WEX Amex 2.25...waiting on 3rd qtr:
(COMTEX) B: Winland Electronics Earns $0.12/Share in Second Quarter
B: Winland Electronics Earns $0.12/Share in Second Quarter
MANKATO, Minn., Jul 29, 2002 /PRNewswire-FirstCall via COMTEX/ -- Winland
Electronics, Inc. (Amex: WEX) today reported net income of $351,009 or $0.12 per
basic and diluted share for the second quarter ended June 30, 2002 compared to a
net loss of $253,955 or ($0.09) per basic and diluted share for the same period
in 2001. For the six months ended June 30, 2002, net income was $632,082 or
$0.21 per basic and diluted share compared to a net loss of $383,510 or ($0.13)
per basic and diluted share for the same period in 2001.
Winland recorded net sales of $5,111,078 in the second quarter, a 33.6% increase
over net sales of $3,824,474 in the second quarter last year. For the six months
ended June 30, 2002, net sales increased 12.5% to $9,396,725 from $8,355,581
reported for the same period last year.
Winland's CEO, Lorin Krueger, stated, "We are pleased that one of Winland's
primary initiatives -- to build a path that leads toward our number one goal of
consistent profitability for the Company, is showing increasingly satisfactory
results."
EARNINGS
The improvement in net income for the first six months of 2002 was primarily due
to increased gross profit margins based on a more profitable sales mix and the
Company's ability to maintain lower direct and variable indirect expenses as
sales increased from the latter part of 2001 into the first six months of 2002.
Profitability also increased due to overall reductions in operating expenses and
interest expense.
Krueger noted, "These earnings results are consistent with the objectives of
initiatives we implemented and outlined to shareholders last year that were
designed to improve margins, reduce expenses, and lower debt."
NET SALES
The increase in sales for both the second quarter and six months ended June 30,
2002 was primarily the result of higher sales to original equipment manufacture
(OEM) customers. Sales of Winland's proprietary products, which include
security/industrial sensors, DC motor controls and utility controls, declined
during both the second quarter and six months ended June 30, 2002, compared to
the same periods last year.
GROSS PROFIT
Gross profit increased 85.8% to $1,195,639 or 23.4% of net sales for the second
quarter ended June 30, 2002, compared to $643,403 or 16.8% of net sales for the
second quarter last year. For the first six months of 2002, gross profit was
$2,281,207 or 24.3% of net sales, an increase from $1,342,450 or 16.1% for the
same period in 2001. The increase in gross profit for the second quarter ended
June 30, 2002 was primarily due to a more profitable sales mix and Winland's
ability to maintain lower direct and variable indirect expenses as sales
increased from the latter part of 2001 into the first and second quarter of
2002. For the first six months of 2002, the decrease in cost of goods sold, as a
percentage of sales, was primarily due to decreased salaries and employee
related expenses and lower information technology and facility expenses, offset
in part by increased, warranty and obsolescence reserves, commissions expense,
accrued employee incentive plan expense and the administrative expenses related
to the establishment of the new Arrow Electronics, Inc. "In Plant Store" (IPS).
Inventory in the IPS, although located on Company premises, is owned and managed
by Arrow Electronics, Inc. and is invoiced to the Company when first utilized by
the Company in manufacturing. The Company expects the use of the IPS to reduce
the shipping and carrying costs of inventory.
Mr. Krueger added, "These substantial improvements in gross profit performance
reflect the high level of energy and attention our entire staff has directed at
strategic initiatives related to sales, cost reductions, and managing
relationships with our customers. This level of gross margin improvement,
together with reduced operating expenses, resulted in operating income of 9.8%
of net sales for the second quarter 2002 compared to negative operating income
in the second quarter last year; and 9.5% for the first six months of 2002
compared to negative operating income in the same period last year."
OPERATING EXPENSES
General and administrative expense was $321,752 or 6.3% of net sales for the
second quarter this year, compared to $529,360 or 13.8% of net sales for the
same period last year. For the first six months of 2002, general and
administrative expense was $624,994 or 6.7% of net sales, compared to $847,991
or 10.1% of net sales for the same period in 2001. The decrease in general and
administrative expense for both periods this year was primarily due to
reductions in salary expense, executive severance expense for the former CEO,
leased vehicle expense and professional fees, offset in part by increased
employee incentive plan accruals, and expenses for investor relations and
directors and officers insurance premiums.
Sales and marketing expense (including project management) was $209,905 or 4.1%
of net sales for the second quarter this year compared to $182,221 or 4.8% of
net sales for the second quarter last year. For the first six months of 2002
sales and marketing expense was $445,942 or 4.7% of net sales, compared to
$351,548 or 4.2% of net sales for the same period in 2001. The increase in sales
and marketing expense for both periods this year is primarily due to increased
salaries and employee related costs due to reassignment of certain personnel and
the addition of a Vice President of Sales. Also, the Company incurred increased
expense related to employee incentive plan accruals, offset in part by decreased
leased vehicle expenses, information technology expenses and promotional
expenses.
Research and development expense was $165,687 or 3.2% of net sales for the
second quarter this, compared to $207,937 or 5.4% of net sales for second
quarter last year. Research and development expense for the first six months of
2002 was $314,468 or 3.3% of net sales, compared to $462,277 or 5.5% of net
sales for the same period in 2001. Research and development expense includes the
development of new Company products as well as design services and support to
OEM customers. The decline in research and development expense for both periods
this year compared to 2001 was primarily due to employee attrition and
reassignment without replacement. Accordingly, total salaries and related
expenses decreased, as well as decreased facility, information technology and
leased vehicle expenses, offset in part by employee incentive plan accruals.
INTEREST EXPENSE
Interest expense was $64,365 or 1.3% of net sales and $143,133 or 1.5% of net
sales for the second quarter and six months ended June 30, 2002, compared to
$126,459 or 3.3% of net sales and $282,400 or 3.4% of net sales for the same
periods in 2001, respectively. The decrease in interest expense for the second
quarter and first six months of 2002 was due to a reduction in short- term and
long-term debt as well as lower interest rates on short-term debt. During the
first six months of 2002, the Company paid down $1,085,501, or 55%, on its
line-of-credit and paid down $269,744 of long-term debt. All of the cash used to
reduce debt was generated from the Company's operating activities.
CAUTIONARY STATEMENTS
Certain statements contained in this press release and other written and oral
statements made from time to time by the Company do not relate strictly to
historical or current facts. As such, they are considered forward-looking
statements, which provide current expectations or forecasts of future events.
The statements included in this release with respect to increasingly
satisfactory results in efforts to achieve consistent profitability and expected
reductions in inventory costs through the use of IPS are forward looking
statements. These statements involve a variety of risks and uncertainties, known
and unknown, including, among others, the risks that (i) one or more significant
customers may elect to take their business elsewhere, (ii) the new products of
our clients will not achieve the projected market acceptance; (iii)
unanticipated problems in design, manufacture or performance of the products
will arise; (iv) costs of production will exceed current estimates, and (v) the
IPS system may not perform as well as currently anticipated. Consequently, no
forward-looking statement can be guaranteed and actual results may vary
materially.
Winland Electronics, based in Mankato, MN, designs and manufactures custom
electronic control products and systems, as well as proprietary products for the
security/industrial marketplace.
WINLAND ELECTRONICS, INC.
STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 2002 and 2001
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net sales $5,111,078 $3,824,474 $9,396,725 $8,355,581
Cost of sales 3,915,439 3,181,071 7,115,518 7,013,131
Gross profit 1,195,639 643,403 2,281,207 1,342,450
Operating expenses:
General and
administrative 321,752 529,360 624,994 847,991
Research and development 165,687 207,937 314,468 462,277
Sales and marketing 209,905 182,221 445,942 351,548
697,344 919,518 1,385,404 1,661,816
Operating income
(loss) 498,295 (276,115) 895,803 (319,366)
Other income (expenses):
Interest expense (64,365) (126,459) (143,133) (282,400)
Other, net (7,921) 11,619 3,412 12,256
(72,286) (114,840) (139,721) (270,144)
Income (loss) before
income taxes 426,009 (390,955) 756,082 (589,510)
Income tax (expense)
benefit (75,000) 137,000 (124,000) 206,000
Net income (loss) $351,009 $(253,955) $632,082 $(383,510)
Earnings (loss) per share
data:
Basic $0.12 $(0.09) $0.21 $(0.13)
Diluted 0.12 (0.09) 0.21 (0.13)
Weighted-average number of
common shares
outstanding:
Basic 2,961,030 2,952,352 2,960,439 2,952,333
Diluted 3,031,438 2,952,352 3,007,096 2,952,333
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SOURCE Winland Electronics, Inc.
CONTACT: Lorin E. Krueger, Chief Executive Officer of Winland
Electronics, Inc., +1-507-625-7231
URL: winland.com
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Copyright (C) 2002 PR Newswire. All rights reserved.
-0-
KEYWORD: Minnesota
INDUSTRY KEYWORD: CPR
SUBJECT CODE: ERN
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(PR NEWSWIRE) Winland Electronics Receives Multi-Year Manufacturing Contract
Winland Electronics Receives Multi-Year Manufacturing Contract From Select
Comfort
MANKATO, Minn., Aug. 12 /PRNewswire-FirstCall/ --
Winland Electronics Inc. (Amex: WEX) and Select Comfort (Nasdaq: SCSS)
announced today a master agreement for Winland to provide new product
introduction, product manufacturing, test and repair services to Select
Comfort.
The multi-year contract names Winland as the supplier of electronic
controls for Select Comfort's SLEEP NUMBER(R) 4000, SLEEP NUMBER(R) 5000 and
SLEEP NUMBER(R) 7000 beds. The renewable contract gives Winland production
rights of these electronic controls for a minimum of three years.
"For more than six years, Winland Electronics has been an exceptional
design and production partner for us, and we're pleased to have this multi-
year agreement in place to formalize the long-term relationship between our
companies," said Kathleen Graber, vice president of supply chain management
for Select Comfort.
"This agreement is a milestone in our relationship," said Lorin Krueger,
CEO of Winland. "Our mutual trust and respect have created a specific synergy
between the two companies, and having our partnership documented and defined
brings this synergy into focus."
In April 2002, Winland announced an $8.4 million purchase order from
Select Comfort.
About Select Comfort
Founded in 1987, Select Comfort Corporation is the nation's leading
bedding retailer, holding 27 U.S. issued or pending patents for its
personalized sleep products. The company designs, manufactures and markets
the adjustable-firmness SLEEP NUMBER(R) bed, as well as foundations and sleep
accessories. Select Comfort's products are sold through its 320 retail stores
located nationwide, including 20 leased departments in Bed Bath & Beyond
stores; through selected bedding retailers; through its national direct
marketing operations; and on the Internet at www.selectcomfort.com .
About Winland Electronics
Winland Electronics, based in Mankato, Minnesota, designs and manufactures
custom electronic control products and systems, as well as proprietary
products for the security/industrial marketplace. The company recently
reported net income of $632,082, or 21 cents per basic and diluted share on
sales of $9,396,725 for the first six months ended June 30, 2002.
CAUTIONARY STATEMENTS
Certain statements contained in this press release and other written and
oral statements made from time to time by the company do not relate strictly
to historical or current facts. As such, they are considered forward-looking
statements, which provide current expectations or forecasts of future events.
The statement included in this release with respect to Winland's right to
produce electronic controls for Select Comfort for a minimum of three years is
a forward-looking statement. This statement involves a variety of risks and
uncertainties, known and unknown, including, among others, the risks that (i)
Select Comfort may terminate the agreement; (ii) Select Comfort does not
achieve the level of sales anticipated due to continuing difficulties in the
U.S. economy, competitive pressures or other reasons, causing it to reduce
purchase orders to the company, and (iii) unanticipated problems may develop
in the design, manufacture or performance of the electronic controls sold to
Select Comfort causing Select Comfort to reduce purchase orders or seek other
suppliers. Consequently, no forward-looking statement can be guaranteed and
actual results may vary materially.
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SOURCE Winland Electronics, Inc.
-0- 8/12/2002
/CONTACT: Lorin E. Krueger of Winland Electronics, +1-507-625-7231, or
Mark Kimball of Select Comfort, +1-763-551-7070/
/Web site: selectcomfort.com /
/Web site: winland.com /
(WEX SCSS)
CO: Winland Electronics, Inc.; Select Comfort
ST: Minnesota
IN: CPR REA TEX HOU
SU: CON
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