CONCORD, Mass., May 21 /PRNewswire/ -- Starmet Corporation (Nasdaq: STMT)
a Concord, Massachusetts based manufacturer of specialized metal products,
today announced financial results for the second quarter which ended March 31,
1999.
The Company continues to experience a period where its traditional DU
penetrator business is declining more rapidly than its other existing
businesses are expanding and emerging technologies are being commercialized.
The Company is pursuing potential expansion of its titanium powder business;
development of its Beralcast(R) investment casting technology for aerospace
and defense applications; its Beralcast(R) MGA extrusion capability for
potential computer disc drive applications, and its DUCRETE(TM) shielding
technology for potential radiation shielding applications. The Company
continues to invest heavily in research and development for perfecting
processes to recover valuable fluorine compounds from uranium tetrafluoride.
All of these have the potential of making significant contributions to the
future profitability of the Company.
Net sales for the second quarter of fiscal 1999 declined to $5,919,000.
$3,310000 or 69% of the decrease from the second quarter of 1998 is
attributable to the phase out of the DU penetrator business. The balance of
the decrease is mostly attributed to the Uranium Services and Recycle segment.
Gross profit in the second quarter decreased by $3,149,000, or 96%, to
$116,000, as compared to the second quarter of fiscal 1998. The decrease in
gross profit for the quarter is attributable in part to $973,000 of Holding
Basin remediation costs expensed in the quarter combined with changes in
product mix and timing issues in further reducing fixed costs.
Selling, general and administrative expenses decreased by $801,000, or
36%, to $1,427,000 in the second quarter of fiscal 1999, as compared to the
second quarter of fiscal 1998. Research and development expenses decreased by
$67,000, or 16%, to $342,000 in the second quarter of fiscal 1999, as compared
to the second quarter of fiscal 1998. Interest expense increased to $421,000
in the second quarter of fiscal 1999 from $356,000 in the second quarter of
fiscal 1998.
The Company sustained a net loss of $2,092,000 for the second quarter or a
loss of $0.44 per share on average shares outstanding of 4,791,000. This
compares with a net income of $272,000, or $0.06 per share on average shares
outstanding of 4,787,000 for the same quarter a year earlier.
Despite a nearly 50% decline in revenue from the prior year, the Company
posted a $2.7 million improvement in cash flow from operations by generating
$945,000 in the six months ending March 31, 1999. This is a result of
aggressive cost reductions and spending curbs implemented by the Company over
the past six months.
As in fiscal 1998, the Company continued to realize financial losses and
liquidity problems in the six month period ended March 31, 1999. The Company
has restructured or amended its debt agreements with its principal lender a
number of times in the past year. The Company is currently reviewing a
proposal from its Bank to amend and extend the current forbearance agreement
into the next calendar year. The new banking agreement is expected to be
finalized later this month.
Backlog as of March 31, 1999 was $22.1 million as compared to $28.4
million as of December 31, 1998.
SECOND QUARTER ENDED SIX MONTHS ENDED
March 31, March 31, March 31, March 31,
1998 1999 1998 1999
Sales $10,690,000 $5,919,000 $18,769,000 $13,338,000
Net Income (Loss) $272,000 $(2,092,000) $(1,288,000) $(2,179,000)
Basic Earnings (Loss)
Per Share $0.06 $(0.44) $(0.27) $(0.45)
Weighted Average
Number of Shares 4,787,000 4,791,000 4,787,000 4,791,000
Special Note Regarding Forward-looking Statements:
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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Related links:
http://www.starmet.com
Company News On-Call:
http://www.prnewswire.com/comp/632850.html or fax,
800-758-5804, ext. 632850
CONTACT:
Gary Mattheson, Controller of Starmet
Corporation, 978-369-5410
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