Business News

Key Technology Announces Fiscal 2009 First Quarter Results

Friday 30. January 2009 - Retained Profitability Amid Effects of Global Economic Conditions

Key Technology, Inc. (NASDAQ: KTEC) today announced sales and operating results for the first quarter of fiscal 2009 ended December 31, 2008.
Net sales for the three-month period ended December 31, 2008 totaled $27.4 million, compared to $28.9 million recorded in the same quarter last year. Net earnings for the first quarter of fiscal 2009 were $569,000, or $0.11 per diluted share. Net earnings for the same quarter last year were $1.1 million, or $0.20 per diluted share. Net earnings for the first quarter of fiscal 2009 were favorably affected by a $160,000 reduction in tax expense due to changes in tax law to retroactively renew the research and development tax credit that was enacted during the quarter.
Gross profit for the first quarter of fiscal 2009 was $11.3 million compared to $11.5 million in the corresponding period last year. As a percentage of sales, gross profit for the quarter was 41.3% compared to 39.6% in the first quarter of fiscal 2008.
“The first quarter year-over-year increase in the gross margin percentage of 1.7% related significantly to favorable product mix and reductions in material costs,” commented David Camp, President and Chief Executive Officer.
Operating expenses for the quarter ended December 31, 2008 were $10.5 million, or 38.4% of sales, compared to $10.2 million, or 35.2% of sales in the same quarter last year.
Mr. Camp noted, “We took a number of actions in the first quarter to reduce our operating expenses from our fiscal 2008 fourth quarter expenses. In addition, we made organizational changes that realign our company to more optimally serve our customers on a global basis. Costs associated with these organizational changes as well as increased expenses related to our ERP implementation resulted in increased General and Administrative expenses in the first quarter of fiscal 2009 compared to the same quarter in fiscal 2008.”
Other income (expense) decreased in the first quarter of fiscal 2009 compared to the same period in fiscal 2008 due to lower interest income and foreign exchange losses incurred in the first fiscal quarter of 2009 compared to foreign exchange gains in the first fiscal quarter of 2008.
Orders received during the first quarter of fiscal 2009 were $22.9 million, compared to $35.0 million in the same period last year. The Company’s backlog at December 31, 2008 was $29.3 million, compared to a backlog of $36.8 million at the end of the same quarter last year.
Camp further commented, “During October, our customers delayed purchasing decisions as they assessed the impact of current economic conditions. We did, however, experience an improvement in orders throughout the remainder of the quarter and had strong orders in December. We do not want to minimize the decrease in total new orders for the first quarter compared to the same period a year ago, but we remain cautiously optimistic that the improvement in orders we saw in December will continue.”
“We firmly believe that our fundamentals are sound and the products that we are bringing to our markets are exactly what our customers are looking for,” stated Camp. “Under current economic conditions, we anticipate our revenue for fiscal 2009 will be similar to or lower than our revenue recorded for fiscal 2008. We continue to focus on our commitment to invest strongly in R&D and to bring new products and solutions to our customers, which will position us well for the future.”
Camp concluded, “With almost $21 million of cash on hand, the Company’s balance sheet remains strong. During the first quarter of fiscal 2009, cash balances decreased by $15.4 million as the Company spent $8.4 million to repurchase approximately 590,000 shares of our common stock under the previously announced stock repurchase program. The Company also invested $8.1 million in capital investments, which was offset by $6.4 million in proceeds from the new mortgage on our Walla Walla headquarters facility. Approximately $5.4 million in cash was used in operations during the quarter, due largely to reductions in customer deposits and other changes in working capital.”
Subsequent to December 31, 2008, the Company repurchased an additional 80,818 shares for $1.6 million under its stock repurchase program. As of January 26, 2009, the Company’s common shares outstanding were 4,994,317 shares compared to 5,629,566 common shares outstanding at September 30, 2008.