MTS Systems (MTSC) Tops Q2 EPS by 1c, Revenues Beat
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MTS Systems (NASDAQ: MTSC) reported Q2 EPS of $0.27, $0.01 better than the analyst estimate of $0.26. Revenue for the quarter came in at $211.46 million versus the consensus estimate of $208.19 million.
SECOND QUARTER FINANCIAL AND OPERATING HIGHLIGHTS
- Record orders of $277.4 million, an increase of 31.1%, reflecting record orders in both our Test & Simulation and Sensors Business Units
- Backlog strong at $500.1 million, an increase of 1.4% over prior year
- Revenue of $211.5 million, a decline of 9.3%
- Sensors revenue growth of 4.6%
- GAAP diluted loss per share of $(0.06), reflecting the impact of the restructuring actions taken amidst economic uncertainty
- Adjusted diluted earnings per share of $0.27, including $0.26 of amortization expense
EXECUTIVE COMMENTARY - DR. JEFFREY GRAVES, PRESIDENT AND CHIEF EXECUTIVE OFFICER
"As we confront the ongoing effects of the global COVID-19 pandemic, we are focused on protecting the well-being of our employees and continuing to service our long-standing customer base while managing our cash, maximizing liquidity, and reducing our cost infrastructure. Despite the pandemic's impact, we achieved record orders in the second quarter in both our Test & Simulation and Sensors businesses and a near-record backlog. Notably, our Test & Simulation segment was awarded the largest order in MTS history for an advanced seismic simulation system in China, valued at over $70 million. These results demonstrate the mission-critical nature of our offering and our customers' long-term commitment to new product development.
Towards the end of the quarter, we saw softer demand as the pandemic forced many customers to temporarily shut down their operations and delay orders. Additionally, temporary closures of some of our facilities as well as government restrictions on cross-border access created logistical delays and further limited our employees' access to customers. Nevertheless, as an essential critical infrastructure business, we are continuing to serve clients in the U.S. and in other parts of the world as permissible.
We continue to act decisively to mitigate COVID-19\'s impact on our business. While the decision to restructure the business and reduce costs was difficult, we completed these initiatives rapidly to improve operating efficiencies and strengthen our financial position. We took further short-term cost actions, including implementing furloughs, extending paid time-off, and reducing work schedules, to address the immediate effects of the virus' impact on our customers, our suppliers and our internal operations. We suspended our dividend to maximize liquidity, helping ensure that we are able to meet our financial obligations while continuing to make the most critical investments in our business.
We remain confident we will emerge from this crisis stronger owing to our highly diverse customer base, our broad geographic footprint, and the critical nature of the MTS product portfolio relative to the markets we serve. While the duration and scale of COVID-19's economic impact remains unknown, we believe companies globally will continue to prioritize R&D over the long-term and that we are uniquely positioned to shorten their development cycles and decrease their costs, supporting their product development and ultimately their success."
Consistent with our announcement on April 16, 2020, given the continued uncertainties in the business environment, we remain unable to accurately predict the specific extent, or duration, of the impact of COVID-19 on our financial results. As a result, financial guidance has been withdrawn for fiscal year 2020.
For earnings history and earnings-related data on MTS Systems (MTSC) click here.
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