Sparton Corporation Reports Fiscal 2019 First Quarter Results

SCHAUMBURG, IL. – November 8, 2018 – Sparton Corporation (NYSE: SPA) today announced results for the first quarter of fiscal year 2019 ended September 30, 2018.

Fourth Quarter Financial Results and Highlights

Joseph J. Hartnett, Interim President & CEO, commented, “We are pleased to report that we have started the fiscal year off with a strong operating performance, supported by organic growth in our MDS segment, a healthy backlog in both MDS and ECP segments and improved consolidated gross margins when compared to the same quarter last year.”

Joseph G. McCormack, Senior Vice President & CFO, commented, “During the first quarter of fiscal year 2019, we adopted the new revenue recognition standard, ASC 606. As a result of the application of the new rules, our net sales were $1.5 million less and our net income was $0.9 million less than what would have been recorded under the old rules.  ASC 606 also impacts the classification of certain balance sheet accounts which have reduced our accounts receivables by $7.8 million and increased our inventories by $9.8 million from what would have been reported under the old rules.”

Consolidated:

  • Net sales of $89.5 million; $82.8 million in prior year Q1
  • Gross profit margin of 19.7%; 19.2% in prior year Q1
  • SG&A expenses of $12.4 million or 13.8% of sales; adjusted SG&A of $11.7 million, 13.1% of sales
  • Earnings per share of $0.02, adjusted earnings per share of $0.20; adjusted earnings per share in prior year Q1 $0.08
  • Adjusted EBITDA of $6.0 million, a 6.7% adjusted EBITDA margin

MDS Segment:

  • Gross sales of $59.3 million; $55.3 million in prior year Q1
  • Gross profit margin of 12.2%; 10.8% in prior year Q1
  • Operating income of $0.3 million; loss of $1.5 million in prior year Q1
  • Adjusted EBITDA of $4.5 million, a 7.6% adjusted EBITDA margin
  • New program wins in Q1 have expected revenue of $14.8 million when fully ramped up into production
  • Trailing four quarter new program win revenue of $66.3 million, which continues to support our future organic growth
  • Backlog of $156 million; prior year Q1 backlog of $131 million

ECP Segment:

  • Gross sales of $33.3 million; $30.4 million in prior year Q1
  • Gross profit margin of 31.3%; 32.7% in prior year Q1
  • Operating income of $5.1 million; $5.4 million in prior year Q1
  • Adjusted EBITDA of $6.7 million, a 20.1% adjusted EBITDA margin
  • Backlog of $180 million; prior year Q1 backlog of $142 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.