Exhibit 99.1
Jaco Electronics Reports Profitable Fiscal 2006 Third Quarter Results
HAUPPAUGE, N.Y.--(BUSINESS WIRE)--May 15, 2006--Jaco Electronics,
Inc. (Nasdaq:JACO):
Conference Call: May 16, 2006 at 9:00 a.m. EDT
Dial-in number: 800/737-8127 (U.S. and Canada)
Webcast: http://www.vcall.com/IC/CEPage.asp?ID=101433
Web Replay: Available for 30 days
Call Replay: Available until May 18, 2006 at 11:00 a.m. EDT
by dialing 800/633-8284
Replay access code: 21292013
Jaco Electronics, Inc. (Nasdaq:JACO), a distributor and integrator
of electronic components and flat panel solutions, today reported
results for its fiscal 2006 third quarter and nine-month period ended
March 31, 2006.
Summary of Fiscal 2006 Third Quarter Results
($ in thousands, except per-share data)
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Three Months Ended
Mar. 31,
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2006 2005
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Net sales $ 60,906 $ 60,537
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Gross profit 7,782 6,667
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Selling, general and administrative expenses 7,062 7,634
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Operating profit (loss) 720 (967)
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Interest expense 622 594
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Earnings (loss) from continuing operations before
income taxes 98 (1,561)
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Net earnings (loss) 84 (1,093)
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Diluted net earnings (loss) per share $ 0.01 $ (0.17)
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Jaco's Chairman and Chief Executive Officer Joel Girsky, stated,
"Jaco returned to profitability in the fiscal third quarter as we
achieved increases in year-over-year net sales and gross profit
margins while reducing SG&A expenses by almost 8% from fiscal 2005
third quarter levels. Over the past year, Jaco strengthened its market
presence by focusing on segments of our business where we are
competitive, while simultaneously reducing non-essential costs.
"Our business plan continues to focus on marketing offerings from
core vendors as well as flat-panel display (FPD) products and
integration applications. Core electronic component distribution sales
were in-line with results from last year's fiscal third quarter while
the contribution to net sales from our logistics business was down
year-over-year as this business does not trend in a consistent
quarter-to-quarter direction. During the fiscal 2006 third quarter,
Jaco's FPD operations contributed $16.5 million, or approximately 27%
of our net sales, compared with $8.1 million, or approximately 13% of
net sales in the same period last year. We continue to realize
benefits from investments in our FPD integration center at Jaco's
Hauppauge, NY facility, which opened in February 2005. In addition to
orders for voting machines, we have also secured recent orders for
gaming machines, as well as military and medical applications.
"Jaco's fiscal 2006 third quarter gross profit margin increased to
12.8% from 11.0% in the corresponding quarter last year, reflecting
increased contributions from FPD operations and the lower level of net
sales derived from Far East logistics activities. Jaco's gross profit
margin is subject to fluctuations, primarily based on the Company's
level of sales to global contract manufacturers as a percentage of
total sales. Reflecting a change in net sales mix during the first
nine months of fiscal 2006, the gross profit margin was 13.4%,
compared to 12.1% in the same period of fiscal 2005.
"Through a concerted effort by the entire Jaco organization, we
are delighted to have returned to profitability. With an ongoing focus
on developing and expanding our business, benefits from our
investments in the FPD integration center and a streamlined cost
structure, we believe that with a stable industry environment, Jaco is
well positioned to extend the momentum of the past quarter."
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 operates an in-house FPD integration center housing its
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. 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
(unaudited)
($ in thousands, except share and per share amounts)
Three months ended Nine months ended
March 31, March 31,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $ 60,906 $ 60,537 $ 161,474 $ 172,741
------------ ------------ ------------ ------------
Gross profit 7,782 6,667 21,564 20,849
Selling, general &
administrative
expenses 7,062 7,634 20,750 24,620
------------ ------------ ------------ ------------
Operating profit
(loss) 720 (967) 814 (3,771)
------------ ------------ ------------ ------------
Interest expense 622 594 1,740 1,433
Earnings (loss)
from continuing
operations before
income taxes 98 (1,561) (926) (5,204)
Income tax provision
(benefit)* 14 (468) 6,453* (1,561)
------------ ------------ ------------ ------------
Earnings (loss)
from continuing
operations 84 (1,093) (7,379) (3,643)
Discontinued operations:
Loss from discontinued
operations, net of
income tax benefit
of $40 -- -- -- (64)
Gain on sale of
net assets of
subsidiary,
net of income tax
provision of $519 -- -- -- 831
------------ ------------ ------------ ------------
Earnings from
discontinued
operations -- -- -- 767
Net earnings
(loss) $ 84 $ (1,093) $ (7,379) $ (2,876)
============ ============ ============ ============
Per share
information:
Basic and diluted
earnings (loss)
per common share:
Earnings (loss)
from continuing
operations $ 0.01 $ (0.17) $ (1.18) $ (0.58)
Earnings from
discontinued
operations -- -- -- $ 0.12
------------ ------------ ------------ ------------
Basic and diluted
net earnings
(loss) $ 0.01 $ (0.17) $ (1.18) $ (0.46)
============ ============ ============ ============
Weighted average
shares:
Basic 6,293,115 6,264,954 6,278,705 6,243,575
============ ============ ============ ============
Diluted 6,387,780 6,264,954 6,278,705 6,243,575
============ ============ ============ ============
* During the three months ended December 31, 2005, $6,611 was added to
Jaco's income tax provision to reduce the carrying value of the
Company's deferred tax asset to zero.
Summary Balance Sheet Supplemental Financial
As of March 31, 2006 Statistics
Accounts Receivable (net) $35,074,000 Per Share Price (5/12/06)$3.34
Inventories (net) 36,926,000 Book Value Per Share $5.52
Tangible Book Value Per
Share $1.48
Revolving Credit Facility $36,700,000
Accounts Payable and
Accrued Expenses 31,646,000
Shareholders' Equity $34,755,000
CONTACT: Jaco Electronics, Inc.
Jeffrey D. Gash, 631-273-5500
Chief Financial Officer
jgash@jacoelect.com
or
Jaffoni & Collins Incorporated
Joseph N. Jaffoni or Robert L. Rinderman, 212-835-8500
jaco@jcir.com