Acquisitions Boost Sparton's Q2 PDF Print E-mail
Written by Mike Buetow   
Tuesday, 04 February 2014 10:41

SCHAUMBURG, IL -- Sparton today announced fiscal second-quarter sales at its Complex Systems segment, which provides electronics manufacturing services,rose 30% year-over-year to $18.3 million. Adjusted operating income at the unit was up 5.5% to $1 million for the period ended Dec. 31.

About $3.1 million in net sales were the result of the acquisitions of Creonix and Beckwood Services. Excluding these sales and a decrease in intercompany sales of $100,000, CS sales to legacy external customers increased $1.3 million, or 13%, from the same quarter last year.

Gross profit rose to 10.6%, up 40 basis points on increased capacity utilization, partially offset by unfavorable product mix.

For the period ended Dec. 31, overall company sales rose 26% year-over-year to $84.6 million, boosted by the acquisitions of Onyx, Creonix, Aydin and Beckwood. Organic sales were up 5% from a year ago. Operating income was $5.3 million, up from $4.2 million, and net income was $3.5 million, down from $4.8 million.

The December acquisition of Beckwood, now part of the company's Complex Systems segment, is expected to add $18 million in annualized revenue.

President and CEO Cary Wood said, "The addition of Beckwood Services meets aspects of our growth strategy by providing Sparton’s entrance into the Northeast geographic market as well as adding industrial control capabilities that further enhance our offerings within the electromechanical value stream.” Beckwood is expected to be accretive to earnings within 12 months.

The company’s Medical segment had net sales of $44.3 million, up 27.3%, aided by $13.1 million in new revenue resulting from the acquisition of Onyx. Defense and Security Systems was up 15% to $26.1 million, including $4 million in new sales resulting from the acquisition of Aydin.

As of Dec. 31, the company had borrowed $25 million against its $65 million credit facility and had available cash and cash equivalents of $1 million. “Our remaining credit facility availability, coupled with the facility's potential $35 million accordion feature provides the company with flexibility as we continue to pursue strategic acquisitions as part of our growth plan," Wood said.

Sparton did not provide specific financial guidance for the coming quarter. Said Wood, “The second quarter’s strong results build upon the success of the first quarter. We continue to experience positive momentum from our new business development process with additional new business wins, increased inclusion of our inertial navigation sensors in key military projects, engineering wins from the sale of those products and continued interest in complementary and compatible acquisitions. We expect the second half of the year will continue to produce results at or above current performance levels.”

 

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