-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LmM0kIZoQZQfMgL0wAPMBvbzXXKS/XSouA0AZh1mtE4AgG5joG3CVgOTBeHiS+AB GLHI78ZMf2taajBaZjvJ3g== /in/edgar/work/20000906/0000065201-00-000012/0000065201-00-000012.txt : 20000922 0000065201-00-000012.hdr.sgml : 20000922 ACCESSION NUMBER: 0000065201-00-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000731 FILED AS OF DATE: 20000906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MET PRO CORP CENTRAL INDEX KEY: 0000065201 STANDARD INDUSTRIAL CLASSIFICATION: [3564 ] IRS NUMBER: 231683282 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07763 FILM NUMBER: 717232 BUSINESS ADDRESS: STREET 1: 160 CASSELL ROAD CITY: HARLEYSVILLE STATE: PA ZIP: 19438 BUSINESS PHONE: 2157236751 MAIL ADDRESS: STREET 1: 160 CASSELL ROAD STREET 2: BOX 144 CITY: HARLEYSVILLE STATE: PA ZIP: 19438 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO WATER TREATMENT CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO INC DATE OF NAME CHANGE: 19661026 10-Q 1 0001.txt ================================================================================ 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: July 31, 2000 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 6,085,609 (as of July 31, 2000). ================================================================================ MET-PRO CORPORATION INDEX PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Condensed consolidated balance sheet as of July 31, 2000 and January 31, 2000................................................................. 2 Condensed consolidated statement of operations for the six-month and three-month periods ended July 31, 2000 and 1999............................................................... 3 Condensed consolidated statement of stockholders' equity for the six-month periods ended July 31, 2000 and 1999..................................................... 4 Condensed consolidated statement of cash flows for the six-month periods ended July 31, 2000 and 1999............................................................... 5 Notes to condensed consolidated financial statements................................................... 6 Report of independent accountants...................................................................... 8 Item 2. Management's discussion and analysis of the financial condition and results of operations................................................................... 9 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. Submissions of Matters to a Vote of Security Holders............................................ 13 Item 5. Other Information............................................................................... 14 Item 6. Exhibits and Reports on Form S-K (a) Exhibits Required by Item 601 of Regulation S-K............................................. 14 (b) Reports on Form 8-K......................................................................... 14 SIGNATURES...................................................................................................... 15
-1- MET-PRO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) PART I - FINANCIAL INFORMATION Item 1. Financial Statements
July 31, January 31, ASSETS 2000 2000 - ---------------------------------------------------------------------------------------------------------------------- Current assets Cash and cash equivalents $ 6,848,416 $ 6,331,556 Accounts receivable, net of allowance for doubtful accounts of approximately $277,000 and $225,000, respectively 13,750,537 13,733,256 Inventories - Note 3 13,594,533 13,744,142 Prepaid expenses, deposits and other current assets 768,381 1,135,443 Deferred income taxes 778,574 778,574 - ---------------------------------------------------------------------------------------------------------------------- Total current assets 35,740,441 35,722,971 Property, plant and equipment, net 13,172,370 13,473,299 Costs in excess of net assets of businesses acquired, net 18,524,323 18,772,176 Other assets 456,544 673,537 - ---------------------------------------------------------------------------------------------------------------------- Total assets $67,893,678 $68,641,983 ====================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------------------------------------------------------------------------------------------------- Current liabilities Current portion of long-term debt $ 2,013,652 $ 2,008,940 Accounts payable 4,221,461 4,989,810 Accrued salaries, wages and expenses 6,026,925 5,108,552 Payroll and other taxes payable 39,440 182,545 Dividend payable 486,849 511,299 Customers' advances 1,419,710 880,432 - ---------------------------------------------------------------------------------------------------------------------- Total current liabilities 14,208,037 13,681,578 Long-term debt 8,924,985 9,933,014 Other non-current liabilities 457,563 415,731 Deferred income taxes 391,043 405,327 - ---------------------------------------------------------------------------------------------------------------------- Total liabilities 23,981,628 24,435,650 - ---------------------------------------------------------------------------------------------------------------------- Stockholders' equity Common stock, $.10 par value; 18,000,000 shares authorized, 7,197,973 and 7,189,194 shares issued, of which 1,112,364 and 797,952 shares were reacquired and held in treasury at the respective dates 719,797 718,919 Additional paid-in capital 8,053,103 7,973,873 Retained earnings 48,795,430 46,087,476 Accumulated other comprehensive loss (507,783) (403,993) Treasury stock, at cost (13,148,497) (10,169,942) - ---------------------------------------------------------------------------------------------------------------------- Total stockholders' equity 43,912,050 44,206,333 - ---------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $67,893,678 $68,641,983 ======================================================================================================================
See accompanying notes to condensed consolidated financial statements. -2- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
Six Months Ended Three Months Ended July 31, July 31, 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ Net sales $40,509,159 $41,366,235 $20,258,228 $20,538,207 Cost of goods sold 26,589,021 27,286,699 13,115,646 13,565,922 - ------------------------------------------------------------------------------------------------------------------------------------ Gross profit 13,920,138 14,079,536 7,142,582 6,972,285 - ------------------------------------------------------------------------------------------------------------------------------------ Operating expenses Selling 3,689,034 3,749,153 1,877,455 1,871,066 General and administrative 4,295,042 4,126,022 2,177,998 1,993,347 - ------------------------------------------------------------------------------------------------------------------------------------ 7,984,076 7,875,175 4,055,453 3,864,413 - ------------------------------------------------------------------------------------------------------------------------------------ Income from operations 5,936,062 6,204,361 3,087,129 3,107,872 Interest expense (360,681) (429,009) (175,850) (216,554) Other income, net 225,884 271,386 128,909 136,319 - ------------------------------------------------------------------------------------------------------------------------------------ Income before taxes 5,801,265 6,046,738 3,040,188 3,027,637 Provision for taxes 2,117,462 2,297,760 1,109,669 1,150,501 - ------------------------------------------------------------------------------------------------------------------------------------ Net income $ 3,683,803 $ 3,748,978 $ 1,930,519 $ 1,877,136 ==================================================================================================================================== Earnings per share, basic (1) $ .59 $ .56 $ .31 $ .28 Earnings per share, diluted (2) $ .59 $ .56 $ .31 $ .28 Cash dividend per share - declared (3) $ .16 $ .40 $ .08 $ .08 Cash dividend per share - paid (3) $ .16 $ .32 $ .08 $ .00 ====================================================================================================================================
(1) Basic earnings per share are based upon the weighted average number of shares outstanding of 6,217,327 and 6,669,627 in the six-month periods ended July 31, 2000 and 1999, respectively, and 6,248,061 and 6,693,898 in three-month periods ended July 31, 2000 and 1999, respectively. (2) Diluted earnings per share are based on the weighted average number of shares outstanding of 6,230,215 and 6,711,457 in the six-month periods ended July 31, 2000 and 1999, respectively, and 6,259,884 and 6,734,268 in the three-month periods ended July 31, 2000 and 1999, respectively. (3) Effective during the second quarter of the fiscal year ended January 31, 2000, the Company altered its historic practice of paying annual dividends to the expected payment of quarterly dividends. The Board of Directors declared quarterly dividends of $.08 per share payable on March 10, 2000, June 9, 2000 and September 11, 2000 to stockholders of record as of February 25, 2000, May 26, 2000 and August 28, 2000, respectively. On February 22, 1999, the Company declared a $.32 per share annual cash dividend payable on April 23, 1999 to stockholders of record on April 9, 1999. On June 2, 1999, the Company declared a quarterly $.08 per share cash dividend payable on September 10, 1999 to stockholders of record on August 20, 1999. See accompanying notes to condensed consolidated financial statements. -3- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)
Accumulated Additional Other Common Paid-in Retained Comprehensive Treasury Stock Capital Earnings (Loss) Stock Total - ---------------------------------------------------------------------------------------------------------------------------- Balances, January 31, 2000 $718,919 $7,973,873 $46,087,476 ($403,993) ($10,169,942) $44,206,333 Comprehensive income: Net income 3,683,803 Foreign currency translation (103,790) Total comprehensive income 3,580,013 Dividends paid, $.08 per share (489,000) (489,000) Dividends declared, $.08 per share (486,849) (486,849) Proceeds from issuance of common stock under dividend reinvestment plan (8,779 shares) 878 79,230 80,108 Purchase of 314,412 shares of treasury stock (2,978,555) (2,978,555) - ---------------------------------------------------------------------------------------------------------------------------- Balances, July 31, 2000 $719,797 $8,053,103 $48,795,430 ($507,783) ($13,148,497) $43,912,050 - ---------------------------------------------------------------------------------------------------------------------------- Accumulated Additional Other Common Paid-in Retained Comprehensive Treasury Stock Capital Earnings (Loss) Stock Total - ---------------------------------------------------------------------------------------------------------------------------- Balances, January 31, 1999 $713,862 $7,508,748 $42,718,355 ($85,103) ($4,930,755) $45,925,107 Comprehensive income: Net income 3,748,978 Foreign currency translation (125,427) Total comprehensive income 3,623,551 Dividends paid, $.32 per share (2,158,079) (2,158,079) Dividend declared, $.08 per share (527,681) (527,681) Proceeds from issuance of common stock under dividend reinvestment plan (44,218 shares) 4,422 426,907 431,329 Stock option transactions (27,180) 42,180 15,000 Purchase of 293,400 shares of treasury stock (3,546,273) (3,546,273) - ---------------------------------------------------------------------------------------------------------------------------- Balances, July 31, 1999 $718,284 $7,908,475 $43,781,573 ($210,530) ($8,434,848) $43,762,954 - ----------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements. -4- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
Six Months Ended July 31, 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Net cash provided by operating activities $5,841,475 $6,431,201 - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities Proceeds from sale of property and equipment 2,000 8,000 Acquisitions of property and equipment (408,949) (526,868) Acquisitions of other intangibles -- (7,281) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used in) investing activities (406,949) (526,149) - ------------------------------------------------------------------------------------------------------------------------------------ Cash flows from financing activities Reduction of debt (1,003,317) (1,123,987) Exercise of stock options -- 15,000 Payment of dividends (920,191) (1,726,750) Purchase of treasury shares (2,978,555) (3,546,273) - ------------------------------------------------------------------------------------------------------------------------------------ Net cash (used in) financing activities (4,902,063) (6,382,010) - ------------------------------------------------------------------------------------------------------------------------------------ Effect of exchange rate changes on cash (15,603) (13,580) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in cash and cash equivalents 516,860 (490,538) Cash and cash equivalents at February 1 6,331,556 7,446,369 - ------------------------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at July 31 $6,848,416 $6,955,831 ==================================================================================================================================== SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ 230,042 $ 429,045 Income taxes $1,586,183 $1,816,716 ====================================================================================================================================
See accompanying notes to condensed consolidated financial statements. -5- MET-PRO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - PRINCIPLES OF CONSOLIDATION The condensed 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 condensed financial statements contain all adjustments necessary to present fairly the financial position as of July 31, 2000 and the results of operations for the six-month and three-month periods ended July 31, 2000 and 1999, and changes in stockholders' equity and cash flows for the six-month periods then ended. The results of operations for the six-month and three-month periods ended July 31, 2000 and 1999 are not necessarily indicative of the results to be expected for the full year. These condensed 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, 2000. NOTE 3 - INVENTORIES Inventories consisted of the following: July 31, January 31, 2000 2000 -------------- ------------- Raw materials $ 6,682,404 $ 6,755,944 Work in progress 1,994,661 2,016,612 Finished goods 4,917,468 4,971,586 -------------- ------------- $13,594,533 $13,744,142 ============== ============= NOTE 4 - RECLASSIFICATIONS Certain reclassifications have been made to the financial statements for the six-month and three-month periods ended July 31, 1999 to conform to the presentation of the financial statements for the six-month and three-month periods ended July 31, 2000. -6- MET-PRO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 - 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.
Six Months Ended July 31, 2000 1999 -------------------------------------- Net sales Product recovery/pollution control equipment $25,940,266 $28,077,235 Fluid handling equipment 14,568,893 13,289,000 ------------ ------------ $40,509,159 $41,366,235 ============ ============ Income from operations Product recovery/pollution control equipment $ 3,257,483 $ 4,289,567 Fluid handling equipment 2,678,579 1,914,794 ------------ ------------ $ 5,936,062 $ 6,204,361 ============ ============ July 31, 2000 1999 -------------------------------------- Identifiable assets Product recovery/pollution control equipment $41,413,269 $42,240,578 Fluid handling equipment 18,422,881 19,213,025 ------------- ------------ 59,836,150 61,453,603 Corporate 8,057,528 7,957,896 ------------- ------------ $67,893,678 $69,411,499 ============ ============
NOTE 6 - 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. -7- REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors Met-Pro Corporation Harleysville, Pennsylvania We have reviewed the accompanying condensed consolidated balance sheet of Met-Pro Corporation and its wholly-owned subsidiaries as of July 31, 2000 and the related condensed consolidated statements of operations, for the six-month and three-month periods ended July 31, 2000 and 1999 and stockholders' equity and cash flows for the six-month periods ended July 31, 2000 and 1999. 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 condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of January 31, 2000 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 25, 2000, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 31, 2000 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 August 16, 2000 -8- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations Results of Operations: Six Months Ended July 31, 2000 vs Six Months Ended July 31, 1999 Net sales for the six-month period ended July 31, 2000 were $40,509,159 compared to $41,366,235 for the six-month period ended July 31, 1999, a decrease of $857,076 or 2.1%. Sales in the Product Recovery/Pollution Control Equipment segment were $25,940,266 or 7.6% lower than the six-month period July 31, 1999 due to lower demand for our product recovery equipment. Sales in the Fluid Handling Equipment segment were $14,568,893 or 9.6% higher compared to the six-month period ended July 31, 1999 due primarily to increased demand for our specialty pump equipment. Backlog at July 31, 2000 totaled $14,268,534 or 64.4% higher than the backlog of orders on hand at July 31, 1999. In addition, the Company had $3,323,362 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 six-month period ended July 31, 2000 was $3,683,803 compared to $3,748,978 for the six-month period ended July 31, 1999, a decrease of $65,175 or 1.7%. The decrease in net income is related to the lower gross margins in the Product Recovery/Pollution Control Equipment segment plus the aforementioned lower sales during this period. The gross margin for the six-month period ended July 31, 2000 was 34.4% versus 34.0 % for the same period in the prior year due to higher gross margins experienced in the Fluid Handling Equipment segment. Selling expense decreased $60,119 during the six-month period ended July 31, 2000 compared to the same period last year. Selling expense as a percentage of net sales was 9.1% for the six-month period ended July 31, 2000, which was equal to the same period last year. General and administrative expense was $4,295,042 for the six-month period ended July 31, 2000 compared to $4,126,022 for the same period last year, an increase of $169,020. General and administrative expense as a percentage of net sales was 10.6% for the six-month period ended July 31, 2000 compared to 10.0% for the same period last year. Interest expense was $360,681 for the six-month period ended July 31, 2000 compared to $429,009 for the same period in the prior year, or a decrease of $68,328. Other income, net, decreased $45,502 for the six-month period ended July 31, 2000 compared to the six-month period ended July 31, 1999. The effective tax rate for the six-month period ended July 31, 2000 was 36.5% compared to 38% for the six-month period ended July 31, 1999. Three Months Ended July 31, 2000 vs Three Months Ended July 31, 1999 Net sales for the three-month period ended July 31, 2000 were 20,258,228 compared to 20,538,207 for the three-month period ended July 31, 1999, a decrease of $279,979 or 1.4%. The sales decrease can be attributed to lower sales in the Product Recovery/Pollution Control Equipment segment. Net income for the three-month period ended July 31, 2000 was $1,930,519 compared to $1,877,136 for the three-month period ended July 31, 1999, an increase of $53,383 or 2.8%. The increase in net income is related to the higher sales volume in the Fluid Handling Equipment segment for the three-month period ended July 31, 2000 plus higher gross margins for this segment during the period. The gross margin for the three-month period ended July 31, 2000 was 35.3% compared to 33.9% for the same period last year. The increase is due to higher gross margins experienced in the Fluid Handling Equipment segment. -9- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Selling expenses increased $6,389 during the three-month period ended July 31, 2000 compared to the same period last year. As a percentage of net sales, selling expense increased to 9.3% for the three-month period ended July 31, 2000 from 9.1% for the three-month period ended July 31, 1999. General and administrative expense was $2,177,998 during the three-month period ended July 31, 2000 compared to $1,993,347 during the three-month period ended July 31, 1999, an increase of $184,651. General and administrative expense for the three-month period ended July 31, 2000 was 10.8% of net sales, compared to 9.7% of net sales for the same period last year. Interest expense was $175,850 for the three-month period ended July 31, 2000 compared to $216,554 for the same period in the prior year, or a decrease of $40,704. Other income, net, decreased $7,410 for the three-month period ended July 31, 2000 compared to the three-month period ended July 31, 1999. The effective tax rate for the three-month period ended July 31, 2000 was 36.5% compared to 38% for the three-month period ended July 31, 1999. Liquidity: The Company's cash and cash equivalents were $6,848,416 on July 31, 2000 compared to $6,331,556 on January 31, 2000, an increase of $516,860. This increase is the net result of the following occurring during the six-month period: the payment of quarterly cash dividends amounting to $920,191 (net of $80,108 of dividends utilized by stockholders for stock purchases under the Dividend Reinvestment Plan), payments on long-term debt totalling $1,003,317, purchases of treasury stock amounting to $2,978,555, and investment in property and equipment amounting to $408,949, offset by positive cash flow provided by operating activities of $5,841,475, and proceeds received from the sale of property and equipment amounting to $2,000. 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 $13,750,537 on July 31, 2000 compared to $13,733,256 on January 31, 2000, which represents an increase of $17,281. 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 $13,594,533 on July 31, 2000 compared to $13,744,142 on January 31, 2000, a decrease of $149,609. Inventory balances fluctuate depending upon market demand, the size and timing of orders, and varying lead times required. Current liabilities amounted to $14,208,037 on July 31, 2000 compared to $13,681,578 on January 31, 2000, an increase of $526,459. Accrued expenses and customer advances, offset by a reduction in accounts payable, accounted for 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 totalling $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. -10- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Capital Resources and Requirements: Cash flows provided by operating activities during the six-month period ended July 31, 2000, amounted to $5,841,475, compared with $6,431,201 during the six-month period ended July 31, 1999, a decrease of $589,726. This decrease in cash flows from operating activities was due principally to the increase in the accounts receivable balance combined with a decrease in accounts payable for the period ended July 31, 2000. Cash flows used in investing activities during the six-month period ended July 31, 2000 amounted to $406,949, compared with $526,149 for the six-month period ended July 31, 1999. The Company's investing activities principally consist of the acquisitions of property, plant and equipment in the two operating segments. Financing activities during the six-month period ended July 31, 2000 utilized $4,902,063 of available resources compared to $6,382,010 for the six-month period ended July 31, 1999. The 2000 activity is the result of the payment of quarterly cash dividends amounting to $920,191 (net of $80,108 of dividends utilized by shareholders for stock purchases under the Dividend Reinvestment Plan), reduction of long-term debt totalling $1,003,317, plus the purchase of treasury stock totalling $2,978,555. On May 11, 1999, the Company announced the initiation of a 350,000 share stock repurchase program ("1999 Stock Repurchase Program"). The Company completed this stock repurchase program during the six-month period ended July 31, 2000. On February 21, 2000 the Company announced a new stock repurchase program (the "2000 Stock Repurchase Program") for an additional 350,000 shares or approximately 6% of the Company's outstanding stock, to commence after all shares have been repurchased under the 1999 Stock Repurchase Program. The new program was initiated because in management's view the current stock price does not reflect the true stock value. Purchases may be made from time to time in open market transactions at the prevailing prices and in accordance with applicable rules. The Company may discontinue the program at any time. For the six-month period ended July 31, 2000, the Company had repurchased a total of 314,412 shares consisting of 249,437 shares under the 2000 Stock Repurchase Program and 64,975 shares under the 1999 Stock Repurchase Program, at a cost of $2,978,555, or 5% of the outstanding shares, which was charged to stockholders' equity. Due to strong cash flows generated from operating activities in 1999, the Company announced the change from an annual dividend, which was traditionally paid during the month of April, to an expected quarterly dividend. Payment of future dividends will depend on future earnings and capital requirements of the Company and is at the discretion of the Board of Directors. The Board of Directors declared quarterly dividends of $.08 per share payable on March 10, 2000, June 9, 2000, and September 11, 2000 to stockholders of record as of February 25, 2000, May 26, 2000, and August 28, 2000, respectively. 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. -11- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Cautionary Statement Regarding Forward-Looking Statements: As a cautionary note to investors, the Company and its representatives may make oral or written statements from time to time that are "forward-looking statements". This would include information concerning possible or assumed future activities, plans, results of operations of the Company and statements preceded by, followed by or that include the words "anticipates", "believes", "designed to", "estimates", "expects", "foreseeable future", "goal", "intends", "projects", "projection", "plans", "scheduled", "should", or similar expressions. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There are a number of important factors which could cause actual results to differ materially from those anticipated. The Company believes that its future operating results will continue to be subject to quarterly variations based upon a wide variety of factors including the cyclical nature of both the business segments and the markets addressed by the Company's products, price erosion, competitive factors, the timing of new product introductions, changes in product mix, the availability and extent of utilization of manufacturing capacity, product obsolescence, the effectiveness of the Company's cost control programs, the availability of suitable acquisition opportunities and the ability to develop and implement new technologies. The Company's operating results could also be impacted by sudden fluctuations in customer requirements, currency exchange rate fluctuations and other economic conditions affecting customer demand and the cost of operations in one or more of the global markets in which the Company conducts business. As a participant in the product recovery/pollution control and fluid handling industries, the Company operates in a rapidly changing and highly competitive environment. The Company sells both custom and industrial products; accordingly, changes in the conditions or composition of any of the Company's customers may have an impact on the Company. While the Company cannot predict what effect these various factors may have on its financial results, the aggregate effect of these and other factors could result in volatility in the Company's future performance and stock price. -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. Submissions of Matters to a Vote of Security Holders The annual meeting of the Company's stockholders was held on June 7, 2000. At that meeting, three proposals were submitted to a vote of the Company's stockholders. Proposal 1 was a proposal to elect two Directors (with Alan Lawley and Gary J. Morgan being the nominees) to serve until the 2003 Annual Meeting of Stockholders and one Director (with Michael J. Morris being the nominee) to serve until the 2002 Annual Meeting of Stockholders. Proposal 2 was to approve the adoption of the Met-Pro Corporation Year 2000 Employee Stock Purchase Plan. Proposal 3 was to ratify the selection of Margolis & Company P.C. as independent certified public accountants for the Company's fiscal year ending January 31, 2001. At the close of business on the record date for the meeting (which was April 13, 2000), there were 6,324,005 shares of common stock outstanding and entitled to be voted at the meeting. Holders of 6,046,404 shares of common stock (representing a like number of votes) were present at the meeting, either in person or by proxy. The following table sets forth the results of the voting on each of the proposals:
Number of Votes Proposals For Against Abstain - ------------------------------------------------------------------------------------------------------- Proposal 1 - Election of Directors: Alan Lawley 5,857,985 188,419 -- Gary J. Morgan 5,856,475 189,929 -- Michael J. Morris 5,857,985 188,419 -- - ------------------------------------------------------------------------------------------------------- Proposal 2 - Adoption of Met-Pro Corporation Year 2000 Employee Stock Purchase Plan 5,649,062 312,801 84,541 - ------------------------------------------------------------------------------------------------------- Proposal 3 - Selection of Margolis & Company P.C. 5,896,789 135,919 13,696 - -------------------------------------------------------------------------------------------------------
Consequently, all proposals were passed by the stockholders. -13- MET-PRO CORPORATION Item 5. Other Information None Item 6. Exhibits and Reports on Form S-K (a) Exhibits Required by Item 601 of Regulation S-K None (b) Reports on Form 8-K There were no Reports on Form 8-K filed during the six-month period ended July 31, 2000. -14- 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) September 6, 2000 /s/ William L. Kacin ----------------------------------- William L. Kacin, Chairman, President and Chief Executive Officer September 6, 2000 /s/ Gary J. Morgan ----------------------------------- Gary J. Morgan, Vice President of Finance, Secretary and Treasurer, Chief Financial Officer, Chief Accounting Officer and Director -15- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 6-MOS JAN-31-2001 JUL-31-2000 6,848,416 0 13,750,537 276,809 13,594,533 35,740,441 28,537,259 15,364,889 67,893,678 14,208,037 10,938,637 719,797 0 0 43,192,253 67,893,678 40,509,159 40,509,159 26,589,021 34,573,097 0 0 360,681 5,801,265 2,117,462 0 0 0 0 3,683,803 .59 .59
-----END PRIVACY-ENHANCED MESSAGE-----