Material
Sciences Corporation, a leading provider of
material-based solutions for acoustical and coated
applications, today announced results for its third
quarter ended November 30, 2009.
Net sales
for the latest three months were $39.1 million, 19.3
percent lower than $48.5 million at this time last year.
The $2.0 million net loss for third quarter, equal to
$0.15 per share, represented a 58.3 percent improvement
from the year-ago net loss of $4.8 million, equal to
$0.35 per share.
Third
Quarter Continues Turnaround
"While
19.3 percent lower quarterly sales may not sound
encouraging, it represents a significant improvement
from the 45.2 percent decline we saw in our second
quarter and 44.3 percent decrease in our first," stated
Clifford D. Nastas, chief executive officer. "We also
have made important progress in other areas this fiscal
year. Gross profit grew 74.9 percent between the first
and third quarters, reaching a gross margin of 11.0
percent versus the first quarter's 7.7 percent. And
strict control of SG&A spending kept the dollar value of
these expenses flat across all three periods. As a
result, we cut our quarterly loss in half -- from $0.30
to $0.15 per share -- in the last three quarters."
Lower
Cost Structure Trims Quarterly Loss
For the
latest three months, sales of acoustical materials --
most often to automotive manufacturers -- were $19.8
million compared with $26.4 million a year ago, off by
25.1 percent. This reflected the continued effects of
significantly lower North American automobile
production, which reduced demand for nearly all of the
company's acoustical applications, including body
panels, engines and brakes. This decline is consistent
with the reduction in automotive production for vehicles
containing Quiet Steel®.
Sales of
coated materials -- sold to automotive, building
products and appliance customers -- decreased 12.4
percent to $19.4 million from $22.1 million in the
year-ago quarter. Sales of fuel tanks increased from a
year ago, helped by several factors including the
stabilizing of several platforms, partially due to the
"cash for clunkers" program, while sales of
appliance-related and building products were down due to
the soft housing market.
Quarterly
gross profit was $4.3 million, a more than six-fold
increase from $0.7 million a year ago. This meant gross
margin as a percent of sales was 11.0 percent compared
with 1.3 percent for the three months last year. The
year-ago quarter had $2.3 million in costs associated
with selling the Morrisville facility and derivative
expenses, which did not recur this year. In addition,
the latest period benefited from $4.6 million in
operating cost reductions.
Selling,
general and administrative expenses (SG&A), at $6.8
million, decreased 9.8 percent from $7.5 million for the
last year's three months. This reflected lower headcount
and salary-related costs (because of restructurings in
the second half of fiscal 2009) and depreciation,
totaling $1.3 million, and partially offset by an
increase in professional fees and marketing trial
expenses.
The $2.4
million quarterly loss from operations, versus last
year's $7.5 million loss, represented a 67.4 percent
improvement. Other income for the three months was $0.2
million compared with $0.3 million, with the difference
reflecting lower foreign currency transaction gains. The
net loss for the latest quarter was $2.0 million, equal
to $0.15 per common share, compared with last year's
third quarter loss of $4.8 million, equal to $0.35 per
common share.
Lower
Sales Lead to Wider Loss for Nine Months
For the
year-to-date, net sales of $102.1 million decreased 37.2
percent from $162.4 million a year ago. This reflected
39.9 percent lower sales for acoustical materials and a
34.4 percent reduction for coated materials. Gross
profit was $9.8 million or 9.6 percent of sales, versus
$13.5 million or 8.3 percent of sales, for last year's
nine months. SG&A was down 25.7 percent, to $20.2
million compared with $27.2 million from the comparable
period last year. Other income for the year-to-date was
$0.6 million versus $2.1 million, reflecting a one-time
gain on the sales of investments a year ago and lower
foreign currency transaction gains in the latest period.
The net loss was $9.7 million, equal to $0.74 per share,
versus last year's loss of $7.6 million, equal to $0.55
per share.
Strong
Financial Condition
Net cash
provided by operations through November 30, 2009, was
$4.5 million, versus a use of cash of $1.4 million a
year ago. The greater reductions in inventory and
increases in accounts payable more than offset a higher
net loss and increased accounts receivable. Through the
nine months, the company invested $0.8 million in
capital improvement projects in contrast to $3.6 million
a year ago.
For the
year-to-date, cash remained solid at $14.7 million, $4.1
million higher than the end of the last fiscal year, and
the company continued to operate with no long-term debt.
About
Material Sciences
Material
Sciences Corporation is a leading provider of
material-based solutions for acoustical and coated
applications. Material Sciences uses its expertise in
materials, which it leverages through relationships and
a network of partners, to solve customer-specific
problems. The company's stock is traded on the OTC
Bulletin Board under the symbol MASC.
This news
release contains forward-looking statements that are
based on current expectations, forecasts and
assumptions. Material Sciences cautions the reader that
the following factors could cause its actual outcomes
and results to differ materially from those stated or
implied in this release: the recent unprecedented
deterioration in the overall economy; changes in the
business environment, including the transportation,
building and construction, electronics and durable goods
industries; competitive factors, including domestic and
foreign competition for both acoustical and coated
applications, pricing acceptance, union activity, as
well as changes in industry capacity; changes in laws,
regulations, policies or other activities of
governments, agencies or similar organizations
(including the ruling under Section 201 of the Trade Act
of 1974); the stability of governments and business
conditions inside and outside of the U.S., which may
affect a successful penetration of the company's
products; acceptance of brake damping materials, engine
components and body panel laminate parts by customers in
North America, Asia and Europe, and new product
introductions; the continued successful operation of the
Application Research Center in Michigan and the
Application Development Center in Europe; increases in
the prices of raw and other material inputs used by the
company, as well as their availability; the loss, or
changes in the operations, financial condition, or
results of operations, including the bankruptcy or
potential bankruptcy of one or more of the company's
significant customers; Material Sciences' ability to
effectively manage its business objectives including the
ability to retain key personnel and maintain good labor
relations with its unions; overcapacity in the coil
coating industry; shifts in the supply model for its
products; the impact of future warranty expenses;
environmental risks, costs, recoveries and penalties
associated with the company's past and present
manufacturing operations; access to credit, which may be
limited under its asset-based credit agreement; the
company's ability to utilize net operating loss
carryforwards; Material Sciences' ability to maintain a
stable liquidity trading environment for its common
stock, traded on the over-the-counter bulletin board
market; and other factors, risks and uncertainties
identified in Part I, Item 1A of the company's Annual
Report on Form 10-K for the year ended February 28,
2009, filed with the Securities and Exchange Commission
on May 14, 2009, and from time to time in other reports
filed with the Securities and Exchange Commission.
Source:
???
Press Release