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Fourth Quarter Report for Fiscal 1997
Electro Rent Corporation (Nasdaq:ELRC) registered an 11 percent improvement in earnings per share on a 7 percent revenue increase in the twelve months ended May 31, 1997, compared with the previous fiscal year. Results for the fourth quarter, however, were lower than in the same months a year ago.
For the three months ended May 31, 1997, net income amounted to $5,180,000, equal to 42 cents per share, a decrease of 14 percent from last year's record $6,046,000, or 48 cents per share. Average common and common equivalent shares outstanding were 12,444,000 in the most recent quarter and 12,398,000 in the same period of fiscal 1996. Fourth quarter revenues were $37,574,000, compared with $38,302,000 one year earlier.
Daniel Greenberg, chairman and chief executive officer, commented: "We experienced some softness in March and April, the first two months of the fourth quarter, but business began picking up in May, allowing us to end the quarter on a more positive note. Improving business trends are continuing in the first two months of fiscal 1998."
Net income for the full fiscal year advanced to $24,073,000, equal to $1.94 per share, from $21,643,000, or $1.75 per share one year ago. Record revenues for fiscal 1997 totaled $150,500,000, compared with $141,137,000 last year.
Greenberg continued: "Even though spring proved to be less robust than expected, results for the full year were at record highs, eclipsing an especially strong period last year. Rental and lease revenues posted an 8 percent increase, led by our short-term, event-oriented business and our operating leases. At the same time, the test equipment segment contributed slightly lower revenues, and used equipment sales were essentially unchanged from the previous year.
"We continued to invest in people, facilities and quality improvements, as well as advertising, during the year. The high service levels required by our customers placed increasing demands on us and our competitors. As a result, selling, general and administrative expense increased by 12.3 percent.
"We also continued to invest in new equipment at a record pace while continuing to improve our overall financial position. Last year we reduced debt by $12.6 million to $4.2 million at fiscal year-end while, at the same time, increasing equipment purchases to an all time high of $76.6 million. Net cash provided by operating activities went up 18 percent to $68.7 million from $58.1 million in the previous year."
At May 31, 1997, the equipment pool had moved up at original cost to $266.6 million, compared with $241.4 million one year ago.
"Our market continues to change and evolve. We will continue to invest to increase our market share and provide superior service. The new year is off to a positive start and we will make every effort to maintain the momentum," Greenberg concluded.
FINANCIAL HIGHLIGHTS
(000 omitted except per share data)
Three Months Ended
May 31Twelve Months Ended
May 311997 1996 1997 1996 Revenues $ 37,574 $ 38,302 $ 150,500 $ 141,137 Net Income $ 5,180 $ 6,046 $ 24,073 $ 21,643 Net Income per common share and common equivalent share $ .42 $ .48 $ 1.94 $ 1.75 Average common and common equivalent shares outstanding 12,444 12,398 12,400 12,350
May 31
1997
1996
Total assets $ 188,213 $ 171,428 Bank borrowings $ 4,200 $ 16,800 Shareholders' equity $ 139,220 $ 114,623