Schmitt Industries, Inc. - Grinding Control, Surface Measurement, Laser Sensors and Remote Propane Tank Monitoring

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Press Release

Schmitt Industries Announces Second Quarter Fiscal 2018 Operating Results

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Dec 13, 2017

PORTLAND, Ore., Dec. 13, 2017 (GLOBE NEWSWIRE) -- Schmitt Industries, Inc. (NASDAQ:SMIT) today announced its operating results for the three and six months ended November 30, 2017.  For the three months ended November 30, 2017, total sales increased $1,115,319, or 42.0%, to $3,770,880 from $2,655,561 in the three months ended November 30, 2016. Net income was $103,248, or $0.03 per fully diluted share, for the three months ended November 30, 2017 as compared to net loss of $382,470, or $(0.13) per fully diluted share, for the three months ended November 30, 2016.

For the six months ended November 30, 2017, total sales increased $1,306,435, or 23.5%, to $6,854,528 from $5,548,093 in the six months ended November 30, 2016.  For the six months ended November 30, 2017, net loss was $30,850, or $(0.01) per fully diluted share, as compared to net loss of $508,099, or $(0.17) per fully diluted share for the six months ended November 30, 2016.

Balancer segment sales focus throughout the world on end-users, rebuilders and original equipment manufacturers of grinding machines with the target geographic markets in North America, Asia and Europe. Balancer segment sales increased $833,180, or 59.6%, to $2,230,846 for the three months ended November 30, 2017 compared to $1,397,666 for the three months ended November 30, 2016. Balancer segment sales increased $1,342,701, or 45.4%, to $4,301,243 for the six months ended November 30, 2017 compared to $2,958,542 for the six months ended November 30, 2016.

The Measurement segment product line consists of laser and white light sensor distance measurement and dimensional sizing products and ultrasonic-based remote tank monitoring products for propane, diesel and other tank-based liquids. Total Measurement segment sales increased $282,139, or 22.4%, to $1,540,034 for the three months ended November 30, 2017 compared to $1,257,895 for the three months ended November 30, 2016. Total Measurement segment sales decreased $36,266, or 1.4%, to $2,553,285 for the six months ended November 30, 2017 compared to $2,589,551 for the six months ended November 30, 2016.

Gross margin for the three months ended November 30, 2017 increased to 45.8% as compared to 38.9% for the three months ended November 30, 2016.  Gross margin for the six months ended November 30, 2017 increased to 45.6% as compared to 43.4% for the six months ended November 30, 2016.

Operating expenses increased $240,251, or 17.3%, to $1,625,203 for the three months ended November 30, 2017 as compared to $1,384,952 for the three months ended November 30, 2016. General, administrative and selling expenses increased $199,768, or 15.1%, to $1,524,443 for the three months ended November 30, 2017 as compared to $1,324,675 for the same period in the prior year. Operating expenses increased $293,536, or 10.2%, to $3,170,004 for the six months ended November 30, 2017 as compared to $2,876,468 for the six months ended November 30, 2016. General, administrative and selling expenses increased $255,443, or 9.3%, to $2,992,787 for the six months ended November 30, 2017 as compared to $2,737,344 for the same period in the prior year.

“We are encouraged by our sales results for the quarter with Balancing segment sales in excess of $2 million again this quarter and Measurement segment sales up relative to the same quarter last year,” commented David M. Hudson, President and CEO of Schmitt Industries. “We are working diligently to achieve profitability on a consistent basis in the second half of Fiscal 2018,” Hudson concluded.

About Schmitt Industries

Schmitt Industries, Inc. (the Company) designs, manufactures and sells high precision test and measurement products for two main business segments: the Balancer Segment and the Measurement Segment. For the Balancer Segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems for the worldwide machine tool industry, particularly for grinding machines. For the Measurement Segment, the Company designs, manufactures and sells laser and white light sensors for distance, dimensional and area measurement for a wide variety of commercial applications and ultrasonic measurement products that accurately measure the fill levels of tanks holding propane, diesel and other tank-based liquids and transmit that data via satellite to a secure web site for display. In addition, the Measurement segment includes the Company’s laser-based microroughness measurement products for the semiconductor wafer and hard disk drive industries and for other industrial applications and the Company’s laser-based surface analysis and measurement products that can be used for a variety of scientific applications. The Company also provides sales and service for Europe and Asia through its wholly owned subsidiary, Schmitt Europe Limited (SEL), located in Coventry, England and through its sales representative office located in Shanghai, China. 

FORWARD-LOOKING STATEMENTS

Certain statements in this release, including but not limited to remarks by David M. Hudson, are “forward-looking statements.” These statements are based upon current expectations, estimates and projections about the Company’s business that are based, in part, on assumptions made by management.  These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.  Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, general economic conditions and global financial concerns, the volatility of the Company’s primary markets, the ability to develop new products to satisfy changes in consumer demands, the intensity of competition, increased pricing pressure from both competitors and customers, the effect on production time and overall costs of products if any of our primary suppliers are lost or if a primary supplier increases the prices of raw materials or components, the ability to ramp up manufacturing to satisfy increasing demand, maintenance of a significant investment in inventories in anticipation of future sales, existing cash levels which may not be sufficient to fund future growth, fluctuations in quarterly and annual operating results, risks associated with operating a global business including risks from international sales and currency fluctuations, ability to reduce operating costs if sales decline, attracting and retaining key management and qualified technical and sales personnel, changes in effective tax rates, the increased costs due to changes in securities laws and regulations, and protection of intellectual property rights.

For further information regarding risks and uncertainties associated with the Company’s business, please refer to Schmitt’s SEC filings, including, but not limited to, its Forms 10-K, 10-Q and 8-K.

The forward-looking statements in this release speak only as of the date on which they were made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release, or for changes to this document made by wire services or internet service providers.

 

For more information contact:
Ann M. Ferguson, CFO and Treasurer
(503) 227-7908 or visit our web site at www.schmitt-ind.com




  SCHMITT INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
             
    November 30, 2017   May 31, 2017  
  ASSETS  
  Current assets            
    Cash and cash equivalents $   586,986     $   867,607    
    Accounts receivable, net     2,150,655         2,344,373    
    Inventories     4,792,085         4,204,723    
    Prepaid expenses     105,436         115,756    
    Income taxes receivable     714         7,310    
        7,635,876         7,539,769    
               
  Property and equipment, net     819,219         865,224    
  Other assets             
    Intangible assets, net     549,059         601,351    
  TOTAL ASSETS $   9,004,154     $   9,006,344    
     
  LIABILITIES & STOCKHOLDERS’ EQUITY  
  Current liabilities            
    Accounts payable $   1,201,098     $   1,101,066    
    Accrued commissions     266,727         300,234    
    Accrued payroll liabilities     229,584         360,239    
    Other accrued liabilities     318,929         267,418    
  Total current liabilities      2,016,338         2,028,957    
               
  Stockholders’ equity            
    Common stock, no par value, 20,000,000 shares authorized,            
    2,995,910 shares issued and outstanding at November 30, 2017            
    and May 31, 2017     10,690,126         10,649,287    
    Accumulated other comprehensive loss     (427,132 )       (427,572 )  
    Accumulated deficit     (3,275,178 )       (3,244,328 )  
  Total stockholders’ equity     6,987,816         6,977,387    
               
  TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $   9,004,154     $   9,006,344    
               

 

  SCHMITT INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2017 AND 2016
(UNAUDITED)
 
                               
        Three Months Ended November 30,   Six Months Ended November 30,  
        2017   2016     2017     2016    
                               
  Net sales $   3,770,880   $   2,655,561     $   6,854,528     $   5,548,093    
  Cost of sales     2,044,898       1,623,151         3,729,027         3,139,934    
      Gross profit     1,725,982       1,032,410         3,125,501         2,408,159    
                               
  Operating expenses:                        
    General, administration and sales     1,524,443       1,324,675         2,992,787         2,737,344    
    Research and development     100,760       60,277         177,217         139,124    
      Total operating expenses     1,625,203       1,384,952         3,170,004         2,876,468    
                               
  Operating loss     100,779       (352,542 )       (44,503 )       (468,309 )  
                               
    Other income (expense), net     9,078       (23,578 )       26,621         (25,411 )  
                               
  Income (loss) before income taxes     109,857       (376,120 )       (17,882 )       (493,720 )  
                               
    Provision for income taxes     6,609       6,350         12,968         14,379    
                               
  Net income (loss) $   103,248   $   (382,470 )   $   (30,850 )   $   (508,099 )  
                               
    Net income (loss) per common share, basic $   0.03   $   (0.13 )   $   (0.01 )   $   (0.17 )  
                               
    Weighted average number of common shares, basic     2,995,910       2,995,910         2,995,910         2,995,910    
                               
    Net income (loss) per common share, diluted $   0.03   $   (0.13 )   $   (0.01 )   $   (0.17 )  
                               
    Weighted average number of common shares, diluted     3,024,099       2,995,910         2,995,910         2,995,910    
                               

 



 

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