation.
3. Adjusted net income as used herein is a calculation of net
income plus amortization of intangibles and excluding the tax
impact of stock option and RSU settlements and other special
items.
4. The Company uses non-US GAAP financial measures in order to
provide supplemental information regarding the Company's operating
performance. The non-US GAAP financial measures presented herein
should not be considered in isolation from, or as a substitute to,
financial measures calculated in accordance with US GAAP. Investors
are cautioned that there are inherent limitations associated with
the use of each non-US GAAP financial measure. In particular,
non-US GAAP financial measures are not based on a comprehensive set
of accounting rules or principles, and many of the adjustments to
the US GAAP financial measures reflect the exclusion of items that
may have a material effect on the Company's financial results
calculated in accordance with US GAAP.
Revenues
The Company's consolidated revenues increased by 7% to US$
--42.4m (H1 2016: US$ 39.7m). Company revenues consist primarily of
sales from Boomed Screed products, which include the S22-E, S-15R
and S-10A Laser Screed machines, sales from Ride-on Screed
products, which are drive through the concrete machines that
include the S-840, S-485, S-940 and S-158C Laser Screed machines,
remanufactured machines sales, 3-D Profiler Systems, and Other
Revenues which consist primarily of revenue from sales of parts and
accessories, sales of other equipment, service, training and
shipping charges. The overall increase for the period was driven by
sales of Ride-on Screed products, 3-D Profiler Systems, and Other
revenues.
Boomed Screed sales decreased to US$ --16.4m (H1 2016: US$
17.9m) primarily as a result of a decrease in volume to 55 units
(H1 2016: 64 units), Ride-on Screed sales increased to US$ 9.4m (H1
2016: US$ 7.3m) primarily due to an increase in volume to 97 units
(H1 2016: 81), remanufactured machine sales remained flat at US$
3.0m (H1 2016: US$ 3.0m) despite a unit volume decrease to 21 units
(H1 2016: 23) due primarily to a shift in mix toward higher priced
equipment, 3-D Profiler System sales increased to US$ 3.9m (H1
2016: US$ 3.0m) primarily due to an increase in units sold to 38
(H1 2016: 30), and Other revenues increased to US$ 9.7m (H1 2016:
US$ 8.5m) primarily due to increased sales of parts and accessories
and increased sales of other equipment including the STS-11M
Topping Spreader. The following table shows the breakdown during
the six months ended June 30, 2017 and 2016:
North EMEA ROW
America (1) (2)
US$ US$ US$
Revenue breakdown
by geography in millions in millions in millions Total US$ in million
--------------------- -------------- -------------- -------------- ----------------------------------
2017 2016
---------------- ----------------
% of % of
Net Net Net Net
2017 2016 2017 2016 2017 2016 sales sales sales sales
------------------- ------ ------ ------ ------ ------ ------ ------- ------- ------- -------
Boomed
Screeds
(3) 10.9 13.8 4.0 2.6 1.5 1.5 16.4 38.7% 17.9 45.1%
Ride-on
Screeds 5.9 5.7 2.1 0.9 1.4 0.7 9.4 22.2% 7.3 18.4%
Remanufactured
machines 1.8 2.0 - - 1.2 1.0 3.0 7.0% 3.0 7.5%
3-D Profiler
Systems 3.7 2.9 - - 0.2 0.1 3.9 9.2% 3.0 7.5%
Other 6.1 5.4 1.2 0.9 2.4 2.2 9.7 22.9% 8.5 21.5%
Total 28.4 29.8 7.3 4.4 6.7 5.5 42.4 100.0% 39.7 100.0%
--------------------- ------ ------ ------ ------ ------ ------ ------- ------- ------- -------
Notes:
1. EMEA includes the Europe, India, Middle East, Scandinavia and
Russia markets.
2. ROW includes the China, Australia, Latin America, Korea, and
Southeast Asia markets.
3. Boomed Screeds include the S-22E, S-15R, and S-10A.
4. Ride-On Screeds include the S-840, S-940, S-485, and
S-158C.
5. Other includes parts, accessories, services and freight, as
well as other equipment such as the STS-11M Topping Spreader,
Copperhead, and Mini Screed C.
Units by product
line H1 2017 H1 2016
------------------- -------- --------
Boomed Screeds 55 64
Ride-on Screeds 97 81
Remanufactured
machines 21 23
3-D Profiler
Systems 38 30
Total 211 198
------------------------ -------- --------
Sales to customers located in North America contributed 67% of
total revenue (H1 2016: 75%), sales to customers in EMEA (Europe,
India, Middle East, Scandinavia, and Russia) contributed 17% (H1
2016: 11%) and sales to customers in ROW (Southeast Asia,
Australia, Latin America, and China) contributed 16% (H1 2016:
14%).
Sales in North America totaled US$ 28.4m (H1 2016: US$ 29.8m)
down 5%, driven by lower sales of Boomed Screeds. Sales to
customers in EMEA (Russia, Middle East, Europe, Scandinavia and
India) contributed US$ 7.3m (H1 2016: US$ 4.4m) which grew 66%
primarily due to an increase in Boomed Screed and Ride-on Screed
sales. Sales to customers in ROW (China, Southeast Asia, Australia,
Korea and Latin America) contributed US$ 6.7m (H1 2016: 5.5m) which
grew 22% primarily due to an increase in Ride-on Screeds,
remanufactured machines, 3-D Profiler System, and Other sales.
US$ in millions
------------------
Regional
sales H1 2017 H1 2016
---------------- -------- --------
North America 28.4 29.8
Europe 5.4 2.6
China 2.7 3.8
Middle East 0.8 1.4
Latin America 1.7 0.2
Rest of
World 3.4 1.9
Total 42.4 39.7
--------------------- -------- --------
Gross profit
Gross profit percentage improved to 56.8% compared to 56.2% in
H1 2016 due to the positive impacts of price increases,
productivity gains, and product mix.
Operating expenses
Operating expenses excluding depreciation, amortization and
stock based compensation for H1 2017 were US$ 11.3m (H1 2016: US$
10.6m). The increase has been driven primarily by increased
personnel costs, sales commissions, marketing costs, professional
fees and insurance expenses. Total employment increased to 179 as
compared to 170 at the end of 2016.
Debt
On January 31, 2017, the Company paid off the remaining
outstanding principal totaling US$ 1.0m on its commercial real
estate mortgage along with accrued interest using cash on hand.
There was no prepayment penalty. There were also no changes to the
Company's US$ 10.0m secured revolving line of credit which will
expire in February 2021.
Provision for income taxes
The provision for income taxes decreased to US$ 2.4m, at an
effective tax rate of 20%, compared to a provision of US$ 3.7m in
H1 2016, at an effective tax rate of 35%, due primarily to the
favorable tax impact of RSU and stock option settlements.
Earnings per share
Basic earnings per share represents income available to common
stockholders divided by the weighted average number of shares
outstanding during the period. Diluted earnings per share reflect
additional common shares that would have been outstanding if
dilutive potential common shares had been issued, as well as any
adjustments to income that would result from the assumed
issuance.
Potential common shares that may be issued by the Company relate
to outstanding stock options and restricted stock units. Earnings
per common share has been computed based on the following:
Six months ended
June 30
2017 2016
US$ 000's US$ 000's
----------- --------------------------
Income available to stockholders 9,578 6,707
Basic weighted shares outstanding 56,225,522 56,153,294
Net dilutive effect of stock
options and restricted stock
units 551,002 1,652,276
Diluted weighted average shares
outstanding 56,776,524 57,805,570
-------------------------------------------------------------- ----------- --------------------------
Per Share Per Share
US$ US$
Basic earnings per share 0.17 0.12
Diluted earnings per share 0.17 0.12
Basic adjusted net income per
share 0.16 0.13
Diluted adjusted net income
per share 0.15 0.13
Somero Enterprises, Inc.
Condensed Consolidated Balance Sheets
As of June 30, 2017 and December 31, 2016
* unaudited As of As of
December
June 30, 31,
2017 2016
US$ 000's US$ 000's
----------------------- --------------
Assets
Current assets:
Cash and cash equivalents 18,258 21,216
Accounts receivable - net 9,363 6,310
Inventories 9,030 8,760
Prepaid expenses and other
assets 1,996 2,428
Total current assets 38,647 38,714
-------------------------------------------------------------- ----------------------- --------------
Accounts receivable, non-current
- net 101 254
Property, plant, and equipment
- net 12,684 11,558
Intangible assets - net 129 901
Goodwill 2,878 2,878
Deferred tax asset 3,165 3,351
Income tax receivable 708 -
Other assets 28 29
-------------------------------------------------------------- ----------------------- --------------
Total assets 58,340 57,685
-------------------------------------------------------------- ----------------------- --------------
Liabilities and stockholders'
equity
Current liabilities:
Notes payable - current portion - 16
Accounts payable 3,973 2,831
Accrued expenses 13,273 5,329
Income tax payable - 147
-------------------------------------------------------------- ----------------------- --------------
Total current liabilities 17,246 8,323
-------------------------------------------------------------- ----------------------- --------------
Notes payable, net of current
portion - 970
Other liabilities 222 223
Total liabilities 17,468 9,516
-------------------------------------------------------------- ----------------------- --------------
Stockholders' equity
Preferred stock, US$.001 par - -
value, 50,000,000 shares authorized,
no shares issued and outstanding
Common stock, US$.001 par value,
80,000,000 shares authorized,
56,425,598 shares issued and
56,203,602 outstanding at June
30, 2017 and December 31, 2016 26 26
Less: treasury stock, 183,477
shares as of June 30, 2017
and 221,996 shares as of December
31, 2016 at cost (408) (483)
Additional paid in capital 17,568 22,112
Retained earnings 25,722 28,480
Other comprehensive loss (2,036) (1,966)
Total stockholders' equity 40,872 48,169
-------------------------------------------------------------- ----------------------- --------------
Total liabilities and stockholders'
equity 58,340 57,685
-------------------------------------------------------------- ----------------------- --------------
See notes to unaudited consolidated
financial statements.
Somero Enterprises, Inc.
Consolidated Statements of Comprehensive Income
For the six months ended June 30, 2017 and
2016
* unaudited Six months ended
June 30
2017 2016
US$ 000's US$ 000's
Except Except
per share per share
data data
----------- --------------------------
Revenue 42,436 39,711
Cost of sales 18,323 17,385
-------------------------------------------------------------- ----------- --------------------------
Gross profit 24,113 22,326
-------------------------------------------------------------- ----------- --------------------------
Operating expenses
Selling, marketing and customer
support 5,354 5,167
Engineering and product development 749 538
General and administrative 6,400 6,275
Total operating expenses 12,503 11,980
-------------------------------------------------------------- ----------- --------------------------
Operating income 11,610 10,346
Other income (expense)
Interest expense (55) (43)
Interest income 128 125
Foreign exchange gain (loss) 295 (63)
Other 26 -
Income before income taxes 12,004 10,365
-------------------------------------------------------------- ----------- --------------------------
Provision for income taxes 2,426 3,658
Net income 9,578 6,707
-------------------------------------------------------------- ----------- --------------------------
Other comprehensive income
Cumulative translation adjustment (70) (227)
Change in fair value of derivative
instruments - net of income
taxes - (9)
-------------------------------------------------------------- ----------- --------------------------
Comprehensive income 9,508 6,471
-------------------------------------------------------------- ----------- --------------------------
Earnings per common share
Earnings per share - basic 0.17 0.12
Earnings per share - diluted 0.17 0.12
Weighted average number
of common shares outstanding
Basic 56,225,522 56,153,294
Diluted 56,776,524 57,805,570
See notes to unaudited consolidated financial
statements.
Somero Enterprises, Inc.
Consolidated Statements of Changes in Stockholders'
Equity
For the six months ended June 30, 2017
* unaudited
Treasury
Common stock stock
Additional Other Total
paid-in Retained Comprehensive Stockholders'
Amount capital Amount earnings/ income equity
US$ US$ US$ US$ (loss) US$
Shares 000's 000's Shares 000's 000's US$ 000's 000's
------- ----------- ----------- ---------- -------------- --------------
Balance
- December
31, 2016 56,425,598 26 22,112 221,996 (483) 28,480 (1,966) 48,169
---------------- ----------- ------- ----------- --------- ----------- ---------- -------------- --------------
Cumulative
translation
adjustment - - - - - - (70) (70)
Change in - - - - - - - -
fair value
of derivative
instruments
Net income - - - - - 9,578 - 9,578
Stock based
compensation - - 251 - - - - 251
Dividend - - - - - (12,336) - (12,336)
Treasury
stock - - (75) (38,519) 75 - - -
RSUs settled
for cash - - (432) - - - - (432)
Stock options
settled
for cash - - (4,288) - - - - (4,288)
Balance
- June 30,
2017 56,425,598 26 17,568 183,477 (408) 25,722 (2,036) 40,872
---------------- ----------- ------- ----------- --------- ----------- ---------- -------------- --------------
See notes to unaudited
consolidated financial
statements.
Somero Enterprises, Inc.
Consolidated Statements of Cash Flows
For the six months ended June 30, 2017 and 2016
*unaudited Six months ended
June 30
2017 2016
US$ 000's US$ 000's
----------- ----------------------
Cash flows from operating
activities:
Net income 9,578 6,707
Adjustments to reconcile
net income to net cash provided
by operating activities:
Deferred taxes 186 112
Depreciation and amortization 1,351 1,254
Bad debt 125
Amortization of deferred
financing costs 38 16
Stock based compensation 251 452
Working capital changes:
Accounts receivable (3,025) (2,934)
Inventories (270) (556)
Prepaid expenses and other
assets 432 (223)
Other assets 1 9
Accounts payable, accrued
expenses and other liabilities 1,585 1,918
Income taxes payable (receivable) (855) (998)
Net cash provided by operating
activities 9,397 5,757
--------------------------------------- ----------- ----------------------
Cash flows from investing
activities:
Proceeds from sale of property 16 -
and equipment
Property and equipment purchases (1,721) (3,807)
Net cash used in investing
activities (1,705) (3,807)
--------------------------------------- ----------- ----------------------
Cash flows from financing
activities:
Payment of dividend (4,836) (2,805)
Payment of RSUs (432) (345)
Stock options settled for
cash (4,288) (145)
Repayment of notes payable (1,024) (24)
Net cash used in financing
activities (10,580) (3,319)
--------------------------------------- ----------- ----------------------
Effect of exchange rates on
cash and cash equivalents (70) (236)
Net decrease in cash and cash
equivalents (2,958) (1,605)
--------------------------------------- ----------- ----------------------
Cash and cash equivalents:
Beginning of period 21,216 13,709
End of period 18,258 12,104
See notes to unaudited consolidated
financial statements.
Notes to the Consolidated Financial Statements
1. Organization and description of business
Nature of business
Somero Enterprises, Inc. (the "Company" or "Somero") designs,
assembles, remanufactures, sells and distributes concrete leveling,
contouring and placing equipment, related parts and accessories,
and training services worldwide. Somero's Operations and Support
Offices are located in Michigan, USA with Global Headquarters and
Training Facilities in Florida, USA. Sales and service offices are
located in Chesterfield, England; Shanghai, China; and New Delhi,
India.
2. Summary of significant accounting policies
Basis of presentation
The consolidated financial statements of the Company have been
prepared in accordance with accounting principles generally
accepted in the United States of America. We have reclassified
certain prior year amounts to conform to the current year
presentation.
Principles of consolidation
The consolidated financial statements include the accounts of
Somero Enterprises, Inc. and its subsidiaries. All significant
intercompany transactions and accounts have been eliminated in
consolidation.
Cash and cash equivalents
Cash includes cash on hand, cash in banks, and temporary
investments with a maturity of three months or less when purchased.
The Company maintains deposits primarily in one financial
institution, which may at times exceed amounts covered by insurance
provided by the US Federal Deposit Insurance Corporation ("FDIC").
The Company has not experienced any losses related to amounts in
excess of FDIC limits.
Accounts receivable and allowances for doubtful accounts
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of accounts
receivable. The Company's accounts receivable are derived from
revenue earned from a diverse group of customers. The Company
performs credit evaluations of its commercial customers and
maintains an allowance for doubtful accounts receivable based upon
the expected ability to collect accounts receivable. Allowances, if
necessary, are established for amounts determined to be
uncollectible based on specific identification and historical
experience. As of June 30, 2017 and December 31, 2016, the
allowance for doubtful accounts was approximately US$ 845,000 and
US$ 743,000, respectively.
Inventories
Inventories are stated at the lower of cost, using the first in,
first out ("FIFO") method, or market. Provision for potentially
obsolete or slow-moving inventory is made based on management's
analysis of inventory levels and future sales forecasts.
Deferred financing costs
Deferred financing costs incurred in relation to long-term debt
are reflected net of accumulated amortization and are amortized
over the expected remaining term of the debt instrument. These
financing costs are being amortized using the effective interest
method.
Intangible assets and goodwill
Intangible assets consist primarily of customer relationships
and patents, and are carried at their fair value when acquired,
less accumulated amortization. Intangible assets are amortized
using the straight-line method over a period of three to twelve
years, which is their estimated period of economic benefit.
Goodwill is not amortized but is subject to impairment tests on an
annual basis, and the Company has chosen December 31 as its
periodic assessment date. Goodwill represents the excess cost of
the business combination over the Group's interest in the fair
value of the identifiable assets and liabilities. Goodwill arose
from the Company's prior sale from Dover Corporation to The Gores
Group in 2005. The Company did not incur a goodwill impairment loss
for the periods ended June 30, 2017 nor December 31, 2016.
The Company evaluates the carrying value of long-lived assets,
excluding goodwill, whenever events and circumstances indicate the
carrying amount of an asset may not be recoverable. For the periods
ended June 30, 2017 and December 31, 2016, the Company tested its
other intangible assets including customer relationships and
technology for impairment and found no impairment. The carrying
value of a long-lived asset is considered impaired when the
anticipated undiscounted cash flows from such asset (or asset
group) are separately identifiable and less than the asset's (or
asset group's) carrying value. In that event, a loss is recognized
to the extent that the carrying value exceeds the fair value of the
long-lived asset. Fair value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the
risk involved.
Revenue recognition
The Company recognizes revenue on sales of equipment, parts and
accessories when persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the price is
fixed or determinable, and collectability is reasonably assured.
For product sales where shipping terms are FOB shipping point,
revenue is recognized upon shipment. For arrangements which include
FOB destination shipping terms, revenue is recognized upon delivery
to the customer. Standard products do not have customer acceptance
criteria. Revenues for training are deferred until the training is
completed unless the training is deemed inconsequential or
perfunctory.
Warranty liability
The Company provides warranties on all equipment sales ranging
from 60 days to three years, depending on the product. Warranty
liabilities are estimated net of the warranty passed through to the
Company from vendors, based on specific identification of issues
and historical experience.
Property, plant, and equipment
Property, plant and equipment is stated at estimated market
value based on an independent appraisal at the acquisition date or
at cost for subsequent acquisitions, net of accumulated
depreciation and amortization. Land is not depreciated.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, which is 31.5 to 40 years for
buildings (depending on the nature of the building), 15 years for
improvements, and 3 to 10 years for machinery and equipment.
Income taxes
The Company determines income taxes using the asset and
liability approach. Tax laws require items to be included in tax
filings at different times than the items reflected in the
financial statements. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
basis and operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the
enactment date. Deferred tax assets are reduced by a valuation
allowance, if necessary, to the extent that it appears more likely
than not, that such assets will be unrecoverable.
The Company evaluates tax positions that have been taken or are
expected to be taken in its tax returns, and records a liability
for uncertain tax positions. This involves a two-step approach to
recognizing and measuring uncertain tax positions. First, tax
positions are recognized if the weight of available evidence
indicates that it is more likely than not that the position will be
sustained upon examination, including resolution of related appeals
or litigation processes, if any. Second, the tax position is
measured as the largest amount of tax benefit that has a greater
than 50% likelihood of being realized upon settlement. The Company
recognizes interest and penalties related to unrecognized tax
benefits in the provision/ (benefit) for income taxes in general
and administrative expenses in the accompanying consolidated
financial statements. The Company is subject to a three-year
statute of limitations by major tax jurisdictions.
The Company recognizes interest and penalties related to
unrecognized tax benefits in the provision for income taxes in
general and administrative expenses in the accompanying
consolidated financial statements, which there were none in 2017
and 2016. The Company is subject to a three-year statute of
limitations by major tax jurisdictions, and currently 2013 through
2015 remain open to investigation.
Use of estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
Stock based compensation
The Company recognizes the cost of employee services received in
exchange for an award of equity instruments in the financial
statements over the period the employee is required to perform the
services in exchange for the award (presumptively the vesting
period). The Company measures the cost of employee services in
exchange for an award based on the grant-date fair value of the
award. Compensation expense related to stock based payments was US$
251,000 and US$ 452,000 for the six-month periods ended June 30,
2017 and 2016, respectively. The Company settled US$ 4,287,000 and
US$ 145,000 in stock options for cash during the six-month periods
ended June 30, 2017 and 2016, respectively. In addition, the
Company settled US$ 432,000 and US$ 345,000 in restricted stock
units for cash during the six-month periods ended June 30, 2017 and
2016, respectively.
Transactions in and translation of foreign currency
The functional currency for the Company's subsidiaries outside
the United States is the applicable local currency. The preparation
of the consolidated financial statements requires the translation
of these financial statements to USD. Balance sheet amounts are
translated at period-end exchange rates and the statement of
comprehensive income accounts are translated at average rates. The
resulting gains or losses are charged directly to accumulated other
comprehensive income. The Company is also exposed to market risks
related to fluctuations in foreign exchange rates because some
sales transactions, and some assets and liabilities of its foreign
subsidiaries, are denominated in foreign currencies other than the
designated functional currency. Gains and losses from transactions
are included as foreign exchange gain (loss) in the accompanying
consolidated statements of comprehensive income.
Comprehensive income
Comprehensive income is the combination of reported net income
and other comprehensive income (OCI). OCI is changes in equity of a
business enterprise during a period from transactions and other
events and circumstances from non-owner sources not included in net
income.
Earnings per share
Basic earnings per share represents income available to common
stockholders divided by the weighted average number of common
shares outstanding during the year. Diluted earnings per share
reflect additional common shares that would have been outstanding
if dilutive potential common shares had been issued using the
treasury stock method. Potential common shares that may be issued
by the Company relate to outstanding stock options and restricted
stock units. Earnings per common share have been computed based on
the following:
Six months ended June 30
2017 2016
US$ 000's US$ 000's
------------- ------------
Net income 9,578 6,707
Basic weighted shares
outstanding 56,225,522 56,153,294
Net dilutive effect
of stock options and
restricted stock units 551,002 1,652,276
Diluted weighted average
shares outstanding 56,776,524 57,805,570
Fair value measurement
The carrying values of cash and cash equivalents, accounts
receivable, accounts payable, and other current assets and
liabilities approximate fair value because of the short-term nature
of these instruments. The carrying value of our long-term debt
approximates fair value due to the variable nature of the interest
rates under our Credit Facility.
The FASB has issued accounting guidance on fair value
measurements. This guidance provides a common definition of fair
value and a framework for measuring assets and liabilities at fair
values when a particular standard prescribes it.
This guidance also specifies a fair value hierarchy based upon
the observability of inputs used in valuation techniques. These
valuation techniques may be based upon observable and unobservable
inputs. Observable inputs reflect market data obtained from
independent sources, while unobservable inputs reflect the
Company's market assumptions. These two types of inputs create the
following fair value hierarchy.
-- Level 1 - Quoted prices for identical instruments in active markets.
-- Level 2 - Quoted prices for similar assets and liabilities in
active markets; quoted prices for identical or similar assets and
liabilities in markets that are not active; and model-derived other
inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets and
liabilities.
-- Level 3 - Unobservable inputs for the asset or liability
which are supported by little or no market activity and reflect the
Company's assumptions that a market participant would use in
pricing the asset or liability.
New accounting pronouncements
In May 2014, the FASB issued Accounting Standards Update No.
2014-09, Revenue from Contracts with Customers ("ASU 2014-09"),
which supersedes nearly all existing revenue recognition guidance
under US GAAP. The core principle of ASU 2014-09 is to recognize
revenues when promised goods or services are transferred to
customers in an amount that reflects the consideration to which an
entity expects to be entitled for those goods or services. ASU
2014-09 defines a five-step process to achieve this core principle
and, in doing so, more judgment and estimates may be required
within the revenue recognition process than are required under
existing US GAAP.
The standard is effective for annual periods beginning after
December 15, 2017, and interim periods therein, using either of the
following transition methods: (i) a full retrospective approach
reflecting the application of the standard in each prior reporting
period with the option to elect certain practical expedients, or
(ii) a retrospective approach with the cumulative effect of
initially adopting ASU 2014-09 recognized at the date of adoption
(which includes additional footnote disclosures). We are currently
evaluating the impact of our pending adoption of ASU 2014-09 on our
consolidated financial statements and have not yet determined the
method by which we will adopt the standard in 2018.
In February 2016, the FASB released Accounting Standard Update
2016-02, Leases. The new guidance requires lessees to recognize
lease assets and lease liabilities on the balance sheet for those
leases classified as operating leases under previous GAAP. Lessees
are required to recognize a single lease cost, amortized on a
straight-line basis over the lease term for operating leases. All
cash payments are to be classified as operating activities on the
cash flow statement. The update is effective for interim and
reporting periods beginning after December 15, 2018. Lessees are
required to measure leases under the new guidance at the beginning
of the earliest period presented using a modified retrospective
approach. We are currently evaluating adoption of the guidance.
3. Inventories
Inventories consisted of the following:
December
June 30, 31,
2017 2016
US$ 000's US$ 000's
----------- -----------
Raw material 2,797 2,574
Finished goods and work
in process 4,208 3,583
Remanufactured 2,025 2,603
------------------------- ----------- -----------
Total 9,030 8,760
------------------------- ----------- -----------
4. Property, plant, and equipment
Property, plant, and equipment consisted of the following:
December
June 30, 31,
2017 2016
US$ 000's US$ 000's
----------- -----------
Land 864 864
Building and improvements 10,546 9,483
Machinery and equipment 6,304 5,769
-------------------------------- ----------- -----------
Sub-total 17,714 16,116
-------------------------------- ----------- -----------
Less: accumulated depreciation
and amortization (5,030) (4,558)
Total 12,684 11,558
-------------------------------- ----------- -----------
5. Notes payable
The Company's debt obligations consisted of the following:
December
June 30, 31,
2017 2016
US$ 000's US$ 000's
------------ -----------
February 2021 secured revolving - -
line of credit
April 2018 commercial real
estate mortgage - 1,024
Deferred financing costs -
--------------------------------- ------------ -----------
Total bank debt - 1,024
--------------------------------- ------------ -----------
Less debt due within one
year - (48)
Obligations due after one
year - 976
--------------------------------- ------------ -----------
The company has implemented Accounting Standards Update No.
2015-03-Interest-Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs for the periods
ended June 30, 2016 and 2017. This update requires that debt
issuance costs related to debt liability be presented in the
balance sheet as a direct reduction from the carrying amount of the
debt liability. The implementation of Subtopic 835-30 has moved
deferred financing costs from an asset to a direct reduction in
liability, as shown above.
As of December 31, 2016 the current portion of term loan
principal due of US $48,000 was offset by US$ 32,000 of loan
origination fees, while the non-current portion of term loan
principal due of US$ 976,000 was offset by US $6,000 of loan
origination fees.
The Company entered into an amended credit facility in February
2016. The agreement will mature between March 2018 and February
2021.
-- US$ 10,000,000 February 2021 secured revolving line of credit
On January 31, 2017, the Company paid off the remaining
outstanding principal totaling US$ 1.0m on its commercial real
estate mortgage along with accrued interest using cash on hand.
Interest
Interest expense on the credit facility for the six months ended
June 30, 2017 and 2016 was approximately US$ 55,000 and USD$
43,000, respectively, and includes amortized swap interest fees and
amortized loan origination fees.
6. Operating leases
The Company leases property, vehicles, and office equipment
under leases accounted for as operating leases without renewal
options. Future minimum payments by year represent the remaining
six months for 2017 and the full 12 months of each successive
period as follows:
US$ 000's
----------
2017 155
2018 280
2019 148
2020 2
Thereafter -
------------ ----------
Total 585
------------ ----------
Capital leases
Interest rates on capital leases are variable and range from
4.5% to 7.3% at June 30, 2017. Future minimum payments by year
represent the remaining six months for 2017 and the full 12 months
of each successive period as follows:
US$ 000's
----------
2017 46
2018 85
2019 56
2020 28
Thereafter 2
------------ ----------
Total 217
------------ ----------
8. Commitments and contingencies
The Company has entered into employment agreements with certain
members of senior management. The terms of these are for renewable
one-year periods and include non-compete and nondisclosure
provisions as well as provide for defined severance payments in the
event of termination or change in control.
The Company is subject to various unresolved legal actions which
arise in the normal course of its business. Although it is not
possible to predict with certainty the outcome of these unresolved
legal actions or the range of possible losses, the Company believes
these unresolved legal actions will not have a material effect on
its consolidated financial statements.
9. Income taxes
The Company's effective tax rate for the six months ended June
30, 2017 was 20% compared to the federal statutory rate of 34%. The
effective tax rate is lower than the federal statutory rate
primarily due to the favorable tax impact of RSU and stock option
settlements.
The Company is subject to US federal income tax as well as
income tax of multiple state and foreign jurisdictions. The Company
was formed in 2005. The statute of limitations for all federal,
foreign and state income tax matters for tax years from 2013
forward is still open. The Company has no federal, foreign or state
income tax returns currently under examination.
At June 30, 2017, the Company had US$ 3,165,000 in non-current
net deferred tax assets recorded on its balance sheet. In assessing
the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization
of the deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary
differences become deductible.
10. Supplemental cash flow and non-cash financing
disclosures
Six months ended
June 30
2017 2016
US$ 000's US$ 000's
----------- -----------
Cash paid for interest 25 29
Cash paid for taxes 3,028 4,679
Non-cash financing activities
- change in fair value of derivative
instruments 2 (9)
11. Goodwill and intangible assets
The following table reflects intangible assets:
Weighted December
average June 30, 31,
amortization 2017 2016
period US$ 000's US$ 000's
--------------- ----------- -----------
Capitalized cost
Patents 12 years 18,538 18,538
Intangible assets not - -
subject to amortization
-------------------------- --------------- ----------- -----------
18,538 18,538
------------------------------------------ ----------- -----------
Accumulated amortization
Patents 12 years 18,409 17,637
Intangible assets not - -
subject to amortization
-------------------------- --------------- ----------- -----------
18,409 17,637
------------------------------------------ ----------- -----------
Net carrying costs
Patents 12 years 129 901
Intangible assets not - -
subject to amortization
-------------------------- --------------- ----------- -----------
129 901
------------------------------------------ ----------- -----------
Future amortization of intangible assets is expected by year
represent the remaining six months for 2017 and the full 12 months
of each successive period as follows:
US$ 000's
----------
2017 129
2018 -
Thereafter -
------------ ----------
Total 129
------------ ----------
12. Subsequent events
Dividend
The Board declared an interim dividend for the six months ended
June 30, 2017 of 2.75 US cents per share. This dividend will be
payable on October 18, 2017 to shareholders on the register at
September 29, 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSDEFIFWSESU
(END) Dow Jones Newswires
September 06, 2017 02:00 ET (06:00 GMT)
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