CONCORD, Mass., May 18 /PRNewswire/ -- Starmet Corporation a Concord
(Nasdaq: STMT), Massachusetts based manufacturer of specialized metal
products, today announced financial results for the second quarter which ended
March 31, 1998.
Net income for the second quarter of fiscal 1998 was $272,000, or $0.06
per share basic, compared with $109,000, or $0.02 per share basic, for the
same quarter a year earlier. Sales increased by $5,348,000 or 100% to
$10,690,000 in the second quarter of fiscal 1998 compared to the second
quarter of fiscal 1997. Sales in the Uranium Services and Recycle segment,
the Specialty Metal Products segment, and the Depleted Uranium Penetrator
segment increased by $2,681,000, $486,000, and $2,181,000, respectively, over
net sales in the comparable period of fiscal 1997. The sales increase in the
Uranium Services and Recycle segment was due primarily to Atomic Vapor Laser
Isotope Separation ("AVLIS") feedstock production orders which were completed
in the second quarter of fiscal 1998. The sales increase in the Specialty
Metal Products segment was due to increased sales of Beralcast(R) products and
medical powders. The sales increase in the Depleted Uranium Penetrator
segment was due primarily to a $1,781,000 increase in revenue on the
remediation of the holding basin at the Company's Concord, Massachusetts
facility pursuant to a U.S. Army contract, which revenue generates nominal
gross margin, as well as to an increase in the production volume of Depleted
Uranium penetrators and blanks, which the Company expects to discontinue after
the second quarter of fiscal 1999.
Gross profit in the second quarter of fiscal 1998 increased by $793,000 to
$3,265,000 or 32% from $2,472,000 in the second quarter of fiscal 1997. Gross
profit in the second quarter was affected by increased sales volumes as well
as by the absence in the second quarter of fiscal 1998 of certain Beralcast(R)
production start-up costs incurred in the second quarter of fiscal 1997.
Absent from gross profit in the second quarter of fiscal 1998 was a reduction
of a reserve for waste disposal in the amount of $670,000 and a $650,000
reduction in an inventory reserve related to Starmet's South Carolina facility
which were included in gross profit in the second quarter of fiscal 1997. As
a percentage of sales, gross profit was 31% for the second quarter of fiscal
1998 compared to 46% for the second quarter of fiscal 1997.
Selling, general and administrative expenses increased by $380,000 or 21%
in the second quarter of fiscal 1998 compared to the second quarter of fiscal
1997, primarily due to an increase in sales and administrative personnel. As
a percentage of sales, these expenses were 21% in the second quarter of fiscal
1998 compared to 35% in the second quarter of fiscal 1997. Interest expense
increased to $356,000 in the second quarter of fiscal 1998 from $64,000 for
the second quarter of fiscal 1997, primarily due to interest expense
associated with increased borrowings.
Net income (loss) for the first six months of fiscal 1998 was
$(1,288,000), or $(0.27) per share basic, compared with $618,000, or $0.13 per
share basic, for the same period a year earlier. Principally due to the sales
increase in the second quarter, sales increased by $6,156,000 or 49% to
$18,769,000 in the first six months of fiscal 1998 compared to the first six
months of fiscal 1997, including a $3,806,000 increase in revenue recognized
in the first six months of fiscal 1998 compared to the first six months of
fiscal 1997 on the remediation of the Concord holding basin which revenue
generates nominal gross margin.
Gross profit in the first six months of fiscal 1998 decreased by $468,000
to $4,243,000 or 10% from $4,711,000 in the first six months of fiscal 1997.
Gross profit in the first six months of fiscal 1998 was affected by a gross
profit decrease within the Uranium Services and Recycle segment which was
largely attributable to the absence in the first six months of fiscal 1998 of
a reserve reduction for waste disposal of $670,000 and a $740,000 reduction in
an inventory reserve related to Starmet's South Carolina facility which
occurred in the comparable period of fiscal 1997.
The first six months of fiscal 1998 also included a $982,000 decrease in
gross profit within the Depleted Uranium Penetrator segment due primarily to
reduced volumes of penetrators and blanks partially offset by increased sales
of other products within this segment. The decreases in Depleted Uranium
Penetrators and the Uranium Services and Recycle Segments were partially
offset by a gross profit increase within the Specialty Metal Products segment
of $1,386,000, including a gross profit increase on Beralcast(R) products of
$1,031,000 from $(1,379,000) in the first six months of fiscal 1997 to
$(348,000) in the first six months of fiscal 1998, principally due to
increased sales volumes and the absence in the second quarter of fiscal 1998
of certain Beralcast(R) production start-up costs incurred in the second
quarter of fiscal 1997.
Selling, general and administrative expenses increased by $1,202,000 or
37% in the first six months of fiscal 1998, primarily due to an increase in
sales and administrative personnel. As a percentage of sales, these expenses
were 24% in the first six months of fiscal 1998 compared to 26% in the first
six months of fiscal 1997. Interest expense increased to $489,000 in the
first six months of fiscal 1998 from $119,000 for the first six months of
fiscal 1997, primarily due to interest expense associated with increased
borrowings.
Backlog as of March 31, 1998, was $ 20.4 million as compared to $ 27.7
million as of September 30, 1997.
SECOND QUARTER ENDED SIX MONTHS ENDED
March 31, March 31, March 31, March 31,
1997 1998 1997 1998
Sales $5,342,000 $10,690,000 $12,613,000 $18,769,000
Net Income (Loss) $109,000 $272,000 $ 618,000 $(1,288,000)
Basic Earnings (Loss)
Per Share $0.02 $0.06 $ 0.13 $(0.27)
Weighted Average
Number of Shares 4,782,000 4,787,000 4,782,000 4,787,000
Backlog $ 27,100,000 $20,400,000 $27,100,000 $20,400,000
Statements contained herein that are not statements of historical fact
are "forward-looking statements." Forward-looking statements include
statements concerning backlog, the timing of orders, quarterly, annual and
long-term sales growth and profitability.
Such forward-looking statements are based on a number of assumptions and
involve a number of risks and uncertainties, and, accordingly, actual results
could differ materially from those projected in the forward-looking
statements. Factors that may cause such differences include, but are not
limited to: the effects of government regulation; the need for additional
financing to fund growth; continued and future acceptance of the Company's
products and services; and the presence of competitors with greater technical,
marketing and financial resources.
SOURCE Starmet Corporation
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CONTACT:
James M. Spiezio,
, , Vice President, Finance of
Starmet Corporation, 508-369-5410
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