Sparton Corporation Reports Fiscal 2017 First Quarter Results

Sparton Corporation (NYSE:SPA) today announced results for the first quarter of fiscal year 2017 ended October 2, 2016.

First Quarter Financial Results

• Net sales of $100.4 million

• Gross profit margin of 17.2%

• SG&A expenses of $13.4 million or 13.3% of sales; adjusted SG&A of $12.6 million, 12.6%

• Earnings per share of $0.01, adjusted EPS of $0.20

• Adjusted EBITDA of $6.1 million, a 6.1% adjusted EBITDA margin

• Borrowings under Credit Facility of $95.8 million

First Quarter Highlights

• 64 new program wins in the MDS Segment with expected annual revenue of $12.2 million when fully ramped up into production

• MDS has trailing four quarter win revenue of $62 million, which continues to support our future organic growth.

• Backlog of:

• $125 million in the MDS Segment

• $119 million in the ECP Segment principally including:

• $98 million in domestic sonobouys

• $6 million in foreign sonobouys

• $11 million in rugged displays

Joseph J. Hartnett, Interim President & CEO, commented, "First quarter revenues came in just above the midpoint of our guidance range. 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."

Joe McCormack, Senior Vice President and CFO, commented, "We continue to be focused on actively managing our working capital, driving free cash flow, and reducing our debt and leverage. Despite the costs associated with the exploration of a sale of the Company and increasing health care costs, we have been able to keep our overall SG&A expenses at a consistent run-rate through a continued focus on reducing our operating expenses throughout the Company."

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