TASA Sales Increase 82% in 1997
Just thought that I'd post this news to ensure its availability next year this time. I am sure that 1998 will be much better.
Tuesday December 30, 4:19 pm Eastern Time
BREWSTER, N.Y., Dec. 30 /PRNewswire/ -- Touchstone Applied Science Associates (Nasdaq:TASA - news) announced today record sales results for its fiscal year ending October 31, 1997. Sales for fiscal 1997 increased 82% to a record $4.6 million as compared to $2.5 million in fiscal 1996. Net loss for fiscal 1997, including a $2.4 million third quarter write off of goodwill and a note receivable, was $1.4 million as compared to net income of $190,000 in fiscal 1996. The resulting loss per share for fiscal 1997 was $0.17 as compared to a per share profit of $0.03 for fiscal 1996. Shares outstanding were 8.2 million in 1997 and 7.6 million in 1996.
Approximately 85% of the $2.1 million sales increase in fiscal 1997 resulted from inclusion of two acquisitions completed during 1997, Modern Learning Press (MLP), and BETA. Sales of the two acquired companies since their respective acquisition dates totaled $1.8 million, with MLP reporting $1.5 million for five months and BETA reporting $300,000 for 10 months. The balance of the 1997 sales increase, $300,000, was from a 13% internal growth of TASA's main product line of reading tests and related products and services. On a proforma basis, 1997 sales would have approximated $6.5 million if all of the acquisitions had been effective November 1, 1996.
Gross profit for 1997 increased to $3.0 million from $1.8 million in 1996. This reflected a decrease in the Company's 1997 gross profit margin to 66% from 72% in 1996. The decrease in the gross profit margin was due primarily to inclusion of the lower margin consulting business of BETA. Within 1997 operating costs, selling costs were $1.1 million or 25% of sales, a decrease from the 28% or $700,000 in 1996. The general and administrative expenses in 1997 were $1.6 million, also a reduction to 35% as compared to 37% or $940,000 in the prior year. Consequently, earnings before taxes, interest, depreciation, amortization, and write offs (EBITDA) rose to $800,000 or 17% of sales as compared to $665,000 or 26% of sales in 1996. The Company has previously announced a third quarter write down of $2.0 million of the goodwill resulting from a 1997 acquisition as well as a write off of a $400,000 loan made by the Company's previous management. The Company had a tax credit in 1997 of $830,000.
At October 31, 1997, TASA had working capital of $2.2 million while its current ratio was 3.7 to 1. Long-term debt at year-end was $2.5 million while its net worth stood at $6.2 million.
The Company expects to file its 1997 10-KSB as well as an amended 10-QSB for the third quarter of 1997 no later than the third week of January 1998. The amended 10-QSB addresses a reallocation of the cost of sales between the third quarter and the fourth quarter. This reallocation is not substantial but by doing so quarterly results will more clearly reflect quarterly operations of MLP as the acquisition process is completed.
Andrew L. Simon, President, and CEO noted ''we are pleased with the sales growth this year. The accomplishment internally of a 23% increase in catalog sales in back to back years, 1997 and 1996, raised catalog sales in 1997 to $2.0 million. This growth in sales of our DRP assessment product to individual schools and universities throughout North America reflects both our recently introduced sales programs coupled with the continued acceptance of our DRP reading test methodology. Strategically, the DRP test is now complemented by BETA's standardized test consulting contracts with six of the major state educational departments and by MLP's highly regarded line of educational books and affordable consumable workbooks for grades K-4.
''Some investment professionals regard our education industry as being positioned where healthcare was in the 1970s. We agree that demand for education products and services will continue to grow. Therefore,'' continued Mr. Simon, ''we have made our business and product base for the future broader, more diversified and increasingly well positioned to participate in the growing demands placed on education by our country. For TASA, these demands include better evaluation and education of our children, addressing the needs of students and adults in English as a second language (ESL) as well as assisting the adult and postgraduate population to improve their earning power through improvement of personal skills. Additionally, selective acquisitions should continue to be important to TASA as we strategically enhance our position in the education field. In furtherance of this strategic objective, we expect to continue to introduce new products and services as well as to address the commercial markets for our DRP methodology, particularly as it relates to the corporate human resources function.''
Mr. Simon concluded by noting that ''it has taken the new management team since 1995 to position TASA strategically and operationally. Our business operational model calls for the gross profit margin of TASA to remain at approximately current levels. We do, however, expect to achieve a slight further decrease of our operating expenses as a percentage of sales. Our higher sales levels at current margins provide the financial resources to broaden our management infrastructure as well during 1998.''
For further information, please contact either Mr. Andrew Simon, 914-277-8100 or Mr. John M. Dutton, 213-630-4401.
Statements contained in this release which are not historical facts are forward-looking statements as contemplated by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. |
