CONTACT: Dan King, Vice President of Finance and Administration
The Cherry Corporation
(847) 360-3541 FOR IMMEDIATE RELEASE
CHERRY CORPORATION REPORTS FIRST
QUARTER RESULTS
NET EARNINGS INCLUDE GAIN ON SALE OF
SEMICONDUCTOR OPERATION
WAUKEGAN, IL. (June 22, 2000) -The Cherry Corporation (Nasdaq - CHER) today
announced sales and earnings for its first quarter ended May 31, 2000. The
results of the Company's semiconductor operation, which was recently sold, are
reflected as a discontinued operation.
For the Company's continuing operations, sales for the quarter were $90,472,000,
down 2.5 percent from last year's level of $92,755,000. Domestic sales increased
1.7 percent while sales for the European operations decreased 6.4 percent.
Although sales for the European operations were higher when measured in local
currencies, that increase was more than offset by a weaker Euro.
Net earnings for the quarter were $88,459,000. Included in this amount is the
gain on the sale of the Company's semiconductor operation of $84,733,000 as well
as the net earnings of that discontinued operation up through the date of sale
which were $922,000.
Net earnings from continuing operations were $2,804,000, up 10.2 percent from a
year earlier. Diluted earnings per share of $.27 increased 8 percent from a year
ago. Underlying this increase was a 26.9 percent decrease in earnings before
interest and taxes which was more than offset by interest income earned on the
proceeds from the sale of the semiconductor operation.
The quarter was negatively affected by the operational problems with the North
American automotive division that started in the third quarter of fiscal 2000.
The North American switches and controls business experienced higher sales and
profits in connection with the launch of a custom electronic control panel. The
quarter was also positively affected by lower depreciation expense resulting
from a change in the calculation used to estimate depreciation for interim
periods.
The Cherry Corporation manufactures proprietary and custom electrical switches,
sensors, electronic keyboards and controls for the worldwide automotive,
computer, and consumer and commercial markets. The Company has two operating
divisions in the United States and seven wholly owned subsidiaries in 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 Limited. Additional information is available on the
Company's website at http://www.cherrycorp.com
Tables Follow
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THE CHERRY CORPORATION (NASDAQ CHER)
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
<CAPTION>
Three Months Ended May 31,
--------------------------
SUMMARY OF CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except share data) 2000 1999 % Change
----------------------------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Net Sales $ 90,472 $ 92,755 -2.5
Cost of Products Sold 67,117 69,141 -2.9
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Gross Profit 23,355 23,614 -1.1
Operating Expenses 20,095 19,448 3.3
-------------- -------------- --------------
Operating Income 3,260 4,166 -21.7
Other Income, Net 141 485 -70.9
-------------- -------------- --------------
Earnings Before Interest and Taxes 3,401 4,651 -26.9
Interest Income (Expense), Net 1,283 (636) N/M
-------------- -------------- --------------
Earnings from Continuing Operations Before Income
Taxes 4,684 4,015 16.7
Income Tax Provision 1,880 1,470 27.9
-------------- -------------- --------------
Earnings from Continuing Operations 2,804 2,545 10.2
Earnings from Discontinued Operations (less
applicable income taxes of $550 and $456,
respectively) 922 1,031 -10.6
Gain on Disposition of Discontinued Operations
(less applicable income taxes of $66,549) 84,733 0 N/M
============== ============== ==============
Net Earnings $ 88,459 $ 3,576 N/M
============== ============== ==============
EARNINGS PER SHARE - BASIC:
Earnings from Continuing Operations $ .28 $ .25 12.0
Earnings from Discontinued Operations $ 8.45 $ .10 N/M
-------------- -------------- --------------
Net Earnings Per Share - Basic $ 8.73 $ .35 N/M
NET EARNINGS PER SHARE - DILUTED:
Earnings from Continuing Operations $ .27 $ .25 8.0
Earnings from Discontinued Operations $ 8.32 $ .10 N/M
-------------- -------------- --------------
Net Earnings Per Share - Diluted $ 8.59 $ .35 N/M
-------------- -------------- --------------
Average Shares Outstanding
Basic
10,138,233 10,177,697 -0.4
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Diluted 10,290,319 10,242,680 0.5
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THE CHERRY CORPORATION (NASDAQ CHER)
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
<CAPTION>
CONSOLIDATED BALANCE SHEETS MAY 31, Feb. 29,
(In thousands except share data) 2000 2000 % Change
------------------------------------------------------ ------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Cash $ 174,069 $ 13,602 N/M
Accounts Receivable 49,730 48,019 3.6
Inventory 39,033 37,317 4.6
Net Assets of Discontinued Operations 0 78,738 -100.0
Other Current Assets 5,586 4,889 14.3
Land, Buildings and Equipment, Net 114,317 116,358 -1.8
Investment in Affiliates and Other Assets 13,621 13,195 3.2
------------- -------------- --------------
TOTAL ASSETS $ 396,356 $ 312,118 27.0
============= ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term Debt $ 1,921 $ 19,014 -89.9
Current Maturities of Long-term Debt 1,591 60,785 -97.4
Income Taxes Payable 74,950 2,870 N/M
Other Current Liabilities 42,346 40,220 5.3
Long-term Debt 4,218 4,732 -10.9
Deferred Taxes and Credits 8,626 10,346 -16.6
------------- -------------- --------------
TOTAL LIABILITIES 133,652 137,967 -3.1
STOCKHOLDERS' EQUITY 262,704 174,151 50.8
------------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 396,356 $ 312,118 27.0
============= ============== ==============
STOCKHOLDERS' EQUITY PER SHARE $ 25.72 $ 17.28 48.8
============= ============== ==============
ENDING SHARES OUTSTANDING 10,215,151 10,079,983 1.3
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