Exhibit 99.1
Jaco Electronics Reports Fiscal 2005 Third Quarter Results
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 16, 2005--Jaco Electronics,
Inc. (Nasdaq:JACO), a distributor of electronic components to original
equipment manufacturers, today reported results for its fiscal 2005
third quarter ended March 31, 2005.
Summary of Fiscal 2005 Third Quarter Results
($ in thousands, except per-share data)
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Three Months Ended
March 31,
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2005 2004
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Net sales $60,537 $63,120
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Loss from continuing operations before income taxes (1,561) (45)
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Earnings from discontinued operations, net of income
taxes* -- 157
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Net (loss) earnings (1,093) 129
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Diluted loss per share from continuing operations (0.17) (0.01)
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Diluted earnings per share from discontinued
operations* -- 0.03
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Diluted net (loss) earnings per share (0.17) 0.02
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* In September 2004, Jaco Electronics sold its contract manufacturing
subsidiary. As a result, these operations were classified as
discontinued as of July 1, 2003.
Jaco's Chairman and Chief Executive Officer, Joel Girsky,
commented, "We are continuing to evolve our business model to
strengthen our market presence while simultaneously reducing all
non-essential costs. Our strategy is based on an ongoing focus on our
flat panel display (FPD) capability, marketing efforts targeted at
business in the United States and the reduction of overhead and costs
without impairing our ability to support our customers. Jaco increased
quarterly revenues 16.5 percent over fiscal 2005 second quarter levels
while reducing the quarterly net loss 29 percent on a quarterly
sequential basis reflecting early results of our cost reduction
initiatives.
"In the fiscal 2005 third quarter, we reduced SG&A costs by 10.3
percent versus the corresponding quarter in fiscal 2004, and by 8.0
percent compared with the fiscal 2005 second quarter levels. We
previously announced our goal of achieving $5 million in annual cost
reductions. We now expect to exceed this goal on an annualized basis
by the end of the current fiscal year.
"Our logistics business in the Far East rose in the third quarter
of fiscal 2005 as a percentage of overall revenues. This source of
revenue for Jaco was the primary reason for the reduction in the 2005
third quarter gross profit margins, which declined to 11.0 percent,
compared to 14.0 percent in the year-earlier quarter.
"The growing FPD market continues to be an important area for Jaco
going forward. We recently opened Jaco's in-house integration center
for customized flat panel solutions. We also fortified our FPD
offerings as NEC Electronics America recently selected Jaco to supply
value-add display distribution services for NEC active-matrix liquid
crystal display modules in North America.
"Jaco remains focused on capturing U.S. business, and we recently
expanded our quote group team so we can be even more responsive to our
domestic, mid-level contract manufacturer customer base. We are also
concentrating our efforts on product sectors and core lines that we
expect to produce the highest rates of future growth."
About Jaco Electronics, Inc.
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 (FPD) 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, and one in Beijing, China.
The Company recently completed a new, in-house 20,000 square foot FPD
integration center housing its FPD engineering and manufacturing staff
and operations. The integration center enhances Jaco's ability to
provide customers with unique value-added display solutions and a
"one-stop" source for their FPD supply and integration requirements.
The integration center efficiently accommodates small and large custom
projects, with production capacity of over 50,000 displays per year.
In addition to customized FPD solutions, Jaco provides a variety of
value-added services including automated inventory management services
and assembling stock items for customers into pre-packaged kits. 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.
JACO ELECTRONICS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
($ in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
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2005 2004 2005 2004
----------- ----------- ----------- -----------
Net sales $ 60,537 $ 63,120 $ 172,741 $ 192,034
----------- ----------- ----------- -----------
Gross profit 6,667 8,805 20,849 25,778
Selling, general &
administrative
expenses 7,634 8,512 24,620 26,344
----------- ----------- ----------- -----------
Operating (loss)
profit (967) 293 (3,771) (566)
Interest expense 594 338 1,433 1,199
----------- ----------- ----------- -----------
Loss from continuing
operations before
income taxes (1,561) (45) (5,204) (1,765)
Income tax benefit (468) (17) (1,561) (619)
----------- ----------- ----------- -----------
Loss from continuing
operations (1,093) (28) (3,643) (1,146)
----------- ----------- ----------- -----------
Earnings (loss) from
discontinued
operations, net of
taxes -- 157 (64) 414
Gain on sale of
subsidiary, net of
taxes -- -- 831 --
----------- ----------- ----------- -----------
Net (loss) earnings $ (1,093) $ 129 $ (2,876) $ (732)
=========== =========== =========== ===========
Basic (loss) earnings
per common share:
Loss from continuing
operations $ (0.17) $ (0.01) $ (0.58) $ (0.19)
=========== =========== =========== ===========
Earnings (loss) from
discontinued ops. $ -- $ 0.03 $ (0.01) $ 0.07
=========== =========== =========== ===========
Gain on sale of
subsidiary $ -- $ -- $ 0.13 $ --
=========== =========== =========== ===========
Net (loss) earnings $ (0.17) $ 0.02 $ (0.46) $ (0.12)
=========== =========== =========== ===========
Diluted (loss)
earnings per common
share:
Loss from continuing
operations $ (0.17) $ (0.01) $ (0.58) $ (0.19)
=========== =========== =========== ===========
Earnings (loss) from
discontinued ops. $ -- $ 0.03 $ (0.01) $ 0.07
=========== =========== =========== ===========
Gain on sale of
subsidiary $ -- $ -- $ 0.13 $ --
=========== =========== =========== ===========
Net (loss) earnings $ (0.17) $ 0.02 $ (0.46) $ (0.12)
=========== =========== =========== ===========
Weighted average
shares:
Basic 6,264,954 5,997,409 6,243,575 5,905,567
=========== =========== =========== ===========
Diluted 6,264,954 5,997,409 6,243,575 5,905,567
=========== =========== =========== ===========
Summary Balance Sheet Supplemental Financial Statistics
As of March 31, 2005
Accounts Receivable Per Share Price (5/16/05) $3.18
(net) $38,900,000 Book Value Per Share $7.02
Inventories 44,800,000 Tangible Book Value Per
Revolving Credit Share $2.73
Facility $35,100,000
Accounts Payable and
Accrued Expenses 34,500,000
Shareholder's Equity $44,000,000
Conference Call: Tomorrow, May 17, at 9:00 a.m. EDT
Dial-in numbers: 888/303-7352 or 212/346-6555
Webcast/Replay URL: http://www.vcall.com/CEPage.asp?ID=91947
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