The L.S. Starrett Company Announces Fiscal 2024 First Quarter Results
- Resilient topline performance despite headwinds in North American distribution-facing businesses.
- Saw products regained topline growth momentum internationally.
- High precision granite business benefited from semi-conductor tailwinds.
- Facility capacity and customer diversification expansion plans on schedule for Q1 2024 commissioning, setting the stage for future growth.
- Net sales of precision measuring tools declined due to labor availability and lower factory utilization.
- Net sales of in-line laser measuring systems declined due to U.S. automotive strikes.
Financial results include non-
Fiscal 2024 First Quarter Financial Highlights
-
Net sales for the quarter of
were relatively flat compared to the first quarter of the prior year, while currency neutral net sales of$60.6 million declined$59.1 million 2.3% from the first quarter of fiscal 2023, reflecting the relative weakness of theU.S. Dollar compared to the prior year period. Increases in net sales for the Company’s precision granite products and net sales intoEurope were offset by declines in net sales of precision measuring tools due to labor availability and resulting lower factory utilization in the Company’s measuring tools plant. Net sales of the Company’s in-line laser measuring systems also declined due to theU.S. automotive strikes that temporarily paused capital spending in that sector. -
Gross margin for the quarter was
32.2% , a decline of 120 basis points from33.4% in the first quarter of the prior year. This was partially a result of the forementioned labor headwinds in our measuring tool production facility, and partially due to product mix, as net sales of our higher margin in-line laser measuring systems declined compared to the prior year quarter. -
First quarter operating income was
4.1% , down 200 basis points, from6.1% in the first quarter of the prior year. In addition to lower gross margin, selling, general and administrative expenses increased 80 basis points in relation to net sales compared to the prior year quarter. Approximately half of the increase was due to the translation of foreign currencies, particularly the Brazilian Real, intoU.S. Dollars. In addition, the Company has been reinvesting during the quarter. -
First quarter diluted Earnings per Share was
compared to$0.25 for the first quarter in the prior fiscal year.$0.27
“Our Company continued to exhibit topline resilience in the face of headwinds in our North American industrial distribution-facing businesses. Internationally, aided by new product introductions, our saw products regained topline growth momentum, a reversal from the third and fourth quarters of last fiscal year. Our high precision granite business continued to benefit from semi-conductor tailwinds. Our facility capacity and customer diversification expansion plans are on schedule to be fully commissioned in the first quarter of calendar 2024, which we believe will set the table for future growth.” said Douglas Starrett, President and CEO.
Use of Non-
The Company uses the following non-
The Company discusses these non-
References to currency-neutral net sales should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with
About The L.S. Starrett Company:
Founded in 1880 by Laroy S. Starrett and incorporated in 1929, The L.S. Starrett Company is a leading manufacturer of high-end precision tools, cutting equipment, and metrology systems for industrial, professional and consumer markets and is engaged in the business of manufacturing over 5,000 different products for industrial, professional and consumer markets. The Company has a long history of global manufacturing experience and currently operates three major global manufacturing plants. All subsidiaries principally serve the global manufacturing industrial base with concentration in the metalworking, construction, machinery, equipment, aerospace and automotive markets. The Company offers its broad array of measuring and cutting products to the market through multiple channels of distribution throughout the world. Starrett is a brand recognized around the world for precision, quality and innovation. For more information, please visit: https://www.starrett.com.
Forward-Looking Statements:
This press release may contain forward-looking statements concerning the Company’s expectations, anticipations, intentions, beliefs or strategies regarding the future. These forward-looking statements are based on its current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that it has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond its control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, and other risks and uncertainties described in its Annual Report on Form 10-K, as amended, which was filed with the Securities and Exchange Commission on September 27, 2023 in the section entitled “Risk Factors,” and in its other filings from time to time with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of its assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
L.S. Starrett Company Summary of Operations Quarter Ended September 30, 2023 TABLE 1 |
|||||||
Quarter Ended 9/30/2023 |
Comparison to Quarter Ended 09/30/2022 |
||||||
(Amounts in Thousands, except income per share) | 9/30/2022 | $ Change | % Change | ||||
Net Sales | $ |
60,636 |
$ |
60,461 |
+175 |
|
|
Gross Profit |
|
19,536 |
|
20,200 |
|
-664 |
- |
as % of Net Sales |
|
|
|
|
|||
Selling, general, and administrative expenses |
|
17,077 |
|
16,294 |
+783 |
|
|
as % of Net Sales |
|
|
|
|
|||
Restructuring Charges |
|
- |
|
190 |
|
(190) |
- |
Operating income |
|
2,459 |
|
3,716 |
|
(1,257) |
- |
as % of Net Sales |
|
|
|
|
|||
Other expense |
|
(365) |
|
(676) |
+311 |
- |
|
Income before income taxes |
|
2,094 |
|
3,040 |
|
(946) |
- |
Income tax expense |
|
174 |
|
984 |
|
(810) |
- |
Net Income | $ |
1,920 |
$ |
2,056 |
|
(136) |
- |
Basic net income per share | $ |
0.26 |
$ |
0.28 |
$ |
(0.02) |
- |
Diluted net income per share | $ |
0.25 |
$ |
0.27 |
$ |
(0.02) |
- |
L.S. Starrett Company Consolidated, Condensed Balance Sheet September 30, 2023 TABLE 2 |
||||
ASSETS | 9/30/2023 | 6/30/2023 | ||
Cash | $ |
12,529 |
$ |
10,454 |
Accounts receivable |
|
34,506 |
|
36,611 |
Inventories, net |
|
65,126 |
|
65,414 |
Prepaid expenses and other current assets |
|
9,859 |
|
9,723 |
Total current assets |
|
122,020 |
|
122,202 |
Property, plant and equipment, net |
|
42,600 |
|
39,375 |
Other long-term assets |
|
31,149 |
|
31,225 |
Deferred tax assets, net |
|
19,073 |
|
19,073 |
Intangible assets, net |
|
4,888 |
|
4,888 |
Goodwill |
|
1,015 |
|
1,015 |
Total assets | $ |
195,769 |
$ |
192,802 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | 9/30/2023 | 6/30/2023 | ||
Notes payable and current maturities of long-term debt | $ |
5,270 |
$ |
4,961 |
Current lease liability |
|
1,650 |
|
1,650 |
Accounts payable |
|
16,587 |
|
15,047 |
Other current liabilities |
|
19,650 |
|
19,555 |
Accrued compensation |
|
8,040 |
|
8,040 |
Total current liabilities |
|
41,507 |
|
39,563 |
Other long term liabilities |
|
6,008 |
|
6,307 |
Long-term lease liability | ||||
Long-term debt, net of current portion |
|
7,944 |
|
5,273 |
Postretirement benefit and pension obligations |
|
11,320 |
|
12,192 |
Total Liabilities |
|
66,779 |
|
63,335 |
Stockholders' Equity |
|
128,990 |
|
129,467 |
Total liabilities and stockholders' equity | $ |
195,769 |
$ |
192,802 |
L.S. Starrett Company Reconciliation of Net Sales to Currency Neutral Net Sales Quarter Ended September 30, 2023 TABLE 3 |
||||||
Quarter Ended 9/30/2023 |
Comparison to Quarter Ended 09/30/2022 |
|||||
(Amounts in Thousands) | 9/30/2022 | $ Change | % Change | |||
Net sales, as reported |
|
60,636 |
|
60,461 |
+175 |
|
*Currency Impact |
|
(1,574) |
|
- |
(1,574) |
- |
Currency neutral net sales | $ |
59,062 |
$ |
60,461 |
(1,399) |
- |
*Change when converting FY24 sales in non USD functional currencies at the same exchange rates used in the comparison period |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231113019649/en/
John C. Tripp
Chief Financial Officer
(978) 249-3551
jtripp@starrett.com
Source: The L.S. Starrett Company
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