Two days after settling a federal investigation, MTS Systems Corp. said Thursday that its quarterly profit dipped because of costs related to the agreement.
MTS, an Eden Prairie maker of tire and automotive fuel test systems and sensors, said net income fell 12 percent to $9.6 million, or 59 cents a share, in its fiscal third quarter. The results included $7.75 million in settlement costs with the U.S. attorney's office. Officials will discuss the financial results and settlement in more detail in a conference call with analysts Friday.
MTS has been under investigation for possible export law violations since January 2011. The company disclosed in March 2011 that it was not allowed to bid on new government contracts, which had accounted for 5 to 7 percent of its business. That ban was lifted in the fall.
According to MTS, the agreement would settle the U.S. Department of Justice's potential claims against the company for its past disclosures on its government certifications and representations in connection with federal government contracting.
"We are happy to put the government investigation behind us," said CEO and President Jeffrey Graves, who joined the company in May. "We have made great progress to ensure we meet the U.S. government's contractor standards, and we are committed to meeting these requirements every day," he said.
For the quarter, the manufacturer said revenue grew 21 percent to a record $142 million thanks to strong test sales. Excluding settlement costs to the government, earnings grew 55 percent to $1.07 a share. Analysts on average expected 93 cents a share.
MTS's stock rose 16 cents to $43.02 a share in after-hours trading.
Graves said the company will continue exporting its products and was "excited about the many global technology and service growth opportunities in our markets. "
Dee DePass • 612-673-7725