================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: April 30, 2002 Commission file number: 001-07763
MET-PRO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-1683282
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
160 Cassell Road, P.O. Box 144
Harleysville, Pennsylvania 19438
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 723-6751
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of the Registrant's common stock (par
value $.10 per share) is 6,086,608 (as of April 30, 2002).
================================================================================
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheet as of
April 30, 2002 and January 31, 2002......................................................... 2
Consolidated statement of operations for the three-month
periods ended April 30, 2002 and 2001....................................................... 3
Consolidated statement of stockholders' equity for the
three-month periods ended April 30, 2002 and 2001........................................... 4
Consolidated statement of cash flows for the three-month
periods ended April 30, 2002 and 2001....................................................... 5
Notes to consolidated financial statements.......................................................... 6
Report of independent accountants................................................................... 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................................... 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings........................................................................... 13
Item 2. Changes in Securities and Use of Proceeds................................................... 13
Item 3. Defaults Upon Senior Securities............................................................. 13
Item 4. Submission of Matters to a Vote of Security Holders......................................... 13
Item 5. Other Information........................................................................... 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K......................................... 13
(b) Reports on Form 8-K..................................................................... 13
SIGNATURES................................................................................................... 14
1
MET-PRO CORPORATION
CONSOLIDATED BALANCE SHEET
(unaudited)
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
April 30, January 31,
ASSETS 2002 2002
- --------------------------------------------------------------------------------------------------------------
Current assets
Cash and cash equivalents $11,816,022 $11,832,260
Accounts receivable, net of allowance for doubtful
accounts of approximately $252,000 and
$229,000, respectively 11,282,210 10,465,069
Inventories - Note 3 13,952,956 13,701,676
Prepaid expenses, deposits and other current assets 966,351 911,457
Deferred income taxes 501,217 501,217
- --------------------------------------------------------------------------------------------------------------
Total current assets 38,518,756 37,411,679
Property, plant and equipment, net 12,391,056 12,505,114
Costs in excess of net assets of businesses acquired, net 17,780,767 17,780,767
Other assets 357,379 372,632
- --------------------------------------------------------------------------------------------------------------
Total assets $69,047,958 $68,070,192
==============================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------------------
Current liabilities
Current portion of long-term debt $1,236,924 $1,231,469
Accounts payable 3,531,624 3,094,300
Accrued salaries, wages and expenses 5,040,782 4,003,382
Payroll and other taxes payable 6,664 2,645
Dividend payable 517,362 517,070
Customers' advances 247,271 749,734
- --------------------------------------------------------------------------------------------------------------
Total current liabilities 10,580,627 9,598,600
Long-term debt 6,761,283 7,125,195
Other non-current liabilities 34,974 586,973
Deferred income taxes 499,858 480,030
- --------------------------------------------------------------------------------------------------------------
Total liabilities 17,876,742 17,790,798
- --------------------------------------------------------------------------------------------------------------
Stockholders' equity
Common stock, $.10 par value; 18,000,000 shares
authorized, 7,221,360 and 7,219,165 shares issued,
of which 1,134,752 and 1,135,993 shares were reacquired
and held in treasury at the respective dates 722,136 721,916
Additional paid-in capital 7,914,927 7,879,368
Retained earnings 56,672,884 55,990,079
Accumulated other comprehensive loss (647,441) (827,737)
Treasury stock, at cost (13,491,290) (13,484,232)
- --------------------------------------------------------------------------------------------------------------
Total stockholders' equity 51,171,216 50,279,394
- --------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $69,047,958 $68,070,192
==============================================================================================================
See accompanying notes to consolidated financial statements.
2
MET-PRO CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Three Months Ended
April 30,
2002 2001
- --------------------------------------------------------------------------------------------------------------
Net sales $16,193,880 $17,556,044
Cost of goods sold 10,665,049 11,138,386
- --------------------------------------------------------------------------------------------------------------
Gross profit 5,528,831 6,417,658
- --------------------------------------------------------------------------------------------------------------
Operating expenses
Selling 1,774,824 1,843,707
General and administrative 1,824,129 1,912,887
- --------------------------------------------------------------------------------------------------------------
3,598,953 3,756,594
- --------------------------------------------------------------------------------------------------------------
Income from operations 1,929,878 2,661,064
Interest expense (120,994) (151,069)
Other income, net 66,318 86,377
- --------------------------------------------------------------------------------------------------------------
Income before taxes 1,875,202 2,596,372
Provision for taxes 675,074 960,657
- --------------------------------------------------------------------------------------------------------------
Net income $1,200,128 $1,635,715
==============================================================================================================
Earnings per share, basic (1) $.20 $.27
Earnings per share, diluted(2) $.20 $.27
Cash dividend per share - declared (3) $.085 $.085
Cash dividend per share - paid (3) $.085 $.085
==============================================================================================================
(1) Basic earnings per share are based upon the weighted average number of
shares of Common Stock outstanding of 6,085,306 and 6,098,250 for the
three-month periods ended April 30, 2002 and 2001, respectively.
(2) Diluted earnings per share are based upon the weighted average number
of shares of Common Stock outstanding of 6,136,370 and 6,157,844 for
the three-month periods ended April 30, 2002 and 2001, respectively.
(3) The Board of Directors declared quarterly dividends of $.085 per share
payable on March 8, 2002 and June 7, 2002 to stockholders of record as
of February 22, 2002 and May 24, 2002, respectively. Quarterly
dividends of $.085 per share were payable on March 9, 2001 and June 8,
2001 to stockholders of record as of February 23, 2001 and May 25,
2001, respectively.
See accompanying notes to consolidated financial statements.
3
MET-PRO CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury
Stock Capital Earnings Income/(Loss) Stock Total
- -----------------------------------------------------------------------------------------------------------------------------
Balances, January 31, 2002 $721,916 $7,879,368 $55,990,079 ($827,737) ($13,484,232) $50,279,394
Comprehensive income:
Net income - - 1,200,128 - -
Cumulative translation adjustment - - - 138,038 -
Interest rate swap,
net of tax of $24,290 - - - 42,258 -
Total comprehensive income 1,380,424
Dividends declared, $.085 per
share - - (517,323) - - (517,323)
Proceeds from issuance of
common stock under dividend
reinvestment plan (2,195
shares) 220 34,459 - - - 34,679
Stock option transactions - 1,100 - - 118,900 120,000
Purchase of 8,759 shares of
treasury stock - - - - (125,958) (125,958)
- -----------------------------------------------------------------------------------------------------------------------------
Balances, April 30, 2002 $722,136 $7,914,927 $56,672,884 ($647,441) ($13,491,290) $51,171,216
=============================================================================================================================
Accumulated
Additional Other
Common Paid-in Retained Comprehensive Treasury
Stock Capital Earnings (Loss) Stock Total
- -----------------------------------------------------------------------------------------------------------------------------
Balances, January 31, 2001 $720,658 $8,139,799 $51,880,800 ($491,163) ($13,188,728) $47,061,366
Comprehensive income:
Net income - - 1,635,715 - -
Cumulative translation adjustment - - - (102,972) -
Total comprehensive income 1,532,743
Dividends declared, $.085 per share - - (518,939) - - (518,939)
Proceeds from issuance of
common stock under dividend
reinvestment plan (3,346
shares) 334 38,072 - - - 38,406
Stock option transactions - (40,860) - - 70,860 30,000
Purchase of 137 shares of
treasury stock - - - - (1,647) (1,647)
- -----------------------------------------------------------------------------------------------------------------------------
Balances, April 30, 2001 $720,992 $8,137,011 $52,997,576 ($594,135) ($13,119,515) $48,141,929
=============================================================================================================================
See accompanying notes to consolidated financial statements.
4
MET-PRO CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Three Months Ended
April 30,
2002 2001
- -------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities
Net Income $1,200,128 $1,635,715
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 365,054 517,082
Deferred income taxes 19,828 (7,125)
Gain on sale of property and equipment, net (6,000) (9,102)
Allowance for doubtful accounts 23,392 22,486
(Increase) decrease in operating assets
Accounts receivable (803,869) 1,198,312
Inventories (202,917) (1,381,544)
Prepaid expenses and other current assets (51,481) (59,548)
Other assets (1,800) (1,725)
Increase (decrease) in operating liabilities
Accounts payable, accrued expenses and taxes 1,450,005 (139,745)
Customers' advances (502,463) 457,600
Other non-current liabilities (551,999) 22,103
- -------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 937,878 2,254,509
- -------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Proceeds from sale of property and equipment 6,000 49,350
Acquisitions of property and equipment (195,753) (341,507)
- -------------------------------------------------------------------------------------------------------------
Net cash (used in) investing activities (189,753) (292,157)
- -------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Reduction of debt (316,199) (503,708)
Exercise of stock options 120,000 30,000
Payment of dividends (482,352) (479,756)
Purchase of treasury shares (125,958) (1,647)
- -------------------------------------------------------------------------------------------------------------
Net cash (used in) financing activities (804,509) (955,111)
- -------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 40,146 (24,900)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (16,238) 982,341
Cash and cash equivalents at February 1 11,832,260 8,510,045
- -------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at April 30 $11,816,022 $9,492,386
- -------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
5
MET-PRO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Met-Pro
Corporation and its wholly-owned subsidiaries, Strobic Air Corporation,
Flex-Kleen Canada Inc., and Mefiag B.V. (collectively "Met-Pro" or the
"Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the financial position as of
April 30, 2002 and the results of operations, changes in stockholders' equity
and cash flows for the three-month periods ended April 30, 2002 and 2001. The
results of operations for the three-month period ended April 30, 2002 are not
necessarily indicative of the results to be expected for the full year. These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended January 31, 2002.
NOTE 3 - INVENTORIES
Inventories consisted of the following:
April 30, January 31,
2002 2002
------------- ------------
Raw materials $7,505,125 $7,369,965
Work in progress 1,587,870 1,559,273
Finished goods 4,859,961 4,772,438
------------- ------------
$13,952,956 $13,701,676
============= ============
NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
Net cash flow from operating activities reflect cash payments for interest and
income taxes as follows:
Three Months Ended April 30,
2002 2001
------------- ---------------
Cash paid during the period for:
Interest $120,994 $152,480
Income taxes 38,216 192,697
6
MET-PRO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - OTHER INCOME, NET
Other income, net was comprised of the following:
Three Months Ended April 30,
2002 2001
-----------------------------------
Gain on sale of property and equipment $6,000 $9,102
Other, primarily interest income 60,318 77,275
-----------------------------------
$66,318 $86,377
===================================
NOTE 6 - BUSINESS SEGMENT DATA
The Company's operations are conducted in two business segments as follows: the
manufacture and sale of product recovery/pollution control equipment, and the
manufacture and sale of fluid handling equipment.
No significant intercompany revenue is realized by either business segment.
Interest income and expense are not included in the measure of segment profit
reviewed by management. Income taxes are also not included in the measure of
segment operating profit reviewed by management.
Financial information by business segment is shown below:
Three Months Ended April 30,
2002 2001
-----------------------------------
Net sales
Product recovery/pollution control equipment $10,309,621 $10,361,710
Fluid handling equipment 5,884,259 7,194,334
------------- -------------
$16,193,880 $17,556,044
============= =============
Income from operations
Product recovery/pollution control equipment $1,243,500 $1,271,277
Fluid handling equipment 686,378 1,389,787
------------- -------------
$1,929,878 $2,661,064
============= =============
April 30, January 31,
2002 2002
-----------------------------------
Identifiable assets
Product recovery/pollution control equipment $37,990,934 $38,945,179
Fluid handling equipment 18,267,551 18,209,157
------------ ------------
56,258,485 57,154,336
Corporate 12,789,473 10,915,856
------------- -------------
$69,047,958 $68,070,192
============= =============
7
MET-PRO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - NEW ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board ("FASB") issued FASB No.
141, "Business Combinations", and FASB No. 142, "Goodwill and Other Intangible
Assets". FASB No. 141, which is effective for business combinations completed
after June 30, 2001, requires among other things, that (1) the purchase method
of accounting be used for all business combinations, (2) specific criteria be
established for the recognition of intangible assets separately from goodwill
and (3) additional information about acquired intangible assets be provided.
FASB No. 142, which became effective for the Company prospectively as of
February 1, 2002, primarily addresses the accounting for goodwill and intangible
assets subsequent to their acquisition. Among other things it requires that
goodwill not be amortized for financial statement purposes; instead, management
is required to test goodwill for impairment at least annually.
If FASB No. 142 had been in effect during the year ended January 31, 2002, the
Company's earnings would have been improved because of reduced amortization, as
described below:
Three Months Ended April 30, 2001
-----------------------------------------------------------
Basic Earnings Diluted Earnings
Net Income per Share per Share
--------------- ----------------- -------------------
Net income as reported $1,635,715 $ .27 $ .27
Add: amortization 78,073 .01 .01
--------------- ----------------- -------------------
Adjusted net income $1,713,788 $ .28 $ .28
=============== ================= ===================
NOTE 8 - ACCOUNTANTS' 10-Q REVIEW
Margolis & Company P.C., the Company's independent accountants, has performed a
limited review of the financial information included herein. Their report on
such review accompanies this filing.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Met-Pro Corporation
Harleysville, Pennsylvania
We have reviewed the accompanying consolidated balance sheet of Met-Pro
Corporation and its wholly-owned subsidiaries as of April 30, 2002, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the three-month periods ended April 30, 2002 and 2001. These financial
statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet as of
January 31, 2002, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated February 21, 2002, we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the accompanying consolidated balance sheet as of January 31, 2002 is fairly
stated, in all material respects, in relation to the balance sheet from which it
has been derived.
/s/ Margolis & Company P.C.
----------------------------
Certified Public Accountants
Bala Cynwyd, Pennsylvania
May 21, 2002
9
MET-PRO CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations:
The following table sets forth, for the three-month periods indicated, certain
financial information derived from the Company's consolidated statement of
operations expressed as a percentage of net sales.
Three Months Ended
April 30,
2002 2001
-----------------------------------------------------------------------------
Net sales 100.0% 100.0%
Cost of goods sold 65.9% 63.4%
-----------------------------------------------------------------------------
Gross profit 34.1% 36.6%
Selling expenses 11.0% 10.5%
General and administrative expenses 11.2% 10.9%
-----------------------------------------------------------------------------
Income from operations 11.9% 15.2%
Interest expense (.7%) (.9%)
Other income, net .4% .5%
-----------------------------------------------------------------------------
Income before taxes 11.6% 14.8%
Provision for taxes 4.2% 5.5%
-----------------------------------------------------------------------------
Net income 7.4% 9.3%
=============================================================================
Three Months Ended April 30, 2002 vs Three Months Ended April 30, 2001
Net sales for the three-month period ended April 30, 2002 were $16,193,880
compared to $17,556,044 for the three-month period ended April 30, 2001, a
decrease of $1,362,164 or 7.8%. Sales in the Product Recovery/Pollution Control
Equipment segment were $10,309,621 or slightly lower than the three-month period
ended April 30, 2001. Sales in the Fluid Handling Equipment segment were
$5,884,259 or 18.2% lower than the three-month period ended April 30, 2001. We
believe that the decreased demand is attributed to a slowing economy, especially
in the Fluid Handling Equipment segment.
Backlog at April 30, 2002 totaled $9,306,079 compared to $13,540,476 at April
30, 2001. In addition, at April 30, 2002, the Company had $4,987,777, compared
to $4,280,236 at April 30, 2001 of orders, which are not included in our backlog
due to the Company's long-standing policy of not including these orders in
backlog until engineering drawings are approved.
Net income for the three-month period ended April 30, 2002 was $1,200,128
compared to $1,635,715 for the three-month period ended April 30, 2001, a
decrease of $435,587 or 26.6%. The decrease in net income is principally related
to the lower sales in the Fluid Handling Equipment segment.
The gross margin for the three-month period ended April 30, 2002 was 34.1%
versus 36.6% for the same period in the prior year due to lower gross margins
experienced in the Fluid Handling Equipment segment. The Fluid Handling
Equipment segment represented 36.3% of the Company's sales in the three-month
period ended April 30, 2002 compared to 41.0% for the three-month period ended
April 30, 2001.
Selling expense decreased $68,883 during the three-month period ended April 30,
2002 compared to the same period last year. Selling expense as a percentage of
net sales was 11.0% for the three-month period ended April 30, 2002 compared to
10.5% for the three-month period ended April 30, 2001.
10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations continued...
General and administrative expense was $1,824,129 for the three-month period
ended April 30, 2002 compared to $1,912,887 for the same period last year, a
decrease of $88,758. General and administrative expense as a percentage of net
sales was 11.2% for the three-month period ended April 30, 2002 compared to
10.9% for the same period last year. This reduction, in dollars, is principally
related to the reduction in amortization expense for goodwill that is no longer
being amortized per FASB No. 142.
Interest expense was $120,994 for the three-month period ended April 30, 2002
compared to $151,069 for the same period in the prior year, or a decrease of
$30,075. During the first quarter ended April 30, 2002, the Company reduced its
long-term debt by $358,457 and by $1,431,100 since April 30, 2001.
Other income, net, decreased $20,059 for the three-month period ended April 30,
2002 compared to the three-month period ended April 30, 2001, principally
because of the reduction in interest rates on our short-term investments.
The effective tax rates for the three-month periods ended April 30, 2002 and
April 30, 2001 were 36.0% and 37.0%, respectively.
Liquidity:
The Company's cash and cash equivalents were $11,816,022 on April 30, 2002
compared to $11,832,260 on January 31, 2002, a decrease of $16,238. This
decrease is the net result of the positive cash flows provided by operating
activities of $937,878, proceeds received from the sale of property and
equipment amounting to $6,000, and proceeds of $120,000 received from the
exercise of stock options, offset by payment of the quarterly cash dividend
amounting to $482,352 (net of $34,679 of dividends returned to the Company for
stock purchases under the Dividend Reinvestment Plan), payments on long-term
debt totalling $316,199, purchases of treasury stock amounting to $125,958, and
investment in property and equipment amounting to $195,753. The Company's cash
flows from operating activities are influenced by the timing of shipments and
negotiated standard payment terms, including retention associated with major
projects.
Accounts receivable (net) amounted to $11,282,210 on April 30, 2002 compared to
$10,465,069 on January 31, 2002, which represents an increase of $817,141. The
timing and size of shipments and retainage on contracts, especially in the
Product Recovery/Pollution Control Equipment segment, will influence accounts
receivable balances at any point in time.
Inventories were $13,952,956 on April 30, 2002 compared to $13,701,676 on
January 31, 2002, an increase of $251,280. Inventory balances fluctuate
depending on the size and timing of orders, and market demand, especially when
major systems and contracts are involved.
Current liabilities amounted to $10,580,627 on April 30, 2002 compared to
$9,598,600 on January 31, 2002, an increase of $982,027. Accounts payable and
accrued expenses, offset by a reduction in customer advances, accounted for a
substantial amount of the increase.
The Company has consistently maintained a high current ratio and has not
utilized either the domestic line of credit or the foreign line of credit which
together total $5.0 million, which are available for working capital purposes.
Cash flows, in general, have exceeded the current needs of the Company. The
Company presently foresees no change in this situation in the immediate future.
As of April 30, 2002 and January 31, 2002, working capital was $27,938,129 and
$27,813,079, respectively, and the current ratio was 3.6 and 3.9, respectively.
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations continued...
Capital Resources and Requirements:
Cash flows provided by operating activities during the three-month period ended
April 30, 2002 amounted to $937,878 compared with $2,254,509 in the three-month
period ended April 30, 2001, a decrease of $1,316,631. This decrease in cash
flows from operating activities was due principally to an increase in accounts
receivables and inventories, and a decrease in net income, customer advances and
other non-current liabilities offset by an increase in the accounts payable
balance.
Cash flows used in investing activities during the three-month period ended
April 30, 2002 amounted to $189,753 compared with $292,157 for the three-month
period ended April 30, 2001. The Company's investing activities principally
represent the acquisitions of property, plant and equipment in the two operating
segments.
Consistent with past practices, the Company intends to continue to invest in new
product development programs and to make capital expenditures to support the
ongoing operations during the coming year. The Company expects to finance all
capital expenditure requirements through cash flows generated from operations.
Financing activities during the three-month period ended April 30, 2002 utilized
$804,509 of available resources compared to $955,111 for the three-month period
ended April 30, 2001. The $150,602 decrease in cash flows used in financing
activities is primarily due to a reduction in debt payments of $187,509. The
2002 activity is the result of the payment of the quarterly cash dividend
amounting to $482,352 (net of $34,679 of dividends returned to the Company for
stock purchases under the Dividend Reinvestment Plan), reduction of long-term
debt totalling $316,199, plus the purchase of treasury stock totalling $125,958,
offset by the proceeds from the exercise of stock options totalling $120,000.
The Board of Directors declared quarterly dividends of $.085 per share payable
on March 8, 2002 and June 7, 2002 to stockholders of record as of February 22,
2002 and May 24, 2002, respectively.
Cautionary Statement Concerning Forward-Looking Statements:
In this Management's Discussion and Analysis, and elsewhere in this Quarterly
Report, we have made forward-looking statements. These statements are based on
our estimates and assumptions and are subject to risk and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations. Forward-looking statements also include
those preceded or followed by the words "anticipates", "believes", "estimates",
"hopes" or other similar expressions. For those statements, we claim protection
of the safe harbor for all forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
The following important factors, along with those discussed elsewhere in our
filings with the Securities and Exchange Commission including without limitation
our Annual Report on Form 10-K for the year ended January 31, 2002, could affect
future results and could cause those results to differ materially from those
expressed in the forward-looking statements:
o materially adverse changes in economic conditions in the markets served by
us or in significant customers of ours;
o material changes in available technology;
o changes in our accounting rules promulgated by regulatory agencies,
including the Securities and Exchange Commission, which could result in an
impact on earnings;
o unexpected results in our product development activities;
o retention of customers;
o changes in our existing management;
o unexpected changes in our execution of customers orders; and
o changes in federal or state laws.
12
MET-PRO CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K
None
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed for the three-month
period ended April 30, 2002.
13
MET-PRO CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Met-Pro Corporation
-----------------------------------
(Registrant)
June 7, 2002 /s/ William L. Kacin
-----------------------------------
William L. Kacin,
Chairman, President and
Chief Executive Officer
June 7, 2002 /s/ Gary J. Morgan
-----------------------------------
Gary J. Morgan,
Vice President - Finance,
Secretary and Treasurer, Chief
Financial Officer, Chief Accounting
Officer and Director
14