Technitrol, Inc. reported consolidated revenues of $254.4 million for its first fiscal quarter ended March 30, 2007. Revenues were $236.1 million in the previous quarter and $221.1 million in the first quarter of 2006.
According to U.S. Generally Accepted Accounting Principles (GAAP), first-quarter net earnings from continuing operations were $4.7 million, or $0.12 per diluted share, compared with $14.4 million, or $0.35 per diluted share, in the prior quarter and $12.0 million, or $0.30 per diluted share, in the first quarter of 2006. First-quarter 2007 earnings reflect high levels of operating losses and restructuring expenses that are not expected to be tax-deductible. After-tax severance and asset-impairment expenses in the Electronic Components Group related to previously announced restructuring and relocation of European operations totaled approximately $9.2 million ($0.22 diluted per share) and purchase accounting and inventory write-downs amounted to $0.9 million ($0.02 diluted per share). Excluding these items, earnings per diluted share in the first quarter were $0.36, slightly above earlier company guidance, compared to $0.40 in the prior quarter and $0.33 in the first quarter of 2006, excluding similar charges.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $27.1 million in the first quarter of 2007, compared with $26.5 million in the previous quarter and $24.3 million in the first quarter of 2006. Net cash at March 30, 2007 was $36.5 million (cash and equivalents of $87.1 million less debt of $50.6 million), compared with $28.0 million (cash and equivalents of $87.2 million less debt of $59.2 million) at the end of the previous quarter. Technitrol paid down approximately $8.9 million of net debt during the first quarter. Technitrol’s capital spending in the first quarter of 2007 was approximately $4.5 million.
Technitrol’s Electrical Contact Products Group manufactures a full range of electrical contacts, contact materials and contact assemblies. First-quarter shipments reflected continued market strength and seasonally high demand, particularly in Europe, coupled with the rising costs of raw materials including precious and other metals. Revenues in the first quarter were $90.5 million, compared with $82.1 million in the previous quarter and $76.9 million in the first quarter of 2006. Stronger revenues in the most recent period reflect primarily higher pass-through prices for silver and other metals, along with the favorable translation effect of a weaker dollar relative to the euro, in which the majority of the Group’s business is transacted.
First-quarter GAAP operating profit was $5.0 million, compared with $6.1 million in the previous quarter and $2.9 million in the first quarter of 2006. Excluding severance and asset-impairment expense, operating profit was $6.3 million in the previous quarter and $3.3 million in the first quarter of 2006.. The Group’s operating margin in the most recent quarter is somewhat lower than in the prior quarter, reflecting negligible to no incremental margin on rising levels of pass-through costs of raw materials and accruals for incentive and certain other costs that are not expected to recur at first-quarter levels.
