Schmitt Industries announced its results for the third quarter ended February 29, 2016. Q3 total sales decreased $482,153, or 16%, to $2,528,465 from $3,010,618 in the three months ended February 28, 2015.
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Net loss was $450,906, or $0.15 per fully diluted share, for the three months ended February 29, 2016 as compared to net loss of $168,371, or $0.06 per fully diluted share, for the three months ended February 28, 2015.
For the nine months ended February 29, 2016, total sales decreased $504,792, or 5.5%, to $8,706,618 from $9,211,410 in the nine months ended February 28, 2015.
Net loss was $1,049,755, or $(0.35) per fully diluted share, for the nine months ended February 29, 2016 as compared to net loss of $186,428, or $(0.06) per fully diluted share, for the nine months ended February 28, 2015.
Balancer segment sales focus throughout the world on end-users, rebuilders and original equipment manufacturers of grinding machines with the target geographic markets of North America, Asia and Europe.
Balancer segment sales decreased $623,010, or 32.7%, to $1,280,472 for the three months ended February 29, 2016 compared to $1,903,482 for the three months ended February 28, 2015. The decrease is primarily attributed to a significant decline in sales into China and North America for the quarter.
Balancer segment sales decreased $577,805, or 10.2%, to $5,088,696 for the nine months ended February 29, 2016 compared to $5,666,501 for the nine months ended February 28, 2015.
The decrease is primarily attributed to a significant decline in sales into China and decreased sales into other parts of Asia and Europe.
The Measurement segment product line consists of SMS and Lasercheck® laser-based surface microroughness measurement systems, Acuity laser-based distance measurement and dimensional sizing laser sensors, and Xact® ultrasonic-based remote tank monitoring products.
Total Measurement segment sales increased $140,857, or 12.7%, to $1,247,993 for the three months ended February 29, 2016 compared to $1,107,136 for the three months ended February 28, 2015. The increase is primarily attributed to increased sales in our Acuity product line.
Measurement segment sales increased $73,013, or 2.1%, to $3,617,922 for the nine months ended February 29, 2016 compared to $3,544,909 for the nine months ended February 28, 2015, due to increased sales in our Acuity and Xact product lines, offset in part by lower sales in our SMS product line.
Gross margin for the three months ended February 29, 2016 decreased to 42.1% as compared to 44.9% for the three months ended February 28, 2015. Gross margin for the nine months ended February 29, 2016 decreased to 43.4% as compared to 47.4% for the nine months ended February 28, 2015.
The overall decrease in gross margin in both the three and nine month periods ended February 29, 2016 compared to the three and nine month periods in the prior fiscal year is primarily influenced by shifts in product sales mix.
Operating expenses decreased $27,215, or 1.8%, to $1,473,655 for the three months ended February 29, 2016 as compared to $1,500,870 for the three months ended February 28, 2015.
General, administrative and sales expenses increased $492 for the three months ended February 29, 2016 as compared to the same period in the prior year with increases in sales-related travel expense offset by reductions in sales commissions and professional, legal and accounting expenses.
The increase in general, administrative and sales expense was offset by a decrease in spending of $27,707, or 28.9%, for research and development for the quarter ended February 29, 2016 as compared to the same quarter in the prior year.
Operating expenses increased $216,267, or 4.8%, to $4,752,584 for the nine months ended February 29, 2016 as compared to $4,536,317 for the nine months ended February 28, 2015.
General, administrative and sales expenses increased $281,657, or 6.6%, for the nine months ended February 29, 2016 as compared to the same period in the prior year due to increases in sales commissions and personnel expense, increases in patent expenses and increases in sales-related travel, general office and utilities costs offset by a reduction in trade show expenses.
This increase was offset by a decrease in spending of $65,390, or 22.3%, for research and development for the first three quarters of Fiscal 2016 as compared to the same period in the prior year. ■