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Tag: Earnings

Kodak improves bottom line in Q3

Eastman Kodak Co. Executive Chairman Jim Continenza

Eastman Kodak Co. after the bell on Tuesday reported an improved third-quarter bottom line.

Sales for the quarter ended Sept. 30 were $287 million, up from $252 million in the third quarter last year. Net income for the quarter rose to $8 million from a net loss of $445 million in the year-ago quarter.

“I’m pleased with our continued improvement in the third quarter despite challenges posed by supply chain issues, labor shortages and inflationary pressures,” said Kodak Executive Chairman and CEO Jim Continenza in a statement. “Our core print business has achieved increased market share in environmentally-friendly process-free plates and we are well-positioned to continue growing that important segment. Looking forward, we’ll continue to execute our go-to-market strategy focused on driving profitable revenue and growth.”

During an earnings call, Continenza said that the company is seeing a resurgence in its film business.

“More people are shooting still film, and the motion picture industry is choosing film as the ideal medium for their productions. As a result, we are increasing the capacity of our film factory,” he noted.

Kodak ended the third quarter with $380 million in cash and cash equivalents, an increase of $184 million from Dec. 31, 2020.

“During the third quarter we continued to see strong growth in our key product areas, including SONORA Process Free Plates volume and PROSPER annuities which were up 35 and 17 percent respectively compared to the prior-year quarter,” said Kodak CFO David Bullwinkle. “Kodak used $15 million in cash for the quarter, primarily driven by ongoing global cost increases which we are taking actions to address. We will continue to execute on our long-term plan — focusing on our core businesses and investing in future growth.”

Shares of Kodak stock (NYSE: KODK) closed Tuesday at $7.16 and was down more than 2 percent to $6.88 at the start of the day Wednesday.

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Garlock parent stock climbs on Q3 earnings results

EnPro Industries Inc., the parent company of Palmyra’s Garlock Family of Companies, on Friday reported strong third-quarter results, beating Wall Street expectations.

For the quarter ended Sept. 30, the Charlotte, N.C., based manufacturer reported revenue of $283.1 million, up from $268.3 million in the year-ago quarter. Net income for the quarter was $27.5 million, compared with a $21.6 million loss in the third quarter last year. Diluted earnings per share were $1.33, up from a loss of $1.05 per share a year ago.

Adjusted earnings were $1.40 on income of $29.1 million.

“Enpro delivered strong third-quarter results driven primarily by continued momentum in our Sealing Technologies and Advanced Surface Technologies segments,” said interim President and CEO Eric Vaillancourt in a statement. “Our commercial and supply chain teams have done an excellent job mitigating the impact of the supply chain headwinds facing our businesses and remaining agile in the face of raw material shortages and inflationary pressures. In addition, our results for the quarter reflect our team’s continued focus on cost management and our ability to capitalize on increased demand in general industrial, semiconductor, petrochemical, heavy-duty truck and food & pharma markets.”

Separately, EnPro said that it has entered into a definitive agreement to acquire NxEdge, an advanced manufacturing, cleaning, coating and refurbishment business focused on the semiconductor value chain, from Trive Capital. The transaction marks a significant next step in Enpro’s multi-faceted strategy to accelerate growth in unique, high-margin industrial technology-related businesses, officials said.

Under the terms of the agreement, Enpro will acquire NxEdge for $850 million in cash. The transaction is expected to close by the end of 2021.

EnPro on Thursday declared a regular quarterly dividend of 27 cents per share. The dividend is payable Dec. 15, 2021, to shareholders of record as of the close of business on Dec. 1, 2021.

Shares of company stock (NYSE: NPO) were up nearly 9 percent Friday afternoon to $100.30.

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Transcat sales, income soar in second quarter

Rochester’s Transcat Inc., a supplier of accredited calibration, repair, inspection and laboratory instrument services, on Tuesday reported a drastically improved second-quarter, beating analyst estimates.

For the second quarter ended Sept. 25, Transcat reported sales of $50.3 million, up 21 percent from $41.6 million in the year-ago quarter. Net income for the quarter was $3.01 billion, up 49 percent from $2.02 billion in the same quarter of 2020. On a per-share basis, earnings were up from 27 cents in the year-ago quarter to 40 cents in the second quarter this year.

“Our excellent second-quarter results were driven by broad-based revenue strength and solid operational execution across both of our operating segments,” said President and CEO Lee Rudow. “Our Service segment revenue grew 20.3 percent and gross margin increased 70 basis points to a second-quarter record of 32.9 percent. We reported 14 percent organic revenue growth as demand in our highly regulated end markets, including life sciences, remained strong. We are pleased with the continued expansion of our gross margin, which was largely driven by operating leverage on our fixed costs from organic growth.”

Results included the previously reported acquisitions of BioTek Services Inc. on Dec. 16, 2020, Upstate Metrology on April 29, 2021, and Cal OpEx Ltd., dba NEXA, on Aug. 31, 2021.

“We are excited with the early progress made on our recent acquisition of NEXA Enterprise Asset Management. NEXA expands our reach into the attractive market for asset management services and its unique capabilities around managing cost, efficiency and the reliability components of life science companies’ instrumentation programs is a natural complement to our core calibration offerings,” Rudow said. “We are confident this enhances our overall value proposition to current and future customers and the NEXA and Transcat teams have already worked together to identify several synergistic growth opportunities.”

Service revenue in the second quarter grew more than 20 percent to $29.5 million, while distribution sales grew more than 22 percent to $20.8 million. Organic revenue growth was 14 percent and was driven by improvement in end-market conditions, continued market share gains and an easier comparison over the prior-year quarter, which was impacted by the pandemic, officials said.

Shares of company stock (Nasdaq: TRNS) opened Tuesday at $76.42 and by midmorning Wednesday had climbed to $80.87.

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Graham misses analysts’ expectations in Q2

Batavia’s Graham Corp. on Wednesday reported a 22 percent growth in second-quarter sales, but a net loss for the quarter of $500,000.

For the second quarter ended Sept. 30, the manufacturer posted revenues of $34.1 million, a $6.2 million increase from the second quarter of 2020. Increased revenues were driven by $16.5 million in sales associated with the acquisition of Barber Nichols, which offset lower sales to commercial energy markets.

Graham reported a $500,000 net loss for the quarter, compared with net income of $2.7 million in the same quarter last year. The losses in earnings were 5 cents per diluted share, compared with earnings of 27 cents a year ago.

Earnings missed Wall Street estimates by 10 cents per share, while sales were off by $830,000.

“We believe that our strategic expansion into a defense industry business was clearly demonstrated in the quarter. The addition of Barber Nichols is anticipated to help to offset the challenges which our energy and petrochemical business has been experiencing. We expect our energy and chemical markets to recover over the next twelve to twenty-four months. In addition, we will focus on growth opportunities in defense, renewable energy and commercial space,” President and CEO Daniel Thoren said in a statement.

Sales to the U.S. increased to $40.1 million, or 74 percent, of first-half net sales in fiscal 2022, up from $26.7 million, or 60 percent, of fiscal 2021 first-half net sales reflecting the impact of the BN acquisition. International sales were $14.2 million and represented 26 percent of total sales, compared with $18.0 million, or 40 percent, of sales in the same prior-year period.

“Barber Nichols has proven to be an excellent addition to Graham. Since we acquired the business in June, it has outperformed our revenue and EBITDA margin expectations,” said CFO Jeffrey Glajch. “Importantly, it is a critical element of our strategic expansion into the defense industry and provides the platform from which we can further diversify into renewable energy and commercial space.”

Shares of company stock (NYSE: GHM) were up less than 1 percent midday Wednesday at $13.26.

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Xerox beats Wall Street estimates on Q3 earnings

Xerox Holdings Corp. on Tuesday reported third-quarter earnings that beat analysts’ estimates but fell below sales predictions.

For the quarter ended Sept. 30, the onetime document company reported revenues of $1.76 billion, compared with $1.78 in the third quarter last year. Net income for the quarter was $89 million, down from $90 million in the same quarter last year. Basic and diluted earnings for the quarter were 48 cents, up from 41 cents per share in the year-ago quarter.

Analysts had expected non-GAAP earnings of 43 cents on sales of $2.26 billion.

“Our revenue this quarter was essentially flat year-over-year, despite a deterioration in global supply chain conditions and the Delta variant, which caused delays in many of our clients’ plans to return employees to the workplace,” said Xerox Vice Chairman and CEO John Visentin. “As a result of these ongoing challenges, we are revising our revenue guidance lower, but we are maintaining our free cash flow guidance of at least $500 million. Our focus on generating cash allows us to preserve, and in some cases increase, investments in innovation while continuing to return more than 50 percent of free cash to shareholders and pursue M&A.”

The company ended the quarter with $100 million in operating cash flow, down $6 million year-over-year, and $81 million in free cash flow, compared with $88 million in the year-ago quarter.

Xerox completed its expected $500 million of buybacks for 2021, and the board has approved an additional $500 million share repurchase program to be used opportunistically.

Shares of company stock (Nasdaq: XRX) were down 7 percent mid-morning Tuesday to $19.13.

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Li-Cycle reports loss in Q3

Li-Cycle Holdings Corp., the Toronto-based lithium-ion battery recycler that has a “spoke” facility at Eastman Business Park, on Thursday reported a third-quarter loss of $6.9 million, despite an 840 percent increase in sales.

For the quarter ended July 31, Li-Cycle reported revenues of $1.7 million, compared with $200,000 in the same quarter last year, driven primarily by an increase in the number of batteries and battery scrap processed at the Rochester spoke facility. Operating expenses also increased as a result of personnel costs and ramp-up of facilities including Rochester.

The net loss of $6.9 million for the quarter compared to a $1.8 million loss in the same quarter last year.

“I am incredibly proud of what the Li-Cycle team has accomplished so far in 2021, continuing our mission to solve the global battery manufacturing scrap and end-of-life lithium-ion battery problem by creating a secondary supply of critical battery materials, while also ensuring a sustainable future for our planet,” said Li-Cycle President and CEO Ajay Kochhar. “Since announcing our business combination with Peridot Acquisition Corp. in February, we signed significant commercial agreements with Ultium Cells LLC — the joint venture between General Motors and LG Energy Solution — and Univar Solutions Inc.; we began construction of our Arizona Spoke; and just yesterday, we announced plans to build an incremental fourth Spoke in Alabama.

“With the funds from our business combination transaction completed in August 2021, we believe that Li-Cycle is primed to capitalize on the significant growth opportunities created by the continuing mobility revolution,” he added.

Li-Cycle was founded in 2016 and uses a patented “spoke & hub” technology to recover and recycle lithium-ion batteries. The EBP facility produces an intermediate mixed battery material product known as “black mass” from all types of spent lithium-ion batteries. The facility, which was the second spoke for the company, has the capacity to process up to 5,000 tons of spent lithium-ion batteries per year.

In a statement, Li-Cycle officials noted that the demand for lithium-ion battery recycling has continued to exceed the company’s projections. In order to meet the growing demand, the company plans to increase and accelerate investment in the build-out of its recycling capacity, including through the development of the Alabama Spoke, increasing its processing capacity beyond that of previous plans and projections.

Li-Cycle officials said the company is confident in its ability to scale the business to at least 100,000 tons per year of spoke processing capacity and 220,000 to 240,000 tons per year of hub processing capacity by 2025.

Shares of company stock (NYSE: LICY) were trading down Friday midday at $7.85.

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Boston manufacturing to acquire IEC Electronics

Newark’s IEC Electronics Corp. has agreed to be acquired by a Boston-based electronics manufacturing services supplier in a deal worth nearly $174 million.

The Wayne County manufacturer on Thursday said the two companies had signed a definitive merger agreement under which Creation Technologies will acquire all outstanding shares of IEC for $15.35 per share in cash, with an aggregate value of $242.3 million, based on debt of $68.6 million. The transaction has been unanimously approved by the boards of directors of both companies.

IEC is a leading provider of high-complexity, low-to-medium volume electronic manufacturing services focused on high-reliability applications within the aerospace and defense, medical and industrial end markets. The merger will boost IEC’s existing production capabilities with access to Creation’s existing low-cost manufacturing facilities in Mexico.

Creation Technologies is a global EMS supplier with a focus on medium volume, high-reliability customers in aerospace and defense, medical and tech industrial markets. Creation and IEC combined will have more than 4,000 employees in facilities located in the U.S., Canada, Mexico and China.

“IEC is excited about joining the Creation family. The transaction presents our stakeholders with immediate value while providing our customers a broader platform for continued growth,” said IEC President and CEO Jeffrey Schlarbaum in a statement.

The purchase price represents a premium of roughly 47 percent to IEC’s closing share price on Aug. 11. Following the closing of the tender offer, a wholly owned subsidiary of Creation will merge with and into IEC, with each share of IEC common stock that has not been tendered being converted into the right to receive the same $15.35 per share in cash offered in the tender offer. The transaction will be financed through a committed debt financing package provided by JPMorgan Chase Bank and Citizens Bank. The transaction is expected to close by early October 2021.

“A combination of IEC and Creation creates a leading medium volume, high-reliability electronics manufacturer with a customer service driven culture,” said Stephen DeFalco, Chairman and CEO of Creation. “Furthermore, IEC and Creation’s complementary geographic footprints create a premier full-service North American supply chain for both companies’ customers.”

Upon completion of the transaction, IEC will become a privately held company and shares of IEC’s common stock will no longer be listed on any public market.

Separately on Thursday, IEC reported third-quarter revenues of $49.4 million, an increase of 4.2 percent from $47.4 million for the third quarter last year. Gross profit for the third quarter of was $5.2 million, or 10.6 percent of sales, compared with gross profit of $6.6 million, or 14 percent of sales in the third quarter of fiscal 2020. Operating profit was $1.9 million for the third quarter of fiscal 2021, compared with an operating profit of $3.0 million for the same quarter in the prior fiscal year.

The company reported net income of $1 million or 10 cents per basic share and 9 cents per diluted share for the third quarter, compared with net income of $2.1 million or 20 cents per basic and diluted share in the third quarter of fiscal 2020.

“We were pleased to have delivered solid revenue growth during the third quarter of fiscal 2021 of $49.4 million, despite headwinds that we, and many in our industry, are experiencing related to ongoing material shortages and labor constraints,” Schlarbaum said in a separate statement. “During the fiscal quarter, we continued to ramp multiple exciting new programs. As we noted last fiscal quarter, given the complexity of the programs we service, the ramping process is not linear and frequently includes process development adaptations which continue to impact profitability. However, once established, we anticipate that these programs will provide considerable long-term revenue and margin opportunity for IEC.”

Schlarbaum said he is encouraged by the increased backlog compared with year-end fiscal 2020. The company also extended a contract worth $45 million, he noted.

“We believe this recent contract extension serves as a strong endorsement of our capabilities and reliability and speaks to IEC’s position in the marketplace as we pursue new customers and contracts,” Schlarbaum said. “We believe we remain uniquely positioned to drive long-term growth for our shareholders. We are pleased to have made solid progress throughout this challenging year to advance our leadership position and we are excited about the opportunities we are seeing to win new customers and programs as we move toward delivering an expected strong close to fiscal 2021.”

Shares of company stock (Nasdaq: IEC) closed Wednesday at $10.31.

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Vuzix reports disappointing second quarter results

Vuzix Corp. this week reported a drop in sales and a bottom-line loss in the second quarter.

For the quarter ended June 30, the smart-glasses and augmented reality supplier posted revenue of $2.9 million, down from $3 million in the second quarter of 2020. Total operating expenses increased from $5 million last year to $9.3 million this year, contributing to a net loss of $8.8 million in the quarter.

Vuzix CEO Paul Travers said 2021 has been and will continue to be a transformative year for the Rochester company.

“We now have roughly $138 million of cash as of mid-year, have expanded our management, R&D and sales teams, established a new SaaS-based Integrated Solutions Business Unit and are aggressively pursuing other strategic initiatives that will strengthen and extend our business model from one primarily focused on being an industry leader in smart glasses hardware to also now becoming a broader solutions provider in various high-growth market verticals,” Travers said in a statement.

Travers said the company spent time reviewing the needs of its largest cornerstone customers during the quarter and making changes to operations based on those needs. Vuzix also has set the foundation for other markets that are showing leadership in broad-based smart glasses deployments.

“We continued to see steady year-over-year growth in our core smart glasses business with second-quarter smart glasses sales rising 21 percent,” Travers said. “The healthcare portion of our business continues to accelerate with our smart glasses now being used in approximately 1,000 operating rooms worldwide for an ever-expanding set of surgical applications, as just one example of utility in healthcare.”

The company’s focus for the remainder of the year will be on developing and delivering against growing enterprise smart glasses opportunities while extending its market participation and its business model.

“To foster these growing market segments, we will focus on strategic initiatives that we believe will both accelerate the adoption of smart glasses in the enterprise market and unlock significant value for Vuzix shareholders,” Travers said. “We will also continue to develop our core technologies and next-generation products that we believe will be vital to enabling broader market adoption in support of enterprise, defense, aerospace and OEM smart glasses manufacturers. Finally, we will further expand our sales channels and deliver hand-to-glove service to our cornerstone customers to support large-scale adoption of Vuzix smart glasses while continuing to pave the way for enabling additional new market adoption globally.”

For the second half of 2021, Travers said the company expects top-line growth in sales as a result of strong smart-glasses demand and the expected return of OEM-related engineering services revenue and initial sales of OEM production units to a Tier-1 defense customer.

Shares of company stock (Nasdaq: VUZI) tumbled on Tuesday following its earnings report but had rebounded some Wednesday to $13.02.

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Kodak reports improvement in Q2

Eastman Kodak Co. after the bell Tuesday reported an improved bottom line and encouraging cash balance in the second quarter.

For the quarter ended June 30, the one-time photo giant posted sales of $291 million, up from $213 million in the year-ago quarter. GAAP net income for the quarter rose to $16 million, compared with a loss of $5 million in the same quarter last year.

“I am encouraged by our financial performance for the quarter, which included year-over-year improvements in revenues and Operational EBITDA across all of our divisions,” said David Bullwinkle, Kodak’s CFO. “During the second quarter, we used $6 million in cash, an improvement of more than $20 million compared to the prior-year quarter, driven by increases in revenue and profit. We will continue to focus on the execution of our long-term plan.”

Kodak’s traditional printing division revenue was up significantly in the quarter from $119 million to $169 million. Digital printing rose $10 million to $62 million, while advanced materials and chemicals rose to $54 million from $38 million in the year-ago quarter.

Kodak ended the quarter with $395 million, compared with $196 million in the second quarter last year.

Shares of company stock (NYSE: KODK) opened Wednesday at $7.24 and were on the rise in the first few minutes of trading.

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Graham posts loss in Q1

Batavia’s Graham Corp. on Tuesday reported lackluster first-quarter results, missing analysts’ expectations. Separately, the manufacturer named a new chief executive to replace long-time CEO James Lines, who plans to retire.

For the first quarter ended June 30, Graham posted a 21 percent increase in sales to $20.2 million. The company reported a net loss for the quarter of $3.1 million. On a per-share basis, the quarterly loss was 31 cents.

GAAP earnings missed Wall Street estimates by 26 cents, while revenue missed by $3.63 million. Results include one month of financials from the company’s acquisition of Barber-Nichols, which was completed on June 1.

“While sales improved as a result of the acquisition, we had a number of projects with lower margins which heavily impacted profitability in the quarter. This partially reflects our initial strategy to aggressively enter the Naval Nuclear Propulsion Program (“NNNP”),” Lines said in a statement. “Given our strong performance on the NNNP projects, we were successful with our strategy and have since earned a sole source position. We expect that the vast majority of the impact of first-order projects will be behind us by the end of fiscal 2022.”

Sales to the defense markets were up 104 percent to $7.1 million and represented 35 percent of total revenue. Sales to the refining markets increased $1.9 million from the prior-year period to $4.6 million and represented 23 percent of total sales. Chemical/petrochemical market sales were $4.6 million, compared with $8 million in the prior fiscal year.

“While the quarter’s results were disappointing, we view this fiscal year as a transition and believe we are better positioned to drive growth and stronger margins for the future,” Lines said.

Lines also early Tuesday said he would retire, following nearly four decades with the company. Daniel Thoren, who currently serves and president and chief operating officer, has been named as president and CEO, effective Sept. 1. He will join the board of directors at that time.

“We first met Dan in 2019 when we were evaluating the acquisition of Barber-Nichols (“BN”), which we completed on June 1, 2021. Dan has proven his strong leadership skills through the rapid growth of BN and, since joining Graham, has demonstrated a robust vision for the future of the company,” said Graham’s board Chairman James Malvaso in a statement. “Dan had built a strong leadership bench at BNI enabling this succession plan to be another key benefit of our transformative acquisition. We are excited to have him take charge of the next phase of Graham’s future.”

Thoren was named president and COO in June. He previously served as BN’s president and CEO since 1997, quadrupling the size of the business during that time.

“I believe these are incredible times for Graham as we work to transform the business and pivot toward growth,” Thoren said. “I am excited to lead the team as we expand our defense business, develop new products and capture a larger share of the defense and energy markets we serve. I am looking forward to working with our combined team and the Board to drive value for customers and shareholders.”

Lines has been with Graham for more than 37 years and led the organization for more than 15 years. Malvaso said that under Lines’ leadership, Graham has improved its cash generation, expanded geographically and created more flexible and efficient production processes while building a culture of quality.

“It has been an honor and privilege to serve as the president and chief executive officer of Graham. I value the relationships developed through the years with our employees, customers and shareholders and I appreciate the support the board of directors has provided all these years,” Lines said. “I am excited about Graham’s future under Dan’s leadership and look forward to watching the company transform into a leading defense industry supplier while further advancing our energy business. We have enhanced our strong leadership team with the BNI acquisition and I expect that supported by our tremendously talented team of employees, they will propel Graham to new heights.”

Graham is a global business headquartered in Genesee County that designs, manufactures and sells critical equipment for the energy, defense, aerospace and medical industries, among others.

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Garlock parent reports strong Q2, announces leadership change

EnPro Industries Inc., the parent company of Palmyra’s Garlock Family of Companies, on Tuesday reported a strong second quarter, while also announcing a change in leadership.

For the second quarter ended June 30, the Charlotte, N.C., manufacturer posted a 20 percent increase in sales to $298.6 million. Net income for the quarter was $29.3 million, compared with a net loss of $3.3 million in the year-ago quarter. Diluted earnings per share were $1.41, compared with a 16-cent loss in the second quarter last year.

Analysts had expected earnings of $1.02 on sales of roughly $273 million.

Separately on Tuesday, EnPro said company President and CEO Marvin Riley would step down from his role effective immediately. Company officials said Riley’s departure was not related to any disagreement with the board or members of management concerning corporate strategy or financials.

The board has engaged a search firm for a permanent replacement and named Eric Vaillancourt as interim president and CEO. Vaillancourt previously served as president of the company’s Sealing Technologies and has been with the firm 12 years. Sealing Technologies includes Garlock, STEMCO and Technetics Group.

“Our portfolio reshaping strategy, focus on organic growth drivers and cost discipline drove significantly improved operating leverage in the second quarter. We reported a strong adjusted EBITDA margin of 19.2 percent, a 400-basis point improvement compared to a year ago and 60 basis points sequentially,” Vaillancourt said of the firm’s second-quarter achievements. “We saw momentum across all businesses in the second quarter as the global economic recovery continued.”

Within the Sealing Technologies division, sales increased 7.9 percent compared with the prior-year period despite the impact of divestitures in 2020. The company saw strong demand in heavy-duty truck, general industrial, food & pharma and petrochemical markets.

“Given our strong first half 2021 results and current order patterns, we now expect 2021 sales to be in the range of $1.075 billion to $1.125 billion, adjusted EBITDA to be in the range of $200 million to $210 million and adjusted diluted earnings per share from continuing operations to be in the range of $5.16 to $5.50,” Vaillancourt said.

Shares of company stock (NYSE: NPO) were down slightly at $90.69 Tuesday morning.

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Ultralife misses Street estimates in Q2

Newark’s Ultralife Corp. on Thursday reported second-quarter earnings that fell short of Wall Street estimates.

For the second quarter ended June 30, the Wayne County power solutions, communications and electronics systems provider posted revenue of $26.8 million, a more than 6 percent decrease from $28.6 million in the second quarter of 2020. Net income was $800,000, or 5 cents per diluted share, compared with $1.7 million, or 10 cents per diluted share a year ago.

Analysts had anticipated GAAP earnings of 7 cents per share on sales of $28.5 million.

Michael D. Popielec
Michael D. Popielec

“Ultralife’s end-market diversification strategy continues to serve us well. For the second quarter, sales increased sequentially 3 percent from the first quarter as our oil and gas revenues rebounded, growing 49 percent year over year,” said President and CEO Michael Popielec in a statement. “Medical sales abated from last year’s COVID-related demand spike yet were above pre-pandemic levels, and sales from government/defense customers were soft relative to last year’s strong shipment flows.”

Popielec said that given the company’s liquidity position, Ultralife increased investments in capital expenditures and critical engineering resources to support new contracts and the completion of transformational new products.

“Although these investments weighed on operating and net income year-over-year comparisons, sequential EPS grew 20 percent on the strength of gains in commercial sales,” he said.

Supply chains and logistics continue to be the source of operational challenges, Popielec noted, delaying some shipments and increasing freight costs.

“Nevertheless, activity in our end markets remains high and our goal is to continue improving our financial performance each quarter,” he explained. “We remain focused on executing near-term growth initiatives and developing long-term growth opportunities while adhering to our proven and profitable business model.”

Shares of company stock (Nasdaq: ULBI) were down nearly 3 percent in morning trading Thursday to $8.22.

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Transcat reports strong Q1 results

Transcat Inc. on Tuesday reported record first-quarter results, beating Wall Street estimates.

For the first quarter ended June 26, the Rochester provider of accredited calibration, repair, inspection and laboratory instrument services posted revenues of $47.79 million, up nearly 23 percent from $38.9 million in the year-ago quarter. Net income for the quarter was $3.69 billion, up from $798 million in the first quarter of fiscal 2021. Diluted earnings per share increased to 49 cents from 11 cents.

Analysts had expected earnings of 25 cents on sales of $44.42 million.

Lee Rudow
Lee Rudow

“The start to our fiscal year 2022 was very strong and allowed us to achieve record first-quarter revenue, gross margin, operating income and EBITDA,” said Transcat President and CEO Lee Rudow. “Our service segment continued to perform at a high level, growing revenue 20 percent and increasing gross margin 540 basis points from the prior-year period. We reported 16.6 percent organic revenue growth as our highly-regulated end markets, including life sciences, remained strong, and we compared against a COVID-19 impacted prior-year quarter. Our gross margin improvement was driven by operating leverage on our fixed costs from the strong organic growth and to a lesser degree continued strong technician productivity.”

At the end of the first quarter, the company had $27.9 million available for borrowing under its secured revolving credit facility. Total debt of $22.2 million was up $2.6 million from fiscal 2021 year-end.

“Cash flow from operations in the first quarter was in line with our expectations and our balance sheet remains strong,” Rudow said. “We recently announced an amendment to our credit facility which favorably updates certain terms and increases our available revolving line of credit from $40 million to $80 million to support future growth investments and a robust acquisition pipeline.”

Rudow added: “For the second quarter of fiscal 2022, we expect service organic growth to be similar to what we achieved in the first quarter. We expect more modest improvement in service gross margin than we have experienced over the last several quarters, largely due to a more difficult technician productivity comparison versus the second quarter of fiscal 2021. Distribution is expected to achieve high teens growth in the second quarter on improved order trends and a prior-year comparison that includes lower levels of demand due to the COVID-19 pandemic.”

Shares of company stock (Nasdaq: TRNS) spiked early Wednesday but by mid-afternoon had settled at $60.40.

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Monro beats sales projections in first quarter

Monro Inc. on Wednesday reported record first-quarter sales, beating analysts’ estimates.

For the first quarter ended June 26, the Rochester-based automotive undercar repair company reported a more than 38 percent increase in revenue to $341.8 million. The company attributed the increase to a 34.5 percent increase in comparable-store sales and an increase in sales from new stores.

Net income for the quarter was $15.7 million, compared with $3 million in the year-ago quarter. On a per-share basis, GAAP earnings were 46 cents, compared with 9 cents in the first quarter of fiscal 2021. Analysts had expected earnings of 53 cents on sales of $328.17 million.

“Monro’s solid first-quarter results are a testament to the strong execution of our teammates, paired with the continued progress we have made on our Monro.Forward initiatives to enhance our competitive position and capitalize on the strengthening demand environment,” said Monro President and CEO Mike Broderick. “We delivered double-digit comparable store sales growth across all our regions driven by strength in our services categories. We are pleased to see this momentum continue into our second quarter to date with comparable-store sales up approximately 15 percent in fiscal July and we are excited about the significant opportunities that lie ahead of us.”

During the first quarter, Monro opened 30 stores and closed two. The company ended the quarter with 1,291 company-operated stores and 91 franchised locations.

“Looking ahead, we are confident that our focus on operational excellence and customer-centric approach will be instrumental in unlocking the full potential of our Monro.Forward strategy. Importantly, our commitment to our teammates will be critical to further solidify our position as a field-led, best-in-class service organization to drive sustainable growth,” Broderick said. “Lastly, our proven business model and financial flexibility position us well to capitalize on additional market share opportunities through strategic and value-accretive acquisitions and greenfield expansion to deliver long-term shareholder value.”

Monro ended the quarter with cash and cash equivalents of roughly $17 million and availability on its revolving credit facility of some $372 million.

“In fiscal 2022, we continue to expect approximately $15 million to $20 million in structural cost savings, in addition to $5 million in benefits from store closures compared to fiscal 2020,” said Brian D’Ambrosia, company CFO. “In addition, we remain focused on working capital improvement and we believe we have additional opportunity in this area.”

Monro declined to offer full-year guidance due to the fluid nature of the pandemic, but D’Ambrosia said the company expects comparable store sales growth to moderate compared with first-quarter results, and Monro expects to spend some $30 million to $45 million in capital expenditures during fiscal 2022.

“We expect tire and oil costs to increase year-over-year. And in light of cost increases in general inflation in the current environment, we’ll continue to leverage our diversified supply chain and cost leadership position,” D’Ambrosia added. “We have a successful track record of operating in an inflationary environment while maintaining and expanding gross margins.”

Separately, Monro recently released its inaugural Corporate Responsibility Report, Monro.Forward Responsibly, covering fiscal 2021. The report is available on the company’s corporate website.

Shares of company stock (Nasdaq: MNRO) Wednesday afternoon were down more than 7 percent to $59.

[email protected] / 585-653-4021
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Xerox reports impressive second quarter earnings

Xerox Holdings Corp. shares were up roughly 5 percent on Tuesday following an earnings report that beat Wall Street estimates.

Shares of company stock (NYSE: XRX) were trading $24.75 this afternoon, up from today’s opening price of $23.54.

For the second quarter ended June 30, the Norwalk, Conn., company reported revenue of $1.79 billion, up from $1.47 billion in the second quarter last year. Net income for the quarter was $91 million, compared with $21 million in the year-ago quarter. Earnings for the quarter rose to 46 cents from 11 cents a year ago.

Analysts had expected earnings of 26 cents per diluted share on sales of $1.09 billion.

John Visentin
John Visentin

“We saw growing demand for our products and services in the second quarter. Increased equipment sales and print volumes in many regions are consistent with a continuing, gradual return to the office and give us confidence to reaffirm our revenue and cash flow guidance for the year,” said Xerox Vice Chairman and CEO John Visentin. “Over the past 18 months, our team has successfully managed through an unprecedented level of uncertainty to continue delivering value to our clients. This focus will continue in the second half of the year as we manage through global supply chain disruption while investing for sustainable, long-term growth.”

Xerox reported $198 million of free cash flow, up $183 million from a year ago.

Company officials said they expect that measures to control the pandemic and expand economic activity will result in a moderate economic improvement in 2021, but that in the near term, recovery may be uneven and affected by the emergence of new variants of the COVID-19 virus, which could result in a resurgence of cases in various countries and regions, affecting the company’s bottom line.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer