Steinway Reports Q2 Results, Operating Income Doubles

On Thursday of this week (August 2, 2012), Steinway Musical Instruments, Inc. (NYSE: LVB) reported earnings for the quarter and six months ended June 30, 2012.

Second Quarter Results Compared to Prior Year Period

• Sales of $85.7 million, down $3.2 million, or 3.6%
• Gross profit of $27.4 million, up 3.4%
• Gross margin increased to 31.9% from 29.8%
• Income from operations of $6.0 million, up $3.1 million
• Adjusted EBITDA of $7.1 million
• Earnings per share of $0.19, up $0.28 per share

YTD Results

• Sales of $163.7 million, up 1%
• Gross profit of $50.5 million, up 3.4%
• Gross margin increased to 30.9% from 30.2%
• Income from operations of $8.1 million, up 23.5%
• Adjusted EBITDA of $11.1 million
• Earnings per share of $0.24, up $0.28 per share

Non-GAAP Adjustments are detailed in the attached financial tables.

Balance Sheet Highlights

• Cash of $40.5 million
• Borrowing availability of over $105 million
• Inventory reduced $13.8 million, or 9%, from June 2011

Commenting on the second quarter, CEO Michael Sweeney said, “We are pleased with our overall results. We saw substantial improvements in our manufacturing operations worldwide, leading to increased gross margins. Higher gross profit, along with tight control over operating expenses and lower interest expense, resulted in a substantial increase in net income for the quarter.”