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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (18615)	2/13/2004 3:58:12 PM
From: - with a K	Read Replies (1) \| Respond to of 78595

KTEC notes from 1/29 CC and 10-Q. Highlights: Two new products this quarter. The "KPI" inspection system for cigarette packages is the first KTEC product in this area and was well received at Barcleona show. Came out with the "ADR4C" upgrade kit for older defect removal systems. "Encouraged by tobacco orders, above expectations." "Strong aftermarket business (upgrades and spares)" Re: Mad Cow -- "Don't see impact in short term but hopeful for more opportunities in future." "Capex may be stronger than last year, particularly in Europe, Latin America, and Asia. North America is more of a wild card. Impressed with the level of projects in East Europe, particularly Poland. Level of quotes for optic systems is encouraging." "The Q backlog is approx. $1mil higher and makes me optimistic. Looking for another strong Q for parts and service; together, we feel good about the short term." 10-Q posted today. Highlights: The Company reported net earnings of $505,000, or $0.10 per diluted share, for the most recent quarter compared to net earnings of $221,000, or $0.04 per diluted share, in the corresponding quarter last year. The Company's results for the three-month period ending December 31, 2003 were favorable compared to the corresponding quarter last year in both revenue and net income. Net sales for the first quarter of fiscal 2004 totaled $18.7 million, compared to $15.4 million recorded in the same quarter last year, and net earnings for the quarter increased to $505,000 compared with net earnings of $221,000 in the same period one year ago. Orders from international customers during the first quarter were strong and totaled approximately 49% of the total orders for the December 2003 quarter compared with 35% for the prior year quarter. The October through December period is typically when the Company's customers in the food industry, particularly seasonal processors located in the northern hemisphere, are between processing seasons and are planning for capital projects for the upcoming year. New orders from these customers normally occur during the Company's second and third fiscal quarters resulting in strong shipments for those quarters. The Company's business in the first fiscal quarter of 2004 reflected a seasonal pattern of lower net sales and orders consistent with past years. The Company's customer base is continuing to invest in capital equipment as it has done for the last several quarters. The widely publicized shift in the food industry away from french fries has not materially affected the Company's business to date. The balance sheet reflects growth in the Company's cash position, control over credit and accounts receivable, emphasis on inventory management, and a further reduction of debt. The Company is in compliance with all bank covenants. The Company expects that cash flows from operations plus currently available operating credit lines will be sufficient to fund the current year's cash needs. For the three months ended December 31, 2003 and 2002 Net sales increased 21.7% to $18.7 million for the three-month period ended December 31, 2003, up $3.3 million from $15.4 million recorded in the same quarter last year. The sales mix for the first quarter contained fewer automated inspection systems, but showed growth in process systems as well as stronger sales from the Company's European location. Sales of tobacco sorters into Asia along with increased parts and service business contributed to the quarter's sales growth. The Company's backlog at the close of the December 31, 2003 quarter totaled $19.5 million, a 4.9% increase from a backlog of $18.6 million at the same time last year. Automated inspection systems represented 59% of the total backlog at the more recent quarter-end compared to 45% one year ago, resulting in a more favorable product mix in backlog going into the Company's second quarter." Price/sales currently .92; ROE 22%; Debt/E .136. Next year estimate raised .03 to $1.43 in last 7 days. Chart shows KTEC has dropped $3.26 from high January high to support of 50dma: finance.yahoo.com