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The L. S. Starrett Company Reports Fiscal 2012 Fourth Quarter And Full Year Results

The L. S. Starrett Company today reported fiscal 2012 fourth quarter and full year financial results for the periods ended June 30, 2012.

Annual Highlights
  • Revenues of $260 million were the second highest in the history of the Company
  • Non-GAAP fiscal 2012 earnings, which were adjusted to exclude a pension adjustment, were $10.0 million or $1.48 per share compared to GAAP earnings of $6.8 million or $1.02 per share in fiscal 2011
  • GAAP fiscal 2012 earnings, including the pension adjustment, were $0.9 million or $0.13 per share
  • A $15.2 million non-cash pension adjustment was recorded in the fourth quarter of fiscal 2012.

“Our Company had a strong year with growth in revenue and operating income in both the North American and International markets,” said President and CEO Douglas Starrett.

The table below illustrates the impact of the non-cash pension adjustment in the fourth quarter and full year.
      $(Millions)
Fourth Quarter     Annual
                       
FY2012 Pension FY2012 FY2011 FY2012 Pension FY2012 FY2011

GAAP

Adj

Non-GAAP

GAAP

GAAP

Adj

Non-GAAP

GAAP

Net Sales

$

70.0

$

70.0

$

71.20

$

260.1

$260.1

$

244.8
 

Gross Margin

13.0

$

12.0

25.0

23.7

78.1

$

12.0

90.1

81.8
% of Sales 18.6 % 35.7 % 33.3 % 30.0 % 34.6 % 33.4 %
 

S, G & A Expenses

22.7

3.2

19.5

19.5

79.9

3.2

76.7

70.8
 

Net Earnings (Loss)

($4.6

)

$

9.1

$

4.5

$

1.5

$

0.9

$

9.1

$10.0

$

6.8
Earnings (loss) per share ($0.68 ) $ 1.35 $ 0.67 $ 0.23 $ 0.13 $ 1.35 $1.48 $ 1.02

Solid revenue growth continued in fiscal 2012 as sales increased $15.3 million or 6.3% over a strong fiscal 2011. The Company was not immune to the financial volatility of the past twelve months as lower long-term interest rates driven by Federal Reserve policy led to the discount rate falling to historic lows. As a result, the Company recognized a significantly higher pension liability, and a $17.2 million non-cash annual pension expense, including a $15.2 million pension adjustment, recorded in the fourth quarter of fiscal 2012. The eight fold increase in normal pension expense negatively impacted gross margin and selling, general and administrative expenses and was the prime driver in the net loss for the fourth quarter and the small profit results for the year.

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