Sparton Corporation Reports Fiscal 2018 Fourth Quarter Results

SCHAUMBURG, Ill.–(BUSINESS WIRE)–Sep 13, 2018– Sparton Corporation (NYSE:SPA) today announced results for the fourth quarter of fiscal year 2018 ended July 1, 2018.

Fourth Quarter Financial Results and Highlights

Joseph J. Hartnett, Interim President & CEO, commented, “We are pleased to report that we closed the 2018 fiscal year with a total backlog of $320 million, made up of $148 million in our MDS segment and $172 million in our ECP segment. Gross margins also closed strong with consolidated gross margins reported at 21.9% for the quarter and 21.2% for the year. While this has been a year of significant challenges on a number of fronts, the management team remains committed to taking the steps necessary to improve our long-term operating performance.”

Joseph G. McCormack, Senior Vice President & CFO, commented, “During the 2018 fiscal year, we reduced our total adjusted SG&A to $49.1 million from $50.9 million in the prior fiscal year. While we generated free cash flow of $13.8 million in the fourth quarter of fiscal 2018, we experienced a net outflow of cash for the year of $8.3 million as a result of working capital needs. Working capital was impacted in the current fiscal year by supply shortages in the marketplace of certain electronic components, resulting in higher prices and higher inventory levels caused by accelerated component purchases, and increased accounts receivables principally related to the timing of payments from the U.S. Navy for shipments near year-end.”

Consolidated:

  • Net sales of $100.5 million
  • Gross profit margin of 21.9%
  • SG&A expenses of $15.8 million or 15.7% of sales; adjusted SG&A of $12.4 million, 12.3% of sales
  • Earnings per share of $(0.03), adjusted earnings per share of $0.32
  • Adjusted EBITDA of $9.3 million, a 9.3% adjusted EBITDA margin

MDS Segment:

  • Gross sales of $62.5 million
  • Gross profit margin of 11.3%
  • Operating loss of $0.6 million
  • Adjusted EBITDA of $4.4 million, a 7.1% adjusted EBITDA margin
  • New program wins in Q4 have expected revenue of $12.5 million when fully ramped up into production
  • Trailing four quarter new program win revenue of $62.8 million, which continues to support our future organic growth
  • Backlog of $148 million

ECP Segment:

  • Gross sales of $41.1 million
  • Gross profit margin of 36.4%
  • Operating income of $8.0 million
  • Adjusted EBITDA of $9.8 million, a 23.9% adjusted EBITDA margin
  • Backlog of $172 million

View the full release of results

About Sparton Corporation

Sparton Corporation (NYSE:SPA), now in its 119th 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 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 10-K and Form 10-Q. 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