Exports on the Rise at Sierra Monitor
By Ken Nagy, CFA
On July 23, 2012, Sierra Monitor Corporation (SRMC) the designer, manufacturer and seller of electronic safety and environmental instrumentation, reported financial results for its second quarter and six months ended June 30, 2012.
Sierra Monitor reported strong results with year over year second quarter revenues increasing $680,918 or over 17 percent to $4.665 million from $3.984 million for the comparable quarter of 2011.
The Company’s second quarter 2012 GAAP net income rocketed over 47 percent or $107,672 to net income of $334,875 from $227,203 during the three months ended June 30, 2011.
The year over year jump in net income was a primarily a result of total operating expenses as a percentage of revenues dropping from 49.6 percent of revenues to 46 percent of revenues during the second quarter of fiscal 2012.
Still, gross margin dropped slightly year over year from 59.1 percent to 58.0 percent for the three months ended June 30, 2012.
Based on a weighted average number of basic common shares of 9.901 million, basic net income per share resulted in $0.03 per share during the second quarter fiscal 2012. This compared to basic net income per share of $0.02 on a weighted average number of basic shares of 9.896 million during the three months ended June 30, 2011.
Non-GAAP net income for the second quarter of 2012 increased year over year by nearly 37 percent to $447,102 and non-GAAP earnings per basic share for the second quarter of 2011 jumped to $0.05 compared to $0.03 for the three months ended June 30, 2011.
For the six months ended June 30, 2012, year over year revenues improved by 33.3 percent or $2.714 million to $10.867 million from $8.152 million for fiscal 2011.
GAAP Net income for the six months jumped by $364,107 year over year to $907,931 for the six months ended June 30, 2012. This compares to $543,824 for the comparable six months ended June 30, 2011.
Here again, the year over year jump in net income was a primarily a result of a drop in total operating expenses as a percentage of revenues.
Total operating expenses as a percent of revenues fell to 40.0 percent from 48.6 percent of revenues for the six months ended June 30, 2011.
However, gross margin for the six months fell to 54.0 percent compared to gross margin of 59.7 percent for the six months ended June 30, 2011.
Based on a weighted average number of basic common shares of 9.901 million, basic net income per share resulted in $0.09 per share for the six months ended June 30, 2012. This compared to basic net income per share of $0.05 on a weighted average number of basic shares of 9.896 million during the six months ended June 30, 2011.
Non-GAAP net income for the first six months of 2012 increased year over year by 50 percent to $1.129 million and non-GAAP earnings per basic share for the first six months of 2012 jumped to $0.09 compared to $0.05 for the six months ended June 30, 2011.
Sierra Monitor’s balance sheet remained strong with cash and equivalents of $2.132 million, net accounts receivables of $2.455 million and no bank debt. This compares to cash and equivalents of $513,391 million and net accounts receivables of $4.116 million for the three months ended March 31, 2012.
Likewise, the Company had a Days Sales Outstanding in Accounts Receivable of 46 days.
Similarly, working capital for the quarter improved sequentially to $6.639 million from $6.241 million for the period ended December 31, 2011.
It should further be noted that recently, in an attempt to develop and support FieldServer Technologies’ customers in Europe, Sierra Monitor opened an international sales office in Berlin, Germany.
Correspondingly, it should be noted that during the past six months Sierra Monitor continued its strategy to emphasize expansion of its international sales channels by opening sales offices in Europe and Asia, appointing a number of international channel partners, and investing in additional third party approvals to meet foreign country requirements.
The approach resulted in an increase in export sales from 15% last year to 36% of sales in the first half of 2012.
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