Sparton Corporation Reports Fiscal 2017 Second Quarter Results

SCHAUMBURG, Ill.–(BUSINESS WIRE)–Feb. 7, 2017–Sparton Corporation (NYSE:SPA) today announced results for the second quarter of fiscal year 2017 ended January 1, 2017.

Second Quarter Financial Results and Highlights

Joseph J. Hartnett, Interim President & CEO, commented, “We are pleased to report that our Q2 performance reflects the continued improvement in revenues and profitability in our MDS segment as well as the continued strengthening of our balance sheet. The MDS segment reported net organic revenue growth along with increased new program wins and stronger margins as compared to the prior quarter and Q2 of fiscal 2016. Our ECP segment did not perform as expected due to delays in production of the Q53G sonobuoy and the need to record a loss on a contract in our rugged display platform. Both of these issues have been addressed and are not expected to have any impact on future results.”

Joe McCormack, Senior Vice President and CFO, commented, “Through our continued focus on working capital management and cash flow, we generated strong free cash flow in the quarter of $10 million, principally as a result of the management of inventory levels and our supply chain. We are pleased to report that our borrowings under our revolving credit agreement was reduced to $85.7 million.”

Consolidated:

• Net sales of $97.4 million

• Gross profit margin of 16.3%

• SG&A expenses of $13.0 million or 13.3% of sales; adjusted SG&A of $12.3 million, 12.6%

• Earnings (loss) per share of $(0.09), adjusted EPS of $0.10

• Adjusted EBITDA of $5.6 million, a 5.7% adjusted EBITDA margin

• Borrowings under Credit Facility reduced $10.1 million to $85.7 million

• Free cash flow of $10.0 million

MDS Segment:

• Gross sales of $67.4 million

• Gross profit margin of 12.4% as compared to 11.2% in the prior quarter and 10.3% in Q2 FY16

• Operating income of $1.0 million as compared to operating losses of $0.5 million and $2.5 million in the prior quarter and in Q2 FY16, respectively

• Adjusted EBITDA of $5.9 million, an 8.7% adjusted EBITDA margin, as compared to $4.7 million (7.2%) and $4.2 million (6.2%) in the prior quarter and in Q2 FY16, respectively

• New program wins in Q2 have expected revenue of $14.5 million when fully ramped up into production

• Q2 new program wins increased $2 million over the prior quarter wins

• Trailing four quarter win revenue of $59 million, which continues to support our future organic growth

• Backlog of $123 million

ECP Segment:

• Gross sales of $32.4 million

• Gross profit margin of 23.3% as compared to 26.6% in the prior quarter and 28.4% in Q2 FY16

• Margins were impacted by the delay in reaching full run-rate production for the Q53G sonobuoy and the recognition of a loss contract in the rugged display platform

• Operating income of $3.1 million as compared to $5.4 million and $7.0 million in the prior quarter and in Q2 FY16, respectively

• Adjusted EBITDA of $4.6 million, a 14.4% adjusted EBITDA margin as compared to $7.2 million (19.2%) and $8.7 million (21.4%) in the prior quarter and in Q2 FY16, respectively

• Backlog of $113 million comprised principally of $89 million in domestic sonobuoys, $11 million in foreign sonobuoys, and $9 million in rugged displays

View the full release of results

 

 

About Sparton Corporation

Sparton Corporation (NYSE:SPA), now in its 117th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service, and refurbishment. The primary markets served are Medical & Biotechnology, Military & Aerospace, and Industrial & Commercial. Headquartered in Schaumburg, IL, Sparton currently has thirteen manufacturing locations and engineering design centers worldwide. Sparton’s Web site may be accessed at http://www.sparton.com/.

Safe Harbor and Fair Disclosure Statement

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: To the extent any statements made in this release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the difficulty of predicting future results, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in Sparton’s filings with the Securities and Exchange Commission (SEC). The matters discussed in this press release may also involve risks and uncertainties concerning Sparton’s services described in Sparton’s filings with the SEC. In particular, see the risk factors described in Sparton’s most recent Form 10K and Form 10Q. Sparton assumes no obligation to update the forward-looking information contained in this press release.


Contact

Investors:
Institutional Marketing Services (IMS)
John Nesbett/Jennifer Belodeau, 203-972-9200
jnesbett@institutionalms.com
or
Company:
Sparton Corporation
Joseph McCormack, 847-762-5812
jmccormack@sparton.com