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Sparton Corp. has reported net sales of $97.4 million and gross profit margin of 16.3% for the second quarter of fiscal year 2017 ended January 1, 2017.
"We are pleased to report that our Q2 performance reflects the continued improvement in revenues and profitability in our MDS segment as well as the continued strengthening of our balance sheet. The MDS segment reported net organic revenue growth along with increased new program wins and stronger margins as compared to the prior quarter and Q2 of fiscal 2016. Our ECP segment did not perform as expected due to delays in production of the Q53G sonobuoy and the need to record a loss on a contract in our rugged display platform. Both of these issues have been addressed and are not expected to have any impact on future results," commented Joseph J. Hartnett, Interim President & CEO.
Joe McCormack, Senior Vice President and CFO, said, "Through our continued focus on working capital management and cash flow, we generated strong free cash flow in the quarter of $10 million, principally as a result of the management of inventory levels and our supply chain. We are pleased to report that our borrowings under our revolving credit agreement was reduced to $85.7 million."
Hartnett concluded, "Looking forward, we expect third quarter revenues to be in the range of $97 million to $101 million with a gross profit margin of approximately 18.5%."
As previously announced, the Board of Directors of Sparton is exploring a possible sale of the company. There can be no assurance that such a sale will occur.
Sparton Corporation (NYSE:SPA), now in its 117th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service and refurbishment. The primary markets served are Medical & Biotechnology, Military & Aerospace and Industrial & Commercial. Headquartered in Schaumburg, IL, Sparton currently has thirteen manufacturing locations and engineering design centers worldwide. For more information, visit www.sparton.com.