EXHIBIT 99.2
NEWS RELEASE
June 28, 2005
Torrance, California
Summa Reports 3rd Quarter Earnings
Summa Industries (Nasdaq NM:SUMX) reports net income of $508,000, or $.13 per share, on sales of $31,541,000 for the three months ended May 31, 2005, versus net income of $1,390,000, or $.30 per share, on sales of $33,160,000 for the three months ended May 31, 2004.
| | Three months ended | |
| | May 31, 2005 | | May 31, 2004 | |
Sales | | $ | 31,541,000 | | $ | 33,160,000 | |
Net income | | $ | 508,000 | | $ | 1,390,000 | |
Diluted earnings per share | | $ | .13 | | $ | .30 | |
Sales and earnings were adversely impacted primarily by weakness in the Optical Components Segment, which resulted from softness in demand for high-bay, high intensity discharge lighting products and other issues. Additionally, earnings have been substantially impacted by facility relocation costs. The effects of the relocation expenses and the pro forma earnings, calculated as though the relocation expenses had not been incurred, are as follows:
| | Three months ended May 31 | | Nine months ended May 31 | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Operating income | | $ | 1,245,000 | | $ | 2,455,000 | | $ | 3,430,000 | | $ | 5,257,000 | |
Relocation expense, net | | 497,000 | | 187,000 | | 1,393,000 | | 626,000 | |
Pro forma operating income | | $ | 1,742,000 | | $ | 2,642,000 | | $ | 4,823,000 | | $ | 5,883,000 | |
| | | | | | | | | |
Net income | | $ | 508,000 | | 1,390,000 | | $ | 1,394,000 | | $ | 2,673,000 | |
Tax-effected relocation expense | | 318,000 | | 120,000 | | 891,000 | | 401,000 | |
Pro forma net income | | $ | 826,000 | | $ | 1,510,000 | | $ | 2,285,000 | | $ | 3,074,000 | |
| | | | | | | | | |
Diluted EPS | | $ | 0.13 | | $ | 0.30 | | $ | 0.34 | | $ | 0.51 | |
Pro forma diluted EPS | | $ | 0.20 | | $ | 0.33 | | $ | 0.56 | | $ | 0.60 | |
Note that “pro forma” has no defined meaning under Generally Accepted Accounting Principles. The information presented above is for the purpose of drawing attention to a critical component of current performance. By providing this information, the Company does not assume the responsibility to provide such supplemental information in future releases of earnings. There are other components of current performance which are not highlighted in the above presentation. Investors are urged to read the Management’s Discussion and Analysis section of the Company’s Quarterly Report on Form 10-Q for the period ended May 31, 2005, which is expected to be filed before July 15, 2005.
A conference call to discuss the results will be held at 9:00 a.m., Pacific Time, Tuesday, June 28, 2005. The call-in number is (800) 289-0496 and the international call-in number is (913) 981-5519. The conference call will also be simulcast and archived by www.vcall.com.
Statements in this news release which relate to future plans, financial results, projections, events or performance, including without limitation expectations and beliefs regarding future events, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and fall under the safe harbor. These forward-looking statements include, but are not limited to, statements regarding the Company’s expectations regarding the timing of completion of the ongoing Pharr relocation, and expectations that aggregate relocation costs will diminish steadily throughout the remainder of the fiscal year. Actual results may differ materially from those anticipated because of a number of factors, including, but not limited to, delays and/or cost overruns in the ongoing Pharr relocation, implementation of additional relocation projects not currently in process, and other risks and uncertainties described in detail under “Risk Factors” in Summa’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004.
Summa Industries manufactures proprietary engineered plastic products for a broad spectrum of industrial and commercial markets. The Company has manufacturing facilities across North America. Products, many of which are unique or patented, are shipped to customers worldwide.
For further information, contact Jim Swartwout, (310) 792-7024; Fax (310) 792-7079; www.summaindustries.com; or ir@summaindustries.com.
Summa Industries
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| | May 31, 2004 | | August 31, 2004 | | May 31, 2005 | |
ASSETS | | | | | | | |
| | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 680,000 | | $ | 1,248,000 | | $ | 1,027,000 | |
Accounts receivable | | 19,895,000 | | 18,227,000 | | 18,761,000 | |
Inventories | | 13,306,000 | | 14,749,000 | | 15,638,000 | |
Prepaid expenses and other | | 3,098,000 | | 3,782,000 | | 3,895,000 | |
| | | | | | | |
Total current assets | | 36,979,000 | | 38,006,000 | | 39,321,000 | |
Property, plant and equipment, net | | 28,474,000 | | 31,053,000 | | 32,227,000 | |
Goodwill and other assets, net | | 11,818,000 | | 11,058,000 | | 10,894,000 | |
| | | | | | | |
Total assets | | $ | 77,271,000 | | $ | 80,117,000 | | $ | 82,442,000 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 7,365,000 | | $ | 9,088,000 | | $ | 9,909,000 | |
Accrued liabilities | | 5,769,000 | | 7,429,000 | | 5,429,000 | |
Current maturities of long-term debt | | 1,957,000 | | 2,195,000 | | 4,178,000 | |
| | | | | | | |
Total current liabilities | | 15,091,000 | | 18,712,000 | | 19,516,000 | |
Long-term debt, net of current maturities | | 30,337,000 | | 28,663,000 | | 29,157,000 | |
Other long-term liabilities | | 2,577,000 | | 2,508,000 | | 2,448,000 | |
Minority interest in subsidiary | | 205,000 | | 205,000 | | 155,000 | |
Total stockholders’ equity | | 29,061,000 | | 30,029,000 | | 31,166,000 | |
| | | | | | | |
Total | | $ | 77,271,000 | | $ | 80,117,000 | | $ | 82,442,000 | |
Summa Industries
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
| | Three months ended May 31 | | Nine months ended May 31 | |
| | 2004 | | 2005 | | 2004 | | 2005 | |
Net sales | | $ | 33,160,000 | | $ | 31,541,000 | | $ | 85,631,000 | | $ | 88,976,000 | |
Cost of sales | | 25,096,000 | | 24,980,000 | | 64,907,000 | | 70,183,000 | |
| | | | | | | | | |
Gross profit | | 8,064,000 | | 6,561,000 | | 20,724,000 | | 18,793,000 | |
Selling, general, administrative and other expenses | | 5,609,000 | | 5,316,000 | | 15,467,000 | | 15,363,000 | |
| | | | | | | | | |
Operating income | | 2,455,000 | | 1,245,000 | | 5,257,000 | | 3,430,000 | |
Interest expense | | 321,000 | | 476,000 | | 1,210,000 | | 1,314,000 | |
| | | | | | | | | |
Income before income taxes and minority interest | | 2,134,000 | | 769,000 | | 4,047,000 | | 2,116,000 | |
Provision for income taxes | | 744,000 | | 278,000 | | 1,374,000 | | 772,000 | |
| | | | | | | | | |
Income before minority interest | | 1,390,000 | | 491,000 | | 2,673,000 | | 1,344,000 | |
Minority interest in net (loss) of subsidiary | | — | | (17,000 | ) | — | | (50,000 | ) |
| | | | | | | | | |
Net income | | $ | 1,390,000 | | $ | 508,000 | | $ | 2,673,000 | | $ | 1,394,000 | |
Preferred stock accretion | | $ | 81,000 | | — | | $ | 450,000 | | — | |
Net income available to common stockholders | | $ | 1,309,000 | | $ | 508,000 | | $ | 2,223,000 | | $ | 1,394,000 | |
| | | | | | | | | |
Earnings per common share | | | | | | | | | |
Basic | | $ | .31 | | $ | .13 | | $ | .52 | | $ | .35 | |
Diluted | | $ | .30 | | $ | .13 | | $ | .51 | | $ | .34 | |
| | | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | | |
Basic | | 4,234,000 | | 3,984,000 | | 4,297,000 | | 3,990,000 | |
Diluted | | 4,310,000 | | 4,038,000 | | 4,372,000 | | 4,060,000 | |
