MikeDDKing
14 years ago
Material Sciences Announces Higher Revenues and Profit in Latest Three and Six Month Periods
- Strong Automotive Builds Boost RevenuesDespite the Sale of Certain Coil Coating Assets
- Higher Gross Profit and Lower SG&A Lead to Second-straight Quarter of Profitability
- Financial Condition Remains Healthy: Excellent Cash Position, Strong Cash Flows from Operations
- Stock Now Trades on the NASDAQ Capital Market
On Thursday October 7, 2010, 8:00 am
ELK GROVE VILLAGE, Ill., Oct. 7 /PRNewswire-FirstCall/ -- Material Sciences Corporation (Nasdaq:MASC - News), a leading provider of material-based solutions for acoustical and coated applications, today announced stronger performance for its second quarter and six months ended August 31, 2010.
Net sales for the latest quarter improved 6.4 percent to $33.1 million compared to $31.1 million for the same period last year. Net income for the second quarter was $3.9 million, or 31 cents per common share, compared with a net loss of $3.6 million, equal to 28 cents per common share, for the year-ago period.
Improvements in All Key Performance Metrics Drove Strong Results
"A 117.9 percent increase in gross profit; a 26.9 percent decrease in selling, general and administrative expenses; and a $7.6 million improvement in net income were all achieved on 6.4 percent higher sales for the second quarter when compared to the prior-year period," said Clifford D. Nastas, chief executive officer. "While we recorded a $1.9 million gain from selling certain coil coating assets, most of the improvements came from following our plan for growth. We sold non-strategic assets, reduced the size of our operations to reflect current market opportunities, increased efficiencies at facilities around the world, introduced new products, and expanded our penetration of markets outside North America. Fortunately, the benefits from these actions were accelerated in the second quarter by a stronger automotive industry."
Second Quarter Sales, Net Income Growth Led by Acoustical Materials
Sales of acoustical materials—most often to automotive manufacturers—grew 31.4 percent to $18.4 million from $14.0 million for last year's second quarter. Higher North American automotive builds led to greater demand for body panel laminate, original equipment brakes and engine sales.
Revenues for coated materials—primarily used in the automotive industry—were $14.7 million in contrast to $17.1 million in last year's second quarter. The sale of certain coil coating assets in April 2010 accounted for a $6.5 million reduction in revenue for the quarter. However, this was partially offset by greater demand for electrogalvanized and gasket products.
Gross profit increased 117.9 percent to $6.6 million for the latest quarter, up from $3.0 million during the prior-year period. This created a gross profit margin of 19.9 percent compared to 9.7 percent in the prior year's quarter. The $3.6 million increase resulted from higher revenue, a higher margin product mix, stronger capacity utilization and improvements in quality and secondary scrap sales.
Selling, general and administrative expenses (SG&A) decreased 26.9 percent, to $5.0 million compared with $6.8 million for the second quarter of fiscal 2010. As a percentage of sales, SG&A in the latest quarter was 15.0 percent compared to 21.8 percent in the prior-year quarter. This positive change reflected lower salary and people-related costs (from restructurings in fiscal 2010 and fiscal 2011), and reduced professional fees and product development costs.
Second quarter income from operations was $3.5 million compared with a net loss of $3.8 million during the prior-year quarter. The provision for income taxes was a $0.01 million benefit for the second quarter compared to a $0.1 million expense during the year-ago period. Net income was $3.9 million, or 31 cents per common share, up from a net loss of $3.6 million, equal to 28 cents per common share during the prior-year quarter.
Stronger First-half Results
For the first six months of fiscal 2011, net sales grew 20.1 percent to $75.6 million from $62.9 million for the year-ago period. The increase in sales was due to a 36.2 percent rise in acoustical materials sales and a 6.1 percent improvement in coated materials sales, despite coil coating sales being down $7.8 million due to the April 2010 asset sale. Gross profit was $16.1 million or 21.3 percent of sales, compared to $5.5 million or 8.7 percent of sales in last year's first half. SG&A of $10.3 million this year was down 23.8 percent compared with $13.4 million in the prior-year period, or a $3.1 million reduction. Other income for the latest six-month period was $0.6 million in contrast with $0.4 million during the prior-year period. Net income was $7.9 million, or 62 cents per common share during the first six months of fiscal 2011, compared to last year's loss of $7.7 million, equal to 58 cents per common share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first six months of fiscal 2011 totaled $11.3 million. This included net income of $7.9 million; plus provision for taxes of $0.3 million; less interest income of zero; plus depreciation of $3.1 million. A number of items related to the sale of certain coil coating assets affected net income in the first half of fiscal 2011, including, a gain on the sale of assets of $6.6 million, real property impairment expense of $3.7 million, restructuring expense for severance of $1.1 million and one-time facility shutdown- related costs of $1.0 million.
Management believes that EBITDA is an important metric used by investors and analysts when reviewing the Company's historical results. However, it should not be considered as an alternative to net income or operating income as an indicator of the Company's operating performance, or as an alternative to operating cash flows as a measure of liquidity.
Solid Financial Condition
For the first half of fiscal 2011, net cash provided by operating activities was $6.9 million compared to $5.1 million in the prior-year period. The increase was primarily due to higher net income and a lower balance of accounts receivables. This was partially offset by a lower improvement in fiscal 2011 inventory levels when compared to the same period of fiscal 2010, a use of cash from accounts payable in fiscal 2011 when compared to the prior-year period and higher tax refunds in fiscal 2010. Material Sciences generated $15.0 million of net cash from investing activities, reflecting the sale of certain coil coating assets at Middletown, Ohio, and Elk Grove Village, Illinois; and the collection of a note receivable in advance of the scheduled payment date. The Company invested $0.8 million in capital improvements for the first six months of fiscal 2011 compared with $0.5 million in the prior-year period.
On August 31, 2010, cash on hand reached $34.8 million, up significantly from $12.9 million at February 28, 2010.
Conference Call
Material Sciences will host a conference call to share the results of its second quarter fiscal 2011 results today at 9:00 a.m. Central Time. CEO Clifford D. Nastas and James D. Pawlak, vice president and chief financial officer, will discuss the Company's financial performance and answer questions from the financial community.
Interested investors are invited to listen to the presentation, which will be carried live on the Company's Web site: www.matsci.com. A replay of the call will be available on the site for the following 30 days. Those who wish to listen should go to the Web site several minutes before the discussion begins. After clicking on the presentation icon, investors should follow the instructions to ensure their systems are set up to hear the event, or download the correct applications at no charge.
About Material Sciences
Material Sciences Corporation is a leading provider of material-based solutions for acoustical and coated applications. The Company uses its expertise in materials, which it leverages through relationships and a network of partners, to solve customer-specific problems. Its stock is traded on the NASDAQ Capital Market under the symbol MASC.
This news release contains forward-looking statements that are based on current expectations, forecasts and assumptions. Material Sciences cautions readers that the following factors could cause its actual outcomes and results to differ materially from those stated or implied here: Changes in the business environment—including the transportation, building and construction, electronics and durable goods industries; competitive factors—including domestic and foreign competition for both acoustical and coated applications, pricing acceptance, union activity, as well as changes in industry capacity; changes in laws, regulations, policies or other activities of governments, agencies or similar organizations (including the ruling under Section 201 of the Trade Act of 1974); the stability of governments and business conditions inside and outside of the U.S., which may affect a successful penetration of the Company's products; acceptance of brake damping materials, engine components and body panel laminate parts by customers in North America, Asia and Europe, and new product introductions; the continued successful operation of the Application Research Center in Michigan and the Application Development Center in Europe; increases in the prices of raw and other material inputs used by the Company, as well as their availability; the loss, or changes in the operations, financial condition, or results of operations, including the bankruptcy or potential bankruptcy of one or more of the Company's significant customers; Material Sciences' ability to effectively manage its business objectives including the ability to retain key personnel and maintain good labor relations with its unions; overcapacity in its industries; shifts in the supply model for its products; environmental risks, costs, recoveries and penalties associated with the Company's past and present manufacturing operations; access to credit, which may be limited under its asset-based credit agreement; the Company's ability to utilize net operating loss carry-forwards; and other factors, risks and uncertainties identified in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended February 28, 2010, filed with the Securities and Exchange Commission, and from time to time in other reports filed with the Securities and Exchange Commission.
Additional information about Material Sciences is available at www.matsci.com.
MikeDDKing
14 years ago
Material Sciences Announces Higher Revenues, Profit for Fiscal 2011 First Quarter
- Sales Grow with Rising Global Automotive Builds and New Product Introductions
- Increased Operating Efficiency, Plus Expense Controls, Bring Turnaround to Quarterly Profit
- Strong Cash Position, Positive Cash Flows from Operations, No Long-term Debt
On Friday July 9, 2010, 8:00 am EDT
ELK GROVE VILLAGE, Ill., July 9 /PRNewswire-FirstCall/ -- Material Sciences Corporation (OTC Bulletin Board:MASC.ob - News), a leading provider of material-based solutions for acoustical and coated applications, today reported improved results for its first quarter ended May 31, 2010.
Net sales for the most recent three months rose 33.4 percent to $42.5 million from $31.8 million for the same period last year. Net income for the latest quarter was $4.0 million, or 31 cents per share, compared with a net loss of $4.1 million, equal to 30 cents per share, for the year-ago period.
Quarter Benefits from Prior-year Actions, Improving Markets
"Three factors were instrumental in our return to profitability this quarter," said Clifford D. Nastas, chief executive officer. "First, for the past year we have focused on lowering our cost base by increasing operating efficiencies, using stringent expense controls, selling non-core assets, and sizing our operations to current market opportunities. Second, we continued to invest in improving the quality of existing products and bringing several new ones to market. So when the third factor— improved global demand for our products—began to materialize during our first fiscal quarter, we were able to leverage the first two accomplishments into strong earnings growth."
Sales Increase for Acoustical and Coated Materials
Sales of acoustical materials—most often to automotive manufacturers—were $21.4 million, a 40.5 percent improvement from $15.2 million in the first quarter last year. Automotive builds increased in most regions, which led to higher sales from body panel laminate, engines and brake materials.
Revenues for coated materials—primarily used in the automotive and building products industries—grew 27.0 percent to $21.1 million versus $16.6 million for the same period last year. The main reasons for the improved performance included stronger demand for Material Sciences' existing fuel tank, gasket and electro galvanized products, plus initial orders for some new ElectroBrite® and automotive sealing product applications. The increases were partially offset by lower appliance-related revenues, resulting from the sale of certain coil coating assets in April 2010.
Gross profit of $9.5 million during the latest quarter was nearly four times greater than last year's $2.5 million. The gross profit margin for the most recent period reached 22.3 percent, up from 7.7 percent in the prior year period. Several factors accounted for the significant increase: higher product sales, improvements in productivity and quality-related costs and stronger secondary scrap sales.
Selling, general and administrative expenses (SG&A) were 20.6 percent lower in the latest period. SG&A was $5.3 million, or 12.4 percent of sales, in contrast to $6.7 million, or 20.9 percent of sales for last year's first quarter. This positive change reflected lower salary and headcount costs (from restructurings in fiscal 2010) and reduced professional fees.
Income from operations in the first quarter totaled $4.1 million compared with a loss from operations of $4.2 million during the year ago period. The provision for income taxes was $0.3 million for the quarter. Net income for the fiscal 2011 first quarter was $4.0 million, or 31 cents per share, compared with last year's first quarter net loss of $4.1 million, equal to 30 cents per share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter was $6.2 million. EBITDA is calculated as net income of $4.0 million; plus provision for taxes of $0.3 million; less interest income, net of $0.03 million; plus depreciation of $1.9 million. Management believes that EBITDA is an important metric used by our shareholders when reviewing the Company's performance. However, EBITDA should not be considered as an alternative to net income or operating income as an indicator of the Company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Items related to the sale of coil coating assets affecting first quarter fiscal 2011 net income are as follows: a gain on the sale of assets of $4.7 million, real property impairment expense of $3.7 million, and restructuring expenses for severance and inventory write downs of $1.3 million.
Financial Condition Provides Flexibility
For the latest quarter, net cash provided by operating activities was $2.9 million, compared with $6.4 million during the prior year period. The decrease was partially due to changes in working capital resulting from significantly higher sales in the current year, which more than offset the increase in cash resulting from higher net income. In addition, the prior year had favorable cash flows from inventory reductions that were mainly due to higher inventory levels at the end of fiscal 2009, caused by significant automotive shutdowns and production cutbacks. Prior year favorable accounts receivable cash flows benefited from early payments from GM before it filed for bankruptcy. Material Sciences generated $10.4 million of net cash from investing activities from the coil coating asset sale and the full collection of a note receivable. The Company invested $0.5 million in capital improvements versus $0.3 million for the prior year quarter.
On May 31, 2010, cash on hand reached $26.1 million, more than double the $12.9 million at February 28, 2010. This did not include the $4.9 million in net proceeds generated by the sale of assets from the idled Middletown, Ohio facility, which occurred on June 24, 2010, after the close of the quarter. Material Sciences continues to operate without any long-term debt.
Fiscal 2011: Focused Operations Capitalizing on Growth Opportunities
"Our objective was to return to profitable growth in fiscal 2011, and in the latest period we posted our first profit since the third quarter of fiscal 2008. Operationally and financially, Material Sciences is in a good position. We sold assets that were non-strategic, which allows us to focus on areas that provide greater opportunity. During the quarter, we had a number of new business wins in North America and abroad for our rubber coated brake and gasket materials, as well as ElectroBrite® and VivaColor®. Improving markets—plus the combination of a high level of cash and no debt—will help us continue on the path of prudently investing in new products and technologies to bring further profitable growth," Nastas said.
Conference Call
Material Sciences will host a conference call to share the results of its first quarter fiscal 2011 results on Friday, July 9, at 9:00 a.m. Central Time. CEO Clifford D. Nastas and James D. Pawlak, vice president and chief financial officer, will discuss the Company's financial performance and answer questions from the financial community.
Interested investors are invited to listen to the presentation, which will be carried live on the Company's Web site: www.matsci.com. A replay of the call will be available on the site for the following 30 days. Those who wish to listen should go to the Web site several minutes before the discussion begins. After clicking on the presentation icon, investors should follow the instructions to ensure their systems are set up to hear the event, or download the correct applications at no charge.
About Material Sciences
Material Sciences Corporation is a leading provider of material-based solutions for acoustical and coated applications. The Company uses its expertise in materials, which it leverages through relationships and a network of partners, to solve customer-specific problems. Its stock is traded on the OTC Bulletin Board under the symbol MASC.OB.
This news release contains forward-looking statements that are based on current expectations, forecasts and assumptions. Material Sciences cautions readers that the following factors could cause its actual outcomes and results to differ materially from those stated or implied here: the recent unprecedented deterioration in the overall economy; changes in the business environment—including the transportation, building and construction, electronics and durable goods industries; competitive factors—including domestic and foreign competition for both acoustical and coated applications, pricing acceptance, union activity, as well as changes in industry capacity; changes in laws, regulations, policies or other activities of governments, agencies or similar organizations (including the ruling under Section 201 of the Trade Act of 1974); the stability of governments and business conditions inside and outside of the U.S., which may affect a successful penetration of the Company's products; acceptance of brake damping materials, engine components and body panel laminate parts by customers in North America, Asia and Europe, and new product introductions; the continued successful operation of the Application Research Center in Michigan and the Application Development Center in Europe; increases in the prices of raw and other material inputs used by the Company, as well as their availability; the loss, or changes in the operations, financial condition, or results of operations, including the bankruptcy or potential bankruptcy of one or more of the Company's significant customers; Material Sciences' ability to effectively manage its business objectives including the ability to retain key personnel and maintain good labor relations with its unions; overcapacity in our industries; shifts in the supply model for its products; the impact of future warranty expenses; environmental risks, costs, recoveries and penalties associated with the Company's past and present manufacturing operations; access to credit, which may be limited under its asset-based credit agreement; the Company's ability to utilize net operating loss carryforwards; Material Sciences' ability to maintain a stable liquidity trading environment for its common stock, traded on the over-the-counter bulletin board market; and other factors, risks and uncertainties identified in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended February 28, 2010, filed with the Securities and Exchange Commission, and from time to time in other reports filed with the Securities and Exchange Commission.
Additional information about Material Sciences is available at www.matsci.com.
di4
15 years ago
Material Sciences Announces Fourth Quarter, Fiscal 2009 Results
May 14, 2009 9:00:00 AM
Email Story Discuss on ZenoBank
View Additional Profiles- Sales for Quarter and Year Decreased Primarily due to Difficult North American Automotive and Housing Markets
- Restructuring Plans on Track to Save More than $7.6 Million Annually
- Several Noncash Charges Increased Net Loss for Both Periods
- Strong Cash Position with No Long-term Debt
ELK GROVE VILLAGE, Ill., May 14 /PRNewswire-FirstCall/ -- Material Sciences Corporation (OTC Bulletin Board: MASC), a leading provider of material-based solutions for acoustical and coated applications, today reported results for the fourth quarter and fiscal year ended February 28, 2009.
Net sales for fiscal 2009 were $187.0 million compared with $235.0 million for the prior year, down 20.4 percent. The net loss for the latest year was $33.1 million, equal to $2.41 per diluted common share, versus a loss of $6.5 million, equal to $0.45 per diluted common share, a year ago.
Fiscal 2009: Disappointing Performance but Progress Made on Reducing Costs
"In the second half of our fiscal year, we were hit by unprecedented contractions in the automotive and housing markets, accompanied by softness in the appliance industry, which caused our sales to decline," said Clifford D. Nastas, chief executive officer. "As this situation unfolded, we took a number of actions to bring our costs in line with current opportunities. This included significant reductions in both cost of goods sold as well as selling, general and administrative expenses. We restructured the company's operations, and regrettably needed to reduce both our salaried and hourly workforce by 30 percent. Excluding severance of $1.9 million, these steps saved about $4.4 million during fiscal 2009, and we believe they will allow us to cut more than $7.6 million in annual expenses from our business."
Lower Sales, Noncash Charges Lead to Wider Loss in Fiscal 2009
Sales of acoustical materials, primarily purchased by automotive manufacturers, were off 16.8 percent to $94.1 million for fiscal 2009, versus $113.2 million in fiscal 2008. These declines are consistent with the production cuts experienced by the company's largest customers, as North American automotive production reached its lowest level in 20 years. Brake sales growth into Europe and Asia helped offset some of the decrease.
Coated materials -- sold mainly to appliance, building product and automotive customers -- experienced a 23.7 percent sales decrease, to $92.9 million compared with $121.8 million in fiscal 2008. This resulted from softer housing markets, which negatively affected demand for products sold to appliance and building product customers. In addition, fuel tank sales declined because of the automotive industry downturn.
Gross profit for fiscal 2009 was $11.1 million, down 54.3 percent from $24.3 million in the prior year. As a result, it represented 5.9 percent of sales for the latest year, compared with 10.3 percent in fiscal 2008. Lower product sales and a decrease in scrap metal sales more than offset reductions in overhead spending and quality-related costs, and several positive one-time items.
Selling, general and administrative expenses (SG&A) were $33.9 million, 7.2 percent lower than fiscal 2008's $36.5 million. The main reasons for the improvement were decreases in spending on professional services, insurance, and information technology, and a reduction in personnel.
The Effect of Unusual Items
Material Sciences experienced a number of unusual items--primarily noncash charges--during the year that affected its financial performance. Selling the Morrisville facility resulted in a $0.9 million charge, which was more than offset by the $5.9 million gain on the sale recorded in the fourth quarter. During that quarter, the company tested the value of its long-lived assets and recorded an $8.1 million asset impairment and noncash charge after determining that the value of certain assets used in production and research and development were not fully recoverable. After determining it was unlikely that the company would be able to use all of its deferred tax assets, Material Sciences recorded a $17.5 million valuation reserve, bringing the balance to $22.5 million, and a noncash charge to tax expense of $7.5 million during the year. In fiscal 2009, Material Sciences incurred restructuring expenses of $2.5 million.
The loss from operations was $27.5 million for the latest fiscal year, compared with a $13.6 million loss a year ago. Other income for the latest year was $1.9 million versus $2.7 million, reflecting reduced foreign currency translation gains and a decline in interest income due to lower interest rates. As a result, the fiscal 2009 net loss was $33.1 million, equal to $2.41 per diluted share, versus a $6.5 million loss, equal to 45 cents per share, a year earlier.
Lower Sales Led to Loss in Fourth Quarter
Net sales for the latest quarter were $24.6 million, off 53.7 percent from $53.1 million for the prior-year period. Acoustical materials accounted for 52 percent of sales, with coated metal providing the remaining 48 percent. Gross profit was a loss of $2.4 million in contrast to a gain of $1.1 million in the fiscal 2008 quarter. SG&A, including unusual items mentioned above, increased to $10.8 million from $10.6 million. This led to a loss from operations of $13.2 million compared with last year's quarterly loss of $9.4 million. Other expense of $0.2 million compared with $0.4 million of income a year ago. The net loss for the most recent quarter was $25.5 million, equal to $1.87 per diluted share, versus the prior year quarter's loss of $5.4 million, equal to $0.37 per diluted share.
Financial Condition
Net cash used in operations for fiscal 2009 was $1.8 million compared with cash provided by operations of $12.9 million for the prior year. The latest year's results reflected lower levels of accounts payable and amounts accrued, partially offset by a decrease in inventory and accounts receivable. The company invested $3.7 million in capital improvement projects versus $6.7 million in fiscal 2008.
The cash balance increased by $2.8 million, and the company ended the year with a cash balance of $10.7 million and no long-term debt.
Fiscal 2010: Focus on What can be Controlled
"While no one claims to have much visibility on conditions in our markets--and how these will affect us in the new fiscal year--there are three things we do know," said Nastas. "Softness in the U.S. automotive market is expected to continue at least through this year. The Morrisville facility, which we sold in December, contributed $15 million in sales that we will not see in fiscal 2010. And we believe our current financial condition offers sufficient funding to meet our operational and working capital needs for the foreseeable future.
"While our focus this year will continue to be on controlling costs, we also will be looking to the future. In addition to expanding international sales, we will be working to commercialize promising products such as ElectroBrite(R), Deco Steel(R) and Vivacolor(R). By watching our costs, further improving operations, and finding opportunities to reach new markets with current and new products, Material Sciences can weather the current downturn and be ready to benefit from improvements in its markets when these arrive," Nastas concluded.
Conference Call
Material Sciences will host a conference call to share the results of its fourth quarter and full-year fiscal 2009 results on Thursday, May 14, at 9:00 a.m. Central Time. CEO Nastas and James M. Froisland, senior vice president, chief financial officer, chief information officer and corporate secretary, will discuss the company's financial performance and answer questions from the financial community.
The company invites interested investors to listen to the presentation, which will be carried live on the company's Web site: www.matsci.com. A replay of the call will be available on the site for the following 30 days. Those who wish to listen should go to the Web site several minutes before the discussion begins. After clicking on the presentation icon, investors should follow the instructions to ensure their systems are set up to hear the event, or download the correct applications at no charge.
About Material Sciences
Material Sciences Corporation is a leading provider of material-based solutions for acoustical and coated applications. Material Sciences uses its expertise in materials, which it leverages through relationships and a network of partners, to solve customer-specific problems. The company's stock is traded on the OTC Bulletin Board under the symbol MASC.
This news release contains forward-looking statements that are based on current expectations, forecasts and assumptions. Material Sciences cautions the reader that the following factors could cause its actual outcomes and results to differ materially from those stated or implied in this release: the recent unprecedented deterioration in the overall economy; changes in the business environment, including the transportation, building and construction, electronics and durable goods industries; competitive factors, including domestic and foreign competition for both acoustical and coated applications, pricing acceptance, union activity, as well as changes in industry capacity; changes in laws, regulations, policies or other activities of governments, agencies or similar organizations (including the ruling under Section 201 of the Trade Act of 1974); the stability of governments and business conditions inside and outside of the U.S., which may affect a successful penetration of the company's products; acceptance of brake damping materials, engine components and body panel laminate parts by customers in North America, Asia and Europe, and introduction of new products; the continued successful operation of the Application Research Center in Michigan and the Application Development Center in Europe; increases in the prices of raw and other material inputs used by the company, as well as their availability; the loss, or changes in the operations, financial condition, or results of operations, including the bankruptcy or potential bankruptcy of one or more of the company's significant customers; Material Sciences' ability to effectively manage its business objectives including the ability to retain key personnel and maintain good labor relations with its unions; overcapacity in the coil coating industry; shifts in the supply model for its products; the impact of future warranty expenses; environmental risks, costs, recoveries and penalties associated with the company's past and present manufacturing operations; access to credit, which may be limited under its asset-based credit agreement; the company's ability to utilize net operating loss carryforwards; Material Sciences' ability to maintain a stable liquidity trading environment for its common stock, now that this is traded on the over-the-counter bulletin board market; and other factors, risks and uncertainties identified in Part I, Item 1A of the company's Annual Report on Form 10-K for the year ended February 28, 2009, filed with the Securities and Exchange Commission on May 14, 2009, and from time to time in other reports filed with the Securities and Exchange Commission.
Additional information about Material Sciences is available at www.matsci.com.
FINANCIAL TABLES FOLLOW
Consolidated Statements of Operations
Material Sciences Corporation and Subsidiaries
(Unaudited)
Three Months Ended For the Years Ended
February 28 or 29, February 28 or 29,
(In thousands, except per share ------------------ ------------------
data) 2009 2008 2009 2008
------------------------------- ---- ---- ---- ----
Net Sales $24,584 $53,086 $187,026 $234,991
Cost of Sales 27,012 51,977 175,941 210,715
------ ------ ------- -------
Gross Profit (2,428) 1,109 11,085 24,276
Selling, General and
Administrative Expenses 8,140 9,233 33,888 36,510
Gain on Sale of Morrisville Assets (5,897) - (5,897) -
Asset Impairment Charges 7,579 1,319 8,092 1,319
Restructuring and Other 929 - 2,511 -
--- --- ----- ---
Income (Loss) from Operations (13,179) (9,443) (27,509) (13,553)
------- ------ ------- -------
Other (Income) Expense, Net:
Gain on Sale of Marketable
Securities - - (841) -
Interest and Dividend Income, Net (86) (114) (248) (421)
Equity (Increase) Decrease in
Results of Joint Venture 112 (73) (252) (330)
Foreign Transaction (Gain) Loss 149 (209) (308) (1,741)
Other (Income) Expense, Net 1 (44) (232) (240)
--- --- ---- ----
Total Other (Income) Expense, Net 176 (440) (1,881) (2,732)
--- ---- ------ ------
Income (Loss) Before Provision
(Benefit) for Income Taxes (13,355) (9,003) (25,628) (10,821)
Provision (Benefit) for Income
Taxes 12,161 (3,625) 7,483 (4,357)
------ ------ ----- ------
Net Income (Loss) $(25,516) $(5,378) $(33,111) $(6,464)
======== ======= ======== =======
Basic Net Income (Loss) Per Share $(1.87) $(0.37) $(2.41) $(0.45)
====== ====== ====== ======
Diluted Net Income (Loss) Per Share $(1.87) $(0.37) $(2.41) $(0.45)
====== ====== ====== ======
Weighted Average Number of Common
Shares Outstanding Used for Basic
Net Income (Loss) Per Share 13,643 14,169 13,716 14,358
Dilutive Shares - - - -
--- --- --- ---
Weighted Average Number of Common
Shares Outstanding Plus Dilutive
Shares 13,643 14,169 13,716 14,358
====== ====== ====== ======
Outstanding Common Stock Options
Having No Dilutive Effect 472 175 472 175
=== === === ===
Consolidated Balance Sheets
Material Sciences Corporation and Subsidiaries
(In thousands, February 28, February 29,
except share data) 2009 2008
------------------- ---- ----
Assets
Current Assets:
Cash and Cash
Equivalents $10,664 $7,913
Short Term Investment - 6,933
Receivables, Less
Reserves of $2,965
and $3,708,
Respectively 13,297 28,547
Income Taxes
Receivable 2,567 3,316
Prepaid Expenses 657 744
Inventories:
Raw Materials 11,401 13,177
Finished Goods 13,256 18,634
Deferred Income Taxes - 3,754
Assets Held for Sale 3,329 3,882
Other Assets - 180
--- ---
Total Current
Assets 55,171 87,080
------ ------
Property, Plant and
Equipment:
Land and Building 40,499 55,511
Machinery and
Equipment 129,301 156,462
Construction in
Progress 210 1,869
--- -----
170,010 213,842
Accumulated
Depreciation (122,264) (146,541)
-------- --------
Net Property, Plant
and Equipment 47,746 67,301
------ ------
Other Assets:
Notes Receivable 4,363 -
Investment in Joint
Venture 2,288 3,094
Deferred Income Taxes - 6,608
Other 471 232
--- ---
Total Other Assets 7,122 9,934
----- -----
Total Assets $110,039 $164,315
======== ========
Liabilities
Current Liabilities:
Accounts Payable $10,442 $22,513
Accrued Payroll
Related Expenses 3,269 4,691
Accrued Expenses 8,284 7,403
Total Current
Liabilities 21,995 34,607
------ ------
Long-term Liabilities:
Pension and
Postretirement
Liabilities 10,574 9,628
Other 3,250 4,948
----- -----
Total Long-term
Liabilities 13,824 14,576
------ ------
Commitments and
Contingencies - -
Shareowners' Equity
Preferred Stock, $1.00 Par
Value; 10,000,000
Shares Authorized;
1,000,000 Designated
Series B Junior
Participating
Preferred; None
Issued - -
Common Stock, $.02 Par Value;
40,000,000 Shares Authorized;
18,977,364 Shares Issued
and 13,605,587 Shares
Outstanding as of
February 28, 2009, and
19,039,817 Shares Issued
and 14,137,566
Shares Outstanding
as of February 29, 2008 380 381
Additional Paid-in
Capital 79,696 79,491
Treasury Stock at Cost,
5,371,777 Shares as of
February 28, 2009, and
4,902,251 Shares
as of February 29,
2008 (56,146) (52,978)
Retained Earnings 55,161 88,272
Accumulated Other
Comprehensive Income
(Loss) (4,871) (34)
------ ---
Total Shareowners'
Equity 74,220 115,132
------ -------
Total Liabilities
and Shareowners'
Equity $110,039 $164,315
======== ========
Consolidated Statements of Cash Flows
Material Sciences Corporation and Subsidiaries
For the years ended
February 28 or 29,
-------------------
(In thousands) 2009 2008 2007
-------------- ---- ---- ----
Cash Flows From:
Operating Activities:
Net Income (Loss) $(33,111) $(6,464) $6,287
Adjustments to Reconcile Net
Income (Loss) to Net
Cash Provided by Operating Activities:
Depreciation, Amortization and Accretion 10,671 11,389 10,919
Gain on Sale of Marketable Securities (841) - -
Gain on Sale of Morrisville Assets (5,897) - -
Non-Cash Loss on Impairment
of Fixed Assets 8,092 - -
Non-Cash Loss on Derivative Instruments 2,206 - -
Cash Distribution Received
from Joint Venture 359 - -
Change in Provision for
Deferred Income Taxes 8,142 (3,799) 36
Compensatory Effect of Stock Plans 189 133 94
Loss on Disposal of Assets 421 50 114
Foreign Currency
Transaction Gain (354) (1,741) -
Goodwill Impairment - 1,319 -
Other, Net (252) (329) (145)
Changes in Assets and Liabilities:
Receivables 15,236 19,938 (11,493)
Income Taxes Receivable 1,042 (1,744) 671
Prepaid Expenses 75 435 74
Inventories 6,251 10,749 (1,890)
Accounts Payable (11,212) (17,099) 10,702
Accrued Expenses (2,461) 663 1,165
Other, Net (396) (593) (1,383)
-------------- ---- ---- ------
Net Cash Provided by (Used
in) Continuing Operations (1,840) 12,907 15,151
Net Cash Provided by (Used
in) Discontinued Operations - - (613)
----------------------------------- --- --- ----
Net Cash Provided by (Used
in) Operating Activities (1,840) 12,907 14,538
--------------------------------------- ------ ------ ------
Investing Activities:
Capital Expenditures (3,720) (6,694) (14,707)
Proceeds from Sale of Marketable Securities 6,727 - -
Proceeds from Sale of Morrisville Assets 5,000 - -
Purchases of Short-term investment - (131,500) -
Proceeds from Short-term investment sold - 125,525 -
Proceeds from Exclusivity Agreement 1,250 - -
Transfer of Proceeds from Exclusivity
Agreement to Escrow (1,250) - -
-------------------------------------- ------ --- ---
Net Cash Provided by (Used
in) Investing Activities 8,007 (12,669) (14,707)
--------------------------------------- ----- ------- -------
Financing Activities:
Purchase of Treasury Stock (3,168) (4,221) (2,229)
Issuance of Common Stock 15 157 424
Excess Tax Benefits From Stock Compensation - 30 83
------------------------- --- -- --
Net Cash Provided by (Used
in) Financing Activities (3,153) (4,034) (1,722)
--------------------------------------- ------ ------ ------
Effect of Exchange Rate Changes on Cash (263) 42 (42)
Net Increase (Decrease) in Cash 2,751 (3,754) (1,933)
Cash and Cash Equivalents at
Beginning of Year 7,913 11,667 13,600
----------------------------- ----- ------ ------
Cash and Cash Equivalents at
End of Year $10,664 $7,913 $11,667
----------------------------- ======= ====== =======
Non-Cash Transactions:
Asset Retirement Obligation Established $- $- $11
== == ===
Capital Expenditures in Accounts
Payable at Year End $96 $881 $503
=== ==== ====
Note Received in Sale of
Morrisville Assets $4,654 $- $-
====== == ==
Supplemental Cash Flow Disclosures:
Interest Paid $78 $146 $124
=== ==== ====
Income Taxes Paid $40 $2,052 $1,529
=== ====== ======
SOURCE Material Sciences Corporation
----------------------------------------------
James M. Froisland
Senior Vice President
Chief Financial Officer
Chief Information Officer and Corporate Secretary of Material Sciences Corporation
+1-847-718-8020; or Media
Lynne Franklin of Wordsmith
+1-847-729-5716
for Material Sciences Corporation
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