Espey Mfg. & Electronics Corp. reports third quarter results

Rhea-AI Summary

Espey Mfg. & Electronics Corp. (NYSE American: ESP) reported a net sales decline in Q3 FY 2021 of $4.21 million, down from $6.19 million in Q3 FY 2020. The company faced a net loss of $1.07 million, or $(0.44) per diluted share, compared to a net loss of $(0.10) million, or $(0.04) per diluted share, last year. For the first nine months, net sales totaled $18.4 million, a decrease from $19.4 million in FY 2020. The backlog grew to $67.3 million, an increase from $59.8 million year-over-year. The impact of the COVID-19 pandemic and supply chain disruptions contributed significantly to these results.

Positive

• Backlog increased to $67.3 million compared to $59.8 million in FY 2020.
• New order bookings are expected to exceed $40 million for the fiscal year.

Negative

• Net sales for Q3 FY 2021 dropped to $4.21 million from $6.19 million in Q3 FY 2020.
• Net loss was $(1.07 million) for Q3 FY 2021, compared to a smaller loss of $(0.10 million) in the previous year.
• For the nine-month period, net sales decreased from $19.4 million to $18.4 million.
• Impact of COVID-19 led to production challenges and a facility closure.

SARATOGA SPRINGS, N.Y., May 17, 2021 (GLOBE NEWSWIRE) -- Espey Mfg. & Electronics Corp. (NYSE American: ESP) announces results for the first nine months of fiscal year 2021.

Net sales for the third quarter of fiscal year 2021, January 1 to March 31, 2021, were $4,205,068, compared with last year's third quarter net sales of $6,191,300. Net loss for the quarter was $(1,070,114), $(0.44) per diluted share, as compared to net loss of $(103,765), $(0.04) per diluted share for the same quarter last year.

For the first nine months of fiscal year 2021, July 1 to March 31, 2021, net sales were $18.4 million, compared with $19.4 million for the first nine months of fiscal year 2020. Net loss for the period was $(1,061,297), $(0.44) per diluted share, compared with net income of $206,975, $0.09 per diluted share, for the same period last year.

The backlog for the Company was approximately $67.3 million at March 31, 2021, compared with last year's backlog of $59.8 million at March 31, 2020. New orders in the first nine months of fiscal year 2021 were $30.8 million, compared with new orders in the first nine months of fiscal year 2020 of $33.6 million.

Mr. Patrick Enright, President and CEO, commented,

The current quarter results reflect continuing issues associated with the pandemic’s impact on the industries we service. Direct impacts include the write-off of inventory under a commercial airline industry contract partially written down last quarter. We also incurred additional, unplanned investment in a new development program for submarines. A major subcontractor increased its cost to supply a critical component for the first production deliveries. This one-time increase was absorbed by Espey in order to remain a supplier for the submarine class over the coming decade. In addition, supply of electronic components, which were already in short supply prior to the pandemic, now have lead times stretching out to over a year, which moves revenue recognition into future quarters.

Unfortunately the pandemic also hit closer to home for us. Nearly a year into the pandemic, Espey suffered a COVID 19 outbreak in our facility. Following governmental guidelines, Espey closed the facility for ten days to allow the outbreak to run its course, but the impacts to our production line are still being felt more than a month later.

Based on the direct and indirect impacts the pandemic had on Espey in Q3, we currently believe annual sales will be lower than prior year sales and earnings-per share will be lower than the prior year, each reflecting a decrease from the original plan. However, new order bookings are expected to exceed $40 million for the current fiscal year and our backlog remains strong at over $67 million as of March 31, 2021.

Our customers, suppliers and the end users of our defense products are coming together in a collaborative environment to identify and address the common issues we are all facing. The challenges encountered over this fiscal year are not unique to Espey. The diversity of our offerings, and the relationships built over the last few years continue to allow our backlog to grow to record levels. We are positioned well for the coming fiscal years with stable programs and dedicated customers. We recognize and appreciate the continued support we have from our investors, and we are preparing to emerge from the challenges of the pandemic stronger than we have ever been.

Espey's primary business is the development, design, and production of specialized military and industrial power supplies/transformers. The Company can be found on the Internet at www.espey.com.

For further information, contact Mr. David O’Neil (518)245-4400.

This press release may contain certain statements that are "forward-looking statements" and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company's current expectations or beliefs concerning future events. The matters covered by these statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

 

FAQ

What were the Q3 FY 2021 financial results for Espey Mfg. & Electronics Corp. (ESP)?

Espey reported net sales of $4.21 million in Q3 FY 2021, down from $6.19 million in Q3 FY 2020, with a net loss of $(1.07 million).

How did the COVID-19 pandemic affect Espey Mfg. & Electronics Corp. (ESP) in Q3 FY 2021?

The pandemic led to significant production challenges, including a facility closure and increased supply chain disruptions.

What is the backlog for Espey Mfg. & Electronics Corp. (ESP) as of March 31, 2021?

The backlog for Espey reached approximately $67.3 million as of March 31, 2021, compared to $59.8 million the previous year.

What are the expected new order bookings for Espey Mfg. & Electronics Corp. (ESP) for the current fiscal year?

Espey expects new order bookings to exceed $40 million for the current fiscal year.