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TOROTEL REPORTS LOWER SALES AND EARNINGS FOR FISCAL 1993

 KANSAS CITY, Mo., July 2 /PRNewswire/ -- Torotel, Inc. (AMEX: TTL), a leading manufacturer of magnetic components, today reported lower sales and earnings for fiscal 1993, as a result of industry-wide order softness in the second half of the year and its investments in increasing commercial market penetration.
 COST CONTROLS PREVENT LOSS;
 COMMERCIAL MARKET PENETRATION IMPROVES OUTLOOK
 "In April, we announced our expectation for a fourth quarter loss and lower sales and earnings for fiscal 1993, " said Alfred F. Marsh, president and chief executive officer. "The second half of fiscal 1993 saw a standstill in defense electronics, which traditionally generated most of Torotel's revenues. While we provide magnetics for non-nuclear programs -- and none of the communications or weapons systems using our products have been eliminated -- orders continued to be slow. We anticipated this situation and took two courses of action: making our cost control program even more aggressive, and stepping up our efforts to penetrate commercial markets for our products.
 "Driving down fixed costs allowed Torotel to remain profitable for fiscal 1993 at revenue levels that would have meant a loss a few years ago," explained Marsh. "And our expanded efforts in the commercial market give us the opportunity to see increased sales in fiscal 1994 and, in the longer term, lessen the effects of military market slowdowns."
 Net sales for the latest fiscal year were $8.5 million, 18 percent lower than the $10.3 million seen for fiscal 1992. Net earnings were $284,000, or 10 cents per share, compared with $901,000, or 32 cents per share, a year ago.
 For the fourth quarter ended April 30, 1993, net sales were down 41 percent to $1.5 million versus $2.5 million at the same time last year. The company reported a net loss of $190,000, equal to 7 cents per share, compared with net earnings of $228,000, or 8 cents per share, for the three months in 1992.
 FINANCIAL CONDITION REMAINS STRONG
 Despite the difficult operating environment, Torotel's financial position remained strong and improved in several areas. Working capital was a healthy $2.9 million, and the company's current ratio was 2.8.
 During fiscal 1993, cash flow from operations reached $1.1 million, up 122 percent from $502,000 in fiscal 1992. In addition, total liabilities were down 48 percent, to $1.8 million.
 Stockholders' equity benefited from cash flow and lower debt, increasing 12 percent to $3.5 million. As a result, the company's debt- to-equity ratio continued to decline, to 0.5:1 from 1.1:1 at April 30, 1992.
 EXPANDING PENETRATION OF COMMERCIAL MARKETS
 Marsh said, "In fiscal 1993, defense electronics accounted for 95 percent of our sales. Our goal is to boost commercial revenues to 30 percent of fiscal 1994 sales and reach a 50/50 split between commercial and defense by fiscal 1996.
 "The commercial market we are targeting is at least $500 million in annual revenues. It consists of domestic manufacturers currently buying offshore magnetics. We offer competitive prices because of our low-cost production. We also provide the benefits of `made in the USA:' a reliable source of products without tariffs or duties.
 "At the close of fiscal 1993, 80 percent of the marketing activity from our independent sales representatives and in-house technical support was devoted to commercial customers. In the past 12 months, we have supplied over 500 prototypes and small production runs to several new customers. These include companies in the automotive, entertainment electronics, computer systems and home appliance industries. We believe their orders ultimately should result in high-volume production.
 "In addition, we continue to explore the option of acquiring a company or product lines that offer growth potential through reaching complementary markets," he added.
 FIRST QUARTER AN IMPROVEMENT OVER FOURTH
 In discussing the company's outlook for the coming quarter, Marsh said, "Our first quarter should see sales 15-20 percent higher than in the fourth quarter, which should bring the company near break even for the period. The sales increase should come from new markets: commercial and electrical assembly."
 Torotel, Inc. specializes in the design and high-volume manufacture of a broad line of precision magnetic components used in commercial and military electronics. These components, which include transformers, inductors, reactors, chokes and toroidal coals, are sold to original equipment manufacturers for use in telecommunications systems, computers, digital control devices, and avionics equipment. The company has a base of more than 400 customers.
 For further information on Torotel by FAX, Dial 1-800-PRO-INFO, ext. 155.
 TOROTEL, INC.
 CONDENSED STATEMENT OF OPERATIONS
 OPERATING DATA (Unaudited, Dollars in Thousands, Except Per Share)
 (Unaudited)
 Three Months Fiscal Year
 Periods ended April 30, 1993 1992 1993 1992
 Net sales $1,475 $2,491 $8,479 $10,285
 Gross profit 373 986 2,965 3,975
 Earnings (loss) from operations (165) 287 456 1,192
 Earnings (loss) before
 income taxes (196) 236 284 933
 Net earnings (loss) (190) 228 284 901
 Earnings per share $ (.07) $ .08 $ .10 $ .32
 Weighted average common and
 common equivalent
 shares outstanding 2,714 2,885 2,840 2,852
 BALANCE SHEET DATA
 Period ended April 30, 1993 1992
 Working capital $2,891 $4,239
 Current ratio 2.8 3.6
 Total assets $5,396 $6,703
 Short-term debt $ 658 $ 122
 Long-term debt $ 290 $1,909
 Total liabilities $1,854 $3,539
 Debt-to-equity 0.5:1 1.1:1
 Stockholders' equity $3,542 $3,164
 -0- 7/1/93
 /CONTACT: Al Marsh, president of Torotel, Inc., 816-761-6314; or Lynne Franklin of The Financial Relations Board, 312-266-7800/
 (TTL)


CO: Torotel, Inc. ST: Missouri IN: CPR SU: ERN

MP -- NY013 -- 8121 07/02/93 11:59 EDT
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