Schmitt Industries announced its operating results for the fourth quarter and fiscal year ended May 31, 2016. Q4 total sales decreased $878,946, or 22.8%, to $2,978,735 from $3,857,681 in Q4 2015.
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Net loss was $465,434, or $(0.16) per fully diluted share, for the three months ended May 31, 2016 as compared to net income of $92,759, or $0.03 per fully diluted share, for the three months ended May 31, 2015.
For the fiscal year ended May 31, 2016, total sales decreased $1,383,738, or 10.6%, to $11,685,353 from $13,069,091 in the fiscal year ended May 31, 2015. Net loss was $1,514,189, or $(0.51) per fully diluted share, for the fiscal year ended May 31, 2016 as compared to net loss of $93,669, or $(0.03) per fully diluted share, for the fiscal year ended May 31, 2015.
The focus of Balancer segment sales throughout the world is 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 $309,685, or 14.2%, to $1,874,050 for the three months ended May 31, 2016 compared to $2,183,735 for the three months ended May 31, 2015.
Balancer segment sales decreased $887,490, or 11.3%, to $6,962,746 for the fiscal year ended May 31, 2016 compared to $7,850,236 for the fiscal year ended May 31, 2015.
The decreases in both periods are primarily attributed to a significant decline in sales into China and other parts of Asia and North America, offset in part by increased sales into 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 decreased $569,261, or 34.0%, to $1,104,685 for the three months ended May 31, 2016 compared to $1,673,946 for the three months ended May 31, 2015. Measurement segment sales decreased $496,248, or 9.5%, to $4,722,607 for the fiscal year ended May 31, 2016 compared to $5,218,855 for the fiscal year ended May 31, 2015.
Net sales and gross margin for the fiscal year ended May 31, 2015 included the sales of two CASI machines, which were not repeated in fiscal 2016. These decreases in both periods are primarily due to decreased sales in our SMS product line, offset in part by increased sales in our Acuity product line.
Gross margin for the three months ended May 31, 2016 decreased to 36.4% as compared to 45.9% for the three months ended May 31, 2015. Gross margin for the fiscal year ended May 31, 2016 decreased to 41.7% as compared to 47.0% for the fiscal year May 31, 2015.
The overall decrease in gross margin in the three months and fiscal year ended May 31, 2016 compared to the three months and fiscal year ended May 31, 2015 is primarily influenced by shifts in product sales mix.
Operating expenses decreased $117,654, or 7.1%, to $1,551,185 for the three months ended May 31, 2016 as compared to $1,668,839 for the three months ended May 31, 2015.
General, administrative and sales expenses decreased $92,411, or 5.8%, to $1,490,948 for the three months ended May 31, 2016 as compared to $1,583,359 for the same period in the prior year due to decreases in sales commissions and administrative payroll expenses partially offset by increases in general office and other administrative expenses.
In addition, research and development expenses decreased $25,243, or 29.5%, for the three months ended May 31, 2016 as compared to the same period in the prior year.
Operating expenses increased $98,613, or 1.6%, to $6,303,769 for the fiscal year ended May 31, 2016 as compared to $6,205,156 for the fiscal year ended May 31, 2015.
General, administrative and sales expenses increased $189,246, or 3.2%, to $6,016,097 for the fiscal year ended May 31, 2016 as compared to $5,826,851 the same period in the prior year due to increases in sales commissions, salaries and related payroll expense in the early part of the fiscal year and increases in general office and utilities costs offset by a reduction in depreciation expense.
This increase was offset by a decrease in spending of $90,633, or 24.0%, for research and development for fiscal year 2016 as compared to the same period in the prior year. ■