Exhibit 99.1
Jaco Electronics Reports Fiscal 2005 Fourth Quarter Results
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Sept. 28, 2005--Jaco
Electronics, Inc. (Nasdaq: JACO):
Conference Call: Tomorrow, September 29, at 4:30 p.m. (Eastern)
Dial-in numbers: 800/416-4615
Webcast/Replay URL: http://www.vcall.com/CEPage.asp?ID=95590
Jaco Electronics, Inc. (Nasdaq:JACO), a distributor and integrator of
electronic components and flat panel solutions, today reported results for its
fiscal 2005 fourth quarter and year ended June 30, 2005.
Summary of Fiscal 2005 Fourth Quarter Results
($ in thousands, except per-share data)
Three Months Ended June 30,
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2005 2004
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Net sales $59,083 $57,064
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Loss from continuing operations before income
taxes (1) (3,037) (80)
- ----------------------------------------------------------------------
Earnings from discontinued operations, net of
taxes (2) - 322
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Loss on sale of subsidiary, net of taxes (199) -
- ----------------------------------------------------------------------
Net (loss) earnings (1) (1,984) 177
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Diluted loss per share from continuing
operations (1) (0.29) (0.02)
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Diluted earnings per share from discontinued
operations (2) - 0.05
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Diluted loss per share on sale of subsidiary (0.03) -
- ----------------------------------------------------------------------
Diluted net (loss) earnings per share (1) (0.32) 0.03
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Summary of Fiscal 2005 Full-Year Results
($ in thousands, except per-share data)
Twelve Months
Ended June 30,
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2005 2004
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Net sales $231,825 $249,100
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Loss from continuing operations before income taxes
(1) (8,241) (1,844)
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(Loss) earnings from discontinued operations, net of
taxes (2) (64) 735
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Gain on sale of subsidiary, net of taxes 631 -
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Net loss (1) (4,860) (556)
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Diluted loss per share from continuing operations (1) (0.87) (0.22)
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Diluted (loss) earnings per share from discontinued
operations (2) (0.01) 0.13
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Diluted gain per share on sale of subsidiary 0.10 -
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Diluted net loss per share (1) (0.78) (0.09)
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(1) The fiscal 2005 fourth quarter and full-year results reflect a
non-recurring, non-cash, pre-tax write down of approximately $2,200,000,
or $0.22 per share after tax, of the Company's inventories to their
current expected market value.
(2) Jaco Electronics reported on September 21, 2004 the sale of its contract
manufacturing subsidiary, Nexus Custom Electronics, Inc. As a result,
the operations of Nexus Custom Electronics are classified as
discontinued as of July 1, 2003 (the beginning of Jaco's 2004 fiscal
year).
Jaco's Chairman and Chief Executive Officer, Joel Girsky, stated, "I believe
we have made progress in extending our U.S. market presence with a focused
marketing model emphasizing Jaco's core strengths in providing value-added
products and services for our customers, especially in the flat panel display
(FPD) and Far Eastern logistics business segments.
"Jaco's flat panel display (FPD) distribution and integration business
continues to achieve noteworthy success. The recent multi-million dollar,
electronic voting machine contract from Sequoia highlights Jaco's expanding
capabilities and growing reputation in the industrial FPD sector as a trusted
provider of unique, state-of-the-art solutions to an expanding array of vertical
markets. Another key area of strength continues to be Jaco's logistics programs
in Asia, supporting multi-national contract manufacturers in the region with
important services such as automated inventory management.
"Consistent with the plan disclosed earlier this year, we remain diligent in
our efforts to manage expenses. Fiscal 2005 fourth quarter SG&A expenses
declined approximately 14 percent from last's year's fiscal fourth quarter and
we recorded a full-year reduction in SG&A of over eight percent when compared to
fiscal 2004. Importantly, streamlining operating costs did not impair Jaco's
top-line during the quarter, as we recorded a 3.5 percent revenue gain compared
to last year's fourth quarter period.
"The Company incurred a non-recurring, non-cash, pre-tax $2.2 million
inventory write-down during the fourth quarter, which had the effect of
significantly reducing Jaco's reported gross margin for the period. Without the
effect of the write-down, gross profit would have been approximately 12 percent
of revenues, which is above fiscal Q3 levels.
"Looking ahead to fiscal 2006, we believe our focused, strategic business
model and a manageable level of overhead based on our expectations for the
quarters ahead will result in improved operating results during the fiscal
year."
About Jaco 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 (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 has 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. 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.
"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
($ in thousands, except per share amounts)
Three months ended Fiscal year ended
June 30,* June 30,*
------------------ -----------------
2005 2004 2005 2004
---- ---- ---- ----
Net sales $ 59,083 $ 57,064 $ 231,825 $ 249,100
--------- --------- ---------- ----------
Gross profit 5,051 8,933 25,900 34,711
Selling, general &
administrative
expenses 7,492 8,673 32,112 35,016
--------- --------- ---------- ----------
Operating (loss)
profit (2,441) 260 (6,212) (305)
Interest expense 596 340 2,029 1,539
--------- --------- ---------- ----------
Loss from continuing
operations before
income taxes (3,037) (80) (8,241) (1,844)
Income tax (benefit)
provision (1,252) 65 (2,814) (553)
--------- --------- ---------- ----------
Loss from continuing
operations (1,785) (145) (5,427) (1,291)
--------- --------- ---------- ----------
Earnings (loss) from
discontinued operations,
net of taxes - 322 (64) 735
(Loss) gain on sale
of subsidiary, net
of taxes (199) - 631 -
--------- --------- ---------- ----------
Net (loss) earnings $ (1,984) $ 177 $ (4,860) $ (556)
========= ========= ========== ==========
Basic (loss) earnings per common share:
Loss from continuing
operations $ (0.29) $(0.02) $ (0.87) $ (0.22)
========= ========= =========== ==========
Earnings (loss)
from discontinued
ops. $ - $ 0.05 $ (0.01) $ 0.13
========= ========= =========== ==========
(Loss) gain on sale
of subsidiary $(0.03) $ - $ 0.10 $ -
========= ========= =========== ==========
Net (loss) earnings $(0.32) $ 0.03 $ (0.78) $ (0.09)
========= ========= =========== ==========
Diluted (loss) earnings per common share:
Loss from continuing
operations $ (0.29) $(0.02) $ (0.87) $ (0.22)
========== ========= =========== ==========
Earnings (loss) from
discontinued ops. $ - $ 0.05 $ (0.01) $ 0.13
========== ========= =========== ==========
(Loss) gain on sale
of subsidiary $(0.03) $ - $ 0.10 $ -
========== ========= =========== ==========
Net (loss) earnings $(0.32) $ 0.03 $ (0.78) $ (0.09)
========== ========= =========== ==========
Weighted average shares:
Basic 6,267,832 6,185,008 6,249,622 5,974,844
========= ========= ========= =========
Diluted 6,267,832 6,185,008 6,249,622 5,974,844
========= ========= ========= =========
Summary Balance Sheet Supplemental Financial Statistics
As of June 30, 2005*
Receivables Per Share Price (9/28/05) $4.00
(net) $34,695,000
Inventories 37,057,000 Book Value Per Share $6.71
Tangible Book Value Per
Share $2.44
Revolving Credit
Facility $33,205,000
A/C Payable and Accrued
Expenses 27,426,000
Shareholders' Equity $42,071,000
* Jaco Electronics reported on September 21, 2004 the sale of its contract
manufacturing subsidiary, Nexus Custom Electronics, Inc. As a result, the
operations of Nexus Custom Electronics are classified as discontinued as of July
1, 2003 (the beginning of Jaco's 2004 fiscal year).
CONTACT: Jaco Electronics
Jeffrey D. Gash, 631/273-5500
jgash@jacoelect.com
or
Jaffoni & Collins Incorporated
Joseph N. Jaffoni or Robert L. Rinderman, 212/835-8500
jaco@jcir.com