Profits grow by 175% as sales increase by 12%
Elecsys Corporation (NASDAQ: ESYS), a provider of innovative data acquisition systems, machine to machine (M2M) communication technology solutions, and custom electronic equipment for critical industrial applications worldwide, today announced the financial results for its second fiscal quarter ended October 31, 2011.
Sales for the quarter were $6,133,000, an increase of 12%, or $654,000, from $5,479,000, in the second quarter of fiscal 2012.
Total sales year-to-date increased 11%, or $1,145,000, to $11,806,000. The increases resulted from overall growth in sales of our proprietary products and services, led by our wireless remote monitoring and secure industrial communication solutions, and continued growth in our custom electronic manufacturing business.
Operating income for the quarter was $483,000, compared to operating income of $254,000 for the same quarter in the prior year.
Net income was $278,000, or $0.07 per diluted share, for the quarter ended October 31, 2011. For the quarter ended October 31, 2010, net income was $101,000, or $0.03 per diluted share.
Sales of proprietary products and services were $2,361,000 for the quarter ended October 31, 2011, an increase of 5%, or $106,000.
Sales of wireless remote monitoring and secure industrial communication solutions increased almost 41%, or $522,000, from the previous year to $1,799,000 for the current quarter. The overall increase in sales of remote monitoring equipment and services was driven by an increase in customer orders combined with an increase in recurring data management services. The Company’s Radix handheld mobile computing and eXtremeTAG RFID solutions reported a decrease in sales compared to the comparable period of the prior fiscal year due to poor economic conditions in certain international markets that effected many of our largest customers.
Sales for the Company’s Electronic Design and Manufacturing Services (“EDMS”) business segment grew by 17% to approximately $3,772,000 for the quarter ended October 31, 2011, an increase of $548,000 from $3,224,000 in the prior fiscal year.
The Company expects that total sales for its proprietary products and services will continue to increase during the second half of the fiscal year as compared to the first six months of the year. Increases in proprietary product sales will be driven by wireless remote monitoring and secure industrial communication solutions through anticipated strong demand for the Company’s current offering of M2M solutions as well as similar potential from new products currently being developed. The Company believes that EDMS sales will grow modestly over the next few quarters based upon the current scheduled orders in backlog and the anticipated addition of new EDMS customers.
Total backlog at October 31, 2011 was approximately $10,964,000, an increase of $5,206,000, or 90%, from a total backlog of $5,758,000 on April 30, 2011. The increase in backlog was largely due to an increase in EDMS bookings during the quarter offset by a decreased proprietary product backlog.
Gross margin for the quarter ended October 31, 2011 was approximately 34%, or $2,097,000, versus 32%, or $1,729,000 for the quarter ended October 31, 2010.
Total selling, general and administrative expenses were approximately $1,614,000 during the quarter ended October 31, 2011 compared with $1,475,000 in the comparable quarter of the prior fiscal year. The increase of $139,000, or 9%, resulted from increases in research and development costs and sales and marketing expenses.
Karl B. Gemperli, Chief Executive Officer, stated:
“We are pleased to report this latest fiscal quarter which reflects continued revenue growth, enhanced gross margin, an expanded order backlog, and a substantial increase in earnings compared to our prior year.”
“Sales grew by 12% relative to last year while increased margins and disciplined operations nearly tripled our net income. Certain regions and industry sectors were stronger than others during the quarter, but overall sales of our diverse proprietary products continued to demonstrate strong growth.”
“Elecsys reliably delivered dependable and innovative products to our select OEM partners during the quarter as we continued to build stable, long-term business relationships in our electronic design and manufacturing services segment.”
Gemperli continued, “With the return of robust growth in our national economy uncertain, we are steadfast in our resolve to expand our company with targeted strategic investments and anticipate the growth of our proprietary products business to accelerate. We remain committed to both developing new products and technologies and expanding sales of our existing products into new industry segments and international markets with substantial new business potential. Although the global economic environment is difficult to predict and uncertainties still abound, we anticipate positive trends in both revenues and earnings during the coming quarters.“