HIALEAH, FL -- Electronics contract manufacturer Simclar Inc. reported 2005 revenue of $61.2 million, up 14% from 2004. The net income was $1.3 million, compared to $2.3 million in 2004.

Much of the revenue gain -- 55% -- came via acquisitions; year-on-year sales of preexisting business units rose 6.5%.

For the year, pretax income fell to $2.2 million, from $3.4 million, due to losses from the company's North American unit, startup and preproduction costs of its new sheet metal facility in Mexico, a significant decrease in sales at one plants, and increased depreciation and interest expenses.

For the fourth quarter ended Dec. 31, the pretax profit was $941,000 on sales of $18.3 million.

Gross margin improved to 13.7% from 11% sequentially and 10.9% for the same period last year, due to higher plant utilization and favorable product sales mix. Fourth-quarter sales at the firm's cable and harness operations in Hialeah rose 112% over the third quarter and 149% over last year.

Cash flow from operations was $1.5 million, down slightly. At year end the company had cash and cash equivalents of $834,000, up from $280,000 at the end of 2004. Average days sales outstanding was 55.3, up from to 54.2 in 2004. Inventory turnover was up 0.3 turns to 4.4 for the year.

Chairman Sam Russell said, "After a disappointing start to the year, I am very pleased with the improvements in performance as the year progressed, culminating in excellent levels of sales and profitability in the fourth quarter. We continue to grow organically and through strategic acquisitions."

Last year the company acquired the former Litton backplane fabrication and assembly company in Springfield, MO, and renamed it Simclar Interconnect Technologies. The company did warn in an SEC filing that servicing its debt "requires us to dedicate a substantial portion of our cash flow from operations to payments [and] could reduce amounts for working capital and other general corporate purposes."

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