-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GJZRqCT3CTtHbLBAn1Jz2p6xuVPDGJox8PJsvwlDKCN1xqVGjardjmha0BwfEh0e QWxFYLa6f8qm6huYnQAr9Q== 0000897101-03-000326.txt : 20030425 0000897101-03-000326.hdr.sgml : 20030425 20030425155439 ACCESSION NUMBER: 0000897101-03-000326 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030421 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MTS SYSTEMS CORP CENTRAL INDEX KEY: 0000068709 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 410908057 STATE OF INCORPORATION: MN FISCAL YEAR END: 0928 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-02382 FILM NUMBER: 03664782 BUSINESS ADDRESS: STREET 1: 14000 TECHNOLOGY DR CITY: EDEN PRAIRIE STATE: MN ZIP: 55344-2290 BUSINESS PHONE: 6129374000 MAIL ADDRESS: STREET 1: 14000 TECHNOLOGY DR CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: RESEARCH INC DATE OF NAME CHANGE: 19670216 8-K 1 mts031912_8-k.txt MTS SYSTEMS FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 21, 2003 MTS SYSTEMS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MINNESOTA 0-2382 41-0908057 (STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER OF INCORPORATION) IDENTIFICATION NO.) 14000 TECHNOLOGY DRIVE, EDEN PRAIRIE, MN 55344 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (952) 937-4000 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99.1 Press Release issued by the registrant on April 21, 2003. The contents of internet addresses included in such press release are not incorporated by reference into the press release or this filing. ITEM 9. REGULATION FD DISCLOSURE (INFORMATION BEING FURNISHED UNDER 12). In accordance with the Securities and Exchange Commission Release No. 33-8216, the following information, which is intended to be furnished under Item 12, "Results of Operations and Financial Condition," is instead being furnished under Item 9, "Regulation FD Disclosure." This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On April 21, 2003, the registrant issued a press release regarding the registrant's results of operations for the second quarter of fiscal 2003. The full text of the press release is filed as Exhibit 99.1 to this Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MTS SYSTEMS CORPORATION (Registrant) Date: April 25, 2003 By: /s/ John R. Houston ---------------------------------------------- John R. Houston Secretary MTS SYSTEMS CORPORATION FORM 8-K REPORT INDEX TO EXHIBITS Exhibit No. Description - ------------ ---------------- 99.1 Press Release issued by the registrant on April 21, 2003. The contents of internet addresses included in such press release are not incorporated by reference into the press release or this filing. EX-99.1 3 mts031912_ex99-1.txt NEWS RELEASE EXHIBIT 99.1 [LOGO] MTS Systems Corporation 14000 Technology Drive Eden Prairie, MN 55344-2290 Telephone 952-937-4000 Fax 952-937-4515 NEWS RELEASE FOR IMMEDIATE RELEASE For More Information Contact: APRIL 21, 2003 Susan Knight, Chief Financial Officer (952) 937-4000 Thomas Minneman, Treasurer (952) 937-4647 MTS REPORTS SECOND QUARTER RESULTS, RAISES FULL YEAR OUTLOOK Eden Prairie, Minn., April 21, 2003 - MTS Systems Corporation (Nasdaq: MTSC) today reported net income from continuing operations of $6.4 million, or $0.30 per diluted share, for its second quarter ended March 29, 2003, compared to the previously communicated estimate range of $0.23-$0.26. Associated with the third quarter sale of its Automation division that was announced on March 31, 2003 and April 11, 2003, the Company recorded a one-time impairment loss on discontinued operations of $2.4 million, net of taxes, or $0.11 per share. After recognition of the impairment charge, the Company reported diluted earnings per share of $0.19 compared to $0.24 in the second quarter of fiscal 2002. (A reconciliation of financial results before and after the impact of discontinued operations is included in this release as Exhibit A.) Cash and short-term investments increased approximately $19 million in the quarter, driven by continued favorable working capital performance. "We delivered operating profit above expectations for the quarter on strong revenue performance, while further strengthening the balance sheet," said Sidney W. Emery, Jr., Chairman and CEO. "The sale of the Automation division enables the Company to increase its focus on the core businesses where we have a breadth of long-term opportunities for profitable growth. While backlog is down $22 million from the beginning of the year and we have recorded a one-time impairment charge on discontinued operations, our forecast indicates that we will be able to deliver improved earnings per share in the high $0.80's to low $0.90's range for fiscal 2003, as compared to previous guidance in the mid-$0.80's." Second quarter orders, before the impact of discontinued operations, were $86.8 million, slightly above the estimate range of $80-$85 million. Orders from continuing operations were $78.8 million, a decrease of four percent compared to orders of $81.9 million for second quarter of fiscal 2002. Backlog for continuing operations decreased nine percent, from approximately $162 million to approximately $148 million. Second quarter revenue, before the impact of discontinued operations, was $100.6 million, exceeding the estimate range of $90-$95 million primarily due to an increase in short-duration projects in the MT&S segment. Revenue from continuing operations was $93.2 million, an increase of ten percent compared to revenue of $84.7 million for second quarter of fiscal 2002. The Company reported diluted earnings per share of $0.19 in the current year quarter compared to $0.24 for second quarter of fiscal 2002. Year-over-year earnings per share were favorably impacted by $0.10 from increased revenue volume and $0.04 due to proceeds from penalties associated with a canceled contract in the current year quarter, as well as the $0.08 impact of Automation division inventory write-offs recorded in the prior year second quarter. These favorable impacts were more MTS News Release Page 2 than offset by negative impacts of $0.11 from the impairment charge on discontinued operations and $.08 from margin rate decline due to product mix in the current year quarter, as well as the $0.08 impact of a non-recurring $2.6 million pre-tax gain on the sale of an investment recorded in the prior year second quarter. SEGMENT RESULTS --------------- MECHANICAL TESTING AND SIMULATION SEGMENT (MT&S): Orders for the MT&S segment were $65.7 million for the second quarter, down 9 percent compared to orders of $72.5 million for second quarter of fiscal 2002, primarily due to continued weakness in the global automotive and industrial markets. Backlog decreased approximately $14 million, or 9 percent, to approximately $141 million. Second quarter revenue was $80.8 million, an increase of 8 percent compared to $74.7 million for second quarter of fiscal 2002, driven by strong performance in the North American and European automotive and motorsports markets. The MT&S gross margin rate was 34.4 percent, a decrease of 2.6 percentage points compared to 37.0 percent for second quarter of fiscal 2002, primarily due to product mix. The segment reported $7.2 million in operating earnings for the current year quarter compared to $8.9 million for second quarter of fiscal 2002 due to lower margin in the quarter and the timing of operating expenses, partially offset by increased volume. FACTORY AUTOMATION SEGMENT (FA): In conjunction with the third quarter sale of its Automation division, the Company recorded a loss on impairment of discontinued operations of $2.4 million, net of taxes, in the second quarter. Excluding the impairment charge, the Company's discontinued operations reported effectively break-even operating results for the current year quarter compared to an operating loss of $2.6 million, net of taxes, for second quarter of fiscal 2002 due to inventory write-offs. The carrying values of the Automation division's net assets and liabilities included in total current assets and liabilities are $11.5 million and $1.9 million, respectively. Before the impact of discontinued operations, orders for the FA segment were $21.1 million for the second quarter, an increase of 41 percent compared to $15.0 million for second quarter of fiscal 2002. Orders from continuing operations were $13.1 million, an increase of 39 percent compared to orders of $9.4 million for second quarter of fiscal 2002. The Company's AeroMet business was awarded a $1.5 million development contract from the U.S. government, and orders in the Sensors business increased due to strong demand in Europe and Japan. Backlog from continuing operations was flat at approximately $7 million. Before the impact of discontinued operations, revenue was $19.8 million, an increase of 13.8 percent compared to revenue of $17.4 million for second quarter of fiscal 2002. Revenue from continuing operations was $12.4 million, an increase of 24 percent compared to revenue of $10.0 million for second quarter of fiscal 2002. The FA gross margin rate from continuing operations was 44.3 percent, a decrease of 3.4 percentage points compared to gross margin of 47.7 percent for second quarter of fiscal 2002 due to product mix and one-time costs associated with a canceled contract. Operating earnings from continuing operations were $0.9 million compared to $0.5 million for second quarter of fiscal year 2002, driven by favorable volume partially offset by the decline in gross margin rate in the quarter. SECOND QUARTER CONFERENCE CALL ------------------------------ A conference call will be held on Tuesday, April 22, at 11:00 a.m. CDT (Noon EDT). Call +1-712-257-2476; state the Passcode "Second Quarter" and conference leader "Chip Emery". Telephone re-play will be available through 6:00 p.m. CDT, May 22, 2003. Call +1-402-220-4147 and state the Passcode "4006." MTS News Release Page 3 If you prefer to listen live over the Internet - please log on to the web at http://www.mts.com/news/financial_news.htm and click on the Vcall webcast -------------------------------------------- image. The webcast will be archived through 6:00 p.m. (CDT), May 22, 2003. ABOUT MTS SYSTEMS CORPORATION ----------------------------- MTS Systems Corporation is a global supplier of integrated simulation solutions that help customers accelerate and improve their design, development, and manufacturing processes. MTS supplies products for determining the mechanical behavior of materials, products and structures - including computer-based testing and simulation systems, modeling and testing software, and consulting services - as well as products for automating manufacturing processes. MTS had 1,900 employees and revenue from continuing operations of $327 million for the fiscal year ended September 28, 2002. Additional information on MTS can be found on the worldwide web at http://www.mts.com. THIS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS" MADE PURSUANT TO THE SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES, AS WELL AS ASSUMPTIONS, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS AND THOSE PRESENTLY ANTICIPATED OR PROJECTED. IN ADDITION TO THE FACTORS DISCUSSED ABOVE, OTHER IMPORTANT RISK FACTORS ARE DELINEATED IN THE COMPANY'S SEC REPORTS, INCLUDING FORM 10-K FOR THE YEAR ENDED SEPTEMBER 28, 2002. (more) MTS News Release Page 4 MTS SYSTEMS CORPORATION Consolidated Balance Sheets (unaudited - in thousands of dollars, except per share data)
March 29, September 28, 2003 2002 --------- --------- ASSETS Current Assets: Cash and cash equivalents $ 59,228 $ 62,456 Short-term investments 53,997 35,094 Accounts receivable, net of allowances for doubtful accounts 55,844 59,943 Unbilled contracts and retainage receivable 29,813 32,276 Inventories 29,978 34,773 Prepaid expense 5,280 5,380 Current deferred tax asset 8,739 8,739 Other current assets 1,147 19 Assets of discontinued operations 11,548 15,311 --------- --------- Total current assets 255,574 253,991 --------- --------- Property and Equipment: Land 3,247 3,247 Buildings and improvements 46,009 44,723 Machinery and equipment 83,298 79,679 Accumulated depreciation (75,657) (70,765) --------- --------- Total property and equipment, net 56,897 56,884 --------- --------- Goodwill 4,329 4,268 Other assets 2,729 3,363 Non-current deferred tax asset 1,593 1,593 --------- --------- Total Assets $ 321,122 $ 320,099 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Notes payable to banks $ 198 $ 598 Current maturities of long-term debt 6,828 8,605 Accounts payable 12,051 13,137 Accrued payroll-related costs 27,445 26,112 Advance payments from customers 43,376 37,209 Accrued warranty costs 5,035 4,482 Accrued income taxes 6,135 11,453 Other accrued liabilities 10,029 9,917 Liabilities of discontinued operations 1,879 1,462 --------- --------- Total current liabilities 112,976 112,975 --------- --------- Deferred income taxes 1,740 1,519 Long-term debt, less current maturities 36,325 42,790 Other long-term liabilities 584 550 --------- --------- Total Liabilities 151,625 157,834 --------- --------- Shareholders' Investment: Common stock 5,268 5,302 Additional paid-in capital 8,101 9,770 Retained earnings 153,780 146,857 Accumulated other comprehensive income 2,348 336 --------- --------- Total shareholders' investment 169,497 162,265 --------- --------- Total Liabilities and Shareholders' Investment $ 321,122 $ 320,099 ========= =========
MTS News Release Page 5 MTS SYSTEMS CORPORATION Consolidated Statements of Income (unaudited - in thousands of dollars, except per share data)
Three Months Ended Six Months Ended ---------------------- ---------------------- March 29, March 31, March 29, March 31, 2003 2002 2003 2002 --------- --------- --------- --------- Revenue $ 93,236 $ 84,665 $ 177,675 $ 164,263 Cost of sales 59,916 52,215 113,049 101,197 --------- --------- --------- --------- Gross profit 33,320 32,450 64,626 63,066 --------- --------- --------- --------- Operating expenses: Selling 13,817 12,694 26,352 25,873 General and administrative 7,290 5,874 13,441 12,202 Research and development 4,044 4,435 7,623 8,573 --------- --------- --------- --------- Total operating expenses 25,151 23,003 47,416 46,648 --------- --------- --------- --------- Income from continuing operations 8,169 9,447 17,210 16,418 --------- --------- --------- --------- Interest expense 949 995 1,993 2,102 Interest income (617) (168) (1,104) (305) (Gain) on sale of investments -- (2,630) -- (2,630) Other expense (income), net (1,729) (435) (1,712) (1,698) --------- --------- --------- --------- Income before income taxes, discontinued operations, and cumulative effect of accounting change 9,566 11,685 18,033 18,949 Provision for income tax 3,184 3,914 5,951 6,292 --------- --------- --------- --------- Income before discontinued operations and cumulative effect of accounting change 6,382 7,771 12,082 12,657 --------- --------- --------- --------- Discontinued operations: Loss from discontinued operations, net of tax (17) (2,608) (220) (3,781) Impairment on discontinued operations, net of tax (2,402) -- (2,402) -- Cumulative effect of accounting change, net of tax -- -- -- (9,198) --------- --------- --------- --------- Loss from discontinued operations, net of tax (2,419) (2,608) (2,622) (12,979) --------- --------- --------- --------- Income (loss) before cumulative effect of accounting change on continuing operations 3,963 5,163 9,460 (322) Cumulative effect of accounting change on continuing operations, net of tax -- -- -- (4,523) --------- --------- --------- --------- Net income (loss) $ 3,963 $ 5,163 $ 9,460 $ (4,845) ========= ========= ========= ========= Earnings (loss) per share: Basic- Income before discontinued operations and cumulative effect of accounting change $ 0.30 $ 0.37 $ 0.57 $ 0.60 Discontinued operations: Loss from discontinued operations, net of tax 0.00 (0.12) (0.01) (0.18) Impairment on discontinued operations, net of tax (0.11) 0.00 (0.11) 0.00 Cumulative effect of accounting change, net of tax 0.00 0.00 0.00 (0.44) --------- --------- --------- --------- Loss from discontinued operations, net of tax (0.11) (0.12) (0.12) (0.62) --------- --------- --------- --------- Income (loss) before cumulative effect of accounting change on continuing operations 0.19 0.25 0.45 (0.02) Cumulative effect of accounting change, net of tax 0.00 0.00 0.00 (0.21) --------- --------- --------- --------- Earnings (loss) per share $ 0.19 $ 0.25 $ 0.45 $ (0.23) ========= ========= ========= ========= Weighted average number of common shares outstanding - basic 21,112 21,057 21,122 21,042 ========= ========= ========= ========= Diluted- Income before discontinued operations and cumulative effect of accounting change $ 0.30 $ 0.36 $ 0.56 $ 0.59 Discontinued operations: Loss from discontinued operations, net of tax 0.00 (0.12) (0.01) (0.18) Impairment on discontinued operations, net of tax (0.11) 0.00 (0.11) 0.00 Cumulative effect of accounting change, net of taxes 0.00 0.00 0.00 (0.43) --------- --------- --------- --------- Loss from discontinued operations, net of tax (0.11) (0.12) (0.12) (0.61) --------- --------- --------- --------- Income (loss) before cumulative effect of accounting change on continuing operations 0.19 0.24 0.44 (0.02) Cumulative effect of accounting change, net of tax 0.00 0.00 0.00 (0.21) --------- --------- --------- --------- Earnings (loss) per share $ 0.19 $ 0.24 $ 0.44 $ (0.23) ========= ========= ========= ========= Weighted average number of common shares outstanding - diluted 21,404 21,336 21,379 21,367 ========= ========= ========= =========
MTS News Release Page 6 EXHIBIT A MTS SYSTEMS CORPORATION Discontinued Operations Reconciliation (unaudited - in thousands of dollars)
Three Months Ended Six Months Ended ---------------------- ---------------------- MARCH 29, MARCH 31, MARCH 29, MARCH 31, 2003 2002 2003 2002 --------- --------- --------- --------- ORDERS: Before discontinued operations $ 86,782 $ 87,545 $ 168,541 $ 184,231 Discontinued operations 7,989 5,603 14,223 10,724 --------- --------- --------- --------- Continuing operations 78,793 81,942 154,318 173,507 --------- --------- --------- --------- BACKLOG: Before discontinued operations $ 154,898 $ 161,038 $ 154,898 $ 161,038 Discontinued operations 6,721 $ 7,656 6,721 $ 7,656 --------- --------- --------- --------- Continuing operations 148,177 153,382 148,177 153,382 --------- --------- --------- --------- REVENUE: Before discontinued operations $ 100,589 $ 92,075 $ 191,850 $ 179,239 Discontinued operations 7,353 7,410 14,175 14,976 --------- --------- --------- --------- Continuing operations 93,236 84,665 177,675 164,263 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE: Before discontinued operations $ 9,544 $ 7,434 $ 14,537 $ 12,780 Discontinued operations (22) (4,251) (3,496) (6,169) --------- --------- --------- --------- Continuing operations 9,566 11,685 18,033 18,949 --------- --------- --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE: Before discontinued operations $ 3,963 $ 5,163 $ 9,460 $ 8,876 Discontinued operations (2,419) (2,608) (2,622) (3,781) --------- --------- --------- --------- Continuing operations 6,382 7,771 12,082 12,657 --------- --------- --------- ---------
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