Schmitt Industries Announces Fourth Quarter And Fiscal Year 2010 Operating Results

PORTLAND, Ore., July 13, 2010 (GLOBE NEWSWIRE) -- Schmitt Industries, Inc. (Nasdaq:SMIT) today announced its operating results for the fourth quarter and fiscal year ended May 31, 2010. Sales for the three months ended May 31, 2010 increased $561,546, or 36.1%, to $2,118,341 compared to $1,556,795 for the same period last year. Net loss for the fourth quarter ended May 31, 2010 was $469,119, or $.16 per fully diluted share, compared to net loss of $1,812,530, or $.63 per fully diluted share, for the same period last year. For the fiscal year ended May 31, 2010, sales decreased $2,695,460, or 28.4%, to $6,805,748 compared to $9,501,208 for the prior year. Net loss for the fiscal year ended May 31, 2010 was $1,711,013, or $.59 per fully diluted share, compared to net loss of $2,153,524, or $.75 per fully diluted share, for the prior year. 

In the fourth quarter, sales in the SBS Balancer segment increased $325,664, or 28.8%, to $1,454,692 for the three months ended May 31, 2010 from $1,129,028 in the fourth quarter of Fiscal 2010.  Sales in the SMS Measurement segment increased $235,882, or 55.1%, to $663,649 in the fourth quarter of Fiscal 2010 from $427,767 in the fourth quarter of the prior year.  Sales of the Company's balancer and laser-based measurement products increased from prior periods due to increased demand in the fourth quarter of Fiscal 2010 as a result of slowly improving market conditions in the U.S. auto industry and the global manufacturing markets.

Gross margins for the fourth quarter and the year have improved as compared to the same periods in the prior year primarily due to lower increases in reserves for excess and obsolete inventory in the current quarter offset in part by a shift in the sales product mix to lower margin products. Operating expenses decreased during the current year primarily due to lower personnel costs and spending controls, lower stock-based compensation, lower commissions related to the decrease in sales and lower research and development costs.