Tech/Ops Sevcon Inc.
155 Northboro Road
Southborough, MA 01772
Telephone (508) 281 5510
News Release
For release: Immediately
For further information contact: Paul McPartlin
TECH/OPS SEVCON REPORTS IMPROVED ANNUAL AND FOURTH QUARTER RESULTS
AND ANNOUNCES QUARTERLY CASH DIVIDEND
Southborough, Mass. December 5, 2006. Tech/Ops Sevcon, Inc. (AMEX symbol TO)
reported that net income for the year ended September 30, 2006 was $1,114,000,
or $.35 per diluted share. In fiscal 2005 the Company had net income of
$641,000, or $.20 per diluted share. Revenues for fiscal 2006 were
$34,630,000, an increase of $2,955,000, or 9%, compared to the prior year's
$31,675,000. Foreign currency fluctuations accounted for a decrease of
$500,000 in reported sales. Excluding the foreign currency impact, volumes
were 11% higher than last year. This was mainly due to improved conditions in
the aerial lift and other markets served by the controls business segment.
Operating income for fiscal 2006 of $1,844,000 was 85% higher than the
$999,000 recorded in fiscal 2005. Higher volumes were the main reason for the
improvement in operating income.
Fourth quarter sales were $8,934,000, an increase of $1,348,000 or 18%,
compared to the prior year's $7,586,000. Foreign currency fluctuations
resulted in an increase in reported sales of $280,000, or 4%. Most markets
served by the Company were up in the fourth quarter of fiscal 2006 compared
to the prior year. Operating income for the fourth quarter was $454,000
compared to $313,000 for the same quarter last year, an increase of $141,000,
or 45%. The increase in operating income was mainly due to increased volumes,
partially offset by higher operating expense. There was a currency loss in
the fourth quarter of fiscal 2006 of $41,000 compared to a gain of $24,000 in
the fourth quarter of last year. There was net income of $243,000 for the
fourth quarter of fiscal 2006 compared to $233,000 for the same quarter last
year. The net income per diluted share was $.08 in the fourth quarter of
fiscal 2006 compared to $.07 per share for the same quarter last year.
In September 2006 the Financial Accounting Standards Board issued Statement
No. 158 which changes employers'accounting for defined benefit pension and
other postretirement plans. The new Standard requires annual measurement and
recognition of an asset or liability reflecting the funded status of such
plans, with current year changes in that funded status recognized through
cumulative other comprehensive income. Although the Company was not obliged to
adopt this Standard until fiscal 2007 the Company decided to adopt it as of
September 30, 2006. This has resulted in a charge to cumulative other
comprehensive income, a component of stockholder equity, of $1,923,000, net
of tax, the recording of a long term liability for pension benefits of
$2,886,000 and a long-term deferred tax asset of $920,000. Adoption of this
Standard did not impact the income statement.
The Board of Directors today declared a quarterly cash dividend of $.03 per
share for the first quarter of fiscal 2007. The dividend will be paid on
January 4, 2007 to stockholders of record on December 20, 2006.
Tech/Ops Sevcon, Inc. is a world leader in the design, manufacture and
marketing of microprocessor based controls for electric vehicles. The
controls are used to vary the speed and movement of vehicles, to integrate
specialized functions, and to prolong the shift life of the vehicles'
batteries. Sevcon supplies customers throughout the world from its operations
in the United Kingdom, the USA, France, the Far East, and through an
international dealer network. The Company's customers are manufacturers
of fork lift trucks, aerial lifts, mining vehicles, airport tractors,
sweepers, and other battery powered vehicles.
Financial Highlights 2006
(in thousands except per share data)
Three months ended Twelve months ended
------------------ -------------------
Sept 30 Sept 30 Sept 30 Sept 30
2006 2005 2006 2005
------ ------ ------- -------
Net sales $8,934 $7,586 $34,630 $31,675
------ ------ ------- -------
Operating income 454 313 1,844 999
Income before income taxes 399 323 1,734 951
Net income $ 243 $ 233 $ 1,114 $ 641
------ ------ ------- -------
Basic income per share $ .08 $ .07 $ .35 $ .21
------ ------ ------- -------
Diluted income per share $ .08 $ .07 $ .35 $ .20
------ ------ ------- -------
Cash dividend per share $ .03 $ .03 $ .12 $ .12
------ ------ ------- -------
Average shares outstanding 3,146 3,125 3,139 3,125
------ ------ ------- -------
Summarized Balance Sheet Data
(in thousands of dollars)
September 30, September 30,
2006 2005
-------------- -------------
Cash and cash equivalents and
short-term investments $ 1,290 $ 1,130
Receivables 6,187 6,193
Inventories 4,717 3,737
Prepaid expenses and
other current assets 847 915
-------------- -------------
Total current assets 13,041 11,975
Long-term assets 5,650 4,471
-------------- -------------
Total assets $ 18,691 $ 16,446
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Current liabilities $ 5,673 $ 5,824
Liability for pension benefits 2,886 -
Deferred taxes and
other long-term liabilities 95 33
Stockholders' equity $ 10,037 $ 10,589
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Total liabilities and
stockholders' investment $ 18,691 $ 16,446
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