WSI Industries Reports Third Quarter Financial Results

MINNEAPOLIS, MN -- (Marketwired) -- 06/22/17 -- WSI Industries, Inc. (NASDAQ: WSCI) today reported sales for its fiscal 2017 third quarter ending May 28, 2017 of $9,594,000 versus the prior year amount of $8,886,000, or an increase of 8%. Year-to-date sales for the period ended May 28, 2017 totaled $22,237,000 versus $27,106,000 in the prior year.

The Company also reported a net loss of $220,000 or $.08 per diluted share for the fiscal 2017 third quarter compared to net income of $78,000 or $.03 per diluted share in the prior year third quarter. Year-to-date, the Company has incurred a net loss of $904,000 or $.31 per diluted share versus net income of $216,000 or $.07 per diluted share in the prior year.

Michael Pudil, president and chief executive officer, commented: "Our third quarter income was affected by one-time expenses related to the change in CEO leadership. In addition, we also realized an impairment in equipment value in the quarter. Without these one-time costs our operations were profitable during the quarter."

Pudil concluded: "We have an excellent existing customer base who are leaders in their respective businesses. In addition, new business efforts in aerospace, energy and industrial markets look promising. We are in a highly competitive and dynamic marketplace and I intend on WSI being a successful leader in our industry."

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 vehicles, small engines, 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

                            Third quarter ended      Three quarters ended
                         ------------------------  ------------------------
                           May 28,      May 29,      May 28,      May 29,
                             2017         2016         2017         2016
                         -----------  -----------  -----------  -----------
Net Sales                $     9,594  $     8,886  $    22,237  $    27,106
Cost of products sold          8,563        7,934       20,692       24,620
                         -----------  -----------  -----------  -----------
 Gross margin                  1,031          952        1,545        2,486

Selling and
 administrative expense        1,203          788        2,684        2,209
Interest and other
 income                           (7)         (16)         (10)         (20)
Interest and other
 expense                         220           76          354          236
                         -----------  -----------  -----------  -----------
Income (loss) from
 operations
before income taxes             (385)         104        (1483)          61
Income tax expense
 (benefit)                      (165)          26         (579)        (155)
                         -----------  -----------  -----------  -----------

Net income (loss)        $      (220) $        78  $      (904) $       216
                         ===========  ===========  ===========  ===========


Basic income (loss) per
 share                   $     (0.08) $      0.03  $     (0.31) $      0.07
                         ===========  ===========  ===========  ===========

Diluted (loss) income
 per share               $     (0.08) $      0.03  $     (0.31) $      0.07
                         ===========  ===========  ===========  ===========

Weighted average number
 of common shares              2,923        2,920        2,921        2,920

Weighted average number
 of diluted shares             2,923        2,925        2,921        2,929



CONDENSED BALANCE SHEETS (Unaudited)
In thousands

                                                       May 28,     May 29,
                                                         2017        2016
                                                     ----------- -----------
Assets:
Total Current Assets                                 $    11,714 $    12,746
Property, Plant, and Equipment, net                       10,738      11,811
Intangible Assets                                          2,368       2,376
                                                     ----------- -----------
  Total Assets                                       $    24,820 $    26,933
                                                     =========== ===========

Liabilities and Shareholders' Equity:
Total current liabilities                            $     4,935 $     3,811
Long-term debt                                             5,796       7,180
Deferred tax liabilities                                     823       1,951
Shareholders' equity                                      13,266      13,991
                                                     ----------- -----------
  Total Liabilities and Shareholders' Equity         $    24,820 $    26,933
                                                     =========== ===========



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 (Unaudited)
In thousands
                                                      Three quarters ended
                                                    -----------------------
                                                      May 28,     May 29,
                                                        2017        2016
                                                    ----------- -----------

Cash flows from operating activities (1)            $     2,469 $     3,886
Cash used in investing activities                          (786)       (276)
Cash provided by (used in) financing activities             166      (1,381)
                                                    ----------- -----------
Net increase in cash and cash equivalents                 1,849       2,229

Cash and cash equivalents at beginning of period          3,739       4,150
                                                    ----------- -----------

Cash and cash equivalents at end of period          $     5,588 $     6,379
                                                    =========== ===========

(1) Cash flows from operating activities includes non-cash adjustments for
    depreciation and stock option compensation expense of $1,589 and $1,518
    at May 28, 2017 and May 29, 2016, respectively

For additional information:
Michael J. Pudil (President & CEO) or Paul D. Sheely (CFO)
763-295-9202

Source: WSI Industries, Inc.

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