KEY TECHNOLOGY, INC.
WALLA WALLA, Wash., Jan. 26, 2017 (GLOBE NEWSWIRE) -- Key Technology, Inc. (NASDAQ:KTEC) announced today sales and operating results for its fiscal 2017 first quarter, ended December 31, 2016.
First Quarter Overview
Net sales for the three months ended December 31, 2016 totaled $27.4 million, compared to $24.8 million recorded in the corresponding quarter last year. The Company reported a net earnings for the quarter of $15,000, or $0.00 per diluted share, compared to a net loss of $1.7 million, or $0.27 per diluted share, in the same period a year ago.
The gross profit for the first quarter of fiscal 2017 was $9.2 million, compared to $7.0 million in the corresponding period last year. As a percentage of net sales, gross profit was 33.7% and 28.1% in the first quarter of fiscal 2017 and 2016, respectively. Operating expenses for the quarter ended December 31, 2016 were $9.1 million, or 33.4% of net sales, compared to $9.4 million, or 37.8% of net sales, in the same quarter last year.
Jack Ehren, President and CEO, stated, “While our first quarter is historically a lower revenue quarter for Key, during the first quarter of fiscal 2017 we realized higher gross margins and positive operating income on revenues of $27.4 million. The quarter-over-quarter gross margin improvement resulted from a more favorable mix of our higher-margin Automated Inspection Systems products and increased margins in our Process Systems product lines.”
Orders and Backlog
Key's backlog at the end of the first quarter of fiscal 2017 was $45.8 million, compared to $37.0 million one year ago. New orders received during the first quarter were $32.5 million, compared to $31.0 million in the corresponding period last year.
Ehren commented, “We again achieved solid orders for the quarter, and we are pleased to have now driven seven consecutive quarters of quarter-over-quarter order growth. Our ending backlog of $45.8 million, up almost 25% over the prior year’s first quarter ending backlog, is one of the largest quarter-end backlogs in our Company’s history.”
Ehren further commented, “We have continued to build on the prior fiscal year’s record order levels in the EMEIA region, with first quarter EMEIA orders increasing by 50% over the prior-year’s first quarter results. First quarter orders included a number of significant wins in North America as well as EMEIA, including important strategic orders for our VERYX® platform in both regions. We continue to see significant opportunities for our new VERYX platform and other Key solutions in all of our core markets globally.”
Conclusion
Ehren concluded, “We remain committed and focused on the execution of our long-term strategy, and generation of attractive returns for the Company and our shareholders. We now have successful installations of our VERYX platform in all of our core markets, and the customer response globally to VERYX continues to be very positive. Throughout 2017, we will continue to release the VERYX platform for new applications and with additional capacities and functionalities, which we expect will continue to drive increased orders for VERYX in fiscal 2017.”
Conference Call
The Company's conference call related to the fiscal 2017 first quarter can be heard live on the Internet at 2:00 p.m. Pacific Time on Thursday, January 26, 2017.
To access the call and audio webcast:
| Phone -- | Q&A participation: |
| Toll-Free: 877-341-5668 International: 224-357-2205 | |
| Internet -- | Audio webcast: |
| http://edge.media-server.com/m/p/xg2hhg8m | |
| Replay -- | Available through Thursday, February 9, 2017 |
| http://edge.media-server.com/m/p/xg2hhg8m |
About Key Technology
Key Technology (NASDAQ:KTEC) is a global leader in the design and manufacture of automation systems including digital sorters, conveyors, and other processing equipment. Applying processing knowledge and application expertise, Key helps customers in the food processing and other industries improve quality, increase yield, and reduce cost. An ISO-9001 certified company, Key manufactures its products at its headquarters in Walla Walla, Washington, USA; in Beusichem, the Netherlands; Hasselt, Belgium; and Redmond, Oregon, USA. Key offers customer demonstration and testing services at five locations including Walla Walla, Beusichem, and Hasselt as well as Sacramento, California, USA and Melbourne, Australia; and maintains a sales and service office in Santiago de Queretaro, Mexico.
Forward-Looking Statements
Certain statements in this press release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. These statements may relate to expected results of operations or gross margins; expected trends in sales, orders, earnings and other financial measures; projected expenses, including general and administrative expenses; national and international economic conditions; the effect of foreign exchange fluctuations; or other future occurrences. Actual results could differ materially from those anticipated in the forward-looking statements as a result of a variety of economic, competitive, and governmental risks and uncertainties. These risks and uncertainties include, among other things: factors that could increase our cost of operations and reduce gross margins and profitability, including expanding into new markets, undertaking complex projects and applications, increasing research and development expenses, and offering increasingly integrated products; acquisitions that may harm our operating results; failure of our existing and new products to compete successfully, which could result in the loss of market share and a decrease in our sales and profits; significant investments in unsuccessful research and development efforts; industry consolidation increasing competition in the food processing equipment industry; advances in technology by competitors adversely affecting our sales and profitability; the failure of our independent sales representatives to perform as expected, thereby harming our net sales; our dependence on certain suppliers leaving us temporarily without adequate access to raw materials or products; and increased or unanticipated costs associated with product warranties adversely affecting our profitability. These and other risk factors are discussed in our filings with the Securities and Exchange Commission, including in Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended September 30, 2016. We undertake no obligation to update or revise any forward-looking statements in this press release as a result of subsequent developments, except as may be required by law.
News releases and other information about Key Technology, Inc. can be
accessed at www.key.net.
(Financial Tables to Follow)
| Key Technology, Inc. and Subsidiaries | |||||||
| Statement of Selected Operating Information | |||||||
| (Unaudited, in thousands, except per share data) | |||||||
| Three Months Ended December 31, | |||||||
| 2016 | 2015 | ||||||
| Net sales | $ | 27,363 | $ | 24,803 | |||
| Cost of sales | 18,133 | 17,823 | |||||
| Gross profit | 9,230 | 6,980 | |||||
| Operating expenses: | |||||||
| Sales and marketing | 4,318 | 4,070 | |||||
| Research and development | 2,494 | 2,279 | |||||
| General and administrative | 2,092 | 2,685 | |||||
| Amortization of intangibles | 227 | 349 | |||||
| Total operating expenses | 9,131 | 9,383 | |||||
| Gain on disposition of assets | 2 | 8 | |||||
| Earnings (loss) from operations | 101 | (2,395 | ) | ||||
| Other income (expense) | (78 | ) | (339 | ) | |||
| Earnings (loss) before income taxes | 23 | (2,734 | ) | ||||
| Income tax expense (benefit) | 8 | (1,035 | ) | ||||
| Net earnings (loss) | $ | 15 | $ | (1,699 | ) | ||
| Net earnings (loss) per share | |||||||
| - basic | $ | 0 | $ | (0.27 | ) | ||
| - diluted | $ | 0 | $ | (0.27 | ) | ||
| Shares used in per share calculations - basic | 6,375 | 6,261 | |||||
| Shares used in per share calculations - diluted | 6,375 | 6,261 | |||||
| Key Technology, Inc. and Subsidiaries | |||||||
| Balance Sheet Information | |||||||
| (Unaudited, in thousands) | |||||||
| December 31, 2016 | September 30, 2016 | ||||||
| Cash and cash equivalents | $ | 7,210 | $ | 10,491 | |||
| Trade accounts receivable, net | 16,301 | 14,024 | |||||
| Inventories | 33,811 | 30,687 | |||||
| Deferred income taxes | 3,924 | 3,934 | |||||
| Prepaid expenses and other assets | 3,683 | 3,285 | |||||
| Total current assets | 64,929 | 62,421 | |||||
| Property, plant and equipment, net | 13,299 | 13,789 | |||||
| Deferred income taxes | 3,268 | 3,001 | |||||
| Goodwill | 9,759 | 10,277 | |||||
| Investment in Proditec | 1,127 | 1,127 | |||||
| Intangibles and other assets, net | 4,780 | 5,369 | |||||
| Total assets | $ | 97,162 | $ | 95,984 | |||
| Accounts payable | $ | 8,764 | $ | 7,381 | |||
| Accrued payroll liabilities and commissions | 5,339 | 4,932 | |||||
| Customers' deposits | 10,536 | 9,139 | |||||
| Accrued customer support and warranty costs | 2,045 | 2,197 | |||||
| Customer purchase plans | 754 | 1,124 | |||||
| Short-term borrowings | — | — | |||||
| Current portion of long-term debt | 527 | 587 | |||||
| Other accrued liabilities | 702 | 956 | |||||
| Total current liabilities | 28,667 | 26,316 | |||||
| Long-term debt | 4,446 | 4,565 | |||||
| Deferred income taxes | 1,557 | 1,761 | |||||
| Other long-term liabilities | 301 | 348 | |||||
| Shareholders' equity: | |||||||
| Common stock | 34,274 | 34,237 | |||||
| Warrants | — | — | |||||
| Retained earnings and other shareholders' equity | 27,917 | 28,757 | |||||
| Total shareholders' equity | 62,191 | 62,994 | |||||
| Total liabilities and shareholder's equity | $ | 97,162 | $ | 95,984 | |||
Contact Jeff Siegal Senior Vice President and CFO Key Technology, Inc. 150 Avery Street Walla Walla, WA 99362 Tel: +1 509-394-3300 Email: jsiegal@key.net URL: www.key.net
