MILPITAS, CA — (Marketwired) — 07/31/13 — Sierra Monitor Corporation (OTCQB: SRMC), a company that designs, manufactures and sells electronic safety and environmental instrumentation, today announced financial results for the second quarter and six months ended June 30, 2013.
Achieved second quarter 2013 sales of approximately $4.8 million, compared to $4.7 million in the same period of 2012
Reported second quarter net income of $0.4 million, up 30% compared to second quarter net income of $0.3 million in the prior year
Income from operations increased 29% to $0.7 million, compared to $0.6 million in the second quarter of 2012
Increased cash balance to approximately $3.3 million at the end of the second quarter of 2013 with no bank debt
Recorded sales of $9.1 million for the six months ended June 30, 2013
Reported year-to-date net income of $0.6 million
Received an order valued at over $500,000 from the United States Navy for the replacement of on-board gas detection sensors for life safety systems. The order is expected to ship in 2013.
Expanded sales of ProtoCessor protocol interface cards to Original Equipment Manufacturers in the boiler control industry, delivering product to 68 manufacturers and increasing boiler control market sales by 73% year over year for the first six months of 2013.
Supplied over $100,000 of new Sentry-IT gas detection controllers to a long-term Sierra Monitor customer to upgrade systems at a large Midwest waste-water treatment utility
Received follow-on orders to supply approximately 400 gas detectors to the Guangzhou Refinery on the Southeast Coast of China.
Received our first order for gas detection systems from a state-owned Indonesian oil and gas corporation.
Received a $300,000 order for gas detection systems for Tie-in Works at East Abu Dhabi
Received first order for supply of gas detection systems for a refinery in Oman.
Net sales for the quarter ended June 30, 2013 were $4,787,581 compared to $4,665,279 reported for the same period of 2012. For the six months ended June 30, 2013, sales were $9,144,690, compared to $10,867,215 for the same period of 2012.
Sierra Monitor posted GAAP net income of $436,237, or $0.04 per share (basic and diluted), for the quarter ended June 30, 2013, compared to GAAP net income of $334,875 or $0.03 per share (basic and diluted), for the same period of 2012. Sierra Monitor posted GAAP net income of $633,795, or $0.06 per share basic (basic and diluted), for the six months ended June 30, 2013, compared to GAAP net income of $907,931, or $0.09 per share (basic and diluted), for the same period of 2012.
Sierra Monitor posted non-GAAP net income of $537,280 or $0.05 per share basic and diluted, for the quarter ended June 30, 2013 compared to non-GAAP net income of $447,102 or $0.05 per share basic and $0.04 per share diluted, for the same period of 2012. Sierra Monitor posted non-GAAP net income of $845,949 or $0.08 per share (basic and diluted), for the six months ended June 30, 2013, compared to non-GAAP net income of $1,129,316, or $0.11 per share basic and diluted, for the same period of 2012.
“Our second quarter results show strong growth over the first quarter with improvements in gross margin, operating profit and cash flow,” said Gordon R. Arnold, chairman and chief executive officer. “Our sales revenue in the first half of 2013 returned to a more normalized run rate compared to the first six months of 2012 when we had shipped the largest order for gas detection instrumentation in the Company-s history valued at over $2 million. Our backlog improved as a result of new orders including several new international gas detection customers in the oil and gas industry and a large order from the US Navy. We ended the second quarter with a strong balance sheet and $3.3 million cash on hand.”
Sierra Monitor had $3,258,545 in cash at June 30, 2013 with no bank borrowings. Trade receivables at June 30, 2013 were $2,216,502. At June 30, 2013, the Company-s Days Sales Outstanding was 42 days.
Sierra Monitor Corporation designs, manufactures and sells electronic safety and environmental instrumentation. The company-s unique protocol translator product lines enable communication between disparate electronic systems overcoming protocol language barriers. By enabling communication between central building automation systems and many electronic subsystems, such as fire panels, chillers and air handlers, Sierra Monitor assists with the integration of energy saving building automation systems. The company-s products improve the safety and comfort of workers while contributing to climate and natural resource protection. Sierra Monitor-s intelligent hazardous gas detection systems can be found in a broad range of applications including alternate fuel vehicle maintenance facilities, US Navy ships, wastewater treatment facilities, refineries, offshore oil platforms, chemical plants, parking garages and underground telephone vaults providing 24/7 protection of personnel and facilities.
The Company-s vision is to capitalize on the expanding worldwide demand for knowledge-based products and services that improve operational performance, productivity, efficiency and safety in building automation, industrial and military applications, while reducing demands on resources and energy consumption. For more information visit:
The accompanying news release dated July 31, 2013 contains non-GAAP financial measures. Table C reconciles the non-GAAP financial measures in that news release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating expenses, non-GAAP profit from operations and related non-GAAP profit as a percentage of revenue, non-GAAP net profit and basic and diluted non-GAAP net profit per share.
Sierra Monitor continues to provide all information required in accordance with GAAP and does not suggest or believe non-GAAP financial measures should be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Sierra Monitor believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating results primarily because they exclude amounts the Company does not consider part of ongoing operating results when assessing the overall Company performance.
We believe that our non-GAAP financial measures facilitate the comparison of results for current periods with results for past periods. We exclude the following items from non-GAAP financial measures:
In accordance with GAAP, depreciation and amortization of tangible and intangible assets includes depreciation of purchased capital assets and amortization of intangible assets including third party approval fees. We exclude these amounts from our internal measures for budget and planning purposes.
We maintain an allowance for doubtful accounts which is analyzed on a periodic basis to ensure that it is adequate to the best of management-s knowledge. We exclude these amounts from our internal measures for budget and planning purposes.
We evaluate our inventories for excess or obsolescence on a quarterly basis. Inventories identified as slow moving or obsolete are determined based on historical experience and current product demand. The quarterly analysis is used to adjust the provision for inventory losses. We exclude the provision for inventory losses from our internal measures for budget and planning purposes.
The effect of changes in deferred tax balances is non-cash and is not comparable across periods or with other companies. We exclude these amounts from our internal measures for budget and planning purposes.
Our non-GAAP financial measures exclude stock-based compensation expenses, which consist of expenses for stock options. While stock-based compensation is an expense affecting our results of operations, management excludes stock-based compensation from our budget and planning process. For these reasons we exclude stock-based compensation expenses from our non-GAAP financial measures. We compute weighted average dilutive stocks using the methods required by GAAP for both GAAP and non-GAAP diluted net income per share.
Sierra Monitor refers to these non-GAAP financial measures in evaluating and measuring the performance of our ongoing operations and for planning and forecasting in future periods. These non-GAAP financial measures also facilitate our internal comparisons to historical operating results. We are reporting non-GAAP financial measures because we believe that the inclusion of comparative numbers provides consistency in our financial reporting. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year.
Sierra Monitor believes that non-GAAP measures have significant limitations in that they do not reflect all of the amounts associated with Sierra Monitor-s financial results as determined in accordance with GAAP and that these measures should only be used to evaluate Sierra Monitor-s financial results in conjunction with the corresponding GAAP measures, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Because of these limitations, Sierra Monitor qualifies the use of non-GAAP financial information in a statement when non-GAAP information is presented. In addition, the exclusion of the charges and expenses indicated above from the non-GAAP financial measures presented does not indicate an expectation by Sierra Monitor management that similar charges and expenses will not be incurred in subsequent periods.
Steve Polcyn
408-262-6611 ext. 134
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