Universal Security Instruments Reports Record Second Quarter Earnings Tuesday November 14, 7:49 am ET Earnings Rise to $0.59/Share on 12.6% Increase in Sales
OWINGS MILLS, Md., Nov. 14 /PRNewswire-FirstCall/ -- Universal Security Instruments, Inc. (Amex: UUU - News) today announced its highest second quarter earnings in the Company's 37-year history. ADVERTISEMENT
The Company reported a 21.8% increase in after-tax net income to $1,416,204, or $0.59 per basic share ($0.57 per diluted share), on net sales which rose 12.6% to $8,018,088 in the quarter ended September 30, 2006, compared to net income of $1,162,695, or $0.52 per basic share ($0.48 per diluted share), and net sales of $7,119,100 for the same period last year. Pre-tax net income rose 81.3% for the quarter to $1,926,159, from $1,062,695 for the comparable quarter.
For the six months ended September 30, 2006, sales rose 14.3% to $16,056,525 versus $14,042,910 for the same period last year. The Company reported a 45.9% increase in after-tax net earnings to $2,993,672, or $1.27 per basic share ($1.20 per diluted share) compared to net earnings of $2,052,465 or $0.93 per basic share ($0.85 per diluted share) last year. Universal's pre-tax net income rose 107.5% for the first six months of the year to $3,869,627, from $1,865,037 for the comparable six months.
Included in the Company's three and six-month results was a provision for income tax expense in the amount of $509,955 and $875,955, compared to a net tax benefits of $100,000 and $187,428 for the same periods last year. Also included in last year's six months results were legal fees of approximately $430,000 associated with the settlement of a suit brought by a former director and Company executive.
"We are very pleased with the results for the quarter, despite the challenges of a softening housing market. Substantially increased financial results from our Hong Kong Joint Venture also contributed to the record results for the quarter. We continue to work to leverage our strengths and reduce our dependence to any single sector going forward. Our recent acquisition of steel conduit manufacturing facilities in Canada represent an important element in this strategy," said Harvey Grossblatt, chief executive officer."
UNIVERSAL SECURITY INSTRUMENTS, INC. is a U.S.-based manufacturer (through its Hong Kong Joint Venture) and distributor of safety and security devices. Founded in 1969, the Company has a 37-year heritage of developing innovative and easy-to-install products, including smoke, fire and carbon monoxide alarms. For more information on Universal Security Instruments, visit our website at http://www.universalsecurity.com .
I don't think the inventory increase should be a concern, especially given the strong growth in sales. UUU is not like a department store where high inventory means that markdowns will likely be necessary before the season changes. UUU's inventory generally keeps (unless a model is doscontinued) and gets them ahead of expected demand.
The results were excellent. We're basically growing at twice the PE. At least 1 x is fully justified and I very much doubt we will stay at a .5 PEG. UUU has now demonstrated multiple strong growth quarters and deserves credibility for putting up numbers consistently and despite a weak housing market.
For the first six months of this year Eyston had net income of 4,513,465. Our share was half or 2,256,732. For all of last year our income from Eyston was 2,109,594. New plant was justified and looks good for the year. Jeris