TASA @ 1 1/16
should run to 2 1/2
very good company on its way back up
With insider buying
1st quarter '98 - 38% increase
325% increase in 3 years
others can learn from them
TASA Reports Strong 1998 Q1 Results
BREWSTER, N.Y.--(BUSINESS WIRE)--March 5, 1998--Touchstone Applied Science Associates (NASDAQ: TASA - news), Brewster, NY, announced today results for its first fiscal quarter ended January 31, 1998. First quarter sales for 1998 increased 38% to a first quarter record of $1.3 million as compared to $0.9 million for the first quarter of 1997. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the 1998 first quarter were $222,000 as compared to $326,000 in the previous year's quarter. Net income (loss) was ($33,000) for the 1998 first quarter as compared to net income of $151,000 in the 1997 first quarter. The resulting per share profit (loss) was $0.00 in the 1998 first quarter as compared to $0.02 per share for the 1997 first quarter, based on shares outstanding of 8.4 million and 7.9 million respectively.
The 38% increase in TASA first quarter sales was from internal growth of 7%, accounting for approximately 18% of the gain, with the balance or 82% from inclusion of its subsidiaries, MLP and BETA, acquired in 1997. The first quarter of 1998 includes MLP and BETA for the full three months. The two respective transactions closed during or after the 1997 first quarter, and consequently, only one month of BETA operations and no MLP operations were included in the 1997 first quarter.
Gross profit, excluding amortization of the Company's test bank, increased 36% to $1,019,000, or 79% of sales, as compared to $751,000 or 80% of sales in the comparable period last year. The Company's selling expenses, primarily due to inclusion of MLP, increased in this year's first quarter to $323,000 or 25% of sales. Selling expenses were $209,000 or 22% of sales in the comparable period last year. General and administrative expense, excluding depreciation and amortization, was $473,000 or 36% of sales versus $217,000 or 23% of sales in the 1997 first quarter. Over 70% of the quarter's increase reflects inclusion of MLP and BETA.
The Company's operating profit (EBITDA) was $222,000 or 17% of sales for the 1998 first quarter as compared to $326,000 or 35% of sales last year. Depreciation and amortization expenses rose in the current year's quarter 90% to $213,000 from $112,000 in the first quarter of 1997. The increase over the prior year is attributable to amortization of goodwill and other costs arising from the 1997 MLP and BETA transactions. A $50,000 quarterly amortization expense of the MLP $200,000 one-year prepaid consulting contract issued in the transaction accounted for approximately half of the current quarter's increase. Amortization of the prepaid contract is to be completed in May 1998.
The Company had a net interest expense of $52,000 in the 1998 first quarter as compared to net interest income of $23,000 in the previous year's quarter. The net interest expense for the 1998 quarter results from higher interest costs in this year's first quarter associated with notes issued in connection with the 1997 MLP and BETA transactions. Net income (loss) for the 1998 first quarter was ($33,000) as compared to a profit of $151,000. Earnings (loss) per share for the 1998 first quarter was $0.00 as compared to a profit of $0.02 in the previous year's quarter. Shares used for the earnings per share calculation in the first quarter were 8,448,000 in 1998 and 7,938,000 in 1997.
At the end of the 1998 first quarter, TASA's working capital rose to $2,157,000, and its current ratio is 4.8 to 1. At its 1997 fiscal year end on October 31, 1997 working capital stood at $1,250,000 with a current ratio of 1.7 to 1.
Andrew L. Simon, CEO of TASA, noted that ''I am extremely pleased with the progress TASA made in our first quarter. Looking at the rest of the year in light of our two 1997 acquisitions, I believe the following is important: Our MLP subsidiary has generally recorded less than 15% of its annual sales during our first quarter period, with over 70% of its annual sales occurring during the period of TASA's third and fourth quarters. A substantial portion of our annual Catalog sales is recorded during our third quarter as well. With the addition of MLP operations in June 1997, our sales are therefore heavily weighted to the second half of our fiscal year.
''BETA has significantly increased its backlog of contractual work since its acquisition last January, and now has multi-year contracts with five states. Mike Beck, TASA Vice President and BETA President, continues the substantial efforts necessary for obtaining additional state clients,'' Mr. Simon continued. ''MLP, under the leadership of the highly respected educator and publisher, Walter B. Barbe, Ph.D., continues to broaden its product line and has increased the flow of new titles, 14 to date, into its market. Additionally, we are still unfolding our sales and marketing efforts for BookMatch, our on-line children's reading encouragement program. Increasingly, we have been receiving critical acclaim for BookMatch.''
Mr. Simon concluded, ''We continue to generate substantial cash from operations as measured by EBITDA to support our internal cash expansion needs. I am comfortable therefore that the price of our stock, which we recognize is subject to the previously announced NASD continued listing requirement of $1, will reflect the strength of the Company and that TASA will be able to meet the requirement in the requisite period of time.''
TASA is an educational information and learning company. TASA provides the educational market--including individual states, schools, colleges and universities--with select learning, assessment, and evaluation tools. The Company develops, publishes, and distributes a highly regarded, proprietary line of reading tests, and designs tests specifically to meet clients' measurement specifications. Through its wholly-owned subsidiary, Modern Learning Press, Inc., the Company designs, publishes and distributes affordable ''consumable'' student workbooks for grades K-4, and creates and publishes books and pamphlets for elementary school teachers and parents. The Company's subsidiary, Beck Evaluation & Testing Associates, Inc., designs tests and evaluates assessment needs for states, school districts and test and textbook publishers. Visit TASA at tasa.com.
For further information, please contact either Mr. Andrew Simon 914-277-8100 or Mr. John M. Dutton at 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.
QTR QTR
Jan. 31, '98 Jan. 31, '97
Total Sales $1,297,744 $937,511
Operating Income 9,340 213,315
Net (Loss) Income (33,047) 151,442
Earnings (Loss) per Share -- $ 0.02
--------------------------------------------------------------------------------
Contact:
Touchstone Applied Science Associates
Andrew Simon, 914/277-8100
John M. Dutton, 213/630-4401 |
