Astronomers, both professional and backyard, know Meade Instruments Corporation (NASDAQ: MEAD) as a manufacturer and retailer of fine optical instruments, including telescopes, microscopes and binoculars. The company is still in the midst of what CEO Steve Muellner says is a "restructuring."
Revenues for both 4Q and FY 2008 are down, not significantly, but down nonetheless. The results would have been worse but for Meade's decision to sell its Simmons, Weaver and Redfield brands for $15 million in gross cash proceeds. Gross profit margins are down and FY net losses continue, only at a slightly slower pace. FY 2008 net loss was $17.7 million or $0.81 per share versus FY 2007 net loss of $19.3 million or $0.98 per share. Due to the closing of Discovery Stores, Meade Instruments took a $4 million inventory write-down.
The earnings news, while unimpressive, was not unexpected. What caused the stock to drop over 10% in trading on 16 June 2008 to close at $1.10 was a warning by auditors that there are doubts about the company's ability to continue in business. Meade senior management insists the company has the necessary cash flow to stay in business for at least the next 12 months. The company plans to introduce several new products during FY 2009 and will continue to cut costs whenever possible during the restructuring.
Meade Instruments (MEAD): The sky really is falling
Posted Jun 17th 2008 1:43PM by Victoria Erhart
Filed under: Earnings Reports, Bad News, Bargain Stocks
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