WSI Industries Reports Fiscal 2016 First Quarter Financial Results

MINNEAPOLIS, MN -- (Marketwired) -- 12/21/15 -- WSI Industries, Inc. (NASDAQ: WSCI) today reported sales for its fiscal 2016 first quarter ending November 29, 2015 of $9,731,000, versus the prior year amount of $10,098,000. Net income for the fiscal 2016 first quarter was $132,000 or $.05 per diluted share versus the prior year quarter of $167,000 or $.06 per diluted share.

Related to the quarter results, Benjamin Rashleger, president and chief executive officer, commented: "Our fiscal 2016 first quarter sales were down from the prior year quarter due to the continued slump in our energy business. However, our core business in the recreational powersports market experienced another rise with sales increasing by 11% over the prior year quarter." Rashleger continued: "The impact of the low price of oil and natural gas has essentially idled our energy related business. This reduction has, and will continue to, impact our results while we backfill our available and underutilized capacity which leaves us well positioned to capture new business."

Related to the business, Rashleger commented: "We understand the importance of having a robust business development system in place to drive our diversification and growth goals. We have been making important and strategic changes to our organization and strategy as it relates to business development, and we were pleased to recently announce the addition of Tom Schmeling as our Director of Business Development and Marketing. Tom will lead an independent and dedicated department and team with the sole responsibility of developing new business in strategic industries and with strategic accounts in those industries. Tom will be responsible for all of our business development and marketing strategies and the execution towards those strategies. We are excited about the potential Tom will bring to our organization, and for the benefit his contribution and leadership will bring to our diversification and growth goals. Tom's addition will complement and further improve the traction we've developed in our current business development efforts, and we believe the quality of our existing opportunities remains good."

The Company also announced today that its Board of Directors has declared a quarterly dividend of $.04 per share. The dividend will be payable January 20, 2016 to holders of record on January 6, 2016.

WSI Industries, Inc. is a leading contract manufacturer that specializes in the machining of complex, high-precision parts for a wide range of industries, including automotive, avionics and aerospace, energy, recreational powersports vehicles, small engines, marine, bioscience and the defense markets.

The statements included herein which are not historical or current facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. There are certain important factors which could cause actual results to differ materially from those anticipated by some of the statements made herein, including the Company's ability to retain current programs and obtain additional manufacturing programs, and other factors detailed in the Company's filings with the Securities and Exchange Commission.

                           WSI INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS
 (unaudited)
In thousands, except per share amounts

                                                   First quarter ended
                                              -----------------------------
                                               November 29,   November 30,
                                                   2015           2014
                                              -------------- --------------
Net Sales                                     $        9,731 $       10,098
Cost of products sold                                  8,843          9,059
                                              -------------- --------------
Gross margin                                             888          1,039

Selling and administrative expense                       705            700
Interest and other income                                 (1)            (2)
Interest and other expense                                82             88
                                              -------------- --------------
Earnings from operations before income taxes             102            253
Income tax expense (benefit)                             (30)            86
                                              -------------- --------------
Net earnings                                  $          132 $          167
                                              ============== ==============

Basic earnings per share                      $         0.05 $         0.06
                                              ============== ==============

Diluted earnings per share                    $         0.05 $         0.06
                                              ============== ==============

Weighted average number of common shares
 outstanding                                           2,920          2,904

Weighted average number of dilutive common
 shares outstanding                                    2,932          2,961


CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
In thousands
                                                November 29,   November 30,
                                                    2015           2014
                                              -------------- --------------
Assets:
Total Current Assets                          $       13,114 $       12,982
Property, Plant, and Equipment, net                   12,465         12,831
Intangible Assets, net                                 2,378          2,382
                                              -------------- --------------
  Total Assets                                $       27,957 $       28,195
                                              ============== ==============

Liabilities and Shareholders' Equity:
Total current liabilities                     $        4,244 $        4,720
Long-term debt                                         7,959          8,203
Deferred tax liabilities                               1,826          2,060
Shareholders' equity                                  13,928         13,212
                                              -------------- --------------
  Total Liabilities and Shareholders' Equity  $       27,957 $       28,195
                                              ============== ==============


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 (Unaudited)
In thousands
                                                November 29,   November 30,
                                                    2015           2014
                                              -------------- --------------

Cash flows from operating activities (1)      $        1,454 $          436
Cash used in investing activities                        (50)           (33)
Cash used in financing activities                       (513)          (546)
                                              -------------- --------------
Net increase (decrease) in cash and cash
 equivalents                                             891           (143)

Cash and cash equivalents at beginning of
 period                                                4,150          3,233
                                              -------------- --------------

Cash and cash equivalents at end of period    $        5,041 $        3,090
                                              ============== ==============



(1) Cash flows from operating activities includes non-cash adjustments for
 depreciation, deferred taxes and stock option compensation expense of $619
 and $619 at November 29, 2015 and November 30, 2014, respectively.

For additional information:
Benjamin Rashleger
(President & CEO)
or
Paul D. Sheely
(CFO)
763-295-9202

Source: WSI Industries, Inc.

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