MILPITAS, CA--(Marketwired - Oct 29, 2013) - Sierra Monitor Corporation (
- Reported record third quarter sales of $4.9 million, an increase of 22% over the third quarter of 2012
- Achieved third quarter income from operations of $869,123, an increase of 242% over the previous year
- Posted third quarter 2013 net income of $521,499, a 242% increase over the third quarter of 2012
- Recorded nine month year-to-date sales of $14.1 million
- Earned year-to-date net income of approximately $1.2 million, an increase of 9% over the corresponding period in the previous year
- Increased GAAP earnings per share for the third quarter and nine months to $0.05 and $0.11, respectively and Non-GAAP earnings per share for the third quarter and nine months to $0.06 and $0.14, respectively
- Ended the third quarter of 2013 with a strong balance sheet, approximately $3.5 million of cash on hand and no bank debt
- Paid fourth consecutive quarterly dividend of $0.01 per share on August 15, 2013
- Shipped an order valued at over $500,000 to the United States Navy to maintain on-board gas detection sensors for life safety systems.
- Delivered propane detection modules for installation on skid mounted systems used for measuring product volumes at ownership transfer points in North Dakota gas and oil fields.
- Began shipments of ProtoCessor modules that enable interface between fan controls and building automation systems to a new OEM customer manufacturing high volume, low speed commercial fans.
- Received an order for 100 gas and flame detectors to be used in very large, high horsepower engines that are converted from conventional diesel fuel to operate on a combination of natural gas and diesel fuel.
- Shipped FieldServer Gateway orders valued at over $100,000 to enable lighting control panels to interface with building automation systems.
- Supplied over $125,000 worth of gas detection equipment for an upgrade project for Kuwait Oil Company.
Third Quarter and First Nine Months of 2013 Financial Results
Net sales for the quarter ended September 30, 2013 were $4,932,632, an increase of 22.1% from $4,040,406 reported for the same period of 2012. For the nine months ended September 30, 2013, sales were $14,077,322 compared to $14,907,621 for the same period of 2012.
Sierra Monitor posted GAAP net income of $521,499 or $0.05 per share (basic and diluted), for the quarter ended September 30, 2013, compared to GAAP net income of $152,395 or $0.02 per share (basic and diluted), for the same period of 2012. Sierra Monitor posted GAAP net income of $1,155,294, or $0.11 per share (basic and diluted), for the nine months ended September 30, 2013, compared to GAAP net income of $1,060,326, or $0.11 per share basic and $0.10 per share diluted, for the same period of 2012.
Sierra Monitor posted non-GAAP net income of $589,333 or $0.06 per share (basic and diluted), for the quarter ended September 30, 2013 compared to non-GAAP net income of $274,322 or $0.03 per share (basic and diluted), for the same period of 2012. Sierra Monitor posted non-GAAP net income of $1,435,284, or $0.14 per share basic and diluted, for the nine months ended September 30, 2013, compared to non-GAAP net income of $1,403,890, or $0.14 per share (basic and diluted), for the same period of 2012.
"We are very pleased with Sierra Monitor's performance during the third quarter of 2013," said Gordon R. Arnold, president and chief executive officer. "Our team produced strong third quarter sales, achieved a gross margin of 61%, and posted a 242% increase in both income from operations and net income. Our nine-month year-to-date sales in 2012 included a single order valued at over $2.5 million. When adjusted for that single order, our nine month sales in 2013 are 13% higher than the prior year. With profitable operations, positive cash flow and a strong balance sheet we will continue to challenge ourselves toward further record levels of achievement."
Sierra Monitor had $3,505,184 in cash at September 30, 2013 with no bank borrowings. Trade receivables were $2,364,642 at September 30, 2013 while the company's Days Sales Outstanding was 42 days.
About Sierra Monitor Corporation
Sierra Monitor Corporation designs, manufactures and sells electronic safety and environmental instrumentation. The company's unique protocol translator product lines enable communication between disparate electronic systems overcoming protocol language barriers. By enabling communication between central building automation systems and many electronic subsystems, such as fire panels, chillers and air handlers, Sierra Monitor assists with the integration of energy saving building automation systems. The company's products improve the safety and comfort of workers while contributing to climate and natural resource protection. Sierra Monitor's intelligent hazardous gas detection systems can be found in a broad range of applications including US Navy ships, wastewater treatment facilities, refineries, offshore oil platforms, chemical plants, parking garages and underground telephone vaults providing 24/7 protection of personnel and facilities.
The Company's vision is to capitalize on the expanding worldwide demand for knowledge-based products and services that improve operational performance, productivity, efficiency and safety in building automation, industrial and military applications, while reducing demands on resources and energy consumption. For more information visit: http://www.sierramonitor.com/
|SIERRA MONITOR CORPORATION|
|Statements of Operations|
|For the three months ended |
|For the nine months ended |
|Cost of goods sold||1,915,356||1,700,007||5,756,167||6,703,287|
|Research and development||548,153||523,310||1,626,808||1,641,118|
|Selling and marketing||1,040,317||1,012,646||3,127,398||3,101,386|
|General and administrative||559,683||550,572||1,650,795||1,694,828|
|Income from operations||869,123||253,871||1,916,154||1,767,002|
|Income before income taxes||869,165||253,990||1,919,052||1,767,210|
|Income tax provision||347,666||101,595||763,758||706,884|
|Net income available to common shareholders per common share|
|Weighted average number of common shares used in per share computations:|
|SIERRA MONITOR CORPORATION|
|Assets||September 30,||December 31,|
|Cash and cash equivalents||$||3,505,184||$||2,306,258|
|Trade receivables, less allowance for doubtful accounts of approximately $80,000 in 2013 and 2012||2,364,642||1,913,185|
|Income tax deposit||120,796||120,796|
|Deferred income taxes||335,730||335,730|
|Total current assets||9,290,055||7,951,136|
|Property and equipment, net||350,943||289,505|
|Liabilities and Shareholders' Equity|
|Accrued compensation expenses||454,244||259,546|
|Other current liabilities||75,878||89,989|
|Income taxes payable||236,358||-|
|Total current liabilities||1,611,346||1,063,508|
|Deferred tax liability||59,419||59,419|
|Commitments and contingencies|
|Common stock, $0.001 par value; 20,000,000 shares authorized; 10,104,311 and 10,004,311 issued and outstanding in 2013 and 2012 respectively||10,104||10,004|
|Additional paid-in capital||3,002,131||2,871,898|
|Total shareholders' equity||8,235,606||7,253,107|
|Total liabilities and shareholders' equity||$||9,906,371||$||8,376,034|
NON-GAAP FINANCIAL MEASURES
The accompanying news release dated October 29, 2013 contains non-GAAP financial measures. Table C reconciles the non-GAAP financial measures in that news release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating expenses, non-GAAP profit from operations and related non-GAAP profit as a percentage of revenue, non-GAAP net profit and basic and diluted non-GAAP net profit per share.
Sierra Monitor continues to provide all information required in accordance with GAAP and does not suggest or believe non-GAAP financial measures should be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Sierra Monitor believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating results primarily because they exclude amounts the Company does not consider part of ongoing operating results when assessing the overall Company performance.
We believe that our non-GAAP financial measures facilitate the comparison of results for current periods with results for past periods. We exclude the following items from non-GAAP financial measures:
Depreciation and Amortization of Tangible and Intangible Assets
In accordance with GAAP, depreciation and amortization of tangible and intangible assets includes depreciation of purchased capital assets and amortization of intangible assets including third party approval fees. We exclude these amounts from our internal measures for budget and planning purposes.
Provision for Bad Debt Expense
We maintain an allowance for doubtful accounts that is analyzed on a periodic basis to ensure that it is adequate to the best of management's knowledge. We exclude these amounts from our internal measures for budget and planning purposes.
Provision for Inventory Losses
We evaluate our inventories for excess or obsolescence on a quarterly basis. Inventories identified as slow moving or obsolete are determined based on historical experience and current product demand. The quarterly analysis is used to adjust the provision for inventory losses. We exclude the provision for inventory losses from our internal measures for budget and planning purposes.
Deferred Income Taxes
The effect of changes in deferred tax balances is non-cash and is not comparable across periods or with other companies. We exclude these amounts from our internal measures for budget and planning purposes. There are no deferred income taxes reported in the current reporting periods.
Stock-based Compensation Expense
Our non-GAAP financial measures exclude stock-based compensation expenses, which consist of expenses for stock options. While stock-based compensation is an expense affecting our results of operations, management excludes stock-based compensation from our budget and planning process. For these reasons we exclude stock-based compensation expenses from our non-GAAP financial measures. We compute weighted average dilutive stocks using the methods required by GAAP for both GAAP and non-GAAP diluted net income per share.
Sierra Monitor refers to these non-GAAP financial measures in evaluating and measuring the performance of our ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate our internal comparisons to historical operating results. We are reporting non-GAAP financial measures because we believe that the inclusion of comparative numbers provides consistency in our financial reporting. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Sierra Monitor believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with Sierra Monitor's financial results as determined in accordance with GAAP and that these measures should only be used to evaluate Sierra Monitor's financial results in conjunction with the corresponding GAAP measures, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Because of these limitations, Sierra Monitor qualifies the use of non-GAAP financial information in a statement when non-GAAP information is presented. In addition, the exclusion of the charges and expenses indicated above from the non-GAAP financial measures presented does not indicate an expectation by Sierra Monitor management that similar charges and expenses will not be incurred in subsequent periods.
|SIERRA MONITOR CORPORATION|
|Reconciliation of GAAP to Non-GAAP Operating Results|
|For the three months ended |
|For the nine months ended |
|GAAP Net Income||$||521,499||$||152,395||$||1,155,294||$||1,060,326|
|Depreciation and amortization||65,618||76,746||189,071||222,032|
|Provision for bad debt expense||(3,636||)||9,084||(3,479||)||15,434|
|Provision for inventory losses||(16,123||)||11,602||27,065||34,958|
|Stock based compensation expense||21,975||27,495||67,333||71,140|
|Total adjustments to GAAP net income||67,834||121,927||279,990||343,564|
|Non-GAAP Net Income||$||589,333||$||274,322||$||1,435,284||$||1,403,890|
|Non GAAP Net Income Per Share:|
|Weighted-average number of shares used in per share computations:|