EX-99.1 2 mprpr03012007.htm PRESS RELEASE FY2007 Press Release FY2007

 Date:  March 1, 2007
   
 For Release:  Immediate
   
 Contact: Investor Contact:
  Gary J. Morgan, Senior Vice President of Finance, CFO 
  215-723-6751, gmorgan@met-pro.com 
 
Met-Pro Corporation Announces Financial Results
for the Fourth Quarter and Fiscal Year Ended 1/31/2007
 
Harleysville, PA, March 1 - Raymond J. De Hont, Chairman and Chief Executive Officer of Met-Pro Corporation (NYSE: MPR) today announced sales and earnings per share for the fourth quarter and fiscal year ended January 31, 2007.
 
Sales for the fourth quarter ended January 31, 2007 were $22.5 million compared with record high fourth quarter sales of $22.6 million for the same quarter last year. Sales for the fiscal year ended January 31, 2007 were the highest of any fiscal year in the Company’s history, totaling $91.4 million compared with $85.1 million for the same period of last year, an increase of 7%.
 
Net income for the fourth quarter ended January 31, 2007 totaled $2.0 million compared with $2.2 million for the same quarter last year. The decline in net income was principally due to an increase in the estimated tax rate primarily related to a reduction in the tax benefit provided by research and development tax credits which had amounted to $0.6 million in the fiscal year ended January 31, 2006, of which $0.5 million related to the three-year period ended January 31, 2005. Excluding this item, adjusted net income, which constitutes a non-GAAP financial measure, was $2.0 million for the fourth quarter ended January 31, 2007 compared with $1.7 million for the same period last year, an increase of 17%.
 
Net income for the fiscal year ended January 31, 2007 totaled $7.2 million compared with $7.3 million reported last year. The decline in net income was primarily due to (i) non-recurring and non-capitalized expenses incurred in the first quarter resulting from the relocation of the Company’s Sethco and Mefiag business units and the expansion of the Company’s Netherlands and Telford, Pennsylvania facilities, which reduced net income by approximately $0.2 million, (ii) a one time loss on the curtailment of pension benefits in the third quarter which reduced net income by approximately $0.2 million, and (iii) an increase in the estimated tax rate primarily related to a reduction in the tax benefit provided by research and development tax credits which had amounted to $0.6 million in the fiscal year ended January 31, 2006, of which $0.5 million related to the three-year period ended January 31, 2005. Excluding these items, adjusted net income, which constitutes a non-GAAP financial measure, was $7.6 million, an increase of 11% over the $6.9 million for the fiscal year ended January 31, 2006.
 
Additionally, as required by a new GAAP accounting standard, a non-cash charge for stock options reduced net income by $0.2 million for the first time this fiscal year, without a comparable charge in the same period last year.
 
Basic and diluted earnings per share for the fourth quarter ended January 31, 2007 were $0.18 compared with $0.19 for the same period last year. Excluding the impact of research and development tax credits related to the three year period ended January 31, 2005, adjusted basic and diluted earnings per share, which constitute non-GAAP financial measures, were $0.18 for the fourth quarter ended January 31, 2007 compared with $0.15 for the fourth quarter ended January 31, 2006, an increase of 20%.
 
Basic and diluted earnings per share for the fiscal year ended January 31, 2007 were $0.64 and $0.63, respectively, compared with $0.65 for the prior fiscal year. Excluding non-recurring charges and the impact of research and development tax credits related to the three year period ended January 31, 2005, adjusted basic and diluted earnings per share, which constitute non-GAAP financial measures, were $0.68 and $0.67, respectively, for the fiscal year ended January 31, 2007 compared with $0.61 for the fiscal year ended January 31, 2006, an increase of 11% and 10%, respectively.

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Met-Pro Corporation/Page 2
 
“Market demand for Met-Pro’s products remains strong as evidenced by our record fourth quarter and fiscal year bookings, which resulted in a record high backlog totaling $28.6 million compared with $17.7 million for the period ending January 31, 2006," stated De Hont. “Earlier this fiscal year the Company took steps to improve project management and avoid profit erosion on large projects. We also offset higher material costs experienced throughout our industries, by implementing product price increases and improving our purchasing practices. These steps helped improve gross margins in our third and fourth quarters. The increase in our fourth quarter and fiscal year net income and earnings per share on an adjusted basis also demonstrates that these steps are working. Our record backlog and steady quotation activity allow us to remain optimistic about our prospects for the new fiscal year.”
 
The Board of Directors, at their meeting on December 15, 2006, declared a quarterly dividend of $0.0675 per share payable on March 14, 2007 to shareholders of record at the close of business on February 28, 2007. This dividend represents a 8.0% increase over the same period last year. This is the thirty-second consecutive year that Met-Pro Corporation has paid either a cash or stock dividend. 
 
Mr. De Hont and Gary J. Morgan, Senior Vice President of Finance and Chief Financial Officer will hold a conference call for investors today, March 1, 2007, at 11:00 AM (Eastern). Met-Pro’s earnings release and the accompanying financial supplement, which includes significant financial information to be discussed during the conference call, will be available on Met-Pro’s Investor Relations website at www.met-pro.com/html/invrel.htm prior to the beginning of the conference call.
 
Interested persons who wish to hear the live web cast should go to the Met-Pro Corporation website prior to the starting time to register, download and install any necessary audio software.
 
You may also participate by calling the US/Canada Dial-In # 877-818-7738 or the International Dial-In # 706-643-9333 (conference ID 8263874) at 10:55 PM (Eastern) on March 1, 2007. A taped replay of the conference call will be available within two hours of the conclusion of the call and until March 15, 2007. To access the taped replay, call the US/Canada Dial-In # 800-642-1687 or the International Dial-In # 706-645-9291 and enter conference ID 8263874.
 
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included at the end of this press release is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated in accordance with generally accepted accounting principles as well as certain Regulation G disclosures.
 
About Met-Pro
 
Met-Pro Corporation, with headquarters at 160 Cassell Road, Harleysville, Pennsylvania, was recently recognized as one of America’s “200 Best Small Companies” by Forbes magazine. The company, which manufactures and sells product recovery and pollution control equipment for purification of air and liquids, fluid handling equipment for corrosive, abrasive and high temperature liquids, was established in 1966. It provides products to residential, commercial, industrial and municipal markets that include, but are not limited to, pharmaceuticals, chemicals, petrochemicals, water and aquariums. For more information, please visit www.met-pro.com. 
 
 
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release, and other materials filed or to be filed with the Securities and Exchange Commission (as well as information included in oral or other written statements made or to be made by the Company) contain statements that are forward-looking. Such statements may relate to plans for future expansion, business development activities, capital spending, financing, the effects of regulation and competition, or anticipated sales or earnings results. Such information involves risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to, the cancellation or delay of purchase orders and shipments, product development activities, computer systems implementation, dependence on existing management, the continuation of effective cost and quality control measures, retention of customers, global economic and market conditions, and changes in federal or state laws.
 
 
Met-Pro common shares are traded on the New York Stock Exchange, symbol MPR.
 
To obtain an Annual Report or additional information on the Company, please call 215-723-6751 and ask for the Investor Relations Department, or visit the Company’s website at www.met-pro.com.
 
Continued Page 3
Met-Pro Corporation/Page 3
 
Met-Pro Corporation
Condensed Consolidated Balance Sheet
(unaudited)

   
January 31,
  
January 31,
  
   
2007      
 
2006      
 
Assets
          
   Current assets (1)
  
$59,228,282
  
$53,413,413
  
   Property, plant and equipment, net
  
16,832,988
  
13,838,221
  
   Costs in excess of net assets of businesses acquired, net
  
20,798,913
  
20,798,913
  
   Other assets
  
306,403
  
1,020,844
  
        Total assets
  
$97,166,586
  
$89,071,391
  
           
Liabilities and shareholders’ equity
          
   Current liabilities (1)
  
$14,525,297
  
$14,361,953
  
   Long-term debt
  
5,417,990
  
2,723,586
  
   Other non-current liabilities (1)
  
4,646,142
  
4,447,614
  
        Total liabilities
  
24,589,429
  
21,533,153
  
           
Shareholders’ equity
  
72,577,157
  
67,538,238
  
        Total liabilities and shareholders’ equity
 
$97,166,586
  
$89,071,391
  
 
(1)    The Company has reclassified the non-current portion of pension liabilities from current liabilities to other non-current liabilities and the deferred income taxes related to these pension liabilities in the Consolidated Balance Sheet for the fiscal year ended January 31, 2006, in accordance with FASB No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post Retirement Plans”.
 
Met-Pro Corporation
Consolidated Statement of Operations
(unaudited)
 
 
         Three Months Ended
  
          Fiscal Year Ended
  
 
         January 31,
  
          January 31,
  
 
         2007
  
         2006
  
        2007
  
     2006
  
Net sales
$22,529,264
  
$22,623,176
  
$91,411,114
  
$85,116,100
  
Cost of goods sold
14,927,838
  
15,678,779
  
62,901,830
  
58,441,441
  
Gross profit
7,601,426
  
6,944,397
  
28,509,284
  
26,674,659
  
                 
Operating expenses
        
  
      
   Selling
1,988,535
  
1,965,124
  
8,258,379
  
7,864,833
  
   General and administrative
2,703,258
  
2,529,951
  
9,865,583
  
9,147,222
  
   Loss on curtailment of pension benefits
-
  
-
  
234,180
  
-
  
Income from operations
2,909,633
  
2,449,322
  
10,151,142
  
9,662,604
  
                 
Interest expense
(94,633
)
(72,620
)
(351,152
)
(269,488
)
Other income, net
172,878
  
171,840
  
932,590
  
629,035
  
Income before taxes
2,987,878
  
2,548,542
  
10,732,580
  
10,022,151
  
                 
Provision for taxes
986,000
  
392,047
  
3,541,751
  
2,708,867
  
                 
Net income
$2,001,878
  
$2,156,495
  
$7,190,829
  
$7,313,284
  
                 
Basic earnings per share (2)
$.18
  
$.19
  
$.64
  
$.65
  
Diluted earnings per share (2)
$.18
  
$.19
  
$.63
  
$.65
  
                 
Average common shares outstanding:
                
   Basic shares (2)
11,206,619
  
11,187,837
  
11,207,381
  
11,188,657
  
   Diluted shares (2)
11,396,940
  
11,328,833
  
11,403,759
  
11,333,612
  
 
(2)     On October 10, 2005, the Board of Directors declared a four-for-three stock split which was paid on November 15, 2005 to shareholders of record on November 1, 2005. All references in the financial statements to per share amounts and number of shares outstanding give effect to the split.
 


Continued Page 4
Met-Pro Corporation/Page 4
 
Consolidated Business Segment Data
(unaudited)
 
   
         Three Months Ended
  
         Fiscal Year Ended
  
   
     January 31,
  
        January 31,
  
   
     2007
 
    2006
  
      2007
  
     2006
  
Net sales
                  
   Product recovery/pollution control technologies
  
$11,629,613
  
$12,079,618
  
$46,712,811
  
$42,563,591
  
   Fluid handling technologies
  
6,428,321
  
6,253,936
  
25,868,798
  
23,533,933
  
   Filtration/purification technologies
  
4,471,330
  
4,289,622
  
18,829,505
  
19,018,576
  
   
$22,529,264
  
$22,623,176
  
$91,411,114
  
$85,116,100
  
                   
Income from operations
                  
   Product recovery/pollution control technologies
  
$1,593,629
  
$1,467,414
  
$4,733,862
  
$4,119,242
  
   Fluid handling technologies
  
1,307,732
  
789,027
  
4,362,276
  
3,540,428
  
   Filtration/purification technologies
  
8,272
  
192,881
  
1,055,004
  
2,002,934
  
   
$2,909,633
  
$2,449,322
  
$10,151,142
  
$9,662,604
  
                   
           
January 31,
  
January 31,
  
           
   2007
  
   2006
  
Identifiable Assets
                  
   Product recovery/pollution control technologies
          
$35,332,252
  
$34,173,031
  
   Fluid handling technologies
          
21,667,719
  
17,008,765
  
   Filtration/purification technologies
          
20,514,339
  
17,653,316
  
           
77,514,310
  
68,835,112
  
   Corporate (1)
          
19,652,276
  
20,236,279
  
           
$97,166,586
  
$89,071,391
  

(1)   The Company has reclassified the non-current portion of pension liabilities from current liabilities to other non-current liabilities and the deferred income taxes related to these pension liabilities in the Consolidated Balance Segment Data for the three-month period and fiscal year ended January 31, 2006, in accordance with FASB No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post Retirement Plans”.
 


 





 

 

 
 



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Met-Pro Corporation/Page 5
 
Met-Pro Corporation
Consolidated Statement of Cash Flows
(unaudited)
     
   
Years Ended January 31,
   
         2007
  
        2006
  
      2005
  
Increase (Decrease) in Cash and Cash Equivalents
 
Cash flows from operating activities
              
   Net income
  
$7,190,829
  
$7,313,284
  
$4,814,679
  
   Adjustments to reconcile net income to net
             
         cash provided by operating activities:
              
      Depreciation and amortization
  
1,602,138
  
1,486,340
  
1,491,894
  
      Deferred income taxes
  
26,203
  
610,593
  
511,225
  
      (Gain) loss on sales of property and equipment, net
  
13,310
  
13,131
  
(6,358
)
      Stock-based compensation
  
327,200
  
-
  
-
  
      Allowance for doubtful accounts
  
(114,238
)
34,002
  
4,823
  
      (Increase) decrease in operating assets:
              
            Accounts receivable
  
(2,681,106
)
(4,428,817
)
3,080,432
  
            Inventories
  
(2,736,540
)
(2,657,517
)
(1,008,533
)
            Prepaid expenses and deposits
 
2,872
  
(141,097
)
(31,363
)
            Other assets
  
332,466
  
(484,162
)
48,833
  
      Increase (decrease) in operating liabilities:
              
            Accounts payable and accrued expenses (1)
  
416,812
  
228,250
  
683,543
  
            Customers’ advances
  
(721,878
)
409,760
  
813,818
  
            Other non-current liabilities (1)
  
242,084
  
2,057,647
  
(1,857,472
)
      Net cash provided by operating activities
  
3,900,152
  
4,441,414
  
8,545,521
  
               
Cash flows from investing activities
              
   Proceeds from sale of property and equipment
  
14,310
  
31,565
  
18,965
  
   Acquisitions of property and equipment
  
(4,398,910
)
(4,151,253
)
(1,193,767
)
   Securities available for sale
  
(21,820
)
-
  
-
  
      Net cash (used in) investing activities
  
(4,406,420
)
(4,119,688
)
(1,174,802
)
               
Cash flows from financing activities              
   Proceeds from new borrowings
  
4,312,293
  
793,947
  
-
  
   Reduction of debt
  
(1,492,699
)
(1,800,910
)
(1,233,866
)
   Exercise of stock options
  
147,174
  
324,281
  
698,685
  
   Payment of dividends
  
(2,857,423
)
(2,648,576
)
(2,464,033
)
   Purchase of treasury shares
  
-
  
(140,135
)
(538,499
)
   Payment of cash in lieu of fractional shares
  
-
  
(1,914
)
-
  
      Net cash provided by (used in) financing activities
  
109,345
  
(3,473,307
)
(3,537,713
)
Effect of exchange rate changes on cash
  
35,812
  
(54,590
)
60,217
  
               
Net increase (decrease) in cash and cash equivalents
  
(361,111
)
(3,206,171
)
3,893,223
  
               
Cash and cash equivalents at beginning of year
  
17,683,305
  
20,889,476
  
16,996,253
  
               
Cash and cash equivalents at end of year
  
$17,322,194
  
$17,683,305
  
$20,889,476
  
 
(1)   The Company has reclassified the non-current portion of pension liabilities from current liabilities to other non-current liabilities and the deferred income taxes related to these pension liabilities in the Consolidated Statement of Cash Flows for the fiscal years ended January 31, 2006 and 2005, in accordance with FASB No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post Retirement Plans”.


Continued Page 6
Met-Pro Corporation/Page 6

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
 
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the United States ("GAAP") follows. Although Met-Pro Corporation believes that these non-GAAP financial measures provide useful information to investors about its financial position and results of operations, this information should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Management's statements regarding the reasons why it believes the presentation of the non-GAAP financial information in this press release provides useful information to its investors, and any other material purposes for which management uses this non-GAAP financial information, are set forth in Met-Pro’s Current Report on Form 8-K to which this press release is attached as an exhibit.
 
The following table reconciles net income, basic and diluted earnings per share, excluding (i) non-recurring and non-capitalized expenses resulting from the relocation of the Company’s Sethco and Mefiag Divisions, and the expansion of the Company’s Netherlands and Telford, Pennsylvania facilities, (ii) a one time loss on the curtailment of pension benefits, and (iii) an increase in the estimated tax rate primarily related to a reduction in the tax benefit provided by research and development tax credits taken in the fiscal year ended January 31, 2006, of which a portion related to the three-year period ended January 31, 2005, as well as net income, and basic and diluted earnings per share calculated in accordance with generally accepted accounting principles for the three month periods and fiscal years ended January 31, 2007 and 2006:
 
Met-Pro Corporation
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)

   
        Three Months Ended
  
      Fiscal Year Ended
  
   
        January 31,
  
       January 31,
  
   
       2007
  
       2006
  
       2007
  
  2006
  
                   
Income before tax as reported
  
$2,987,878
  
$2,548,542
  
$10,732,580
  
$10,022,151
  
   Add:  Non-recurring charges
  
-
  
-
  
357,267
  
-
  
   Add:  Curtailment loss
  
-
  
-
  
234,180
  
-
  
Adjusted income before tax
  
$2,987,878
  
$2,548,542
  
$11,324,027
  
$10,022,151
  
                   
Net income as reported
  
$2,001,878
  
$2,156,495
  
$7,190,829
  
$7,313,284
  
   Add:  Non-recurring charges
  
-
  
-
  
239,369
  
-
  
   Add:  Curtailment loss
  
-
  
-
  
156,901
  
-
  
   Less: Research and development tax credits
  
-
  
(450,463
)
-
  
(450,463
)
Adjusted net income
  
$2,001,878
  
$1,706,032
  
$7,587,099
  
$6,862,821
  
                   
Basic earnings per share as reported
  
$.18
  
$.19
  
$.64
  
$.65
  
Adjusted basic earnings per share
  
$.18
  
$.15
  
$.68
  
$.61
  
                   
Diluted earnings per share as reported
  
$.18
  
$.19
  
$.63
  
$.65
  
Adjusted diluted earnings per share
  
$.18
  
$.15
  
$.67
  
$.61
  
                   
Average common shares outstanding:
                  
   Basic shares 
  
11,206,619
  
11,187,837
  
11,207,381
  
11,188,657
  
   Diluted shares 
  
11,396,940
  
11,328,833
  
11,403,759
  
11,333,612
  
Adjusted for four-for-three stock split.
                  
 
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