SCHAUMBURG, IL -- Sparton Corp. swung to a fiscal fourth quarter net profit of $2.2 million, a considerable improvement over a loss of $8.8 million a year ago.

For the period ended June 30, the contract electronics manufacturing services company reported net sales of $40 million, down from $58.8 million last year, reflecting the full disengagement from several significant customer contracts (including Honeywell) within its EMS business unit during the second half of fiscal 2009 and first quarter of fiscal 2010. The company ended the quarter with $37.7 million in working capital and minimal long-term debt.The current results included $2 million in one-time charges as the company completed its restructuring.

EMS sales were down 51% to $12.4 million for the quarter. The unit's operating loss was $961,000, up from a loss of $8.3 million a year ago.

For the fiscal year, Sparton had sales of $174 million, down 21.6% year-over-year. Net income rose to $7.4 million, however, versus a loss of $15.8 million in fiscal 2009. EMS sales were down 55% to $57.4 million. The EMS unit's operating loss was $2.1 million, up from a loss of $9.9 million in fiscal 2009.

The firm generated $19.9 million in cash flow from operations, paid down $21.1 million of debt and had $30.6 million of cash as of June 30.

Sparton president and CEO Cary Wood said, “Overall performance within our EMS business unit fell short of our expectations in the fourth quarter and was negatively impacted by unfavorable product mix, compounded by certain program startup costs. Through our continued implementation of Lean Enterprise, we remain confident that we will ultimately be successful in increasing the EMS gross margins to acceptable levels.”

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