Summary data for the six months ended November 30, 2018 and 2017:
| | | | | | | | | | | | | | | | |
| | | Six Months Ended November 30, | | | | | | | |
| | | 2018 | | | 2017 | | | Change ($) | | | Change (%) | |
Total net sales | | $ | 6,943,931 | | | $ | 6,854,528 | | | $ | 89,403 | | | | 1.3 | % |
Balancer segment | | | 4,539,812 | | | | 4,301,243 | | | | 238,569 | | | | 5.5 | % |
Measurement segment | | | 2,404,119 | | | | 2,553,285 | | | | (149,166 | ) | | | (5.8 | %) |
Gross margin | | | 38.9 | % | | | 45.6 | % | | | | | | | | |
Operating expenses | | $ | 3,041,019 | | | $ | 3,170,004 | | | | (128,985 | ) | | | (4.1 | %) |
Net income (loss) | | $ | (467,089 | ) | | $ | (30,850 | ) | | | (436,239 | ) | | | | |
Net income (loss) per fully diluted share | | $ | (0.12 | ) | | $ | (0.01 | ) | | | | | | | | |
“Although the Company had a challenging quarter in the Measurement segment due to a customer timing shift in the Xact product line and a tough year-over-year comparison in the Acuity line, the core Balancer segment remained strong. Since taking over on December 1, 2018, the newly appointed management team and Schmitt employees have begun to identify processes and practices with a sole focus on increasing the profitability of the Company” commented Michael R. Zapata, Executive Chairman and President of Schmitt Industries. “In furtherance of our announcedre-organization, we look forward to communicating expected actions in the coming months,” Zapata added.
About Schmitt Industries
Schmitt Industries, Inc. (the Company) designs, manufactures and sells high precision test and measurement products for two main business segments: the Balancer Segment and the Measurement Segment. For the Balancer Segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems for the worldwide machine tool industry, particularly for grinding machines. The Company also provides sales and service for Europe and Asia through its wholly owned subsidiary, Schmitt Europe Limited (SEL), located in Coventry, England and through its sales representative office located in Shanghai, China. For the Measurement Segment, the Company has two core product lines: the Acuity® product line, which consists of sales of laser and white light sensor distance measurement and dimensional sizing products; and the Xact® product line, which consists of sales of remote tank monitoring products that measure the fill levels of tanks holding propane, diesel and other tank-based liquids and revenues from the related monitoring services associated with the transmission of data from the tanks to a secure web site.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations, estimates and projections about the Company’s business that are based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic conditions and global financial concerns, the volatility of the Company’s primary markets, the ability to develop new products to satisfy changes in consumer demands, the intensity of competition, increased pricing pressure from both competitors and customers, the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary supplier increases the prices of raw materials or components, the ability to ramp up manufacturing to satisfy increasing demand, maintenance of a significant investment in inventories in anticipation of future sales, existing cash levels which may not be sufficient to fund future growth, fluctuations in quarterly and annual operating results, risks associated with operating a global business including risks from international sales, reduction in demand or loss of significant customers, changes in foreign import tariffs and currency fluctuations including the United Kingdom’s likely exit from the European Union, ability to reduce operating costs if sales decline, attracting and retaining key management and qualified technical and sales personnel, impact resulting from the actions of activist shareholders, changes in effective tax rates, protection of intellectual property rights and the increased costs due to changes in securities laws and regulations.
CORPORATE OFFICE: 2765 NW NICOLAIST. • PORTLAND, OREGON 97210 • 503/227-7908 • FAX 503/223-1258
