“Of course, we began to see some of the same market softness which others in our industry experienced, and that contributed to an overall book-to-bill ratio under one-to-one for the first time in several quarters,” noted Sindelar. “However, total incoming orders in the third quarter declined only a couple of percentage points sequentially from our second quarter bookings, so I am not convinced there is a significant downward trend in overall demand in the near term for our business. Our fourth quarter is always impacted by holiday periods, including the Chinese “National Day” holiday period at the beginning of October and the western world holidays leading up to New Years. With the combination of slower bookings we experienced in the third quarter and the holiday effects, we expect to see some sequential decline of total sales, similar to the decline we experienced in the same period last year,” he concluded.
The Company reported net sales of $278.8 million for the three months ended September 30, 2011, a 7.5% year-over-year increase compared with net sales during the third quarter of 2010. Year-over-year increases in net sales to the Company’s automotive, industrial & instrumentation, and computer and datacommunications end market customers were partially offset by declines in net sales to telecommunications, and military and aerospace end market customers. Compared with the three months ended June 30, 2011, net sales increased 3.0% for the quarter ended September 30, 2011. Sequentially, net sales increased in both automotive and computer and datacommunications end markets, partly offset by declines in telecommunications, industrial & instrumentation, and military and aerospace end markets.
Cost of goods sold (excluding items shown separately in the income statement) as a percent of net sales improved to 78.6% for the quarter ended September 30, 2011, compared to 81.1% in the immediately preceding quarter. Product selling price increases that began to take effect in the quarter ended June 30, 2011, were in effect for the full quarter ended September 30, 2011. Further, as compared to the quarter ended June 30, 2011, the composition of the Company’s net sales was more heavily weighted to Printed Circuit Board products, for which gross margins are generally higher than for Assembly products.