| Date: | May 21, 2008 | | |
| For Release: | Immediate | | |
| Contact: | Investor Contact: | | |
| | Gary J. Morgan, | | Joseph Hassett, VP |
| | Senior Vice President of Finance, CFO | | Gregory FCA Communications |
| | 215-723-6751, gmorgan@met-pro.com | | 610-642-8253 extension 120 |
Met-Pro Corporation Announces First Quarter Financial Results
• Earnings Up 30% Versus Last Year’s First Quarter Adjusted Earnings
• Record First Quarter Net Sales and Bookings
Harleysville, PA, May 21, 2008 – 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, 2008.
Sales for the first quarter ended April 30, 2008 were $22.7 million, the highest first quarter sales in the Company’s history, and up from sales of $21.4 million for the same quarter last year.
Net income for the first quarter totaled $1.9 million compared with $3.7 million for the same period last year, which included a $2.2 million net gain from a property sale. Excluding the net gain from the prior year’s property sale, net income in the first quarter was up 28% and was the highest first quarter net income in the Company’s history.
Diluted earnings per share were $0.13 compared with $0.24 for the same period last year, which included a $0.14 per share net gain from a property sale. Excluding the net gain from the prior year’s property sale, diluted earnings per share for the first quarter were up 30% and were the highest first quarter earnings in the Company’s history.
Met-Pro’s bookings of new orders for the first quarter were the highest of any first quarter in the Company’s history, totaling $28.0 million compared with $23.9 million for the same quarter last year, an increase of 17%.
On March 11, 2008, the Company paid a quarterly dividend of $0.055 per share to shareholders of record at the close of business on February 26, 2008. In addition, the Board of Directors, at their meeting on April 3, 2008, declared a quarterly dividend of $0.055 per share payable June 12, 2008 to shareholders of record at the close of business on May 29, 2008. The current quarterly dividend represents a 9% increase over the same period last year. This is the thirty-third consecutive year the Company has paid a cash or stock dividend.
“We are very pleased to report these excellent first quarter results in the face of a difficult economy,” said De Hont. “Our performance demonstrates our ability to deliver solid results while adjusting to varying economic realities. We were able to achieve record first quarter revenues despite some last minute customer changes which delayed the shipment of two Product Recovery and Pollution Control orders into the second quarter. Global market demand for Met-Pro’s products remains strong as evidenced by our record first quarter booking performance and steady quotation activity. We remain optimistic that our wide breadth of products, growing international brand recognition, and improving operating efficiency will be beneficial to our prospects for the fiscal year.”
Mr. De Hont and Gary J. Morgan, Senior Vice President of Finance and Chief Financial Officer, will hold a conference call for investors on May 22, 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, is available on Met-Pro’s Investor Relations website at www.met-pro.com/html/invrel.htm.
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.
Met-Pro Corporation/Page 2
You may also participate by calling the US/Canada Dial-In # 877-818-7738 or the International Dial-In # 706-643-9333 (conference ID 46957906) at 10:55 AM (Eastern) on May 22, 2008. A taped replay of the conference call will be available within two hours of the conclusion of the call and until June 5, 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 46957906.
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, for the second consecutive year, as one of America’s “200 Best Small Companies” by Forbes magazine. The Company was also recently named as one of the world’s “Top Small to Midsize Manufacturers” by Start-It magazine for the second year in a row. 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; Mefiag filtration technologies for harsh, corrosive liquid filtration applications; and filtration and purification technologies which include proprietary water treatment chemicals and filter products for air and liquid filtration. 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 news 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 website at www.met-pro.com.
Met-Pro Corporation/Page 3
Met-Pro Corporation
Consolidated Statement of Operations
(unaudited)
| | | | Three Months Ended April 30, | |
| | | | 2008 | | 2007 | |
| Net sales | | | $22,656,474 | | $21,373,563 | |
Cost of goods sold (1) | | | 15,064,250 | | 14,215,058 | |
| Gross profit | | | 7,592,224 | | 7,158,505 | |
| | | | | | | |
| Operating expenses (income) | | | | | | |
| | | 2,252,076 | | 2,544,181 | |
General and administrative | | | 2,643,919 | | 2,483,853 | |
Gain on sale of building | | | – | | (3,513,940 | ) |
| | | | 4,895,995 | | 1,514,094 | |
| Income from operations | | | 2,696,229 | | 5,644,411 | |
| | | | | | | |
| Interest expense | | | (65,061 | ) | (80,152 | ) |
| Other income, net | | | 175,815 | | 217,306 | |
| Income before taxes | | | 2,806,983 | | 5,781,565 | |
| | | | | | | |
| Provision for taxes | | | 881,338 | | 2,059,814 | |
| | | | | | | |
| Net income | | | $1,925,645 | | $3,721,751 | |
| | | | | | | |
| Basic earnings per share | | | $.13 | | $.25 | |
| Diluted earnings per share | | | $.13 | | $.24 | |
| | | | | | | |
| Average common shares outstanding: | | | | | | |
Basic shares | | | 15,038,900 | | 14,960,769 | |
Diluted shares | | | 15,313,389 | | 15,291,689 | |
| (1) | The Company has reclassified the freight out, and representative and distributor commissions from a deduction of gross sales to the cost of goods sold and selling expense categories, respectively, for the three month period ended April 30, 2007. For the three month periods ended April 30, 2008 and 2007, the freight out was $239,167 and $83,146, respectively, and the representative and distributor commissions was $198,051 and $474,304, respectively. |
Met-Pro Corporation/Page 4
Met-Pro Corporation
Consolidated Balance Sheet
(unaudited)
| | | April 30, | | January 31, | |
| | | 2008 | | 2008 | |
| Assets | | | | | |
| Current assets | | | | | |
Cash and cash equivalents | | $25,060,498 | | $21,906,877 | |
Marketable securities | | 19,824 | | 20,369 | |
Accounts receivable, net of allowance for doubtful | | | | | |
accounts of approximately $163,000 and | | | | | |
$152,000, respectively | | 19,071,332 | | 23,013,988 | |
Inventories | | 21,915,950 | | 21,258,227 | |
Prepaid expenses, deposits and other current assets | | 1,814,054 | | 1,895,679 | |
Total current assets | | 67,881,658 | | 68,095,140 | |
| | | | | | |
| Property, plant and equipment, net | | 20,364,034 | | 20,233,827 | |
| Costs in excess of net assets of business acquired, net | | 20,798,913 | | 20,798,913 | |
| Other assets | | 274,924 | | 283,023 | |
Total assets | | $109,319,529 | | $109,410,903 | |
| | | | | | |
| | | | | | |
| Liabilities and shareholders’ equity | | | | | |
| Current liabilities | | | | | |
Current portion of long-term debt | | $1,758,442 | | $2,028,482 | |
Accounts payable | | 6,048,064 | | 7,512,874 | |
Accrued salaries, wages and expenses | | 5,870,860 | | 6,023,857 | |
Dividend payable | | 827,140 | | 827,147 | |
Customers’ advances | | 585,952 | | 260,698 | |
Deferred income taxes | | 197,743 | | 197,743 | |
Total current liabilities | | 15,288,201 | | 16,850,801 | |
| | | | | | |
| Long-term debt | | 3,996,479 | | 4,075,682 | |
| Other non-current liabilities | | 2,124,237 | | 2,109,250 | |
| Deferred income taxes | | 3,149,259 | | 3,132,002 | |
Total liabilities | | 24,558,176 | | 26,167,735 | |
| | | | | | |
| Shareholders’ equity | | | | | |
Common shares, $.10 par value; 18,000,000 shares | | | | | |
authorized, 15,928,679 and 15,928,810 shares issued, | | | | | |
respectively, of which 889,780 shares were reacquired | | | | | |
and held in treasury at both dates | | 1,592,868 | | 1,592,881 | |
Additional paid-in capital | | 2,005,719 | | 1,897,655 | |
Retained earnings | | 84,373,581 | | 83,267,096 | |
Accumulated other comprehensive income | | 1,644,076 | | 1,340,427 | |
Treasury shares, at cost | | (4,854,891 | ) | (4,854,891 | ) |
Total shareholders’ equity | | 84,761,353 | | 83,243,168 | |
Total liabilities and shareholders’ equity | | $109,319,529 | | $109,410,903 | |
Met-Pro Corporation/Page 5
Met-Pro Corporation
Consolidated Business Segment Data
(unaudited)
| | Three Months Ended April 30, |
| | | 2008 | | 2007 | |
| Net sales | | | | | |
Product recovery/pollution control technologies (1) | | $9,504,792 | | $9,874,988 | |
Fluid handling technologies (1) | | 6,988,583 | | 6,093,669 | |
Mefiag filtration technologies (1) (2) | | 3,255,155 | | 2,879,656 | |
Filtration/purification technologies (1) (2) | | 2,907,944 | | 2,525,250 | |
| | | $22,656,474 | | $21,373,563 | |
| | | | | | |
| Income from operations | | | | | |
Product recovery/pollution control technologies | | $892,251 | | $677,734 | |
Fluid handling technologies | | 1,379,954 | | 1,163,314 | |
Mefiag filtration technologies (2) | | 159,128 | | 179,433 | |
Filtration/purification technologies (2) | | 264,896 | | 109,990 | |
| | | 2,696,229 | | 2,130,471 | |
Gain on sale of building | | – | | 3,513,940 | |
| | | $2,696,229 | | $5,644,411 | |
| | | | | | |
| | | April 30, | | January 31, | |
| | | 2008 | | 2008 | |
| Identifiable assets | | | | | |
Product recovery/pollution control technologies | | $39,287,596 | | $40,509,227 | |
Fluid handling technologies | | 23,203,106 | | 22,401,768 | |
Mefiag filtration technologies (2) | | 13,587,298 | | 12,810,694 | |
Filtration/purification technologies (2) | | 9,187,624 | | 8,877,725 | |
| | | 85,265,624 | | 84,599,414 | |
Corporate | | 24,053,905 | | 24,811,489 | |
| | | $109,319,529 | | $109,410,903 | |
| (1) | The Company has reclassified the freight out, and representative and distributor commissions from a deduction of gross sales to the cost of goods sold and selling expense categories for the three month period ended April 30, 2007. |
(2) | On a quarterly basis, the Company analyzes the segmentation aggregation criteria as outlined in SFAS No. 131. For the quarter ended April 30, 2008, the total consolidated revenue of the Product Recovery/Pollution Control Technologies and Fluid Handling Technologies reporting segments was less than 75% of the Company’s total consolidated revenue. Also, for the quarter ended April 30, 2008, the Mefiag operating segment previously included in the aggregated Filtration/Purification Technologies segment met the quantitative threshold of reported revenue of 10% or more of the totaled consolidated revenue of the Company. As a result of meeting the quantitative revenue thresholds, SFAS No. 131 requires that operating segments contained in the Filtration/Purification Technologies segment be listed as a reportable segment and therefore separately disclosed. This change in segment reporting results in the Company identifying three reportable segments, Product Recovery/Pollution Control Technologies, Fluid Handling Technologies and Mefiag Filtration Technologies, and one other segment, Filtration/Purification Technologies, as presented above. |
Met-Pro Corporation/Page 6
Met-Pro Corporation
Consolidated Statement of Cash Flows
(unaudited)
| | | Three Months Ended April 30, |
| | | 2008 | | 2007 | |
| Increase (Decrease) in Cash and Cash Equivalents |
| | | | | | |
Cash flows from operating activities | | | | | |
Net income | | $1,925,645 | | $3,721,751 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 473,225 | | 417,784 | |
Deferred income taxes | | 4,686 | | 904,929 | |
(Gain) loss on sale of property and equipment, net | | 2,611 | | (3,513,998 | ) |
Stock-based compensation | | 108,051 | | 127,527 | |
Allowance for doubtful accounts | | 11,186 | | 23,302 | |
(Increase) decrease in operating assets: | | | | | |
Accounts receivable | | 4,092,724 | | 1,938,770 | |
Inventories | | (531,236 | ) | (1,739,073 | ) |
Prepaid expenses, deposits and other current assets | | 98,085 | | (296,451 | ) |
Other assets | | 615 | | (1,935 | ) |
Increase (decrease) in operating liabilities: | | | | | |
Accounts payable and accrued expenses | | (1,749,774 | ) | 580,832 | |
Customers’ advances | | 324,179 | | 1,958,922 | |
Other non-current liabilities | | 14,986 | | 40,581 | |
| | | | | | |
Net cash provided by operating activities | | 4,774,983 | | 4,162,941 | |
| | | | | | |
| Cash flows from investing activities | | | | | |
Proceeds from sale of property and equipment | | – | | 4,342,598 | |
Acquisitions of property and equipment | | (404,379 | ) | (354,559 | ) |
| | | | | | |
Net cash provided by (used in) investing activities | | (404,379 | ) | 3,988,039 | |
| | | | | | |
| Cash flows from financing activities | | | | | |
Reduction of debt | | (366,906 | ) | (367,235 | ) |
Exercise of stock options | | – | | 39,238 | |
Payment of dividends | | (827,136 | ) | (757,390 | ) |
| | | | | | |
Net cash used in financing activities | | (1,194,042 | ) | (1,085,387 | ) |
Effect of exchange rate changes on cash | | (22,941 | ) | (33,583 | ) |
| | | | | | |
| Net increase in cash and cash equivalents | | 3,153,621 | | 7,032,010 | |
| | | | | | |
Cash and cash equivalents at February 1 | | 21,906,877 | | 17,322,194 | |
| | | | | | |
| Cash and cash equivalents at April 30 | | $25,060,498 | | $24,354,204 | |
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 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 first quarters ended April 30, 2008 and 2007:
Met-Pro Corporation
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)
| | Three Months Ended |
| | April 30, |
| | | 2008 | | 2007 | |
| Income before tax as reported | | $2,806,983 | | $5,781,565 | |
| Less: Gain on sale of building | | – | | (3,513,940 | ) |
| Adjusted income before tax | | $2,806,983 | | $2,267,625 | |
| | | | | | |
| Net income as reported | | $1,925,645 | | $3,721,751 | |
| Less: Gain on sale of building, net of income taxes | | – | | (2,213,782 | ) |
| Adjusted net income | | $1,925,645 | | $1,507,969 | |
| | | | | | |
| Basic earnings per share as reported | | $.13 | | $.25 | |
| Adjusted basic earnings per share | | $.13 | | $.10 | |
| | | | | | |
| Diluted earnings per share as reported | | $.13 | | $.24 | |
| Adjusted diluted earnings per share | | $.13 | | $.10 | |
| | | | | | |
| Average common shares outstanding: | | | | | |
Basic shares | | 15,038,900 | | 14,960,769 | |
Diluted shares | | 15,313,389 | | 15,291,689 | |
| | | | | | |
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