Wayne County’s Seneca Foods Corp. this week reported an improvement in its second-quarter bottom line and an increase in its gross margin.
For the quarter ended Sept. 26, the manufacturer reported sales of $390.3 million, up from $370 million in the same quarter last year. Net income increased to $18.1 million from $4.6 million in the year-ago quarter. On a per-share basis, earnings improved to $1.97 from 49 cents a year ago.
“The second quarter showed solid results when compared to the prior year. Strong demand driven by our customers anticipated consumer pantry loading due to COVID-19 continues to help drive sales and net income,” President and CEO Paul Palmby said in a statement.
Gross margin for the quarter increased from 6.5 percent to 12.5 percent, compared with the prior year. Company officials said the increase was due to higher selling prices and higher sales volume in the second quarter of fiscal 2021.
Seneca Foods is one of North America’s leading providers of packaged fruits and vegetables, with facilities located throughout the United States, including its headquarters and manufacturing facility in Marion. Its products are primarily sourced from more than 1,600 American farms.
The company holds the largest share of the retail private label, food service and export canned vegetable markets, distributing to more than 90 countries. Products also are sold under the brands of Libby’s, Aunt Nellie’s, Green Valley, CherryMan, READ and Seneca labels, including Seneca snack chips.
Shares of company stock (Nasdaq: SENEB) ranged from $37.50 to $38.42 this week.
Graham Corp. this week reported an improved second-quarter bottom line, beating Street estimates for sales and earnings.
For the quarter ended Sept. 30, the Batavia manufacturer reported revenue of $28 million, up from $21.6 million in the second quarter last year. Net income for the quarter improved to $2.7 million from $1.2 million in the previous year. On a per-share basis, earnings were 27 cents, up from 12 cents last year.
Analysts had expected earnings of 7 cents on sales of $23.2 million.
James Lines
“Results in the second quarter benefited from strong defense industry sales, including a materials only order. We also had the benefit of improved efficiencies in both our supply chain and our production facilities, which enabled us to accelerate conversion of both large and short cycle orders in the quarter,” said President and CEO James Lines. “As a result, higher volume drove operating leverage, which is inherent in our business model.”
Domestic sales were 62 percent of total sales, compared with 73 percent in the second quarter of fiscal 2020. International sales were 38 percent of total sales, compared with 27 percent in the prior-year period.
“We had strong orders in the quarter of $35 million. This order level was driven by our strategy to further our geographic market reach and diversify our end markets, which includes increasing our participation in the defense industry,” Lines said. “We remain confident in our ability to achieve the long-term goal of significantly growing our business organically, as well as continuing to consider acquisition opportunities.”
Graham is increasing revenue guidance for fiscal 2021 while raising expectations for gross margin and tightening the range for SG&A expense. The company expects revenue between $93 million and $97 million and gross margin between 21 percent and 23 percent.
Shares of company stock (NYSE: GHM) closed Tuesday at $13.33 and climbed to $13.91 following Wednesday’s reporting. Graham stock was trading at $13.63 midday Friday.
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Rochester’s Transcat Inc. this week reported record second-quarter operating income and a strong gross margin.
For the quarter ended Sept. 26, the manufacturer reported sales of $41.6 million, compared with $41.8 million in the second quarter last year. Net income for the quarter fell to $2.02 million from $2.38 million a year ago. Gross margin improve to 27.6 percent from 25 percent.
Lee Rudow
“Our service segment delivered another excellent quarter, reaching the second-highest gross margin level in company history,” said Transcat President and CEO Lee Rudow. “Technician productivity, expense reductions and strategic pricing drove the margin improvement, which was further helped by a favorable mix and the results of pipettes.com. Our teams have done a tremendous job leveraging our technology investments and have remained focused on driving efficiencies and better cost controls in our lab network.”
Operating expenses for the quarter increased nearly 14 percent due to investments to further technology initiatives and incremental expenses related to pipettes.com.
“In addition to the high level of performance in our service segment, we were certainly encouraged with the distribution segment, where sales grew significantly over our first quarter of fiscal 2021,” Rudow said. “Overall, our service margin performance helped drive record second quarter consolidated operating income of more than $3 million, exceeding our expectations. Additionally, we continued to generate strong cash from operations, which was used in part to reduce debt and fund technology investments.”
Transcat is a provider of accredited calibration, repair, inspection and laboratory instrument services.
“The results of the second quarter were strong and we are pleased with the significant progress made in our service margin expansion initiatives,” Rudow said. “Our balance sheet is solid and the M&A pipeline is active. Additionally, we believe our new customer pipeline positions us well for strong organic growth as we work through these current challenging times.”
Since reporting earnings on Tuesday, shares of company stock (Nasdaq: TRNS) have climbed from $27.63 to $31 midday Friday.
Newark’s Ultralife Corp. reported a drop in third-quarter sales and income.
For the period ending Sept. 30, the Wayne County battery and power solutions company posted revenue of $24.4 million, a more than 11 percent decrease compared with $27.5 million for the third quarter of 2019. The company reported a 22 percent increase in core battery sales across diversified end-markets, which was offset by lower oil and gas market and Communications Systems sales. Total commercial sales decreased by more than 10 percent and government/defense sales decreased 12.5 percent from the 2019 period.
Net income for the third quarter was $400,000, or 3 cents per diluted share, compared with $900,000, or 6 cents per share, in the year-ago quarter. Adjusted earnings were 4 cents per diluted share, compared with 7 cents in the third quarter last year.
Michael D. Popielec
“Effective execution of both our end-market diversification strategy and operating discipline during the third quarter sustained profitability and positive cash flows, despite a reduction in total company results largely due to the continuing global economic impact of the pandemic,” said Ultralife President and CEO Michael Popielec. “By preserving profitability and continuing to improve working capital management, during the quarter we also further reduced debt by $7.1 million. Supported by a solid balance sheet and resilient business model, we are committed to completing our strategic growth projects and are well-positioned to withstand current economic headwinds.”
Ultralife serves its markets with products and services ranging from power solutions to communications and electronics systems. Through its engineering and collaborative approach to problem-solving, Ultralife serves government, defense and commercial customers across the globe.
The company did not provide a financial outlook for the next quarter or year-end. Shares of company stock (Nasdaq: ULBI) were down 15 cents to $5.57 in Thursday morning trading.
Monro Inc. on Wednesday reported a drop in second-quarter sales and earnings, blaming a reduction in traffic due to COVID-19.
For the quarter ended March 27, the Rochester-based automotive undercar repair and tire company reported revenue of $288.6 million, down 11 percent from $324.1 million in the second quarter last year. The total sales decrease was driven by a comparable store sales decline of 11.4 percent, as well as from closed stores, officials said.
Net income for the quarter was $12.8 million, compared with $20.3 million in the same quarter last year. Diluted earnings per share were 38 cents, down from 60 cents a year ago.
Analysts had expected earnings of 29 cents on sales of $293.7 million.
The company reduced its store hours during the pandemic and added hours at locations where demand improved. Company officials said Monro has “right-sized” store staffing levels since the beginning of the pandemic and has strategically added staffing back to its stores as demand improved.
During the second quarter, Monro closed six company-operated stores, of which five are temporarily closed as a result of damage sustained during Hurricane Laura in Louisiana and Tropical Storm Isaias in the Northeast. During the second quarter, Monro opened one company-operated store, ending the quarter with 1,242 company-operated stores and 97 franchised locations.
Robert Mellor
“While the disruption created by the COVID-19 pandemic has continued to weigh on our top-line results in the second quarter and third quarter-to-date, with comparable-store sales down approximately 12% in fiscal October, our performance is tracking in-line with key industry indicators,” said Robert Mellor, Monro chairman and interim chief executive. “Given the ongoing challenges in the operating environment, we continue to focus on the aspects of our business within our control.
“That includes driving profitability by managing our store operating hours and staffing levels to match demand, as well as expanding variable margins through improved tire pricing and labor productivity.
“These efforts combined with targeted cost reductions and working capital management have led to a significant increase in operating cash flow in the first half of the fiscal year,” Mellor said. “Further, we remain committed to our disciplined M&A strategy as evidenced by our continued expansion in the attractive West Coast region with the acquisition of 17 stores in Southern California.”
The Southern California stores are expected to add roughly $20 million in annualized sales, officials said, with a sales mix of 60 percent tires and 40 percent service. The deal is expected to close in the third quarter.
Monro did not provide a company outlook this week due to ongoing uncertainty as a result of the pandemic.
Shares of company stock (Nasdaq: MNRO) were down more than 5 percent to $40.90 in afternoon trading.
Xerox Holdings Corp. on Tuesday reported a decline in third-quarter revenue and earnings but managed to beat Street estimates.
For the quarter ended Sept. 30, the document company reported sales of $1.77 billion, down roughly 19 percent from $2.18 billion in the year-ago quarter. Operating income for the quarter was $131 million, down from $262 million in the third quarter last year. On a per-share basis, earnings were down 40 percent to 41 cents from 68 cents a year ago.
Analysts had expected GAAP earnings of 2 cents on revenue of $1.61 billion.
John Visentin
“The flexibility and financial discipline we have built in our company enabled us to increase earnings and cash flow sequentially. While we can’t reliably predict the ongoing economic impact of the pandemic, we are prepared to respond however events unfold and are committed to delivering positive cash flow and earnings in the fourth quarter,” said Xerox Vice Chairman and CEO John Visentin. “Investments in digital solutions and services are paying off as companies prepare for a more hybrid work experience that shifts seamlessly between the office and home.”
Business highlights during the quarter include:
• Added or renewed contracts with Fortune 500 and public sector clients such as Aflac, Bell Canada, Mizuho Bank, the state of Illinois, the Texas Health and Human Services Commission, Purolator, the Union of Public Purchasing Groups in France and the Government of Bangladesh;
• Grew market share in production in the region Xerox serves and grew share in entry segments in both the Americas and EMEA. Maintained the top market share position in production in the Americas and EMEA, and maintained overall market share leadership for equipment sales revenue in the Americas, according to the most recent IDC data;
• Awarded a contract from the Defense Advanced Research Projects Agency to develop the next phase of the Ocean of Things, its project to expand what scientists know about the seas;
• Expanded the company’s software portfolio with the launch of DocuShare Go, a cloud-based, SaaS content management platform focused on the small and medium-sized business that automates how users organize, share, collaborate and back up business-critical content;
• Honored with several industry awards including “Best Innovation Project of the Year” by Health Tech Digital and named one of the “World’s Most Sustainably Managed Companies” by the Wall Street Journal; and
• Established a new diversity, inclusion and belonging roadmap, focusing on areas where Xerox can make the biggest impact within the company and society, including a partnership with A Better Chance, a nonprofit dedicated to increasing education, access and opportunity for young people of color.
Xerox ended the quarter with cash of $3.24 billion, up from $2.74 billion in the year-ago quarter. Total assets climbed to $15.35 billion from $15.05 billion a year ago.
For the nine-month period, net income fell to $115 million from $542 million in the same period last year. Due to the pandemic, Xerox officials declined to give future financial guidance.
“During the third quarter, corresponding with business reopenings, the rate of decline of equipment installations (including in areas of our business that support our hybrid workplace initiatives) improved, as did printed-page volumes,” officials said in the earnings report. “These operational improvements resulted in a moderation of our rate of revenue decline during the third quarter as compared to the second quarter, which gives us confidence in the resilience and readiness of our business to recover as progress is made to control the pandemic and as businesses and economies reopen.”
Officials added: “During the current year, the most significant impact from the pandemic has been on sales of our equipment and unbundled supplies. However, due to their transactional nature, these revenues experienced the largest recovery during the third quarter and we expect that they will continue to fluctuate and gradually improve concurrent with business reopenings.”
Shares of company stock (NYSE: XRX) spiked early on Tuesday to $19.06 but had settled at $18.63 at midday, down from Monday’s close at $18.92.
EnPro Industries Inc., the parent company of Palmyra’s Garlock Family of Companies, has reported a second-quarter loss of $3.3 million on a 22 percent decline in sales.
For the quarter ended June 30, EnPro reported a sales decrease to $247 million, with a nearly 73 percent segment profit decrease to $10.7 million, driven primarily by the decline in sales volume and non-cash restructuring related costs. Loss from continuing operations was $3.3 million, compared with income of $16.6 million in the year-ago quarter.
On a per-share basis, the loss was 16 cents, compared with earnings of 80 cents per share in the second quarter last year.
“At EnPro, our core values are safety, excellence and respect for all people. As we navigate through these unprecedented times, the health and safety of our approximately 5,000 global employees, their families, our communities, our customers and our suppliers remains our top priority,” said Marvin Riley, CEO of the Charlotte, N.C.-based manufacturer. “I am proud of how the EnPro community has continued to deliver quality products and solutions to our customers, while adopting enhanced safety practices throughout the organization and keeping our core values at the heart of their actions.
“Consistent with our values, at EnPro we stand against the social injustice, intolerance and systemic racism present in our country and I invite you to read our EnPro Standing Together letter on our website that describes our commitment to being part of our enduring solution,” Riley added.
During the second quarter and beyond, EnPro completed several actions in support of its ongoing portfolio shaping work including entering into an agreement to sell its air springs manufacturing business and finalizing the exit of the remaining part of the brake products business. In addition, in June the company announced plans to exit GGB’s bushing block business, headquartered in France.
“The restructuring actions within our STEMCO and GGB businesses represent significant progress toward our long-term strategic goals of refocusing our portfolio on businesses with compelling margins, leading technology, high cash flow return on investment and favorable secular tailwinds; maintaining a balanced approach to capital allocation; increasing aftermarket exposure and recurring revenue opportunities; and leveraging the EnPro operating system for continuous improvement to increase margins and cash flow return on investment,” Riley said.
The company revised its full-year revenue model to a 15 to 25 percent decline, compared with 2019. Earnings are projects to range from 13 to 14 percent for the year, depending on the sales decline and product mix, officials said.
The companies in the Garlock family feature a distributor network covering 75 countries, employ more than 1,900 workers in 16 global operations and operate a total of 12 manufacturing facilities to produce the broadest range of sealing products specifically for industrial applications. The Wayne County company was founded in Port Gibson in 1886 and now serves as the world headquarters for the Garlock Family of Companies.
Since the beginning of August, shares of company stock (NYSE: NPO) have risen more than $10 to $58.62.
IEC Electronics Corp. last week reported an increase in sales and earnings in the third quarter.
For the quarter ended June 26, the Newark manufacturer reported revenues of $47.4 million, up 17 percent from $40.3 million in the year-ago quarter. The company reported net income of $2.1 million, or 20 cents per diluted share, compared with $1.2 million, or 12 cents per diluted share, in the same quarter last year.
Operating cash flow for the quarter was $6 million, up from $400,000 in the third quarter of 2019.
For the first nine months of fiscal 2020, the company reported revenues of $136.3 million, an increase of 21 percent from revenues of $113.1 million for the first nine months of fiscal 2019. Net income for the first nine months was $4.8 million, or 45 cents per diluted share, compared with net income of $3 million, or 28 cents per diluted share in the first nine months of fiscal 2019.
“IEC delivered a strong third quarter as demonstrated by revenue of $47.4 million, representing growth of 17 percent year-over-year, as well as a sequential increase of 7 percent compared to the second quarter of fiscal 2020. Just a year ago, we achieved a company milestone by breaking through our internal $40 million quarterly revenue threshold, at which time we reset our internal quarterly revenue benchmark to $45 million,” said IEC President and CEO Jeffrey Schlarbaum. “Despite the challenging economic and public health landscape of the past several months, we solidly surpassed that revenue benchmark in the quarter, as well as delivered gross margins of 14 percent, which we believe is amongst the highest in our industry, which is a testament to our growing role as a highly capable and reliable electronic manufacturing solutions provider for complex products in highly regulated industries, and also demonstrates the resilience of our employees who have continued to get the job done while navigating a pandemic.”
Schlarbaum said IEC continues to generate bookings from a diverse base of customers and remains focused on end markets that value its exclusively U.S.-based production model and who recognize the advantages of its vertically integrated manufacturing solutions for mission-critical and life-saving products. IEC’s pipeline and backlog remain strong as the company continues to have success attracting new business from new customers and in securing new projects from existing customers, he said.
“Our focus remains on strengthening our capabilities to meet the high complexity manufacturing needs of our customers as a highly capable and reliable electronic manufacturing solutions provider. We continue to see increased interest from the marketplace and believe we are positioned well to achieve continued organic growth and profitability as we close out fiscal 2020,” Schlarbaum added.
Shares of company stock (Nasdaq: IEC) had dropped initially but have rebounded to $8.75 a share on Monday.
Wayne County’s Seneca Foods Corp. this week reported an improved bottom line in the first quarter as the company continues its restructuring.
Net sales for the quarter ending June 27 increased nearly 9 percent to $288.2 million from $265 million in the year-ago quarter. Net income for the quarter was $20.7 million, compared with $1.1 million a year ago. On a per-share basis, earnings were $2.24 for the quarter, up from 12 cents in the first quarter last year.
“During the first quarter, we continued to see improved results from our extensive restructuring undertaken over the last few years. In addition, pantry loading due to the COVID-19 pandemic helped drive our sales,” said Kraig Kayser, president and CEO, in a statement.
Gross margin percentage increased from 7.2 percent to 16.9 percent compared with the prior year three months due to higher selling prices in the first quarter of 2021.
Seneca Foods is one of North America’s leading providers of packaged fruits and vegetables, with facilities located throughout the U.S. Its products primarily are sourced from more than 2,000 American farms. Seneca holds the largest share of the retail private label, food service and export canned vegetable markets, distributing to more 90 countries. Products also are sold under the brands of Libby’s, Aunt Nellie’s, Green Valley, CherryMan, READ and Seneca labels, including Seneca snack chips.
Shares of company stock, which trade on the Nasdaq Global Stock Market under the symbols SENEA and SENEB, were up this week. SENEA began the week at $39.48 and had climbed to $41.91 by midday Friday, while SENEB began the week at $39.25 and rose to $41.40 by midday Friday.
Bausch Health Cos. Inc. plans to spin off Rochester-based Bausch & Lomb Inc. into an independent publicly traded entity as Bausch & Lomb – NewCo. Shares of company stock (NYSE: BHC) soared 28 percent before the opening bell Thursday and were trading up 10 percent mid-morning.
The move will establish two separate companies that include a fully integrated, pure-play eye-health company built on the iconic Bausch & Lomb brand and history of innovation, as well as a diversified pharmaceutical company with leading positions in gastroenterology, aesthetics/dermatology, neurology and international pharmaceuticals, company officials said.
Joseph Papa
“We are committed to taking action to unlock what we see as unrecognized value in Bausch Health shares, and we believe that separating our business into two highly focused, stand-alone companies is the way to accomplish that goal,” said Bausch Health Chairman and CEO Joseph Papa in a statement. “Four years ago, we initiated a multi-phase plan, first to stabilize and then to transform Bausch Health into a company positioned to deliver long-term organic growth. We have divested approximately $4 billion of non-core assets, paid down over $8 billion of debt, resolved numerous legacy legal issues and managed a loss of exclusivity on an approximately $1.4 billion product portfolio, while also investing in R&D, new product launches and core franchises with attractive growth opportunities.”
Last week, Bausch Health settled charges of improper accounting with the U.S. Securities and Exchange Commission. The company agreed to pay $45 million and three of its former top executives also will pay fines. On Wednesday, the company said that the parties in the Canadian securities class action had agreed to resolve the action for $94 million CAD, or roughly $69 million USD, plus an additional amount for settlement administration costs, subject to court approval. The action, filed in the Quebec Superior Court in 2015, alleged violations of Canadian securities laws regarding substantively the same matters as in the U.S. securities class action.
Bausch + Lomb – NewCo will consist of Bausch Health’s global vision care, surgical, consumer and ophthalmic Rx businesses. The segment posted roughly $3.7 billion in revenues in 2019. The second company, BHC, reported 2019 revenue of roughly $4.9 billion. That company will comprise a diversified portfolio of leading durable brands across the Salix, International Rx, Solta, neurology and medical dermatology businesses.
“Our board of directors and management team have been working on alternatives over the last 12 months to determine how to best unlock value across our businesses, and we believe that the time is right to begin the separation process, so each business has greater flexibility to pursue strategic opportunities in their respective markets,” Papa said in the statement.
The Canadian pharmaceutical company expects to report Bausch & Lomb as a separate segment beginning in the first quarter of 2021, pending regulatory approvals.
Separately on Thursday, Bausch Health reported second-quarter revenues of $1.664 billion, compared with $2.152 billion in the same quarter last year. The company’s Bausch & Lomb/International segment revenues were $883 million for the second quarter of 2020, compared with $1.208 billion for the second quarter of 2019, a decrease of $325 million, or 27 percent. The Bausch & Lomb segment revenues represented 53 percent of the company’s total revenues for the quarter.
“Since the COVID-19 pandemic began, our top priority has been to ensure our employees remain safe and that we have the necessary processes in place to protect our supply chain so that we can continue to provide access to our health care products to people around the world,” Papa said. “The impact of the pandemic continues to cause uncertainty in markets globally. While our business recovery appears to be progressing more quickly in some geographies, such as the United States, other markets in Europe and Asia will take more time to return to pre-pandemic levels. Given these variabilities, we are focused on driving market share for our key products, reaching customers in new ways and executing on our launches, such as the upcoming launch of BAUSCH + LOMB INFUSE™ SiHy daily contact lenses, while also optimizing our cost structure to protect the profitability of the company.”
Net loss for the quarter was $326 million, compared with a net loss of $171 million for the second quarter of 2019. The company reported a 56 percent decline in adjusted net income for the second quarter at $165 million, compared with $372 million for the second quarter of 2019.
On a per-share basis, the loss was 92 cents, compared with a loss of 49 cents per diluted share in the year ago quarter.
Bausch Health narrowed its full-year revenue range from $7.8 to $8.2 billion to $7.8 to $8 billion. The company also narrowed its full-year adjusted EBITDA range from $3.15 to $3.35 billion to $3.15 to $3.30 billion.
Ultralife Corp. on Thursday reported a second-quarter decline in revenue, despite increases in two sales segments.
The Newark battery maker reported revenue for the quarter ended June 30 of $28.6 million, down from $29.4 million in the year-ago quarter. Net income for the quarter fell to $1.7 million from $2.3 million a year ago. On a per-share basis, earnings dropped 4 cents to 10 cents in the quarter.
Michael D. Popielec
“Ultralife’s second-quarter adjusted earnings per share of 13 cents reflects the benefits of our end-market diversity and resilient business model in the face of continued business disruptions caused by the pandemic,” said Ultralife President and CEO Michael Popielec. “Our Battery and Energy Products’ medical sales and government/defense sales increased 72 percent and 50 percent year over year, respectively, and when combined with the contribution from SWE, nearly offset Communications Systems sales which were lower due to the completion of shipments on a major contract. Altogether, our second-quarter performance reinforces our view that Ultralife is durably positioned both to sustain profitability and positive cash flow/liquidity through a period of economic weakness and to execute on initiatives to drive future growth opportunities.”
Ultralife reported cash on hand for the quarter of $8.39 million, compared with $7.41 million at the end of the fourth quarter last year. Total assets were $137.6 million, compared with $144.6 million at the end of 2019.
The Wayne County manufacturer serves its markets with products and services ranging from power solutions to communications and electronics systems. Its business segments include Battery & Energy Products and Communications Systems. The company serves the government, defense and commercial customers globally.
Shares of company stock (Nasdaq: ULBI) were up more than 4 percent midday Thursday at $7.27.
Genesee County’s Graham Corp. on Thursday reported a $4 million decline in first-quarter sales and an 18-cent loss on the bottom line.
For the quarter ended June 30, Graham reported revenues of $16.71 million, a 19 percent drop from $20.59 million in the year-ago quarter. The company reported a net loss of $1.82 million, or 18 cents per diluted share, missing Street estimates by 4 cents per share
James Lines
“Our first quarter was heavily impacted by the COVID-19 pandemic, the economic downturn it generated and the effect of the actions we implemented to provide for the safety of our employees and our community,” Graham President and CEO James Lines said in a statement. “Our team has been resilient and, although we began the quarter at just 10 percent of normal staffing capacity, we successfully increased gradually back to normal capacity by early June. We averaged about 50 percent of normal staffing capacity during the quarter because of our proactive response to the COVID-19 pandemic. As a result, our margins and bottom line were heavily impacted.”
Sales to the defense markets were up $1.4 million to $3.5 million and represented 21 percent of total sales. Sales to the chemical/petrochemical market increased $900,000 to $8 million. Sales to the refining market declined $4.8 million to $2.7 million and sales to other commercial markets were down $1.4 million to $2.5 million, the company reported.
Domestic sales were 56 percent of total sales compared with 70 percent in the first quarter of fiscal 2020. International sales were 44 percent of total sales, compared with 30 percent in the prior-year period.
“As we think about fiscal 2021, our expectation is that our second quarter will improve sequentially. Due to the timing of backlog conversion, we expect the back half of fiscal 2021 to be significantly better than the first half generating a larger contribution of total expected revenue. Approximately 60 percent of our backlog will convert to revenue this fiscal year, which reinforces our guidance,” Lines said. “In addition, we are encouraged by the pipeline activity that we are addressing in both the defense industry and emerging markets, specifically India. Despite challenging energy and petrochemical markets, we believe that our opportunities in the defense industry will enable our backlog to grow in fiscal 2021 which will position us well for a stronger fiscal 2022.”
Based in Batavia, Graham is a global business that designs, manufactures and sells critical equipment for the oil refining, petrochemical and defense industries. Shares of company stock (NYSE: GHM) were up slightly at $12.56 midday Thursday.
Monro Inc. on Wednesday reported a 22 percent drop in sales and an 87 percent plunge in earnings in the first quarter.
For the quarter ended March 27, the Rochester-based undercar repair and tire service company reported revenues of $247.1 million, down from $317.1 million in the year-ago quarter. The decline was driven by a comparable store sales decline of nearly 26 percent, partially offset by sales from new stores of $12.7 million.
Net income for the first quarter of fiscal 2021 was $3 million, compared with $22.6 million in the same period last year. Diluted earnings per share were 9 cents, compared with 67 cents in the first quarter of fiscal 2020. Adjusted diluted earnings per share were 15 cents, which excluded 6 cents per share of planned store closing costs. That compares with 69 cents adjusted diluted earnings in the year-ago quarter.
During the first quarter, Monro closed 36 stores, ending the quarter with 1,247 company-operated stores and 97 franchised locations.
Brett Ponton
“Our first-quarter performance demonstrates solid execution despite the unprecedented challenges related to the COVID-19 pandemic, and I would like to thank all of our Monro teammates for their hard work and dedication to safely serving our customers. In-line with our expectations, April represented a low point in our sales performance, with May and June improving sequentially as government restrictions gradually abated through the quarter,” said Monro President and CEO Brett Ponton. “Since the beginning of the pandemic, we have taken a number of proactive steps to mitigate near-term headwinds while maintaining our focus on our Monro.
“Forward initiatives, including our technology-based store staffing model and our tire category management and pricing system, and are pleased that these efforts have begun to bear fruit. In addition to streamlining our operations, we have redirected our marketing efforts towards higher ROI digital channels and made strategic investments in technology, which we believe have been critical in helping us navigate the current environment.”
Officials said the company has completed the rollout of its collaboration with Amazon.com to provide tire installation services at all of its retail tire and automotive service locations across 32 states. Monro’s collaboration with Amazon.com is a key component of its omni-channel strategy to drive improved customer-centric engagement.
Due to the ongoing uncertainty caused by COVID-19, Monro is not offering fiscal 2021 guidance.
“Despite the challenges presented by COVID-19, we are encouraged by the outperformance of our rebranded stores during the first quarter, reinforcing our confidence in our store rebrand and reimage initiative,” Ponton said. “Our solid financial position will allow us to gradually resume this program in the second quarter as we continue our disciplined approach to capital allocation.
“Overall, we remain focused on the aspects of our business within our control, and we believe that the continued execution of our Monro.Forward strategy will enable us to emerge stronger following this pandemic and drive long-term value creation.”
Shares of company stock (Nasdaq: MNRO) were trading down nearly 2 percent at $60.08 midday Wednesday.
Xerox Holdings Corp. on Tuesday reported a significant drop in second-quarter sales and earnings, falling short of Street estimates for revenues by $80 million.
For the quarter ended June 30, the printer giant posted revenue of $1.47 billion, down $798 million from $2.26 billion a year ago. Operating income fell nearly 78 percent in the quarter to $62 million. Net income for the quarter fell from $181 million to $27 million.
On a per-share basis, adjusted earnings were 15 cents, down 81 percent from 79 cents in the second quarter last year. GAAP earnings fell to 11 cents per share from 60 cents a year ago. Analysts had expected a GAAP loss of 26 cents per share.
John Visentin
“I am proud of our employees who did what was necessary during this unprecedented disruption to support our business and clients, especially those delivering essential services,” said Xerox Vice Chairman and CEO John Visentin. “While the bulk of our markets were fully or partially shut down during the quarter, our team’s financial discipline enabled us to deliver positive earnings per share and cash flow while continuing to invest in key areas of growth.”
The bulk of Xerox’s revenues in the second quarter came from service and maintenance, which saw a drop from $1.4 billion last year to $949 million this year. Sales in the quarter fell to $460 million from $800 million in the year-ago quarter.
“No one can control or accurately predict what happens next. We have modeled numerous scenarios to ensure we have flexibility no matter how the pandemic continues to impact global business,” Visentin said.
In response to the COVID-19 crisis, Xerox did not provide full-year financial guidance.
“The continued uncertainty around the spread and resurgence of the virus has changed our prior expectation for an inflection point following the second quarter. While Europe, Canada and some areas of the U.S. are reopening after controlling the rate of new infections, other areas in Latin America and parts of southern and western U.S. are seeing surges that have forced the rollback of business reopenings and impacted their economies,” according to the earnings report. “We experienced some signs of recovery, and a moderation in our rate of revenue declines during the month of June, however, we expect that our business will continue to be impacted by the ongoing uncertainty. Accordingly, we now expect a slower pace of gradual recovery in the second half of the year.”
Shares of company stock (NYSE: XRX) were down more than 2 percent to $15.44 in morning trading Tuesday.
Tompkins Financial Corp., the parent company of Tompkins Bank of Castile, on Friday reported an improved bottom line in the second quarter of 2020.
For the quarter ended June 30, Tompkins reported net income of $21.4 million, up from $19.4 million in the same period last year. Diluted earnings per share were $1.44, up more than 13 percent from $1.27 in the second period last year.
Year-to-date earnings have suffered, however, due to the COVID-19 crisis. The Ithaca-based financial institution reported a 25 percent drop in diluted earnings in the first six months of the year to $1.97. Net income for the first six months was $29.4 million, down from $40.4 million for the same period last year.
Stephen Romaine
“We are pleased to report strong financial results for the quarter despite a very challenging business climate. Although the longer-term impact of the pandemic and related economic conditions are still unknown, there have been several recent positive trends noted with certain national economic indicators, such as reduced levels of unemployment, improving retail sales and improving consumer confidence,” said Tompkins President and CEO Stephen Romaine. “At Tompkins, we have seen several positive trends as well, with very strong mortgage application volumes in the second quarter, higher levels of debit card spending and favorable credit quality measures when compared to last quarter.”
Romaine said Tompkins are encouraged by recent favorable, though the recent rise in COVID-19 cases nationally “makes it clear that much uncertainty remains.”
“We will remain vigilant in monitoring risk trends as we navigate these challenging times,” he said.
Other quarterly highlights include:
• Total loans of $5.4 billion were up $568 million, or 11.7 percent, over June 30, 2019. The increase over the prior year included $465.6 million of PPP loans funded during the second quarter of 2020.
• Total deposits of $6.4 billion increased by $1.4 billion, or 27.8 percent, over June 30, 2019.
• Net interest margin was 3.45 percent for the second quarter of 2020, up from 3.44 percent for the first quarter of 2020, and 3.43 percent for the fourth quarter of 2019.
• The ratio of total capital to risk-weighted assets improved to 13.95 percent, up from 13.62 percent at March 31, 2020, and 13.53 percent at December 31, 2019.
Net interest income was $56.4 million for the second quarter of 2020, compared with $52.3 million reported for the second quarter of 2019. For the year-to-date period, net interest income was $109.3 million, an increase of $5.1 million, or 4.9 percent, from the same six-month period in 2019.
Net interest income benefited from growth in average loans. Average loans were up $297.7 million, or 6.2 percent, in the first six months of 2020, compared with the same six month period in 2019. The increase in average loans includes the benefit of $465.6 million of loans originated under the Small Business Administration’s Paycheck Protection Program (PPP) in the second quarter of 2020.
Average total deposits were up $778.1 million, or 15.7 percent, in the first six months of 2020, compared with the same period in 2019. Average noninterest deposits were up $251.3 billion, or 18.7 percent, in the first six months of 2020, compared with the same period in 2019. Average deposit balances benefited from $465.6 million of PPP loan originations during the second quarter of 2020, the majority of which were deposited in Tompkins checking accounts.
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