![](https://capedge.com/proxy/8-K/0000065201-07-000020/mprex9913.jpg)
Date: | August 21, 2007 | |
For Release: | Immediate | |
Contact: | Investor Contact: | |
Gary J. Morgan, Senior Vice President of Finance, CFO | ||
215-723-6751, gmorgan@met-pro.com |
Met-Pro Corporation Announces Financial Results
for the Second Quarter Ended 7/31/2007
• Record High Quarterly and First Half Net Sales and Net Income
• Quarterly Net Sales Increase 16% Over Last Year
• Quarterly Net Income Increases 40% Over Last Year
Harleysville, PA, August 21– Raymond J. De Hont, Chairman and Chief Executive Officer of Met-Pro Corporation (NYSE: MPR), today announced the Company’s financial results for the second quarter ended July 31, 2007.
Sales for the second quarter ended July 31, 2007 were the highest sales of any quarter in the Company’s history, totaling $27.6 million compared with $23.8 million for the same quarter last year, an increase of 16%. Sales for the first half ended July 31, 2007 were the highest sales of any first half in the Company’s history, totaling $49.5 million compared with $43.6 million for the same period last year, an increase of 14%.
Net income for the second quarter ended July 31, 2007 was the highest of any quarter in the Company’s history, excluding the first quarter of this fiscal year, which included a net gain of approximately $2.2 million on the sale of property previously associated with the Company’s Sethco business unit in Hauppauge, New York. Net income in the second quarter totaled $2.5 million compared with $1.8 million for the same quarter last year, an increase of 40%. For the first half ended July 31, 2007, net income was the highest of any first half, totaling $6.4 million compared with $3.0 million during the same period last year. Excluding the first quarter net gain on the sale of the Sethco property, Met-Pro’s adjusted net income was the highest of any first half, totaling $4.2 million compared with $3.0 million for the same period last year, an increase of 39%.
Basic earnings per share for the second quarter ended July 31, 2007 were $0.23 per share compared with $0.16 per share for the second quarter of last year, an increase of 44%. Diluted earnings per share for the second quarter were $0.22 per share compared with $0.16 for the second quarter of last year, an increase of 38%. For the first half ended July 31, 2007, basic and diluted earnings per share were $0.57 per share and $0.56 per share, respectively, compared with $0.27 per share earned during last year’s first half. Excluding the first quarter net gain on the sale of the Sethco property, Met-Pro’s adjusted basic and diluted earnings per share for the first half ended July 31, 2007 were each $0.37 per share compared with $0.27 per share for the same period last year, an increase of 37%.
The Company’s backlog of orders as of July 31, 2007 totaled $26.5 million compared with $24.0 million as of July 31, 2006, an increase of 11%. Substantially the entire backlog that existed as of July 31, 2007 is expected to be shipped during the Company’s current fiscal year.
On June 12, 2007, the Company paid a quarterly dividend of $0.0675 per share to shareholders of record at the close of business on May 29, 2007. In addition, the Board of Directors, at their meeting on June 6, 2007, declared a quarterly dividend of $0.0675 per share payable on September 10, 2007 to shareholders of record at the close of business on August 27, 2007. This represents an 8% increase over the corresponding dividends paid during the same periods last year, and is the thirty-second consecutive year the Company has paid a cash or stock dividend.
“We are very pleased with the record high results for the second quarter and first half,” stated Mr. De Hont. “The strategic measures we have implemented over the past year to improve operational performance continued to help increase gross margins and improve profitability. Our strong backlog and quotation activity serve as a solid base for the third quarter and the full fiscal year and allow us to remain optimistic about our future prospects.”
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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, was recently recognized as one of America’s “200 Best Small Companies” by Forbes magazine, and as one of America’s “Top Publicly-Held Manufacturers” by Start-It magazine. Through its business units, in the United States, Canada, Europe and The People's Republic of China, a wide range of products and services are offered for industrial, commercial, municipal and residential markets worldwide. These include product recovery and pollution control technologies for purification of air and liquids; fluid handling technologies for corrosive, abrasive and high temperature liquids; and filtration and purification technologies including proprietary water treatment chemicals and filter products. 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
Consolidated Statement of Operations
(unaudited)
Three Months Ended | Six Months Ended | |||||||||
July 31, | July 31, |
2007 | 2006 | 2007 | 2006 |
Net sales | $27,596,089 | $23,778,882 | $49,512,698 | $43,557,923 | |||||
Cost of goods sold | 18,560,267 | 17,044,392 | 33,557,349 | 30,968,074 | |||||
Gross profit | 9,035,822 | 6,734,490 | 15,955,349 | 12,589,849 | |||||
Operating expenses | |||||||||
Selling | 2,519,901 | 2,076,187 | 4,589,778 | 3,972,366 | |||||
General and administrative | 2,923,408 | 2,181,418 | 5,407,261 | 4,539,931 | |||||
Gain on sale of building | – | – | (3,513,940 | ) | – | ||||
Income from operations | 3,592,513 | 2,476,885 | 9,472,250 | 4,077,552 | |||||
Interest expense | (90,546 | ) | (87,509 | ) | (170,698 | ) | (147,314 | ) | |
Other income, net | 299,087 | 270,453 | 516,393 | 505,251 | |||||
Income before taxes | 3,801,054 | 2,659,829 | 9,817,945 | 4,435,489 | |||||
Provision for taxes | 1,273,353 | 851,144 | 3,412,001 | 1,419,356 | |||||
Net income | $2,527,701 | $1,808,685 | $6,405,944 | $3,016,133 | |||||
Basic earnings per share | $.23 | $.16 | $.57 | $.27 | |||||
Diluted earnings per share | $.22 | $.16 | $.56 | $.27 | |||||
Average common shares outstanding: | |||||||||
Basic shares | 11,222,658 | 11,201,507 | 11,226,822 | 11,202,088 | |||||
Diluted shares | 11,470,742 | 11,383,659 | 11,473,431 | 11,379,867 |
Continued Page 3
Met-Pro Corporation/Page 3
Met-Pro Corporation
Consolidated Balance Sheet
(unaudited)
July 31, | January 31, |
2007 | 2007 |
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $24,426,816 | $17,322,194 | |||
Marketable securities | 24,043 | 24,090 | |||
Accounts receivable, net of allowance for doubtful | |||||
accounts of approximately $150,000 and | |||||
$133,000, respectively | 21,573,525 | 20,837,589 | |||
Inventories | 22,082,136 | 19,296,279 | |||
Prepaid expenses, deposits and other current assets | 1,751,891 | 1,748,130 | |||
Total current assets | 69,858,411 | 59,228,282 | |||
Property, plant and equipment, net | 16,217,855 | 16,832,988 | |||
Costs in excess of net assets of business acquired, net | 20,798,913 | 20,798,913 | |||
Other assets | 294,610 | 306,403 | |||
Total assets | $107,169,789 | $97,166,586 | |||
Liabilities and shareholders’ equity | |||||
Current liabilities | |||||
Current portion of long-term debt | $1,981,082 | $1,955,202 | |||
Accounts payable | 9,057,973 | 6,450,813 | |||
Accrued salaries, wages and expenses | 4,264,905 | 4,135,342 | |||
Dividend payable | 757,389 | 757,029 | |||
Customers’ advances | 2,333,909 | 981,680 | |||
Deferred income taxes | 242,457 | 245,231 | |||
Total current liabilities | 18,637,715 | 14,525,297 | |||
Long-term debt | 4,517,363 | 5,417,990 | |||
Other non-current liabilities | 3,305,321 | 3,276,551 | |||
Deferred income taxes | 2,335,529 | 1,369,591 | |||
Total liabilities | 28,795,928 | 24,589,429 | |||
Shareholders’ equity | |||||
Common shares, $.10 par value; 18,000,000 shares | |||||
authorized, 12,846,608 shares issued, | |||||
of which 1,588,563 and 1,631,364 shares were | |||||
reacquired and held in treasury at the respective dates | 1,284,661 | 1,284,661 | |||
Additional paid-in capital | 8,254,499 | 7,910,708 | |||
Retained earnings | 79,687,717 | 74,921,913 | |||
Accumulated other comprehensive income (loss) | 351,891 | (33,471 | ) | ||
Treasury shares, at cost | (11,204,907 | ) | (11,506,654 | ) | |
Total shareholders’ equity | 78,373,861 | 72,577,157 | |||
Total liabilities and shareholders’ equity | $107,169,789 | $97,166,586 |
Continued Page 4
Met-Pro Corporation/Page 4
Consolidated Business Segment Data
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 |
Net sales | |||||||||||||||
Product recovery/pollution control technologies | $14,552,844 | $12,792,903 | $25,099,730 | $22,091,252 | |||||||||||
Fluid handling technologies | 7,357,498 | 6,106,139 | 13,411,570 | 12,023,633 | |||||||||||
Filtration/purification technologies | 5,685,747 | 4,879,840 | 11,001,398 | 9,443,038 | |||||||||||
$27,596,089 | $23,778,882 | $49,512,698 | $43,557,923 | ||||||||||||
Income from operations | |||||||||||||||
Product recovery/pollution control technologies | $1,681,324 | $839,358 | $2,594,384 | $1,406,072 | |||||||||||
Fluid handling technologies | 1,569,300 | 1,038,204 | 2,732,614 | 1,733,748 | |||||||||||
Filtration/purification technologies | 341,889 | 599,323 | 631,312 | 937,732 | |||||||||||
Gain on sale of building | – | – | 3,513,940 | – | |||||||||||
$3,592,513 | $2,476,885 | $9,472,250 | $4,077,552 |
July 31, | January 31, | |||||||||||||||
2007 | 2007 | |||||||||||||||
Identifiable Assets | ||||||||||||||||
Product recovery/pollution control technologies | $36,026,103 | $35,332,252 | ||||||||||||||
Fluid handling technologies | 21,421,043 | 21,667,719 | ||||||||||||||
Filtration/purification technologies | 20,343,643 | 20,514,339 | ||||||||||||||
77,790,789 | 77,514,310 | |||||||||||||||
Corporate | 29,379,000 | 19,652,276 | ||||||||||||||
$107,169,789 | $97,166,586 |
Continued Page 5
Met-Pro Corporation/Page 5
Met-Pro Corporation
Consolidated Statement of Cash Flows
(unaudited)
Six Months Ended July 31, | ||||
2007 | 2006 | |||
Increase (Decrease) in Cash and Cash Equivalents |
Cash flows from operating activities | |||||
Net income | $6,405,944 | $3,016,133 | |||
Adjustments to reconcile net income to net | |||||
cash provided by operating activities: | |||||
Depreciation and amortization | 843,274 | 768,427 | |||
Deferred income taxes | 899,167 | (1,106 | ) | ||
(Gain) on sale of property and equipment, net | (3,516,683 | ) | (11,589 | ) | |
Stock-based compensation | 255,054 | 163,601 | |||
Allowance for doubtful accounts | 17,221 | (79,629 | ) | ||
(Increase) decrease in operating assets: | |||||
Accounts receivable | (610,728 | ) | 1,607,822 | ||
Inventories | (2,654,774 | ) | (1,405,805 | ) | |
Prepaid expenses, deposits and other current assets | 20,744 | 247,600 | |||
Other assets | (4,841 | ) | (4,644 | ) | |
Increase (decrease) in operating liabilities: | |||||
Accounts payable and accrued expenses | 2,505,115 | (276,556 | ) | ||
Customers’ advances | 1,351,575 | (532,636 | ) | ||
Other non-current liabilities | 28,770 | 1,098 | |||
Net cash provided by operating activities | 5,539,828 | 3,492,716 | |||
Cash flows from investing activities | |||||
Proceeds from sale of property and equipment | 4,345,282 | 12,810 | |||
Acquisitions of property and equipment | (864,953 | ) | (3,275,209 | ) | |
Net cash provided by (used in) investing activities | 3,480,329 | (3,262,399 | ) | ||
Cash flows from financing activities | |||||
Proceeds from new borrowing | - | 4,140,315 | |||
Reduction of debt | (758,148 | ) | (713,113 | ) | |
Exercise of stock options | 390,484 | 55,232 | |||
Payment of dividends | (1,514,780 | ) | (1,400,107 | ) | |
Net cash provided by (used in) financing activities | (1,882,444 | ) | 2,082,327 | ||
Effect of exchange rate changes on cash | (33,091 | ) | 23,357 | ||
Net increase in cash and cash equivalents | 7,104,622 | 2,336,001 | |||
Cash and cash equivalents at February 1 | 17,322,194 | 17,683,305 | |||
Cash and cash equivalents at July 31 | $24,426,816 | $20,019,306 |
Continued Page 6
Met-Pro Corporation/Page 6
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 income before tax, net income, and basic and diluted earnings per share, excluding the gain on the sale of property previously associated with the Company’s Sethco business unit in Hauppauge, New York, as well as income before tax, net income, and basic and diluted earnings per share calculated in accordance with generally accepted accounting principles, for the three and six month periods ended July 31, 2007 and 2006:
Met-Pro Corporation
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)
Three Months Ended | Six Months Ended | |||
July 31, | July 31, |
2007 | 2006 | 2007 | 2006 |
Income before tax as reported | $3,801,054 | $2,659,829 | $9,817,945 | $4,435,489 | |
Less: Gain on sale of building | – | – | (3,513,940 | ) | – |
Adjusted income before tax | $3,801,054 | $2,659,829 | $6,304,005 | $4,435,489 | |
Net income as reported | $2,527,701 | $1,808,685 | $6,405,944 | $3,016,133 | |
Less: Gain on sale of building | – | – | (2,213,782 | ) | – |
Adjusted net income | $2,527,701 | $1,808,685 | $4,192,162 | $3,016,133 | |
Basic earnings per share as reported | $.23 | $.16 | $.57 | $.27 | |
Adjusted basic earnings per share | $.23 | $.16 | $.37 | $.27 | |
Diluted earnings per share as reported | $.22 | $.16 | $.56 | $.27 | |
Adjusted diluted earnings per share | $.22 | $.16 | $.37 | $.27 | |
Average common shares outstanding: | |||||
Basic shares | 11,222,658 | 11,201,507 | 11,226,822 | 11,202,088 | |
Diluted shares | 11,470,742 | 11,383,659 | 11,473,431 | 11,379,867 | |
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