LaBarge Guides for Large Sales Drop
The company struck a ominous tone in a press release issued today. “Despite relative strength in defense, our largest market sector, we anticipate that fiscal 2009 second-half results will be negatively impacted by the declines in current-year industrial and natural resources orders, and the absence of Eclipse shipments which amounted to approximately $8 million in last year’s second half," chief executive and president Craig LaBarge said.
"Specifically, we expect that fiscal 2009 shipments to industrial and natural resources customers will weaken further in the fiscal 2009 second half. Based on the visibility we have today, we expect that fiscal 2009 second-half sales, excluding revenues from the Pensar acquisition, will be down a little more than 20% from last year’s second half. Including revenue from the Pensar acquisition, we expect fiscal 2009 second-half sales will be down approximately 5% from last year’s second-half levels."
During the quarter, LaBarge took a one-time writeoff of $3.7 million for inventory and accounts
receivable related to the Chapter 11 bankruptcy reorganization of Eclipse Aviation.
The newly acquired Pensar Electronic Solutions operation, which LaBarge purchased on Dec. 22, accounted for less than $200,000 in sales during the quarter. The site generated $52.4 million in calendar 2008 sales, and adds several new customers and expands LaBarge’s presence in the medical and industrial markets, the company said.
Gross margin was 15%, down from 19.9% in the year-ago second quarter. Excluding the Eclipse-related charge, gross margin was 21.2%. Net cash flow from operations was $6 million, up from 97,000.
Shipments to defense customers mad up 49% of net sales, up from 35% last year. Natural resources customers made up 20% of net sales, industrial customers 18%, and medical 6%.
