EXHIBIT 99.1
Jaco Electronics Reports Fiscal 2005 First Quarter Results
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Nov. 12, 2004--Jaco Electronics,
Inc. (Nasdaq:JACO)
Conference Call: Today, November 12, at 9:30 a.m. EST
Dial-in numbers: 800/530-9010 or 212/676-5404
Webcast/Replay URL: http://www.vcall.com/CEPage.asp?ID=89803
Jaco Electronics, Inc. (Nasdaq:JACO), a distributor of electronic
components to original equipment manufacturers, today reported results
for its fiscal 2005 first quarter ended September 30, 2004.
Summary of Fiscal 2005 First Quarter Results
($ in thousands, except per-share data)
Three Months Ended Sept. 30,
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2004 2003
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Net sales $60,237 $67,425
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Loss from continuing operations before
income taxes (1,449) (808)
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(Loss) earnings from discontinued
operations, net of income taxes* (64) 101
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Net loss (247) (424)
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Diluted loss per share from continuing
operations (0.16) (0.09)
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Diluted (loss) earnings per share from
discontinued operations* (0.01) 0.02
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Gain on sale of subsidiary 0.13 --
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Diluted net loss per share (0.04) (0.07)
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* In September 2004, Jaco Electronics sold its contract
manufacturing subsidiary. As a result, these operations are classified
as discontinued as of July 1, 2003.
Jaco's Chairman and Chief Executive Officer, Joel Girsky,
commented, "A solid return to profitability is our primary goal.
During the fiscal 2005 first quarter we achieved a sequential
improvement in quarterly revenue while lowering inventory levels and
borrowings under our revolving credit facility.
"Although the worst of the recent cyclical downturn is behind us,
we continue to operate in a challenging industry environment.
Accordingly, we are focusing on cost reductions and other initiatives
to manage in this environment. For example, while fiscal '05 first
quarter SG&A is in line with fourth quarter levels, SG&A declined
approximately 5% from the fiscal 2004 first quarter. Additionally,
subsequent to the end of the fiscal 2005 first quarter, we implemented
a reduction in staffing and other expenses resulting in approximately
$2 million in annual savings.
"In addition to cost containment programs, we are also focusing
our efforts on delivering top line growth in the coming quarters from
our core distribution business and our well positioned flat panel
display (FPD) group. We are presently evaluating several options for
widening our footprint in Asia as this is the fastest growing region
worldwide for electronics. We have established a third-party warehouse
to support our regional customer base and direct sales
representatives, as well as a Beijing, China sales office. We believe
it is important for Jaco to expand its Far East presence.
"During fiscal 2005, we will complete our new, in-house FPD
integration center. When finished, this will be a state-of-the-art,
vertically integrated operation that will provide customers with
unique, value-added display solutions and a 'one-stop' source for all
of their FPD supply and integration needs. As a result, we will be
offering our strategic suppliers and the growing market at-large an
exciting and wide array of adaptable FPD products and solutions.
"We remain committed to achieving profitability and believe recent
cost-cutting initiatives and expected future revenue growth will
contribute to improved operating results for Jaco during fiscal 2005."
Jaco is a leading distributor of electronic components to
industrial OEMs and contract manufacturers. Jaco distributes products
such as semiconductors, capacitors, resistors, electromechanical
devices, flat panel displays and power supplies, which are used in the
manufacture and assembly of electronic products, including:
telecommunications equipment, computers and office equipment, medical
devices and instrumentation, industrial equipment and controls,
military/aerospace systems and automotive and consumer electronics.
Jaco is a leading distributor of electronic components to
industrial OEMs and contract manufacturers. Jaco distributes products
such as semiconductors, capacitors, resistors, electromechanical
devices, flat panel displays and power supplies, which are used in the
manufacture and assembly of electronic products, including:
telecommunications equipment, computers and office equipment, medical
devices and instrumentation, industrial equipment and controls,
military/aerospace systems and automotive and consumer electronics.
Jaco has two distribution centers and 16 strategically located
sales offices throughout the United States. Jaco provides a variety of
value-added services including automated inventory management
services, assembling stock items for customers into pre-packaged kits,
integrating and assembling various custom components with flat panel
displays to customer specifications. The Company's core customer base
consists primarily of small and medium-sized manufacturers that
produce electronic equipment used in a wide variety of industries.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: This press release provides historical information
and includes forward-looking statements that are subject to numerous
assumptions, risks and uncertainties, including, but not limited to,
our dependence on a limited number of distributors for our products,
that most of our distributor agreements are cancelable upon short
notice, the impact of downturns in our industry and the general
economy, the market for our products is very competitive, the impact
of disruptions in air or sea transportation and possible future
legislative or regulatory changes on our business, volatility in
electronic components' pricing may reduce our profit margins, the
level of costs or difficulties incurred in connection with integrating
the operations of businesses we acquire, the financial strength of our
customers and suppliers, and other risks disclosed from time to time
in our Securities and Exchange Commission filings. The forward-looking
statements in this press release involve assumptions, risks and
uncertainties that could cause our actual results or performance,
including margins, SG&A expenses as a percentage of revenues and
earnings per diluted share, to differ materially from those expressed
in the forward-looking statements. We believe that all forward-looking
statements made by us have a reasonable basis, but we cannot assure
you that management's expectations, beliefs or projections as
expressed in the forward-looking statements will actually occur or
prove to be correct. As a result, our actual results may differ
materially from the information set forth herein.
- tables follow -
JACO ELECTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
($ in thousands, except share and per share amounts)
Three months ended
September 30,*
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2004 2003
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Net sales $ 60,237 $ 67,425
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Gross profit 7,601 8,678
Selling, general
and administrative expenses 8,688 9,134
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Operating loss (1,087) (456)
Interest expense 362 352
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Loss from continuing operations
before income taxes (1,449) (808)
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Income tax benefit (435) (283)
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Loss from continuing operations (1,014) (525)
(Loss) earnings from discontinued
operations, net of income taxes (64) 101
Gain on sale of subsidiary, net of
income taxes 831 --
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Net loss $ (247) $ (424)
========== ==========
Basic earnings (loss) per common share:
Loss from continuing operations $ (0.16) $ (0.09)
(Loss) earnings from discontinued
operations $ (0.01) $ 0.02
Gain on sale of subsidiary $ 0.13 $ 0.00
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Net loss $ (0.04) $ (0.07)
========== ==========
Diluted earnings (loss) per common share
Loss from continuing operations $ (0.16) $ (0.09)
(Loss) earnings from discontinued
operations $ (0.01) $ 0.02
Gain on sale of subsidiary $ 0.13 $ 0.00
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Net loss $ (0.04) $ (0.07)
========== ==========
Weighted average shares:
Basic 6,203,403 5,792,123
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Diluted 6,203,403 5,792,123
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* In September 2004, Jaco Electronics sold its contract manufacturing
subsidiary. As a result, these operations are classified as
discontinued as of July 1, 2003.
- additional financials follow -
Summary Balance Sheet Supplemental Financial Statistics
As of Sept 30, 2004
Accounts Receivable (net) Per Share Price
$39,700,000 (11/11/04) $4.62
Inventories 36,600,000 Book Value Per
Share $7.44
Revolving Credit Facility $33,000,000
Accounts Payable and
Accrued Expenses 34,300,000
Shareholder's Equity $46,600,000
CONTACT: Jaco Electronics, Inc.
Jeffrey D. Gash, 631-273-5500
jgash@jacoelect.com
or
Jaffoni & Collins Incorporated
Joseph N. Jaffoni/Robert L. Rinderman
212-835-8500
jaco@jcir.com