Torotel Reports Higher Sales, Operating Earnings for First Quarter; Extraordinary Item Adds $27,000 to Earnings.Business Editors KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BUSINESS WIRE)--Sept. 14, 2001 Torotel, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :TTLO TTLO Things They Left Out ), a manufacturer of precision magnetic components, today reported higher sales and significant improvements in earnings for the first quarter ended July 31, 2001, even before an extraordinary item. Strong Operating Results Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter were $945,000, up nearly 11 percent compared with $855,000 for last year's three months. Earnings from operations more than doubled to $161,000 from $70,000. Earnings before the extraordinary item were $154,000, or 5 cents per diluted share, three times higher than the $51,000, or 2 cents per diluted share, for the first quarter last year. During the current quarter, two old liabilities were settled at amounts lower than originally recorded. This extraordinary item increased net earnings to $181,000, or 6 cents per diluted share. Gain on Settlement with Former Executive Deferred to Second Quarter In late August, Torotel announced it would record a $411,000 gain in the first quarter as a result of a settlement with a former executive on a promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. . While the aggregate amount due under the note had been "in suspense" since 1997, it was determined that the measurement date for recording the gain is the actual date of the settlement. Since the agreement was finalized See finalization. in August, the credit to earnings has been deferred until the second quarter ending October 31, 2001. Solid Quarter; Positive Outlook H. James Serrone, chief financial officer and general manager, said: "First quarter revenues increased because we had a higher shippable backlog. The progress we made in the last year to improve throughput - plus greater emphasis in the first quarter on improving our first-pass yields - were key contributors to stronger operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . As a result, our EBITD EBITD See: Earnings Before Interest, Taxes and Depreciation as a percentage of sales in the first quarter was nearly 19 percent compared with 11 percent for last year's quarter. "Late in the first quarter, we began to see a slowdown in new orders for our magnetics products, reflecting the soft U.S. economy. This situation was offset by a $177,000 order for the potted pot·ted adj. 1. a. Placed in a pot. b. Grown in a pot: many potted plants in the study. 2. Preserved in a pot, can, or jar. 3. Slang a. coil assembly for the Hellfire hell·fire n. The fire of hell, considered as punishment for sinners. hellfire Noun the torment of hell, imagined as eternal fire Noun 1. II missile system, which will be shipped during the second and third quarters of this fiscal year. As a result, our magnetics backlog remains 32 percent higher than a year ago, which means we still anticipate a slight increase in sales for fiscal 2002," 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 avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. equipment, conventional missile guidance systems A system which evaluates flight information, correlates it with target data, determines the desired flight path of a missile, and communicates the necessary commands to the missile flight control system. See also missile control system. , computers, medical equipment, telecommunications systems, and digital control devices. This news release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, which are subject to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 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
(Unaudited)
Three Months Ended
July 31,
2001 2000
---- ----
Net Sales $ 945 $ 855
Gross Profit $ 406 $ 304
Earnings from Operations $ 161 $ 70
Earnings before Provision for Taxes
and Extraordinary Item $ 154 $ 51
Earnings before Extraordinary Item $ 154 $ 51
Extraordinary Item:
Gain on settlements of debt $ 27 $ -
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Net Earnings $ 181 $ 51
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Basic and Diluted Earnings per Share:
Earnings before Extraordinary Item $0.05 $0.02
Extraordinary Item $0.01 $ -
----- -----
$0.06 $0.02
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Weighted Average Shares Outstanding 2,811 2,811
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Condensed Balance Sheet
(Unaudited) (Audited)
July 31, April 30,
2001 2001
---- ----
Working Capital $ (477) $ (120)
Current Ratio .72:1 .90:1
Quick Ratio .47:1 .60:1
Total Assets $1,690 $1,636
Short-term Debt $ 294 $ 195
Long-term Debt $ 446 $1,036
Total Liabilities $2,180 $2,307
Stockholders' Deficit $ (490) $ (671)
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