SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to
Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 17, 1998
THE CHERRY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-8955 36-2977756
(Commission File Number) (I.R.S. Employer Identification Number)
3600 Sunset Avenue, Waukegan, Illinois 60087
(Address of Principal Executive Offices) (Zip Code)
(847) 662-9200
(Registrant's Telephone Number, Including Area Code)
ITEM 5. OTHER EVENTS.
On June 17, 1998, Registrant issued a press release announcing first
quarter earnings and the impact of the General Motors strike. Such press
release is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) EXHIBITS
Exhibit Number Description
99.1 Press Release dated June 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHERRY CORPORATION
By: /s/ Dan A. King
Dan A. King
Vice President of Finance
Dated: June 18, 1998
Wednesday June 17, 5:00 pm Eastern Time
COMPANY PRESS RELEASE
SOURCE: The Cherry Corporation
CHERRY BEGINS YEAR WITH BEST FIRST QUARTER IN HISTORY
Earnings Per Share Up 39 Percent
WAUKEGAN, Ill., June 17 -- The Cherry Corporation (Nasdaq: CHERA - news, CHERB
- - news) today announced that it began its fiscal year with the highest sales and
net earnings for any first quarter in the company's history. The sales level
also represents a record for any quarterly period.
Sales for the first quarter ended May 31, 1998 were a record $122.7 million, up
7.1 percent from the first quarter of last year. The sales increase was driven
by international operations which experienced sales growth of 19.6 percent.
Net earnings for the quarter were a record $6.3 million, up 40 percent from $4.5
million last year. Diluted earnings per share of $.50 increased 39 percent from
$.36 in the prior year, also establishing a first quarter record. The
significant improvement in net earnings is the result of improved utilization of
manufacturing and operating resources at international operations, the company
said.
``We are off to a fine start with continued opportunities for further growth on
the horizon,'' said Peter Cherry, chairman and president. ``I am especially
pleased by the increased demand we have experienced internationally for our
automotive and computer keyboard products. Although our domestic sales were
level with last year, those operations are pursuing a full plate of
opportunities particularly in power management semiconductors and electronic
controls, which we believe will result in increased domestic sales.''
The Company also announced that it is being affected by the current strike at
General Motors. To date, the Company estimates that shipments to General Motors
have been reduced by approximately $750,000 and that the impact on daily sales
would be approximately $250,000 by the end of this week if the strike continues.
As a consequence, the Company temporarily laid off approximately 100 employees
at its automotive operations based in Waukegan, Ill., and should the strike
continue, additional temporary layoffs may be necessary. The impact will be
offset somewhat by a shutdown which the Company had planned for the Waukegan
automotive operations later this month in conjunction with its customers' model
year changeovers, increased sales requirements that might come from other
automotive customers, as well as increased sales which might occur following a
settlement.
The Cherry Corporation manufactures proprietary and custom electrical switches,
sensors, electronic keyboards and controls, and semiconductors for the worldwide
automotive, computer, and consumer and commercial markets. The company has eight
wholly owned subsidiaries in the United States, Germany, England, France,
Australia, Czech Republic, Mexico and Hong Kong. Cherry also has 50-50 joint
ventures in Japan, Hirose Cherry Precision Company Limited, and in India, TVS
Cherry Private Limited, and a Japanese automotive sales and engineering office.
Additional information is available on the company's website at
http://www.cherrycorp.com.
Certain statements in this press release, including those regarding
opportunities for further growth, increased domestic sales and the impact of the
General Motors strike, are ``forward-looking statements'' within the meaning of
the Private Securities Litigation Reform Act of 1995 and involve certain risks
and uncertainties that could significantly impact future results. A discussion
of these risks and uncertainties is contained in the Company's Form 10-K for the
year ended February 28, 1998, filed with the Securities and Exchange Commission.
THE CHERRY CORPORATION (Nasdaq CHERA, CHERB)
<TABLE>
Summary of Consolidated Statements of Earnings
(In thousands except share data)
<CAPTION>
Three Months Ended May 31,
1998 1997 % Change
<S> <C> <C> <C>
Net Sales $122,665 $114,535 7.1
Cost of Products Sold 85,934 82,010 4.8
Gross Profit 36,731 32,525 12.9
Operating Expenses 26,381 24,551 7.5
Operating Income 10,350 7,974 29.8
Other Income, Net 219 98 123.5
Earnings Before Interest
and Taxes 10,569 8,072 30.9
Interest Expense, Net 676 853 -20.8
Earnings Before Income Taxes 9,893 7,219 37.0
Income Tax Provision 3,562 2,699 32.0
Net Earnings $6,331 $4,520 40.1
Earnings Per Share:
Basic $.51 $.36 41.7
Diluted $.50 $.36 38.9
Average Shares Outstanding
Basic 12,483,267 12,429,122 0.4
Diluted 12,656,548 12,503,757 1.2
Condensed Consolidated Balance Sheets
(In thousands except share data)
May 31, Feb. 28,
1998 1998 % Change
Assets
Cash $10,754 $9,659 11.3
Accounts Receivable 60,732 63,332 -4.1
Inventory 55,432 52,068 6.5
Other Current Assets 10,367 9,547 8.6
Land, Buildings and
Equipment, Net 171,338 162,961 5.1
Investment in Affiliates
and Other Assets 12,159 12,766 -4.8
Total Assets $320,782 $310,333 3.4
Liabilities and Stockholders' Equity
Short-term Debt $19,498 $20,630 -5.5
Current Maturities of
Long-term Debt 1,819 1,780 2.2
Other Current Liabilities 53,801 48,938 9.9
Long-term Debt 33,069 33,393 -1.0
Deferred Taxes and Credits 22,834 22,138 3.1
Total Liabilities 131,021 126,879 3.3
Stockholders' Equity 189,761 183,454 3.4
Total Liabilities and
Stockholders' Equity $320,782 $310,333 3.4
Stockholders' Equity Per Share $15.18 $14.71 3.2
Ending Shares Outstanding 12,496,763 12,475,615 0.2
</TABLE>
