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ttlo...85/.95 OTC BB: TODAY: (COMTEX) B: TOROTEL INC - Higher Sales and Earnings for Fiscal 2002, Fou B: TOROTEL INC - Higher Sales and Earnings for Fiscal 2002, Fourth Quarter New York, New York, Jul 19, 2002 (Market News Publishing via COMTEX) -- Torotel, Inc., a manufacturer of precision magnetic components, reported improved sales from a year ago, and the highest operating earnings and earnings per share in the last 10 years. Higher Sales, Earnings for Year and Quarter For the fiscal year ended April 30, 2002, net sales were $3.94 million, up 13 percent compared with $3.48 million last year. Earnings from operations rose nearly 60 percent, to $610,000 from $382,000 a year ago. This was due to higher gross profit, which reflected increased sales volume and lower material costs associated with the product mix. Earnings before the extraordinary item were $568,000, or 19 cents per diluted share, compared with $317,000, or 11 cents per diluted share, for last fiscal year. During the latest year, four old liabilities were settled at amounts lower than originally recorded. This extraordinary item increased net earnings to $1.03 million, or 35 cents per diluted share. Net sales for the fourth quarter increased 12 percent. Torotel Products' net sales were $973,000, up 3 percent compared with $943,000 for last year's three months. Electronika, which was acquired on April 1, had net sales of $86,000. Earnings from operations increased 8 percent to $149,000 from $138,000. Net earnings were $129,000, or 4 cents per diluted share, compared with $120,000, or 4 cents per diluted share, for the fourth quarter of fiscal 2001. Higher Fourth-Quarter Bookings Improve Backlog H. James Serrone, chief financial officer and general manager, said: "At the end of the third quarter, we had reported a 21 percent decrease in Torotel Products' backlog. However, order bookings in the fourth quarter reached $1.15 million, which greatly improved this operation's backlog heading into fiscal 2003. "We are starting to see increased orders from the military segment, while the aerospace market still is steady," Serrone continued. "At the same time, the telecommunications and industrial markets remain soft. These trends are expected to continue over the next several months." Cash Flow and Liquidity Still the Focus "For the last three years, improving cash flow from operations and financial liquidity have been important goals for us," said Serrone. "The favorable trends we experienced last year continued as stronger operating earnings helped generate cash flow of $543,000 in fiscal 2002 -- double what we saw in 2001. Our focus has not changed. Adding Electronika should strengthen our earnings and enhance our cash flow. This will continue to give us greater flexibility to reduce outstanding liabilities, fund additional growth, and create more value for shareholders." Expansion Planning, Cost Controls Seen for Fiscal 2003 "With the addition of Electronika, we have targeted $5.4 million as a consolidated sales goal for fiscal 2003," Serrone explained. "This would represent about a 37 percent increase over 2002's results. "A couple of years ago, we completed the process of shrinking the Torotel Products operation so its size matched its market opportunities. We also made changes to increase throughput and reduce cycle times. These efforts greatly improved our sales and earnings performance. To continue this trend in the years ahead, we have started the planning process to expand Torotel Products' manufacturing capacity. A number of different options are being considered, including joint venture and/or subcontracting alliances with strategic partners. In the meantime, controlling costs will be paramount to sustaining our profit margins. Higher insurance costs, especially for group benefits, will make this a challenging task," Serrone concluded. Torotel, Inc. specializes in the design and manufacture of a wide range of precision magnetic components, including transformers, inductors, reactors, chokes and toroidal coils. These are used in commercial, industrial and military electronics to modify and control electrical voltages and currents. Torotel's products are sold to original equipment manufacturers for use in avionics equipment, conventional missile guidance systems, computers, medical equipment, telecommunications systems, and digital control devices. This news release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, which are subject to the safe harbor created by that Act. These statements are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to be different from what is stated here. These risk factors include the impairment of goodwill acquired in the Electronika acquisition, decreased demand for products, delays in developing new products, expected orders that do not occur, and loss of key customers. Other risk factors are detailed from time to time in Torotel's Securities and Exchange Commission filings. TOROTEL, INC. Operating Data (In Thousands, Except per Share) Condensed Statements of Operations (Audited) (Unaudited) Fiscal Year Three Months Ended Ended April 30, April 30, 2002 2001 2002 2001 Net Sales $ 3,938 $ 3,480 $ 1,059 $ 943 Gross Profit $ 1,661 $ 1,322 $ 448 $ 370 Earnings from Operations $ 610 $ 382 $ 149 $ 138 Earnings before Provision for Taxes and Extraordinary Item $ 576 $ 317 $ 137 $ 120 Provision for Income Taxes $ 8 $ - $ 8 $ - Earnings before Extraordinary Item $ 568 $ 317 $ 129 $ 120 Extraordinary Item: Gain on settlements of debt, less applicable taxes of $3 $ 466 $ - $ - $ - Net Earnings $ 1,034 $ 317 $ 129 $ 120 Basic and Diluted Earnings per Share: Earnings before Extraordinary Item $ 0.19 $ 0.11 $ 0.04 $ 0.04 Extraordinary Item $ 0.16 $ - $ - $ - $ 0.35 $ 0.11 $ 0.04 $ 0.04 Weighted Average Shares Outstanding 2,994 2,811 3,561 2,811 Condensed Balance Sheet (Audited) April 30, April 30, 2002 2001 Cash $ 338 $ 321 Working Capital $ 82 $ (120) Current Ratio 1.07:1 .90:1 Quick Ratio .82:1 .60:1 Total Assets $ 5,017 $ 1,636 Short-term Debt $ 152 $ 195 Long-term Debt $ 1,135 $ 1,036 Total Liabilities $ 2,354 $ 2,307 Stockholders' Equity (Deficit) $ 2,663 $ (671) CONTACT: TEL: 816/761-6314 x 3015 Dale H. Sizemore, Jr., Chairman & CEO TEL: 816/761-6314 x 3024 Jim Serrone, CFO & General Manage MarketbyFax(tm) - To get the NEWS as it happens, call (604) 689-3041. (C) 2002 Market News Publishing Inc. -0- KEYWORD: New York, New York *** end of story *** | ||||||||||||||
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