-----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, V9UXWz9CUQIvyJZLsuX8Tid72JG5jAUPKV4PV30YUPVT2HHiiJ6MBGYAkslk3vYB Tw2uV5FbMhqHCToRiug+Qg== /in/edgar/work/0000065201-00-000013/0000065201-00-000013.txt : 20001129 0000065201-00-000013.hdr.sgml : 20001129 ACCESSION NUMBER: 0000065201-00-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001031 FILED AS OF DATE: 20001128 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: 778017 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: October 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 6,085,985 (as of October 31, 2000). ================================================================================ MET-PRO CORPORATION INDEX PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Condensed consolidated balance sheet as of October 31, 2000 and January 31, 2000....................................................... 2 Condensed consolidated statement of operations for the nine-month and three-month periods ended October 31, 2000 and 1999..................................................... 3 Condensed consolidated statement of stockholders' equity for the nine-month periods ended October 31, 2000 and 1999.......................................... 4 Condensed consolidated statement of cash flows for the nine-month periods ended October 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............................................................................ 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 CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) PART I - FINANCIAL INFORMATION Item 1. Financial Statements
October 31, January 31, ASSETS 2000 2000 - ---------------------------------------------------------------------------------------------------------------------- Current assets Cash and cash equivalents $ 7,900,581 $ 6,331,556 Accounts receivable, net of allowance for doubtful accounts of approximately $258,000 and $225,000, respectively 13,275,831 13,733,256 Inventories - Note 3 13,782,676 13,744,142 Prepaid expenses, deposits and other current assets 947,511 1,135,443 Deferred income taxes 778,574 778,574 - ---------------------------------------------------------------------------------------------------------------------- Total current assets 36,685,173 35,722,971 Property, plant and equipment, net 13,125,572 13,473,299 Costs in excess of net assets of businesses acquired, net 18,400,398 18,772,176 Other assets 490,092 673,537 - ---------------------------------------------------------------------------------------------------------------------- Total assets $68,701,235 $68,641,983 ====================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------------------------------------------------------------------------------------------------- Current liabilities Current portion of long-term debt $ 2,016,085 $ 2,008,940 Accounts payable 4,638,066 4,989,810 Accrued salaries, wages and expenses 6,575,834 5,108,552 Payroll and other taxes payable 24,097 182,545 Dividend payable 486,879 511,299 Customers' advances 403,651 880,432 - ---------------------------------------------------------------------------------------------------------------------- Total current liabilities 14,144,612 13,681,578 Long-term debt 8,420,035 9,933,014 Other non-current liabilities 478,479 415,731 Deferred income taxes 383,855 405,327 - ---------------------------------------------------------------------------------------------------------------------- Total liabilities 23,426,981 24,435,650 - ---------------------------------------------------------------------------------------------------------------------- Stockholders' equity Common stock, $.10 par value; 18,000,000 shares authorized, 7,202,349 and 7,189,194 shares issued, of which 1,116,364 and 797,952 shares were reacquired and held in treasury at the respective dates 720,235 718,919 Additional paid-in capital 8,096,198 7,973,873 Retained earnings 50,325,530 46,087,476 Accumulated other comprehensive loss (679,640) (403,993) Treasury stock, at cost (13,188,069) (10,169,942) - ---------------------------------------------------------------------------------------------------------------------- Total stockholders' equity 45,274,254 44,206,333 - ---------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $68,701,235 $68,641,983 ======================================================================================================================
See accompanying notes to condensed consolidated financial statements. -2- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
Nine Months Ended Three Months Ended October 31, October 31, 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------ Net sales $61,767,172 $59,212,504 $21,258,013 $17,846,269 Cost of goods sold 40,654,436 38,810,490 14,065,415 11,523,791 - ------------------------------------------------------------------------------------------------------------------------------ Gross profit 21,112,736 20,402,014 7,192,598 6,322,478 - ------------------------------------------------------------------------------------------------------------------------------ Operating expenses Selling 5,469,811 5,558,747 1,780,777 1,809,594 General and administrative 6,449,342 6,083,595 2,154,300 1,957,573 - ------------------------------------------------------------------------------------------------------------------------------ 11,919,153 11,642,342 3,935,077 3,767,167 - ------------------------------------------------------------------------------------------------------------------------------ Income from operations 9,193,583 8,759,672 3,257,521 2,555,311 Interest expense (534,376) (634,577) (173,695) (205,568) Other income, net 369,224 386,456 143,340 115,070 - ------------------------------------------------------------------------------------------------------------------------------ Income before taxes 9,028,431 8,511,551 3,227,166 2,464,813 Provision for taxes 3,327,649 3,060,910 1,210,187 763,150 - ------------------------------------------------------------------------------------------------------------------------------ Net income $ 5,700,782 $ 5,450,641 $ 2,016,979 $ 1,701,663 ============================================================================================================================== Earnings per share, basic (1) $ .92 $ .83 $ .33 $ .26 Earnings per share, diluted(2) $ .92 $ .82 $ .33 $ .26 Cash dividend per share - declared (3) $ .24 $ .48 $ .08 $ .08 Cash dividend per share - paid (3) $ .24 $ .40 $ .08 $ .08 - ------------------------------------------------------------------------------------------------------------------------------
(1) Basic earnings per share are based upon the weighted average number of shares outstanding of 6,173,505 and 6,592,232 in the nine-month periods ended October 31, 2000 and 1999, respectively, and 6,185,487 and 6,619,678 in the three-month periods ended October 31, 2000 and 1999, respectively. (2) Diluted earnings per share are based on the weighted average number of shares outstanding of 6,189,773 and 6,631,383 in the nine-month periods ended October 31, 2000 and 1999, respectively, and 6,200,884 and 6,660,094 in the three-month periods ended October 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, September 11, 2000 and December 8, 2000 to stockholders of record as of February 25, 2000, May 26, 2000, August 28, 2000 and November 24, 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. The Company declared quarterly dividends of $.08 per share payable on September 10, 1999 and December 10, 1999 to shareholders of record as of August 20, 1999 and November 26, 1999, respectively. 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 5,700,782 Foreign currency translation (275,647) Total comprehensive income 5,425,135 Dividends paid, $.16 per share (975,849) (975,849) Dividends declared, $.08 per share (486,879) (486,879) Proceeds from issuance of common stock under dividend reinvestment plan (13,155 1,316 122,325 123,641 shares) Purchase of 318,412 shares of treasury stock (3,018,127) (3,018,127) - ------------------------------------------------------------------------------------------------------------------------------ Balances, October 31, 2000 $720,235 $8,096,198 $50,325,530 ($679,640) ($13,188,069) $45,274,254 ============================================================================================================================== 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 5,450,641 Foreign currency translation (150,837) Total comprehensive income 5,299,804 Dividends paid, $.40 per share (2,680,881) (2,680,881) Dividend declared, $.08 per share (511,340) (511,340) Proceeds from issuance of common stock under dividend reinvestment plan (46,882 shares) 4,688 456,465 461,153 Stock option transactions (27,180) 42,180 15,000 Purchase of 453,025 shares of treasury stock (5,239,409) (5,239,409) - ------------------------------------------------------------------------------------------------------------------------------ Balances, October 31, 1999 $718,550 $7,938,033 $44,976,775 ($235,940) ($10,127,984) $43,269,434 ==============================================================================================================================
See accompanying notes to condensed consolidated financial statements. -4- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
Nine Months Ended October 31, 2000 1999 - ----------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Net cash provided by operating activities $8,281,541 $7,715,350 - ----------------------------------------------------------------------------------------------------------------- Cash flows from investing activities Proceeds from sale of property and equipment 2,000 12,048 Acquisitions of property and equipment (784,322) (888,414) Acquisitions of other intangibles -- (7,281) - ----------------------------------------------------------------------------------------------------------------- Net cash (used in) investing activities (782,322) (883,647) - ----------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Reduction of debt (1,505,834) (1,624,270) Exercise of stock options -- 15,000 Payment of dividends (1,363,507) (2,219,728) Purchase of treasury shares (3,018,127) (5,239,408) - ----------------------------------------------------------------------------------------------------------------- Net cash (used in) financing activities (5,887,468) (9,068,406) - ----------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash (42,726) (19,625) - ----------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 1,569,025 (2,256,328) Cash and cash equivalents at February 1 6,331,556 7,446,369 - ----------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at October 31 $7,900,581 $5,190,041 ================================================================================================================= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ 620,652 $ 631,011 Income taxes $2,595,536 $2,739,675 ================================================================================================================
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 October 31, 2000 and the results of operations for the nine-month and three-month periods ended October 31, 2000 and 1999, and changes in stockholders' equity and cash flows for the nine-month periods then ended. The results of operations for the nine-month and three-month periods ended October 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: October 31, January 31, 2000 2000 -------------- ------------- Raw materials $6,775,563 $6,755,944 Work in progress 2,021,919 2,016,612 Finished goods 4,985,194 4,971,586 -------------- ------------- $13,782,676 $13,744,142 ============== ============= NOTE 4 - RECLASSIFICATIONS Certain reclassifications have been made to the financial statements for the nine-month and three-month periods ended October 31, 1999 to conform to the presentation of the financial statements for the nine-month and three-month periods ended October 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.
Nine Months Ended October 31, 2000 1999 ----------------------------------------------- Net sales Product Recovery/Pollution Control Equipment $39,616,215 $39,346,224 Fluid Handling Equipment 22,150,957 19,866,280 ------------ ------------ $61,767,172 $59,212,504 ============ ============ Income from operations Product Recovery/Pollution Control Equipment $ 5,325,510 $ 5,931,528 Fluid Handling Equipment 3,868,073 2,828,144 ------------ ------------ $ 9,193,583 $ 8,759,672 ============ ============ October 31, 2000 1999 ----------------------------------------------- Identifiable assets Product Recovery/Pollution Control Equipment $41,216,727 $42,049,189 Fluid Handling Equipment 18,103,217 18,969,915 ------------- ------------ 59,319,944 61,019,104 Corporate 9,381,291 6,469,469 ------------- ------------ $68,701,235 $67,488,573 ============= ============
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 October 31, 2000 and the related condensed consolidated statements of operations for the nine-month and three-month periods ended October 31, 2000 and 1999 and stockholders' equity and cash flows for the nine-month periods ended October 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 November 17, 2000 -8- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations Results of Operations: Nine Months Ended October 31, 2000 vs Nine Months Ended October 31, 1999 Net sales for the nine-month period ended October 31, 2000 were $61,767,172 compared to $59,212,504 for the nine-month period ended October 31, 1999, an increase of $2,554,668 or 4.3%. Sales in the Product Recovery/Pollution Control Equipment segment were $39,616,215 or slightly higher than the nine-month period October 31, 1999. Sales in the Fluid Handling Equipment segment were $22,150,957 or 11.5% higher compared to the nine-month period ended October 31, 1999. Backlog at October 31, 2000 totaled $11,358,413 or 11.8% lower than the backlog of orders on hand at October 31, 1999. In addition, the Company had $4,245,571 of orders that 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 nine-month period ended October 31, 2000 was $5,700,782 compared to $5,450,641 for the nine-month period ended October 31, 1999, an increase of $250,141 or 4.6%. The gross margin for the nine-month period ended October 31, 2000 was 34.2% versus 34.5% for the same period in the prior year. This decrease is due to lower gross margins experienced in the Product Recovery/Pollution Control Equipment segment. Selling expense decreased $88,936 during the nine-month period ended October 31, 2000 compared to the same period last year. Selling expense as a percentage of net sales was 8.9% for the nine-month period ended October 31, 2000, compared to 9.4% for the same period last year. General and administrative expense was $6,449,342 for the nine-month period ended October 31, 2000 compared to $6,083,595 for the same period last year, an increase of $365,747. General and administrative expense as a percentage of net sales was 10.4% for the nine-month period ended October 31, 2000 compared to 10.3% for the same period last year. Interest expense was $534,376 for the nine-month period ended October 31, 2000 compared to $634,577 for the same period in the prior year, or a decrease of $100,201. Other income, net, decreased $17,232 for the nine-month period ended October 31, 2000 compared to the nine-month period ended October 31, 1999. The effective tax rate for the nine-month period ended October 31, 2000 was 36.9% compared to 36.0% for the nine-month period ended October 31, 1999. Three Months Ended October 31, 2000 vs Three Months Ended October 31, 1999 Net sales for the three-month period ended October 31, 2000 were $21,258,013 compared to $17,846,269 for the three-month period ended October 31, 1999, an increase of $3,411,744 or 19.1%. The sales increase can be attributed to higher sales in both Product Recovery/Pollution Control Equipment and Fluid Handling Equipment segments. Net income for the three-month period ended October 31, 2000 was $2,016,979 compared to $1,701,663 for the three-month period ended October 31, 1999, an increase of $315,316 or 18.5%. The increase in net income is related to the higher sales volume in both Product Recovery/Pollution Control Equipment and Fluid Handling Equipment segments. The gross margin for the three-month period ended October 31, 2000 was 33.8% compared to 35.4% for the same period last year. The decrease is due to lower gross margins in the Product Recovery/Pollution Control Equipment segment. -9- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Selling expense decreased $28,817 during the three-month period ended October 31, 2000 compared to the same period last year. As a percentage of net sales, selling expense decreased to 8.4% for the three-month period ended October 31, 2000 from 10.1% for the three-month period ended October 31, 1999. General and administrative expense was $2,154,300 during the three-month period ended October 31, 2000 compared to $1,957,573 during the three-month period ended October 31, 1999, an increase of $196,727. General and administrative expense for the three-month period ended October 31, 2000 was 10.1% of net sales, compared to 11.0% of net sales for the same period last year. Interest expense was $173,695 for the three-month period ended October 31, 2000 compared to $205,568 for the same period in the prior year, or a decrease of $31,873. Other income, net, increased $28,270 for the three-month period ended October 31, 2000 compared to the three-month period ended October 31, 1999. The effective tax rate for the three-month period ended October 31, 2000 was 37.5% compared to 31.0% for the three-month period ended October 31, 1999. Liquidity: The Company's cash and cash equivalents were $7,900,581 on October 31, 2000 compared to $6,331,556 on January 31, 2000, an increase of $1,569,025. This increase is the net result of the following which occurred during this nine-month period: Positive cash flow provided by operating activities of $8,281,541, and by proceeds received from the sale of property and equipment of $2,000, offset by negative cash flow used in the payment of quarterly cash dividends amounting to $1,363,507 (net of $123,641 of dividends utilized by stockholders for stock purchases under the Dividend Reinvestment Plan), payments on long-term debt totaling $1,505,834, purchases of treasury stock amounting to $3,018,127, and investment in property and equipment amounting to $784,322. 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 $13,275,831 on October 31, 2000 compared to $13,733,256 on January 31, 2000, which represents a decrease of $457,425. 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 $13,782,676 on October 31, 2000 compared to $13,744,142 on January 31, 2000, an increase of $38,534. Inventory balances fluctuate depending upon market demand, the size and timing of orders, and varying lead times required. Current liabilities amounted to $14,144,612 on October 31, 2000 compared to $13,681,578 on January 31, 2000, an increase of $463,034. Current portion of long-term debt and accrued expenses, offset by a reduction in accounts payable, other taxes payable, dividend payable, and customers' advances 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 nine-month period ended October 31, 2000 amounted to $8,281,541, compared with $7,715,350 during the nine-month period ended October 31, 1999, an increase of $566,191. This increase in cash flows from operating activities was due principally to the decrease in accounts receivable balances combined with an increase in net income and accrued expenses offset by a decline in accounts payable and customers' advances. Cash flows used in investing activities during the nine-month period ended October 31, 2000 amounted to $782,322 compared with $883,647 for the nine-month period ended October 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 nine-month period ended October 31, 2000 utilized $5,887,468 of available resources compared to $9,068,406 for the nine-month period ended October 31, 1999. The 2000 activity is the result of the payment of quarterly cash dividends amounting to $1,363,507 (net of $123,641 of dividends utilized for stock purchases under the Dividend Reinvestment Plan), reduction of long-term debt totaling $1,505,834, plus the purchase of treasury stock totaling $3,018,127. 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 nine-month period ended October 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 nine-month period ended October 31, 2000, the Company had repurchased a total of 318,412 shares consisting of 253,437 shares under the 2000 Stock Repurchase Program and 64,975 shares under the 1999 Stock Repurchase Program, at a cost of $3,018,127, 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, September 11, 2000 and December 8, 2000 to stockholders of record as of February 25, 2000, May 26, 2000, August 28, 2000 and November 24, 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 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 Reports on Form 8-K filed during the nine-month period ended October 31, 2000. -14- MET-PRO CORPORATIONT 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) November 28, 2000 /s/ William L. Kacin ----------------------------------- William L. Kacin, Chairman, President and Chief Executive Officer November 28, 2000 /s/ Gary J. Morgan ----------------------------------- Gary J. Morgan, Vice President of Finance, Secretary and Treasurer, Chief Financial Officer, Chief Accounting Officer and Director -14- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS JAN-31-2001 OCT-31-2000 7,900,581 0 13,275,831 257,504 13,782,676 36,685,173 28,746,263 15,620,691 68,701,235 14,144,612 10,436,120 720,235 0 0 44,554,019 68,701,235 61,767,172 61,767,172 40,654,436 52,573,589 0 0 534,376 9,028,431 3,327,649 0 0 0 0 5,700,782 .92 .92
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