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Quotes & Info
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| WSCI > SEC Filings for WSCI > Form 10-Q on 30-Mar-2009 | All Recent SEC Filings |
30-Mar-2009
Quarterly Report
Sales from the Company's biosciences market totaled $97,000 and $122,000 for the
quarter ended March 1, 2009 and February 24, 2008, respectively. Year-to-date
sales for the biosciences market were $220,000 and $293,000 for the twenty-six
weeks ended March 1, 2009 and February 24, 2008, respectively. The Company
believes that the biosciences market has also been negatively affected by the
economic recession.
Sales from the Company's other revenue markets are at or less than 1% of total
sales in the current year and are immaterial to the Company's revenues as a
whole.
Gross margin decreased to 5% for the quarter ending March 1, 2009 versus 21% in
the year ago period. Year-to-date gross margins were 10% and 20% for the
twenty-six week periods ending March 1, 2009 and February 24, 2008,
respectively. The decrease in gross margin is attributable to the sales decline
and corresponding inefficiencies created from the lower volumes. Gross margins
were also affected by program start-up costs in the energy business in the
quarter ended March 1, 2009.
Selling and administrative expense of $558,000 for the quarter ending March 1,
2009 was $92,000 lower than in the prior year period due primarily to lower
compensation expense. Year-to-date selling and administrative expense of
$1,140,000 was $86,000 lower than the comparable prior year period due primarily
to the same reason.
Interest expense in the second quarter of fiscal 2009 was $117,000, which was
$40,000 more than the second quarter of fiscal 2008 amount of $77,000.
Year-to-date interest expense for fiscal 2009 of $210,000 was higher than the
prior year-to-date amount by $65,000. The higher interest costs are as a result
of the increased borrowing for investments in new equipment and a building
addition made by the Company.
The Company recorded income tax expense at an effective tax rate of 36% for the
quarter and year-to-date periods ended March 1, 2009 and 35% for the quarter and
year-to-date periods ended February 24, 2008.
Liquidity and Capital Resources:
On March 1, 2009 working capital was $4,090,000 and did not change significantly
as compared to $4,188,000 at August 31, 2008. The ratio of current assets to
current liabilities at March 1, 2009 was also comparable at 2.05 to 1.0 compared
to 1.97 to 1.0 at August 31, 2008.
As discussed in the Notes to Condensed Consolidated Financial Statements, the
Company renewed its $1,000,000 revolving credit agreement with its bank during
the fiscal 2009 second quarter. Interest on the renewed agreement is at LIBOR
plus 2.75%, however the rate shall never go below a floor of 4.50%.
It is the Company's belief that its current cash balance, plus future internally
generated funds and its line of credit, will be sufficient to enable the Company
to meet its working capital requirements through the next 12 months.
Cautionary Statement:
Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases and in oral
statements made with the approval of an authorized executive officer that are
not historical or current facts are "forward-looking statements." These
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made and are not
predictions of actual future results.
The following risks and uncertainties, as well as others not now anticipated, in
some cases have affected, and in the future could affect, the Company's actual
results and could cause the Company's actual financial performance to differ
materially from that expressed in any forward-looking statement: (i) the
Company's ability to obtain additional manufacturing programs and retain current
programs; (ii) the Company's ability to timely and cost effectively ramp up new
programs; (iii) the loss of significant business from any one of its current
major customers could have a material adverse effect on the Company; (iv) the
Company was dependent upon two customers for 87% of its revenues in fiscal year
2008 and expects that a significant portion of its future revenue will be
derived from these customers; (v) a significant downturn in the industries in
which the Company participates could have an adverse effect on the demand for
Company services; (vi) our sales are concentrated in a limited number of highly
competitive industries, each with a limited number of customers; (vii) the
prices of our products are subject to a downward pressure from customers and
market pressure from competitors; (viii) the Company's ability to curtail its
costs and expenses for new manufacturing programs, commensurate with expected
revenues; (ix) the Company's ability to comply with covenants of its credit
facility; (x) fluctuations in operating results due to, among other things,
changes in customer demand for our product in our manufacturing costs and
efficiencies of our operations; and (xi) a trend among our customers toward
outsourcing manufacturing to foreign operations.
The foregoing list should not be construed as exhaustive and the Company
disclaims any obligation subsequently to revise any forward-looking statements
to reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
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