![](https://capedge.com/proxy/8-K/0000065201-06-000008/pr-banner.jpg)
date: | May 23, 2006 |
for release: | Immediate |
contact: | Investor Contact: |
Gary J. Morgan, Vice President of Finance, CFO | |
215-723-6751, gmorgan@met-pro.com |
Met-Pro Corporation Announces Financial Results
for the First Quarter Ended 4/30/2006
Harleysville, PA, May 23 - Raymond J. De Hont, Chairman and Chief Executive Officer of Met-Pro Corporation (NYSE:MPR), today announced the Company’s financial results for the first quarter ended April 30, 2006.
Sales for the first quarter ended April 30, 2006 were $19.8 million, which was 10% above last year’s first quarter sales of $17.9 million.
Net income for the first quarter ended April 30, 2006 totaled $1.2 million compared with $1.3 million for the same period last year. The decline in net income was primarily due to $0.3 million of non-recurring and non-capitalized expenses resulting from the relocation of Met-Pro’s Sethco and Mefiag Divisions, and the expansion of the Company’s Netherlands and Telford, Pennsylvania facilities. Excluding these non-recurring relocation and expansion charges, Met-Pro’s pro forma net income was $1.5 million, an increase of 10% over the first quarter ending April 30, 2005.
Additionally, as required by a new accounting standard, a non-cash charge for stock options was expensed for the first time this quarter, resulting in $0.1 million of additional expenses without a comparable charge in the same quarter in 2005.
Basic and diluted earnings per share were $0.11 compared with the $0.12 earned during last year’s first quarter. Excluding non-recurring charges, Met-Pro’s pro forma basic and diluted earnings per share were $0.13, an increase of 8% over last year’s first quarter.
The Company’s backlog of orders is a record high at $21.5 million compared with $18.3 million for the first quarter ended April 30, 2005, an increase of 18%. Substantially all of the backlog that existed as of April 30, 2006 is expected to be shipped during the current fiscal year.
Met-Pro’s bookings of new orders for the first quarter, which were the second highest of any quarter in the Company’s history, totaling $23.8 million, decreased 4% when compared with $24.7 million for the same period last year, which was the highest quarter in the Company’s history.
“We are pleased with the results for the first quarter as we build for the future,” said De Hont. “Our quotation activity remains high and we continue to achieve solid bookings. The non-recurring relocation and expansion expenses incurred during the first quarter were an investment for a long-term gain in efficiency. Excluding these non-recurring expenses, earnings grew nicely over the comparable quarter last year. The significant orders in the first quarter, combined with steady quotation activity, give us continued optimism about our future prospects.”
On March 9, 2006, the Company paid a quarterly dividend of $0.0625 per share to shareholders of record at the close of business on February 24, 2006. In addition, the Board of Directors, at their meeting on April 5, 2006, declared a quarterly dividend of $0.0625 per share payable June 7, 2006 to shareholders of record at the close of business on May 26, 2006. This represents a 7.5% increase over the same period last year and follows a four-for-three stock split, which was paid on November 15, 2005. This is the thirty-first consecutive year the Company has paid a cash or stock dividend.
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Met-Pro Corporation/Page 2
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included at the end of this press release is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated in accordance with generally accepted accounting principles as well as certain Regulation G disclosures.
About Met-Pro
Met-Pro Corporation, with headquarters at 160 Cassell Road, Harleysville, Pennsylvania, manufactures and sells product recovery and pollution control equipment for purification of air and liquids and fluid handling equipment for corrosive, abrasive and high temperature liquids. The company, established in 1966, provides products to residential, commercial, industrial and municipal markets that include, but are not limited to, pharmaceuticals, chemicals, petrochemicals, water and aquariums. For more information, please visit www.met-pro.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release, and other materials filed or to be filed with the Securities and Exchange Commission (as well as information included in oral or other written statements made or to be made by the Company) contain statements that are forward-looking. Such statements may relate to plans for future expansion, business development activities, capital spending, financing, the effects of regulation and competition, or anticipated sales or earnings results. Such information involves risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to, the cancellation or delay of purchase orders and shipments, product development activities, computer systems implementation, dependence on existing management, the continuation of effective cost and quality control measures, retention of customers, global economic and market conditions, and changes in federal or state laws. |
Met-Pro common shares are traded on the New York Stock Exchange, symbol MPR.
To obtain an Annual Report or additional information on the Company, please call 215-723-6751 and ask for the Investor Relations Department, or visit the Company’s Web site at www.met-pro.com.
Met-Pro Corporation
Condensed Consolidated Balance Sheet
(unaudited)
April 30, 2006 | January 31, 2006 | ||||
Assets | |||||
Current assets | $55,473,036 | $54,004,947 | |||
Property, plant and equipment, net | 15,803,718 | 13,838,221 | |||
Costs in excess of net assets of businesses acquired, net | 20,798,913 | 20,798,913 | |||
Other assets | 1,015,440 | 1,020,844 | |||
Total assets | $93,091,107 | $89,662,925 | |||
Liabilities and shareholders’ equity | |||||
Current liabilities | $16,623,909 | $17,142,747 | |||
Long-term debt | 5,723,812 | 2,723,586 | |||
Other liabilities | 2,301,464 | 2,258,354 | |||
Total liabilities | 24,649,185 | 22,124,687 | |||
Shareholders’ equity | 68,441,922 | 67,538,238 | |||
Total liabilities and shareholders’ equity | $93,091,107 | $89,662,925 |
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Met-Pro Corporation
Consolidated Statement of Operations
(unaudited)
Three Months Ended | ||||
April 30, | ||||
Net sales | $19,779,041 | $17,927,612 | ||
Cost of goods sold | 13,923,682 | 11,973,337 | ||
Gross profit | 5,855,359 | 5,954,275 | ||
Operating expenses | ||||
Selling | 1,896,179 | 1,954,263 | ||
General and administrative | 2,362,923 | 2,093,458 | ||
Income from operations | 1,596,257 | 1,906,554 | ||
Interest expense | (59,805 | ) | (66,052 | ) |
Other income, net | 239,208 | 126,989 | ||
Income before taxes | 1,775,660 | 1,967,491 | ||
Provision for taxes | 568,212 | 649,273 | ||
Net income | $1,207,448 | $1,318,218 | ||
Basic earnings per share (1) | $.11 | $.12 | ||
Diluted earnings per share (1) | $.11 | $.12 | ||
Average common shares outstanding: | ||||
Basic shares (1) | 11,199,599 | 11,175,641 | ||
Diluted shares (1) | 11,439,813 | 11,286,592 |
(1) On October 10, 2005, the Board of Directors declared a four-for-three stock split which was paid on November 15, 2005 to shareholders of record on November 1, 2005. All references in the financial statements to per share amounts and number of shares outstanding give effect to the split.
Consolidated Business Segment Data
(unaudited)
Three Months Ended April 30, | ||||||
2006 | 2005 | |||||
Net sales | ||||||
Product recovery/pollution control equipment (2) | $10,659,665 | $8,824,534 | ||||
Fluid handling equipment (2) | 9,119,376 | 9,103,078 | ||||
$19,779,041 | $17,927,612 | |||||
Income from operations | ||||||
Product recovery/pollution control equipment (2) | $722,097 | $722,328 | ||||
Fluid handling equipment (2) | 874,160 | 1,184,226 | ||||
$1,596,257 | $1,906,554 | |||||
April 30, 2006 | January 31, 2006 | |||||
Identifiable assets | ||||||
Product recovery/pollution control equipment (2) | $39,872,106 | $40,526,378 | ||||
Fluid handling equipment (2) | 29,017,825 | 28,308,734 | ||||
68,889,931 | 68,835,112 | |||||
Corporate | 24,201,176 | 20,827,813 | ||||
$93,091,107 | $89,662,925 |
(2) Effective February 1, 2006, Sethco Division was transferred from the Product Recovery/Pollution Control Equipment Segment to the Fluid Handling Equipment Segment. The business segment information above for the three month period ended April 30, 2005 and the period ended January 31, 2006 was restated to reflect this change.
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Met-Pro Corporation
Consolidated Statement of Cash Flows
(unaudited)
Three Months Ended April 30, | |||||
2006 | 2005 | ||||
Increase (Decrease) in Cash and Cash Equivalents |
Cash flows from operating activities | |||||
Net income | $1,207,448 | $1,318,218 | |||
Adjustments to reconcile net income to net | |||||
cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 370,964 | 374,519 | |||
Deferred income taxes | (553 | ) | (589 | ) | |
(Gain) loss on sale of property and equipment, net | (4,410 | ) | 12,198 | ||
Stock-based compensation | 81,800 | - | |||
Allowance for doubtful accounts | (79,003 | ) | 23,066 | ||
(Increase) decrease in operating assets: | |||||
Accounts receivable | 1,740,117 | 206,313 | |||
Inventories | (1,147,983 | ) | (2,402,889 | ) | |
Prepaid expenses, deposits and other current assets | 86,777 | 57,228 | |||
Other assets | (2,250 | ) | (1,950 | ) | |
Increase (decrease) in operating liabilities: | |||||
Accounts payable and accrued expenses | (1,072,742 | ) | (264,409 | ) | |
Customers’ advances | 262,518 | 623,810 | |||
Other non-current liabilities | 549 | 549 | |||
Net cash provided by (used in) operating activities | 1,443,232 | (53,936 | ) | ||
Cash flows from investing activities | |||||
Proceeds from sale of property and equipment | 4,410 | 12,330 | |||
Acquisitions of property and equipment | (2,227,748 | ) | (261,596 | ) | |
Net cash (used in) investing activities | (2,223,338 | ) | (249,266 | ) | |
Cash flows from financing activities | |||||
Proceeds from new borrowing | 3,602,921 | - | |||
Reduction of debt | (330,508 | ) | (300,910 | ) | |
Exercise of stock options | 55,232 | 184,146 | |||
Payment of dividends | (699,820 | ) | (648,524 | ) | |
Net cash provided by (used in) financing activities | 2,627,825 | (765,288 | ) | ||
Effect of exchange rate changes on cash | 29,778 | (13,122 | ) | ||
Net increase (decrease) in cash and cash equivalents | 1,877,497 | (1,081,612 | ) | ||
Cash and cash equivalents at February 1 | 17,683,305 | 20,889,476 | |||
Cash and cash equivalents at April 30 | $19,560,802 | $19,807,864 |
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Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the United States ("GAAP") follows. Although Met-Pro Corporation believes that these non-GAAP financial measures provide useful information to investors about its financial condition and results of operations, this information should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Management's statements regarding the reasons why it believes the presentation of the non-GAAP financial information in this press release provides useful information to its investors, and any other material purposes for which management uses this non-GAAP financial information, are set forth in Met-Pro’s Current Report on Form 8-K to which this press release is attached as an exhibit.
The following table reconciles net income, and basic and diluted earnings per share, excluding non-recurring and non-capitalized expenses resulting from the relocation of the Company’s Sethco and Mefiag Divisions, and the expansion the Company's Netherlands and Telford, Pennsylvania facilities, as well as net income, and basic and diluted earnings per share calculated in accordance with generally accepted accounting principles for the first quarter ended April 30, 2006 and 2005:
Met-Pro Corporation
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)
Three Months Ended | |||
April 30, | |||
2006 | 2005 | ||
Income before tax as reported | $1,775,660 | $1,967,491 | |
Add: Non-recurring charges | 357,267 | - | |
Adjusted income before tax | $2,132,927 | $1,967,491 | |
Net income as reported | $1,207,448 | $1,318,218 | |
Add: Non-recurring charges | 242,942 | - | |
Adjusted net income | $1,450,390 | $1,318,218 | |
Basic earnings per share as reported | $.11 | $.12 | |
Adjusted basic earnings per share | $.13 | $.12 | |
Diluted earnings per share as reported | $.11 | $.12 | |
Adjusted diluted earnings per share | $.13 | $.12 | |
Average common shares Outstanding: | |||
Basic shares | 11,199,599 | 11,175,641 | |
Diluted shares | 11,439,813 | 11,286,592 |
Adjusted for four-for-three stock split.
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