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TOROTEL ANNOUNCES EARNINGS NEARLY DOUBLE ON SLIGHT SALES GAIN FOR FISCAL 1992

 TOROTEL ANNOUNCES EARNINGS NEARLY DOUBLE ON
 SLIGHT SALES GAIN FOR FISCAL 1992
 KANSAS CITY, Mo., July 1 /PRNewswire/ -- Torotel, Inc. (AMEX: TTL), a leading manufacturer of magnetic components, today announced significant increases in earnings for its fourth quarter and year ended April 30, 1992.
 Earnings Rise 188 Percent For Year
 For the year, net sales increased 5 percent to $10.3 million from last year's $9.8 million. Earnings before income taxes and the cumulative effect of an accounting change were $933,000, a 207 percent increase compared with $303,000 for last year. Fiscal 1992 net earnings were $901,000, or 32 cents per share, 188 percent higher than last year, at $478,000 or 18 cents per share. (The prior year figure includes a $186,000, or 7 cents per share, cumulative effect of an accounting change.)
 Earnings Up 62 Percent In Fourth Quarter
 Net sales for the fourth quarter were $2.5 million, down 4 percent from $2.6 million for last year's quarter. However, earnings before income taxes rose 60 percent to $236,000, compared with $147,000 for the same three months last year. Net earnings reached $228,000, or 8 cents per share, a 62 percent increase from last year's fourth quarter net earnings of $141,000, or 5 cents per share.
 Strong Financial Condition
 These strong operational results were reflected in the company's financial condition. Comparing fiscal 1992 with 1991, working capital was up 14 percent to $4.2 million; total assets increased 8 percent to $6.7 million; long-term debt, at $1.9 million, was 16 percent lower, and shareholders' equity rose 43 percent to $3.2 million. This brought improvements in the current ratio, which reached 3.6-to-1, and the debt to-equity ratio continued to decline, to 1.1-to-1.
 Torotel's cash flow from operations for the latest fiscal year was $502,000, compared with $570,000 at this time last year. Most of the cash flow for the latest year ($474,000) came in the fourth quarter, as a new customer specification that had delayed the normal billing cycle began to be rectified.
 Torotel Meets High-End Of Fiscal 1992 Earnings Goal
 In discussing the year, President and Chief Executive Officer Alfred F. Marsh said, "Torotel met the goals established at this time last year. We increased sales slightly in a period when many of our competitors saw reductions. By controlling costs and increasing operating efficiencies and customer service, we approached our goal of 40 percent gross margins. For the fourth quarter, our gross margin was 39.6 percent, and 38.7 percent for the year, up from 35.6 percent and 33.6 percent for last year's fourth quarter and fiscal year, respectively. This allowed us to meet the high end of our earnings per share goal: 32 cents."
 Near-Term Contract Delays Reduce Backlog
 "In our third quarter, we began to experience delays in the awarding of U.S. Department of Defense (DOD) contracts," Marsh continued. "We noted then that the funds for several major non-nuclear programs already had been approved and set aside -- which means the work is out there, it just hasn't been awarded. The effects are seen in lower sales bookings, which were $1.3 million during the fourth quarter, and backlog, which was down 38 percent to $5.5 million at the end of fiscal 1992.
 "This situation already is improving in the first quarter," Marsh added. "We expect to receive a $2.0 million contract for Hellfire missile magnetic components. Last year this contract was awarded in April, so this is a good example of a program delayed, not canceled. Once again, DOD budget cutbacks do not affect the non-nuclear defense markets Torotel targets."
 1993 Growth: Expanding Market, Potential Acquisitions
 "We expect the first quarter results will echo what occurred in the fourth quarter: about $2.5 million in sales and net earnings around $220,000, or 8 cents per share," Marsh said. "Although current market conditions do not allow us to be as specific with growth goals for all of fiscal 1993, Torotel plans to build sales and earnings in several ways this year.
 First, we are expanding our product base by offering complete electrical assemblies that consist heavily of magnetic components," Marsh explained. "We will be submitting bids directly on these types of government programs. This segment of the military market offers immediate growth opportunities for Torotel. We can be successful in this market for two reasons: 1) we have technical expertise in magnetics, circuitry design and assemblies, and 2) our production efficiencies will result in competitive prices that still offer a good level of profitability. Entry into this market will require a minimal cash outlay and we think it could represent a significant increase in revenues.
 "Second, we are making significant progress in penetrating commercial markets. Torotel's cost effectiveness, along with its 'Made in the U.S.A.' production facility, has generated a substantial increase in quoting activity during the past few months. Many prototypes are in process for several high-volume, long running programs. In addition, Torotel already booked around $100,000 of commercial business in May and June. As a result, we believe future revenues will have a higher mix of commercial business.
 "And third, we continue to search for acquisitions that are a logical extension of our business. Torotel targeted several companies in fiscal 1992, but no likely candidates exist at the present time," Marsh concluded.
 Torotel, Inc. specializes in the design and high-volume manufacture of a broad line of precision magnetic components used in military and industrial electronic systems. These components, which include transformers, chokes and toroidal coils, are sold to original equipment manufacturers for use in such programs as avionic equipment, marine communication and navigation, telecommunications and weapons fire control systems. The company has a customer base of more than 400 companies and substantially all of its sales are to defense contractors.
 For further information on Torotel as an investment, contact Alfred F. Marsh at 1-800-TALKSTK.
 TOROTEL, INC.
 Condensed Statement Of Operations
 (Unaudited)
 Periods ended Year Three Months
 April 30, 1992 1991 1992 1991
 Net sales $10,285,000 $9,810,000 $2,491,000 $2,609,000
 Gross profit 3,975,000 3,293,000 986,000 928,000
 Earnings from
 operations 1,192,000 598,000 287,000 204,000
 Earnings before
 income taxes and
 cumulative effect
 of accounting change 933,000 303,000 236,000 147,000
 Cumulative effect of
 accounting change -- 186,000 -- --
 NET EARNINGS $901,000 478,000 228,000 141,000
 EARNINGS PER SHARE:
 Earnings before
 cumulative effect $.32 $.11 $.08 $.05
 Cumulative effect - .07 - -
 $.32 $.18 $.08 $.05
 Weighted average common
 and common equivalent
 shares outstanding 2,852,000 2,712,000 2,885,000 2,724,000
 TOROTEL, INC.
 Balance Sheet Data
 4/30/92 4/30/91
 Working capital $4,239,000 $3,703,000
 Current ratio 3.6 3.1
 Total assets 6,703,000 6,231,000
 Short-term debt 122,000 130,000
 Long-term debt 1,909,000 2,274,000
 Total liabilities $3,539,000 $4,022,000
 Debt-to-equity 1.1:1 1.8:1
 Stockholders' equity $3,164,000 $2,209,000
 (For information on Torotel, Inc. by fax dial 800-PRO-INFO ext. 155)
 -0- 7/1/92
 /CONTACT: Al Marsh, president of Torotel, 816-761-6314; or Lynne Franklin or Linda Ettel, 312-266-7800, or Regina Ryan, 212-661-8030, all of the Financial Relations Board/
 (TTL) CO: Torotel, Inc. ST: Missouri IN: SU: ERN


SM -- NY058 -- 5645 07/01/92 11:27 EDT
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Date:Jul 1, 1992
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