Key Technology, Inc.
) reported second-quarter 2013 earnings of 38 cents per share,
reversing its year ago loss of 13 cents per share, and way ahead
of the Zacks Consensus Estimate of 9 cents per share.
Total revenue increased 30% to $35 million, beating the Zacks
Consensus Estimate of $31 million.
Cost and Margins
Cost of sales increased 17% to $22.7 million in the quarter.
Gross profit went up 62% to $12.8 million. Gross margin expanded
300 basis points year over year to 36.1%, helped by improved
product mix and more efficient plant utilization.
Total operating expenses increased 15% to $10 million, driven
by acquisition-related expenses, incentive compensation expenses,
Visys operating expenses for the last month of the quarter, and
higher sales expenses related to increased net sales. Key
Technology reported an operating profit of $2.8 million, a stark
improvement from the year-ago quarter's operating loss of $0.8
Key Technology ended the second quarter with a record backlog
of $50.1 million compared to $34.7 million one year ago. New
orders received during the quarter were $32.7 million, up from
$24.9 million in the corresponding period last year. The orders
include several important orders, mainly in the potato and
processed fruit and vegetable markets.
Cash and cash equivalents were $19.2 million as of Mar 31,
2013 compared with $23.7 million as of Dec 31, 2012. Long-term
debt amounted to $5.9 million as of Mar 31, 2013 compared with
$4.8 million as of Dec 31, 2012.
Key completed the acquisition of Belgium-based Visys NV, a
supplier of innovative digital sorters, on Feb 28, 2013. Visys'
operating results were included with Key's operating results for
the last month of the second quarter. The total value of the deal
was approximately $21 million.
The transaction is expected to be accretive within the first
twelve months. The acquisition will increase Key's share in its
core markets, expand into new high-potential markets, and
accelerate its development of next-generation sorting
Key apprehends that a less favorable product mix and the
effects of acquisition-related fair value adjustments to the
acquired Visys inventory will weigh on gross margins for the
balance of 2013. Operating expenses are also expected to
increase from the second quarter of fiscal 2013 due to the
addition of Visys for a full quarter, and increased amortization
of acquisition-related intangibles, affecting operating
Walla Walla, WA-based Key Technology, Inc. designs,
manufactures, sells and services process automation systems in
the United States and internationally. Key Technology currently
retains a Zacks Rank #3 (Hold). Other stocks to watch out for in
the industrial products sector are
) with a Zacks Rank #1 (Strong Buy) and
W.W. Grainger, Inc.
) with a Zacks Rank #2 (Buy).
) reported of $1.47 per share, up 17% from $1.26 in the year-ago
quarter beating the Zacks Consensus Estimate of 88 cents.
Columbus McKinnon Corp.
) will release its quarterly results on May 20, 2013.
COLUMBUS MCKINN (CMCO): Free Stock Analysis
GRACO INC (GGG): Free Stock Analysis Report
GRAINGER W W (GWW): Free Stock Analysis
HYSTER-YALE MAT (HY): Get Free Report
KEY TECHNOLOGY (KTEC): Free Stock Analysis
To read this article on Zacks.com click here.