| Date: | February 28, 2008 | | |
| For Release: | Immediate | | |
| Contact: | Investor Contact: | | |
| | Gary J. Morgan, | | Joseph Crivelli, Executive Vice President |
| | Senior Vice President of Finance, CFO | | Gregory FCA Communications |
| | 215-723-6751, gmorgan@met-pro.com | | 610-642-8253 extension 123 |
Met-Pro Corporation Announces Financial Results
for the Fourth Quarter and Fiscal Year Ended January 31, 2008
Record Revenues and Earnings Reported for Fiscal 2008
Net Income Increases 40% Before Gain on Sale of Property
Harleysville, PA, February 28 – Raymond J. De Hont, Chairman and Chief Executive Officer of Met-Pro Corporation (NYSE: MPR), today announced financial results for the fourth quarter and fiscal year ended January 31, 2008.
Sales for the fourth quarter ended January 31, 2008 were $29.3 million, up 29% compared with sales of $22.7 million for the same quarter last year. Sales for the fiscal year ended January 31, 2008 were a record $106.9 million compared with $93.5 million for the same period of last year, an increase of 14%.
Net income in the fourth quarter ended January 31, 2008 totaled $3.2 million, up 73% compared with net income of $1.8 million for the same quarter last year. The fiscal year ended January 31, 2008 was the most profitable in the Company’s history with net income totaling $11.9 million compared with $6.9 million for fiscal 2007. Net income for the year excluding the net gain on the sale of property was $9.7 million, up 40% over last year.
Basic and diluted earnings per share for the fourth quarter ended January 31, 2008 were both $0.21 per share, compared with $0.12 per basic and diluted share for the fourth quarter of last year, an increase of 75%.
For the fiscal year ended January 31, 2008, basic and diluted earnings per share were $0.79 per share and $0.78 per share, respectively, compared with $0.46 per share earned (both basic and diluted) for last fiscal year. Excluding the net gain on the sale of property, basic and diluted earnings per share for the year were $0.64 per share and $0.63 per share, respectively, up 39% and 37%, respectively, from fiscal 2007.
The Company’s backlog of orders as of January 31, 2008 totaled $16.8 million compared with $29.5 million at January 31, 2007, respectively. Substantially the entire January 31, 2008 backlog is expected to be shipped within the next six months.
A four-for-three stock split was paid by the Company on November 14, 2007. All references to per share amounts and shares outstanding in this release and in the accompanying financial statements give effect to the stock split, except for the Shareholders’ Equity section of the Consolidated Balance Sheet. In addition, the Company recently announced an 8.6% increase in the quarterly cash dividend payable on March 11, 2008 to shareholders of record at the close of business on February 26, 2008. This is the thirty-third consecutive year the Company has paid a cash or stock dividend.
De Hont stated, “The fourth quarter was a very strong finish to the best year in our Company’s history. For fiscal 2008, we reported record revenues and earnings, expanded operating margins, and grew our international revenues by 34%, resulting in 28% of our fiscal 2008 revenues coming from international operations. We are experiencing significant market activity and due to our ability to more quickly deliver on the larger projects, we are increasing the amount of orders which are booked and shipped within the same quarter thus these orders are never reflected in our backlog. Together with significant revenues attributable to recurring demand for parts and consumables, we have a solid, well-diversified base of business on which to build going into our new fiscal year. In addition, our strong balance sheet provides us tremendous flexibility to capitalize on additional growth opportunities. We are excited about our opportunity to sustain the momentum we have developed, to further leverage our revenue growth through improved operating efficiencies, and to continue to deliver value for our shareholders.”
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Met-Pro Corporation/Page 2
Mr. De Hont and Gary J. Morgan, Senior Vice President of Finance and Chief Financial Officer will hold a conference call for investors today, February 28, 2008, at 11:00 AM (Eastern). Met-Pro’s earnings release and the accompanying financial supplement, which includes significant financial information to be discussed during the conference call, will be available on Met-Pro’s Investor Relations website at www.met-pro.com/html/invrel.htm prior to the beginning of the conference call.
Interested persons who wish to hear the live webcast should go to the Met-Pro Corporation website prior to the starting time to register, download and install any necessary audio software.
You may also participate by calling the US/Canada Dial-In # 877-818-7738 or the International Dial-In # 706-643-9333 (conference ID 36039255) at 10:55 AM (Eastern) on February 28, 2008. A taped replay of the conference call will be available within two hours of the conclusion of the call and until March 14, 2008. To access the taped replay, call the US/Canada Dial-In # 800-642-1687 or the International Dial-In # 706-645-9291 and enter conference ID 36039255.
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.
Continued Page 3
Met-Pro Corporation/Page 3
Met-Pro Corporation
Consolidated Statement of Operations
(unaudited)
| | Three Months Ended | Fiscal Year Ended |
| | January 31, | January 31, |
| | | 2008 | | 2007 | | 2008 | | 2007 | |
| Net sales | | $29,251,582 | | $22,702,092 | | $106,867,849 | | $93,505,504 | |
Cost of goods sold (1) | | 19,142,027 | | 14,871,780 | | 70,495,481 | | 63,459,996 | |
| Gross profit | | 10,109,555 | | 7,830,312 | | 36,372,368 | | 30,045,508 | |
| | | | | | | | | | |
| Operating expenses | | | | | | | | | |
Selling (1) | | 2,868,282 | | 2,452,753 | | 11,484,530 | | 10,188,670 | |
| General and administrative | | 2,430,561 | | 2,703,258 | | 10,804,287 | | 10,099,763 | |
| Gain on sale of building | | – | | – | | (3,513,940 | ) | – | |
| Income from operations | | 4,810,712 | | 2,674,301 | | 17,597,491 | | 9,757,075 | |
| | | | | | | | | | |
| Interest expense | | (63,931 | ) | (94,633 | ) | (304,325 | ) | (351,152 | ) |
| Other income, net | | 223,584 | | 172,878 | | 968,715 | | 932,590 | |
| Income before taxes | | 4,970,365 | | 2,752,546 | | 18,261,881 | | 10,338,513 | |
| | | | | | | | | | |
| Provision for taxes | | 1,780,071 | | 908,341 | | 6,355,716 | | 3,411,709 | |
| | | | | | | | | | |
| Net income | | $3,190,294 | | $1,844,205 | | $11,906,165 | | $6,926,804 | |
| | | | | | | | | | |
Basic earnings per share (2) | | $0.21 | | $0.12 | | $0.79 | | $0.46 | |
Diluted earnings per share (2) | | $0.21 | | $0.12 | | $0.78 | | $0.46 | |
| | | | | | | | | | |
| Average common shares outstanding: | | | | | | | | | |
Basic shares (2) | | 14,998,422 | | 14,942,158 | | 15,002,012 | | 14,943,174 | |
Diluted shares (2) | | 15,329,739 | | 15,195,920 | | 15,328,368 | | 15,205,012 | |
| (1) | The Company has reclassified the freight out, and representative and distributor commission from a deduction of gross sales to the cost of goods sold and selling expense categories, respectively, for the three month periods and fiscal years ended January 31, 2008 and 2007. For the three month periods ended January 31, 2008 and 2007, the freight out was $508,365 and $212,168, respectively, and the representative and distributor commission was $861,993 and $464,218, respectively. For the fiscal years ended January 31, 2008 and 2007, the freight out was $1,216,522 and $982,729, respectively, and the representative and distributor commission was $2,762,909 and $1,930,291, respectively. |
| (2) | On October 17, 2007, the Board of Directors declared a four-for-three stock split which was paid on November 14, 2007 to shareholders of record on November 1, 2007. All references in the financial statements to per share amounts and number of shares outstanding give effect to the split. |
Continued Page 4
Met-Pro Corporation/Page 4
Met-Pro Corporation
Consolidated Balance Sheet
(unaudited)
| | | January 31, | | January 31, | |
| | | 2008 | | 2007 | |
| Assets | | | | |
Current assets | | | | |
| Cash and cash equivalents | $21,906,877 | | $17,322,194 | |
| Marketable securities | 20,369 | | 24,090 | |
| Accounts receivable, net of allowance for doubtful | | | | |
| accounts of approximately $152,000 and | | | | |
| $133,000, respectively | 23,013,988 | | 19,988,097 | |
| Inventories | 21,258,227 | | 19,720,842 | |
| Prepaid expenses, deposits and other current assets | 1,895,679 | | 1,748,130 | |
| Total current assets | 68,095,140 | | 58,803,353 | |
| | | | | |
| Property, plant and equipment, net | 20,233,827 | | 16,832,988 | |
| Costs in excess of net assets of businesses acquired, net | 20,798,913 | | 20,798,913 | |
| Other assets | 283,023 | | 306,403 | |
| Total assets | $109,410,903 | | $96,741,657 | |
| | | | | |
| Liabilities and shareholders’ equity | | | | |
| Current liabilities | | | | |
| Current portion of long-term debt | $2,028,482 | | $1,955,202 | |
| Accounts payable | 7,512,874 | | 6,419,951 | |
| Accrued salaries, wages and expenses | 5,920,461 | | 4,005,300 | |
| Dividend payable | 827,147 | | 757,029 | |
| Customers’ advances | 260,698 | | 981,680 | |
| Deferred income taxes | 197,743 | | 245,231 | |
| Total current liabilities | 16,747,405 | | 14,364,393 | |
| | | | | |
| Long-term debt | 4,075,682 | | 5,417,990 | |
| Other non-current liabilities | 2,109,250 | | 3,276,551 | |
| Deferred income taxes | 3,132,002 | | 1,369,591 | |
| Total liabilities | 26,064,339 | | 24,428,525 | |
| | | | | |
| Shareholders’ equity | | | | |
| Common shares, $.10 par value; 18,000,000 shares | | | | |
| authorized, 15,928,810 and 12,846,608 shares issued, | | | | |
| of which 889,780 and 1,631,364 shares were reacquired | | | | |
| and held in treasury at the respective dates | 1,592,881 | | 1,284,661 | |
| Additional paid-in capital | 1,897,655 | | 7,910,708 | |
| Retained earnings | 83,370,492 | | 74,657,888 | |
| Accumulated other comprehensive income (loss) | 1,340,427 | | (33,471 | ) |
| Treasury shares, at cost | (4,854,891 | ) | (11,506,654 | ) |
| Total shareholders’ equity | 83,346,564 | | 72,313,132 | |
| Total liabilities and shareholders’ equity | $109,410,903 | | $96,741,657 | |
Continued Page 5
Met-Pro Corporation/Page 5
Consolidated Business Segment Data
(unaudited)
| | Three Months Ended | | Fiscal Year Ended |
| | January 31, | | January 31, |
| | | 2008 | | 2007 | | 2008 | 2007 | |
| Net sales | | | | | | | | |
Product recovery/pollution control technologies (1) | | $16,921,157 | | $11,519,498 | | $56,897,328 | $47,685,248 | |
Fluid handling technologies (1) | | 6,823,192 | | 6,517,126 | | 27,578,301 | 26,099,803 | |
Filtration/purification technologies (1) | | 5,507,233 | | 4,665,468 | | 22,392,220 | 19,720,453 | |
| | | $29,251,582 | | $22,702,092 | | $106,867,849 | $93,505,504 | |
| | | | | | | | | |
| Income from operations | | | | | | | | |
| Product recovery/pollution control technologies | | $2,682,283 | | $1,358,297 | | $6,573,097 | $4,339,795 | |
| Fluid handling technologies | | 1,570,615 | | 1,307,732 | | 5,895,780 | 4,362,276 | |
| Filtration/purification technologies | | 557,814 | | 8,272 | | 1,614,674 | 1,055,004 | |
Gain on sale of building | | – | | – | | 3,513,940 | – | |
| | | $4,810,712 | | $2,674,301 | | $17,597,491 | $9,757,075 | |
| | | | | | | | | |
| | | | | | | January 31, | January 31, | |
| | | | | | | 2008 | 2007 | |
| | | | | | | | | |
| Identifiable Assets | | | | | | | | |
Product recovery/pollution control technologies | | | | | | $40,509,227 | $34,907,323 | |
Fluid handling technologies | | | | | | 22,401,768 | 21,667,719 | |
Filtration/purification technologies | | | | | | 21,688,419 | 20,514,339 | |
| | | | | | | 84,599,414 | 77,089,381 | |
| Corporate | | | | | | 24,811,489 | 19,652,276 | |
| | | | | | | $109,410,903 | $96,741,657 | |
| (1) | The Company has reclassified the freight out, and representative and distributor commission from a deduction from gross sales to the cost of goods sold and selling expense categories, respectively, for the three month periods and fiscal years ended January 31, 2008 and 2007. |
Continued Page 6
Met-Pro Corporation/Page 6
Met-Pro Corporation
Consolidated Statement of Cash Flows
(unaudited)
| | |
| | 2008 | | 2007 | | 2006 | |
| Increase (Decrease) in Cash and Cash Equivalents |
| | | | | | | |
| Cash flows from operating activities | | | | | | |
| Net income | $11,906,165 | | $6,926,804 | | $7,313,284 | |
| Adjustments to reconcile net income to net | | | | | | |
| cash provided by operating activities: | | | | | | |
| Depreciation and amortization | 1,738,625 | | 1,602,138 | | 1,486,340 | |
| Deferred income taxes | 1,369,460 | | 26,203 | | 610,593 | |
| (Gain) loss on sales of property and equipment, net | (3,556,088 | ) | 13,310 | | 13,131 | |
| Stock-based compensation | 510,108 | | 327,200 | | – | |
| Allowance for doubtful accounts | 19,352 | | (114,238 | ) | 34,002 | |
| (Increase) decrease in operating assets: | | | | | | |
| Accounts receivable | (2,633,358 | ) | (1,831,614 | ) | (4,428,817 | ) |
| Inventories | (1,197,111 | ) | (3,161,103 | ) | (2,657,517 | ) |
| Prepaid expenses and deposits | (754 | ) | 2,872 | | (141,097 | ) |
| Other assets | (115,992 | ) | 332,466 | | (484,162 | ) |
| Increase (decrease) in operating liabilities: | | | | | | |
| Accounts payable and accrued expenses | 2,654,425 | | 255,908 | | 228,250 | |
| Customers’ advances | (723,531 | ) | (721,878 | ) | 409,760 | |
| Other non-current liabilities | (96,157 | ) | 242,084 | | 2,057,647 | |
| | | | | | | |
| Net cash provided by operating activities | 9,875,144 | | 3,900,152 | | 4,441,414 | |
| | | | | | | |
| Cash flows from investing activities | | | | | | |
| Proceeds from sales of property and equipment | 4,396,164 | | 14,310 | | 31,565 | |
| Acquisitions of property and equipment | (5,456,418 | ) | (4,398,910 | ) | (4,151,253 | ) |
| Increase in securities available for sale | – | | (21,820 | ) | – | |
| | | | | | | |
| Net cash (used in) investing activities | (1,060,254 | ) | (4,406,420 | ) | (4,119,688 | ) |
| | | | | | | |
| Cash flows from financing activities | | | | | | |
| Proceeds from new borrowings | – | | 4,312,293 | | 793,947 | |
| Reduction of debt | (1,499,334 | ) | (1,492,699 | ) | (1,800,910 | ) |
| Exercise of stock options | 1,081,835 | | 147,174 | | 324,281 | |
| Payment of dividends | (3,101,839 | ) | (2,857,423 | ) | (2,648,576 | ) |
| Purchase of treasury shares | (630,515 | ) | – | | (140,135 | ) |
| Payment of cash in lieu of fractional shares | (1,642 | ) | – | | (1,914 | ) |
| | | | | | | |
| Net cash provided by (used in) financing activities | (4,151,495 | ) | 109,345 | | (3,473,307 | ) |
| | | | | | | |
| Effect of exchange rate changes on cash | (78,712 | ) | 35,812 | | (54,590 | ) |
| | | | | | | |
| Net increase (decrease) in cash and cash equivalents | 4,584,683 | | (361,111 | ) | (3,206,171 | ) |
| | | | | | | |
| Cash and cash equivalents at beginning of year | 17,322,194 | | 17,683,305 | | 20,889,476 | |
| | | | | | | |
| Cash and cash equivalents at end of year | $21,906,877 | | $17,322,194 | | $17,683,305 | |
Continued Page 7
Met-Pro Corporation/Page 7
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 with 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 month period and fiscal year ended January 31, 2008 and 2007:
Met-Pro Corporation
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)
| | Three Months Ended | Fiscal Year Ended |
| | January 31, | January 31, |
| | | | 2008 | | 2007 | | 2008 | | 2007 | | |
| | Income before tax as reported | | $4,970,365 | | $2,752,546 | | $18,261,881 | | $10,338,513 | | |
| | Less: Gain on sale of building | | – | | – | | (3,513,940 | ) | – | | |
| | Adjusted income before tax | | $4,970,365 | | $2,752,546 | | $14,747,941 | | $10,338,513 | | |
| | | | | | | | | | | | |
| | Net income as reported | | $3,190,294 | | $1,844,205 | | $11,906,165 | | $6,926,804 | | |
| | Less: Gain on sale of building | | – | | - | | (2,213,782 | ) | – | | |
| | Adjusted net income | | $3,190,294 | | $1,844,205 | | $9,692,383 | | $6,926,804 | | |
| | | | | | | | | | | | |
| | Basic earnings per share as reported (1) | | $0.21 | | $0.12 | | $0.79 | | $0.46 | | |
| | Adjusted basic earnings per share (1) | | $0.21 | | $0.12 | | $0.64 | | $0.46 | | |
| | | | | | | | | | | | |
| | Diluted earnings per share as reported (1) | | $0.21 | | $0.12 | | $0.78 | | $0.46 | | |
| | Adjusted diluted earnings per share (1) | | $0.21 | | $0.12 | | $0.63 | | $0.46 | | |
| | | | | | | | | | | | |
| | Average common shares outstanding: | | | | | | | | | | |
| | Basic shares (1) | | 14,998,422 | | 14,942,158 | | 15,002,012 | | 14,943,174 | | |
| | Diluted shares (1) | | 15,329,739 | | 15,195,920 | | 15,328,368 | | 15,205,012 | | |
| (1) | On October 17, 2007, the Board of Directors declared a four-for-three stock split which was paid on November 14, 2007 to shareholders of record on November 1, 2007. All references in the financial statements to per share amounts and number of shares outstanding give effect to the split. |
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