Exhibit 99.1
Jaco Electronics Reports Fiscal Fourth Quarter Diluted EPS of $0.07
HAUPPAUGE, N.Y.----Sept. 28, 2006--Jaco Electronics, Inc. (Nasdaq: JACO):
Conference Call: September 28, 2006 at 4:30 p.m. ET
Dial-in number: 800/731-1098 (U.S. and Canada)
Webcast: http://www.vcall.com/IC/CEPage.asp?ID=109614
Web Replay: Available for 90 days
Call Replay: Available until September 30, 2006 at 6:30
p.m. ET by dialing 800/633-8284
Replay access code: 21305477
Jaco Electronics, Inc. (Nasdaq: JACO), a distributor and integrator of
electronic components and flat panel solutions, today reported results for its
fiscal 2006 fourth quarter and twelve-month period ended June 30, 2006.
Summary of Fiscal 2006 Fourth Quarter Results
($ in thousands, except per-share data)
Three Months Ended June 30,
- ----------------------------------------------------------------------
2006 2005*
- ------------------------------------------============================
Net sales $67,046 $59,083
- ----------------------------------------------------------------------
Gross profit 8,641 5,051
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Selling, general and administrative
expenses 7,332 7,492
- ----------------------------------------------------------------------
Operating income (loss) 1,309 (2,441)
- ----------------------------------------------------------------------
Interest expense 878 596
- ----------------------------------------------------------------------
Earnings (loss) from continuing operations
before income taxes 431 (3,037)
- ----------------------------------------------------------------------
Net earnings (loss) 416 (1,984)
- ----------------------------------------------------------------------
Diluted net earnings (loss) per share $0.07 $(0.32)
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* The fiscal 2005 fourth quarter results included 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.
Jaco's Chairman and Chief Executive Officer Joel Girsky, stated, "The
fiscal 2006 fourth quarter marked our second consecutive profitable quarter. I
am pleased that we are deriving results from our strategy to focus on marketing
product lines from core vendors while positioning the Company as a value-added
services leader in logistics and flat panel display (FPD) design and
integration. Importantly, we continue to see positive results during the first
quarter of fiscal 2007, which we believe will produce our third consecutive
profitable quarter.
"Net sales for fiscal 2006 were $229 million, a slight decline from fiscal
2005 levels. However, with our focus on core vendors and increase in FPD sales,
we improved annual gross profits by approximately 17%, to $30.2 million or 13.2%
of net sales. In addition, our continued discipline in managing expenses
throughout fiscal 2006 resulted in a 12.5% reduction in SG&A costs and, when
combined with the gross profit growth, resulted in a significant operating
profit turnaround. Operating income for fiscal 2006 was $2.1 million, with $1.3
million of this amount generated in the fiscal fourth quarter.
"Fourth quarter net sales reached $67 million, the highest quarterly level
of the fiscal year, as Jaco recorded strong sales growth in its FPD operations.
While we carefully monitor costs, we remain committed to investing in our FPD
business. During fiscal 2006, we continued to add Business Development Managers
to our FPD operations to provide further technical expertise and support in the
sales process. We believe these additions are important, as we market Jaco's
capabilities in providing advanced performance characteristics and enhancements
to prospective customers. During the fiscal 2006 fourth quarter, Jaco's FPD
operations contributed approximately 27% of quarterly net sales, compared with
approximately 12% of net sales in the same period last year. On an annual basis,
FPD sales reached $61 million, a 56% rise over fiscal 2005 levels.
"Jaco's gross profit margin remains a function of our sales mix and can
vary based on quarterly fluctuations related to sales to major contract
manufacturers through our logistics programs. Reflecting Jaco's fiscal 2006
fourth quarter net sales mix, gross profit margin was 12.9%, while the full year
fiscal 2006 gross margin was approximately 13.2%.
"Cost disciplines remain an important element in our overall business
strategy and Jaco's fiscal 2006 fourth quarter SG&A expenses were 10.9% of net
sales, down from 11.6% in the fiscal 2006 third quarter and 12.7% in the fiscal
2005 fourth quarter. The increased net sales, higher gross profit margin and
management of costs combined to result in bottom line earnings of $0.07 per
diluted share in the fiscal fourth quarter.
"We believe Jaco continues to transform itself into a value-added service
leader and is well positioned for fiscal 2007 based on a diversified sales mix,
continued benefits from our investments in the FPD integration center and a
streamlined cost structure."
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
($ in thousands, except share and per share amounts)
Three months ended Twelve months ended
June 30, June 30,
---------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ----------- ----------
(unaudited) (audited)
Net sales $ 67,046 $ 59,083 $ 228,521 $ 231,825
---------- ---------- ----------- ----------
Gross profit 8,641 5,051 30,205 25,900
Selling, general &
administrative expenses 7,332 7,492 28,082 32,112
---------- ---------- ----------- ----------
Operating income (loss) 1,309 (2,441) 2,123 (6,212)
Interest expense 878 596 2,618 2,029
---------- ---------- ----------- ----------
Earnings (loss) from
continuing operations
before income taxes 431 (3,037) (495) (8,241)
Income tax provision
(benefit)* 15 (1,252) 6,467* (2,814)
---------- ---------- ------------ ----------
Income (loss) from
continuing operations 416 (1,785) (6,962) (5,427)
---------- ---------- ----------- ----------
Discontinued operations:
(Loss) earnings from
discontinued
operations, net of
taxes -- (199) -- 567
---------- ---------- ----------- ----------
Net earnings (loss) $ 416 $ (1,984) $ (6,962) $ (4,860)
========== ========== =========== ==========
Basic and diluted
earnings (loss) per
common share:
Earnings (loss) from
continuing operations $ 0.07 $ (0.29) $ (1.11) $ (0.87)
---------- ---------- ----------- ----------
Earnings (loss) from
discontinued operations$ 0.00 $ (0.03) $ 0.00 $ 0.09
---------- ---------- ----------- ----------
Basic and diluted
earnings per share $ 0.07 $ (0.32) $ (1.11) $ (0.78)
---------- ---------- ----------- ----------
Weighted average shares:
Basic 6,294,332 6,267,832 6,282,601 6,249,622
========== ========== =========== ==========
Diluted 6,381,941 6,267,832 6,282,601 6,249,622
========== ========== =========== ==========
* During the year ended June 30, 2006, $6,394 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 Statistics
As of June 30, 2006
Accounts Receivable
(net) $36,498,000 Per Share Price (9/27/06) $3.73
Inventories (net) 33,271,000 Book Value Per Share $5.59
Tangible Book Value Per
Share $1.55
Revolving Credit
Facility $35,096,000
Accounts Payable and
Accrued Expenses 31,539,000
Shareholders' Equity $35,171,000
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