Sparton's EMS Sales Slide, No Buyer in Sight
SCHAUMBURG, IL -- Sparton announced fiscal first quarter net sales of $100.4 million, down 5.9% from year ago.
For the quarter ended Oct. 2, gross profit margin was 17.2%, and adjusted EBITDA was $6.1 million, down from $8.7 million.
The company reiterated it is exploring a sale, but said no progress on that front has occurred.
The company's contract electronics manufacturing segment (MDS) reported gross sales of $65.2 million, down 12.1% from last year. Net sales were $62.8 million, down 8.6% year-over-year. The operating loss was$514,000, down from a profit of $2.34 million. EBITDA excluding corporate allocations was $4.66 million, down from $7.41 million.
Sparton won 64 new programs in its MDS segment in the quarter, with expected aggregate annual revenue of $12.2 million when fully ramped into production. MDS has trailing four quarter win revenue of $62 million, and backlogs in the segment reached $125 million.
“First quarter revenues came in just above the midpoint of our guidance range," interim president and CEO Joseph J. Hartnett said. "However, during the quarter we remained engaged in activities related to the exploration of a possible sale of the company and we have not yet achieved the desired level of success in addressing operating performance issues, implementing cost saving initiatives or carrying out new business development activities. We anticipate that progress in these areas will accelerate upon the completion of the current sale process, whether from an agreement for a sale of the Company or from a determination that no such sale will occur.”
Sparton guided for fiscal second quarter revenues in the range of $97 million to $101 million with a gross profit margin of approximately 18%.
