Tech/Ops Sevcon Inc.
155 Northboro Road
Southborough, MA 01772
Telephone (508) 281 5510
For release: Immediately
For further information contact: Paul Farquhar
TECH/OPS SEVCON REPORTS THIRD QUARTER LOSS AFTER RESTRUCTURING CHARGE
Southborough, Mass. July 29, 2008. Tech/Ops Sevcon, Inc. (AMEX symbol TO)
reported a net loss of $289,000 or $0.09 per share, for the third fiscal
quarter ended June 28, 2008 after providing for the costs of a
significant restructuring of its UK manufacturing operations, completed
in June 2008.
Third quarter 2008 compared to third quarter 2007
* Operating loss was $391,000, after costs of $700,000 relating to
restructuring which is anticipated to immediately remove $2 million of
operating costs on an annualized basis, following the closure of the
residual manufacturing operation in the UK. This followed a strategic
review of the business which identified an opportunity to significantly
reduce ongoing manufacturing costs through further reliance on
subcontractors to manufacture the Company's products. The restructuring
cost comprised one-time termination costs for 41 employees and associated
professional fees.
* Sales decreased by 3% to $10.0 million; volume declined $779,000 or
7.5%. The Company recorded sales increases in North America and in the
Far East, but decreases in the European aerial lift sector. This was
offset by a positive foreign currency impact of $453,000 or 4.0%.
* Gross profit was 32.1% compared to 36.7% last year, due to the impact
of several non-recurring items including start up costs at a
subcontractor, component obsolescence in the UK and warranty costs at one
customer.
* Net loss was $289,000 compared to net income of $483,000 last year.
Foreign currency changes increased net income by $110,000; restructuring
costs and material issues reduced net income by $455,000 and $254,000
respectively.
* Net loss per share was $0.09 compared to net income per share of $0.15
last year. Nine months year-to-date 2008 compared to 2007
* Sales of $30.8 million were 6.5% ahead of last year; volume increased
$355,000, and there was a positive foreign currency impact of $1,522,000.
* Operating income was $829,000, a decrease of $1,055,000 from the same
period last year. Foreign currency improved operating income by $472,000
in the nine month period.
* Net income was $485,000 compared to last year when net income was
$1,139,000. Foreign currency improved net income by $386,000 in the first
nine months. The restructuring charge and third quarter material issues
reduced net income by $497,000 and $277,000 respectively.
* Net income per share was $0.15, down $0.21 from the $0.36 recorded
last year.
Tech/Ops Sevcon, Inc. is a world leader in the design, manufacture and
marketing of microprocessor based controls for zero emission 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, and 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.
Third Quarter 2008 Financial Highlights (unaudited)
(in thousands except per share data)
Three months ended Nine months ended
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June 28 June 30 June 28 June 30
2008 2007 2008 2007
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Net sales $10,015 $10,341 $30,818 $28,941
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Operating (Loss)/Income (391) 782 829 1,884
(Loss)/Income before income taxes(444) 735 747 1,744
Net (Loss)/Income $ (289) $ 483 $ 485 $ 1,139
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Basic income per share $ .(09) $ .15 $ .15 $ .36
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Diluted (Loss)/Income per share $.(09) $ .15 $ .15 $ .36
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Cash dividend per share $ .03 $ .03 $ .09 $ .09
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Average shares outstanding 3,217 3,172 3,206 3,162
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Summarized Balance Sheet Data (in thousands of dollars)
June 28, September 30,
2008 2007
(unaudited) (derived from
Audited
statements)
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Cash,and cash equivalents $ 1,250 $ 1,014
Receivables 8,142 8,714
Inventories 5,420 5,422
Prepaid expenses and other current assets 978 916
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Total current assets 15,790 16,066
Long-term assets 5,907 5,860
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Total assets $ 21,697 $ 21,926
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Other current liabilities 6,575 7,187
Liability for pension benefits 2,179 2,244
Other long-term liabilities 60 61
Stockholders' equity 12,883 12,434
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Total liabilities and stockholders' equity $ 21,697 $ 21,926
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