Company Press Release
Research, Inc. Reports Record Fiscal 1997, Fourth Quarter
New products, market focus drive growth
MINNEAPOLIS, Nov. 6 /PRNewswire/ -- Research, Inc. (Nasdaq:RESR), today reported record sales results for both its
fiscal 1997 year and fourth quarter ended September 30, 1997. For the fiscal year, the Company reported net income of
$1,116,765, or $0.98 per share, on sales of $22.8 million. This compares to net income of $289,830, or $0.24 per share, on
sales of $19.6 million in the prior year. Fiscal 1996 results included approximately $2 million in sales generated by the
Dimension product line, which was sold in the fourth quarter of fiscal 1996 for a one-time gain of $344,400 included in other
income. Fiscal 1997 results include a one-time gain of $1,147,094 related to the sale of 13.1 acres of undeveloped land.
Excluding the two one- time gains, fiscal 1997 income from operations was more than six times greater than that of the prior
year. Without the Dimension sales, fiscal 1997 sales represent a 29 percent increase over those of fiscal 1996. New products
less than three-years old accounted for 57 percent of total sales, up from 48 percent in the previous year.
Fourth quarter sales reach historic high
Results for the fiscal 1997 fourth quarter also showed significant improvement. Sales rose to a record $6,531,421, spurred by
a large, time- sensitive customer order during the quarter. A year ago, sales for the same quarter were $4,230,093. Net
income for the most recent quarter at $208,715, or $0.20 per share, was more than double the $103,137, or $0.09 per share,
for the fiscal 1996 fourth quarter, which included a gain from the sale of the Dimension product line.
The Company increased its investment in selling and research and development for both the most recent year and quarter
based on its new strategic market focus and emphasis on the sale of new, value-added products. During the year, the
Company created new divisions, realigned its sales channels, and added senior marketing and engineering staff to take
advantage of opportunities in its high-growth on-demand printing and semiconductor assembly markets.
Said Claude C. Johnson, Research Inc.'s President and Chief Executive Officer, ''We're extremely pleased with the progress
the Company made in fiscal 1997. In effect, we are a new $22 million 'start-up.' Our newly realigned operating divisions made
real headway in positioning the company for growth. Notable achievements included the development of a first-to-market
ink-drying product line by our new Drying Division and the launch of innovative reflow ovens used in the assembly of surface
mount technology (SMT), ball-grid array (BGA) and Chip-scale packages (CSP) used by the semiconductor industry. These
and other value-added new product solutions are commanding higher margins in the marketplace and are increasingly becoming
a larger part of overall sales, validating our market-driven strategy.''
Company positioned to achieve growth goals
Concluded Johnson, ''As we begin a new fiscal year, we are optimistic that we will achieve increased growth. This said, our
first quarter will be down from the fourth quarter, and we will experience some quarter-to-quarter fluctuations in results.
Overall, we are well-positioned to achieve our goal of 20 percent average growth in 1998 and beyond.''
Research, Inc. designs and manufactures complete product solutions based on its core competency: the precise control of heat.
The Company does business worldwide through its four divisions: Drying, Research International, Thermal Solutions, and
Control Systems. The Company's products target high-growth markets including printing (ink drying) and semiconductor
assembly and packaging. Research, Inc. is headquartered in Eden Prairie, MN, and has subsidiary operations in Humberside,
England. The Company's common stock trades on the Nasdaq National Market tier of the Nasdaq Stock Market under the
symbol: RESR. Additional news and information can be found on the Company's website at http:\\www.researchinc.com .
Except for historical information contained here, the matters discussed in this press release are forward-looking statements that
involve risks and uncertainties. The risks and uncertainties that affect earnings per share and book value per share include the
effectiveness of new product introductions, the product mix of sales, the amount of sales generated or volatility in the major
markets, competition, and general economic conditions.
RESEARCH INC.
Consolidated Financial Summary - Audited
Three Months Ended Twelve Months Ended
September 30 September 30
1997 1996 1997 1996
OPERATIONS:
Net Sales $6,531,421 $4,230,093 $22,843,081 $19,661,182
Cost of sales 3,664,167 2,501,630 12,758,030 11,705,817
Gross profit 2,867,254 1,728,463 10,085,051 7,955,365
Gross profit % 43.9% 40.9% 44.1% 40.5%
Expenses:
Selling 1,715,345 1,290,392 6,013,914 5,431,240
Research and
development 704,634 488,502 2,580,770 1,735,204
General and
administrative 193,575 148,150 939,174 700,460
Total expenses 2,613,554 1,927,044 9,533,858 7,866,904
Income (loss) from
operations 253,700 (198,581) 551,193 88,461
Other income
(expense) (24,035) 351,187 1,143,572 369,369
Income before taxes 229,665 152,606 1,694,765 457,830
Income tax provision 20,950 49,469 578,000 168,000
Net income $208,715 $103,137 $1,116,765 $289,830
Earnings per share $.20 $.09 $.98 $.24
September 30
1997 1996
FINANCIAL CONDITION:
Current assets $10,266,421 $8,153,759
Current liabilities $6,332,235 $3,062,962
Working capital $3,934,186 $5,090,797
Current ratio 1.6 to 1 2.7 to 1
Property and equipment, net $2,520,965 $2,100,443
Total assets $12,848,706 $10,338,416
Stockholders' investment $6,516,471 $7,275,454
Number of shares outstanding 969,174 1,161,243
Book value per share $6.72 $6.27
Backlog of orders $2,730,152 $2,356,112
SOURCE Research, Inc. |
