Sparton Corporation (SPA)

SPA 
$29.44
*  
0.49
1.64%
Get SPA Alerts
*Delayed - data as of Aug. 20, 2014  -  Find a broker to begin trading SPA now
Exchange: NYSE
Industry: Technology
Community Rating:
 
 
Symbol List Views
FlashQuotes InfoQuotes
Stock Details
Summary Quote Real-Time Quote After Hours Quote Pre-market Quote Historical Quote Option Chain
CHARTS
Basic Chart Interactive Chart
COMPANY NEWS
Company Headlines Press Releases Market Stream
STOCK ANALYSIS
Analyst Research Guru Analysis Stock Report Competitors Stock Consultant Stock Comparison
FUNDAMENTALS
Call Transcripts Annual Report Income Statement Revenue/EPS SEC Filings Short Interest Dividend History
HOLDINGS
Ownership Summary Institutional Holdings Insiders
(SEC Form 4)
 Save stocks for next time

Sparton Corporation (SPA)

F3Q13 Earnings Call

May 8, 2013 11:00 am ET

Executives

Cary Wood – President and Chief Executive Officer

Mark Schlei – Chief Financial Officer

Mike Osborne – Senior Vice President-Corporate Development

Analysts

Andrew Shapiro – Lawndale Capital Management

Arnold Ursaner – CJS Securities

Ross Taylor – Somerset Capital Advisers LLC

Steve Shaw – Sidoti & Company

Presentation

[No presentation session for this event]

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question coming from the line of Andrew Shapiro with Lawndale Capital Management. Please proceed with your question.

Andrew Shapiro – Lawndale Capital Management

Hi, if you could do some clarifications on your script here, Cary, that would be helpful. With respect to DSS, you have discussed that you have an expectation of greater domestic and foreign sonobuoy shipping, arguably, sales volumes in the fourth quarter that’s going to give you and bring your nine months up to positive year-over-year results. What I just want to get a clarification on in the sonobuoy statement is are you just talking about how Q4 is going to be better than prior year or the full fiscal year end is going to be better than prior year or does it even work out that the answer is yes to both?

Cary Wood

First is a couple of things here, we were down 30% on year-over-year basis in DS in the third quarter. There is a probably a deferral of the exact revenue into the fourth quarter which will obviously enhance but we’d already expected and planned. And so I think it’s fair to say, yes, we expect a solid fourth quarter, at least in part of result to that shift, but also expect that to influence the year-over-year as we said we expect that to outpace last year’s full-year $0.91.

Andrew Shapiro – Lawndale Capital Management

Okay, so the full year in all that. Now so you also didn’t expect foreign as a portion of the mix in the Q4 to be more than foreign was a portion of this Q3’s mix meaning we should see a margin expansion as well in the DSS side?

Cary Wood

We don’t expect foreign influence to be significant in our fourth quarter. We expect it to be as (inaudible) it was the same time last year.

Andrew Shapiro – Lawndale Capital Management

Okay and when you talked about your earnings expectations that DSS is going to drive the earnings pace. When you’re referring to $0.90 – that you’ll exceed the $0.91 for the full-year and your nine months is I think $0.50 somewhat.

Cary Wood

$0.50.

Andrew Shapiro – Lawndale Capital Management

You are guiding that you will about $0.41 for the quarter?

Cary Wood

Yeah, that would be the difference, yes.

Andrew Shapiro – Lawndale Capital Management

Okay, I just want to make sure the math – I got the math right on that. And then one last question before I back out, but definitely come back to us, we have some more. On the performance in the Complex Systems side, you have put together now double-digit revenue growth in margin expansion in three of that segments last four quarters including the last two back-to-back. Can you discuss your thoughts on this segment’s resurgence and whether and why you feel it is sustainable?

Cary Wood

Well, I continue to be optimistic on that segment and as we continue to grow and I think it’s going to demonstrate that this is our very volume sensitive segment, that’s we’d always expect it to be the case. As we go in to our budgeting cycle, which were currently in the mid-start and we solidify what the outlook is for next year I think it will only further demonstrate that we’ve got positive outlook for it. And then perhaps we’ll have some discussions internally about how we might revise our margin guidance outlook from where it was previously.

Andrew Shapiro – Lawndale Capital Management

Because it’s substantial previously and probably still is under-utilized fixed capacity issue meaning you will be able to just amortize that fixed cost and report much better margins?

Cary Wood

Obviously, yes, the absorption will be much enhanced by volume and there has been a good amount of new business activity that goes back to Complex Systems, obviously, the software growth in our previous quarter has stated. And as we move forward, we’ll get some clarity on what the full year’s volume and revenue streams are going to look like, but as I sit here right now, I’m very optimistic.

Andrew Shapiro – Lawndale Capital Management

Yeah, and in that segment, regarding the margins and the utilization, Medical was referenced in the last quarter has just starting to flow through because Vietnam, which is in your Complex segment was certified for FDA approval for medical products et cetera, but you didn’t have much intercompany, if any, I think when we asked you, you said it’s all still be assessed in the quarter ended December. For the quarter ended March, when we take a look at your intercompany numbers that you provided, is all that intercompany numbers still DSS and DSS margin application or what amount of it is now consider medical that we might apply a medical margin to it to kind of get a feel for margin effects?

Cary Wood,

We will realize the medical impact on the Complex Systems segment until well in fiscal 2014. And if the contribution from any of the medical and complex systems is still fairly negligible in the third quarter and most of it has been internal sales to DSS, but also on a growing, fairly strong basis as external sales.

Read the rest of this transcript for free on seekingalpha.com