HAMPTON, Va., March 15, 2013 (GLOBE NEWSWIRE) -- Measurement Specialties, Inc. (Nasdaq:MEAS) (the "Company"), a global designer and manufacturer of sensors and sensor-based systems, announced that it entered into a long term supply agreement and license agreement with Sensata on March 14, 2013. The long term supply agreement guarantees the Company certain volumes and associated margin through 2017. The license agreement provides the Company with $11 million in royalties through 2019.
The Company has been working cooperatively with Sensata, its largest customer, on a long term plan to enable Sensata to in-source the majority of the production from MEAS. The long term supply agreement provides for an orderly step down of MEAS production over a 5 year period, allowing both companies to plan for the transition in a controlled fashion. Additionally, the Company will receive quarterly royalty payments tied to a license of certain intellectual property to Sensata.
Frank Guidone, Company CEO commented, "Our 15 year relationship with Sensata (and its predecessor Texas Instruments) has been extremely successful and beneficial for both companies. These agreements create long term clarity for both companies as we migrate production from MEAS to Sensata over the next 5 years. The impact to MEAS in FY14 will be a reduction of approximately $5 million in sales, although margin on the Sensata business will improve as a result of the increased royalty. The benefit of the improved margin on the Sensata business, as well as the overall mix shift to non-Sensata sales, should result in an increase to gross margin of 100 to 200 basis points over the next 2-3 years."
About Measurement Specialties: Measurement Specialties, Inc. (MEAS) designs and manufactures sensors and sensor-based systems to measure precise ranges of physical characteristics such as measuring pressure, linear/rotary position, force, torque, piezoelectric polymer film sensors, custom microstructures, load cells, vibrations and acceleration, optical absorption, humidity, gas concentration, gas flow rate, temperature, fluid properties and fluid level. MEAS uses multiple advanced technologies - piezoresistive silicon, polymer and ceramic piezoelectric materials, application specific integrated circuits, micro-electromechanical systems ("MEMS"), foil strain gauges, electromagnetic force balance systems, fluid capacitive devices, linear and rotational variable differential transformers, anisotropic magneto-resistive devices, electromagnetic displacement sensors, hygroscopic capacitive structures, ultrasonic measurement systems, optical measurement systems, negative thermal coefficient ("NTC") ceramic sensors, 3-6 DOF (degree of freedom) force/torque structures, complex mechanical resonators, magnetic reed switches, high frequency multipoint scanning algorithms, and high precision submersible hydrostatic level detection – to engineer sensors that operate precisely and cost effectively.
This release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward looking statements may be identified by such words or phrases as "should", "intends", " is subject to", "expects", "will", "continue", "anticipate", "estimated", "projected", "may", " believe", "future prospects", or similar expressions. Factors that might cause actual results to differ materially from the expected results described in or underlying our forward-looking statements include: Conditions in the general economy, including risks associated with the current financial crisis and worldwide economic conditions and reduced demand for products that incorporate our products; Competitive factors, such as price pressures and the potential emergence of rival technologies; Compliance with export control laws and regulations; Fluctuations in foreign currency exchange and interest rates; Interruptions of suppliers' operations or the refusal of our suppliers to provide us with component materials, particularly in light of the current economic conditions and potential for suppliers to fail; Timely development, market acceptance and warranty performance of new products; Changes in product mix, costs and yields; Uncertainties related to doing business in Europe and China; Legislative initiatives, including tax legislation and other changes in the Company's tax position; Legal proceedings; Compliance with debt covenants, including events beyond our control; Conditions in the credit markets, including our ability to raise additional funds or refinance our existing credit facility; Adverse developments in the automotive industry and other markets served by us; and risk factors listed from time to time in the reports we file with the SEC. The Company from time-to-time considers acquiring or disposing of business or product lines. Forward-looking statements do not include the impact of acquisitions or dispositions of assets, which could affect results in the near term. Actual results may differ materially. The Company assumes no obligation to update the information in this release.
Mark Thomson, CFO (757) 766-4224