(RTTNews) -  Thursday, mechanical testing systems and sensor maker MTS Systems Corp. (MTSC: News ) slipped to a loss in the fourth quarter, from a year ago, on a 24% decline in revenue, as well as higher expenses that includes significant severance charges.

Eden Prairie, Minnesota-based MTS Systems slipped to a net loss of $2.97 million from a net income of $14.54 million in the prior-year period. On a per share basis, net loss was $0.18, compared to a net income of $0.85 in the year-ago period.

Impacting net loss, the reduction in workforce and cost-cutting initiatives resulted in a pre-tax severance charge of $8.1 million or $0.33 per share.

Analysts polled by Thomson Reuters expected earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude one-time items.

MTS Systems' revenue fell 24% to $93.84 million from $124.06 million in the year-earlier quarter. The revenue decline was due to a 31% decline in the Test organic business and 35% decrease in the Sensors business, partially offset by a 7% increase in the SANS segment.

For the fourth quarter, MTS Systems' orders decreased 17% to $95.5 million from last year, due to lower volume in the Test segment in the Americas and Europe, and lower volume in the Sensors segment across all geographies.
Total operating expenses increased to $35.17 million from $32.68 million in the year-earlier period.
Combined with cost-reduction initiatives taken earlier in the year, the company anticipates net saving of $21 million before taxes in fiscal 2010.

For the full-year, profit decreased 65% to $17.39 million from $49.19 million in the year-ago period. On a per share basis, net income declined to $1.03 from $2.80. Analysts expected full-year earnings of $1.39. Pretax severance charges for the full year totaled $12.1 million or $0.48 per share. Revenue decreased 11% to $408.88 million from $460.51 million.

Looking forward, MTS Systems Chair and CEO Laura Hamilton said, "We started fiscal year 2010 with the knowledge that backlog is down $67 million and last year's cost reduction actions will offset much of this operating margin decline. The current economic situation creates a broad range of possible outcomes for orders. Economic and competitive conditions, order timing, mix, and stimulus make accurate forecasting difficult at this time."

MTSC closed Thursday's regular trading session at $27.50, down $1.02 or 3.58%, on the Nasdaq. In the after-hours, the stock further lost $0.01 or 0.02% to trade at $27.4945.

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by RTT Staff Writer

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