-----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, UJrFkhXKnBgyQMmp7tnKNA3L7YgXp6gIR8JxLXgrLSi8PehNOuM78qUpb6Vsglhw 58Ft5kjfSMEM0Re64wPV4Q== 0000950116-96-000863.txt : 19960820 0000950116-96-000863.hdr.sgml : 19960820 ACCESSION NUMBER: 0000950116-96-000863 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960819 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MET PRO CORP CENTRAL INDEX KEY: 0000065201 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 231683282 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07763 FILM NUMBER: 96617586 BUSINESS ADDRESS: STREET 1: P O BOX 144 STREET 2: 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 FORM 10-Q =============================================================================== 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, 1996 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, 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 $0.10 per share) is 6,897,491 (as of July 31, 1996). =============================================================================== MET-PRO CORPORATION INDEX
PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed consolidated balance sheet as of July 31, 1996 and January 31, 1996................................................ 2 Condensed consolidated statement of operations for the three-month and six-month periods ended July 31, 1996 and July 31, 1995........................... 3 Condensed consolidated statement of cash flows for the six-month periods ended July 31, 1996 and July 31, 1995..................................... 4 Notes to condensed consolidated financial statements..................................... 5 Report on Review by Independent Accountants.............................................. 6 Item 2. Management's discussion and analysis of financial condition and results of operations......................................................... 7 PART II - OTHER INFORMATION Item 6(b). Reports on Form 8-K.................................................................. 9 SIGNATURES.................................................................................................... 9
-1- MET-PRO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) PART I - FINANCIAL INFORMATION Item 1. Financial Statements
July 31, January 31, ASSETS 1996 1996 - ----------------------------------------------------------------------------------------------------- Current assets Cash and cash equivalents $ 5,678,113 $ 7,415,375 Accounts receivable, net of allowance for doubtful accounts of approximately $223,000 and $195,000, respectively 11,549,755 8,941,157 Notes receivable-ESOT 400,000 400,000 Inventories 11,348,811 10,302,844 Prepaid expenses, deposits and other current assets 417,139 559,238 Deferred income taxes 649,947 649,947 - ----------------------------------------------------------------------------------------------------- Total current assets 30,043,765 28,268,561 Property, plant and equipment, net 15,106,290 14,433,565 Cost in excess of net assets of businesses acquired, net 3,680,953 3,725,118 Other assets 947,671 1,199,343 - ----------------------------------------------------------------------------------------------------- Total assets $49,778,679 $47,626,587 ===================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------------------------------------------------------------- Current liabilities Current portion of long-term debt $ 1,031,559 $ 1,178,177 Accounts payable 3,020,498 2,307,034 Accrued salaries, wages and expenses 7,591,518 6,347,912 Payroll and other taxes payable 11,785 5,974 Customers' advances 673,084 411,409 - ----------------------------------------------------------------------------------------------------- Total current liabilities 12,328,444 10,250,506 Long-term debt 1,251,589 1,692,962 Other non-current liabilities 137,140 101,345 Deferred income taxes 552,552 569,196 - ----------------------------------------------------------------------------------------------------- Total liabilities 14,269,725 12,614,009 - ----------------------------------------------------------------------------------------------------- Stockholders' equity Common stock, $.10 par value; 10,000,000 shares authorized, 7,138,625 and 4,759,221 shares issued, respectively, of which 241,134 and 121,531 shares, respectively, were reacquired and held in treasury 713,863 475,922 Additional paid-in capital 7,397,662 7,442,810 Retained earnings 29,249,679 28,142,539 Cumulative translation adjustment 229,053 209,333 Treasury stock, at cost (2,081,303) (1,258,026) - ----------------------------------------------------------------------------------------------------- Net stockholders' equity 35,508,954 35,012,578 - ----------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $49,778,679 $47,626,587 ===================================================================================================== 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, 1996 1995 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net sales $28,491,576 $26,746,957 $14,759,594 $13,615,141 Cost of goods sold 18,515,559 17,654,872 9,758,897 9,011,505 - --------------------------------------------------------------------------------------------------------------------------------- Gross profit 9,976,017 9,092,085 5,000,697 4,603,636 - --------------------------------------------------------------------------------------------------------------------------------- Operating expenses Selling 2,506,250 2,303,616 1,250,405 1,177,888 General and administrative 2,951,178 3,252,374 1,447,663 1,606,789 - --------------------------------------------------------------------------------------------------------------------------------- 5,457,428 5,555,990 2,698,068 2,784,677 - --------------------------------------------------------------------------------------------------------------------------------- Income from operations 4,518,589 3,536,095 2,302,629 1,818,959 Other income, net 239,193 261,717 105,670 128,503 - --------------------------------------------------------------------------------------------------------------------------------- Income before taxes on income 4,757,782 3,797,812 2,408,299 1,947,462 Provision for taxes on income 1,879,324 1,538,112 951,278 788,721 - --------------------------------------------------------------------------------------------------------------------------------- Net income $ 2,878,458 $ 2,259,700 $ 1,457,021 $ 1,158,741 ================================================================================================================================= Earnings per share, primary and fully diluted (1) $ .41 $ .32 $ .21 $ .16 Cash dividend per share - declared (2) $ .33 $ .30 $ -- $ -- Cash dividend per share - paid (2) $ .33 $ .30 $ -- $ .30 =================================================================================================================================
(1) Based on weighted average number of common stock and common stock equivalents outstanding during each six-month period (adjusted for the 3-for-2 stock splits completed on July 8, 1996 and May 12, 1995, respectively). The weighted average number of common shares outstanding was 7,036,252 and 7,072,973 in the six-month periods ended July 31, 1996 and 1995, respectively, and 7,030,283 and 7,073,547 in the three-month periods ended July 31, 1996 and 1995, respectively. On June 5, 1996 the Company declared a 3-for-2 stock split payable July 8, 1996 to stockholders of record on June 17, 1996. (2) The Company also declared a 3-for-2 stock split and a cash dividend of $.30 per share, both of which were paid on May 12, 1995 to stockholders of record on April 7, 1995. The cash dividend was paid on all outstanding shares, including those issued as a result of the stock split. The Company also declared a cash dividend of $.33 per share on February 26, 1996 payable on April 26, 1996 to shareholders of record on April 12, 1996. See accompanying notes to condensed consolidated financial statements. -3- MET-PRO CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
Six Months Ended July 31, 1996 1995 - ---------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Net cash provided by operating activities $ 2,373,293 $ 3,517,306 - ---------------------------------------------------------------------------------------------------------------- Cash flows from investing activities Proceeds from sale of property and equipment 135,003 -- Acquisitions of property and equipment ( 1,271,138) ( 868,009) - ---------------------------------------------------------------------------------------------------------------- Net cash (used in) investing activities ( 1,136,135) ( 868,009) - ---------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Reduction of debt ( 587,992) ( 584,661) Exercise of stock options 109,838 299,990 Payment of dividends ( 1,530,693) ( 1,411,308) Purchase of treasury shares ( 978,268) ( 354,371) Cash in lieu of fractional shares ( 2,685) -- - ---------------------------------------------------------------------------------------------------------------- Net cash (used in) financing activities ( 2,989,800) ( 2,050,350) - ---------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash 15,380 23,375 - ---------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents ( 1,737,262) 622,322 Cash and cash equivalents at February 1 7,415,375 6,648,380 - ---------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at July 31 $ 5,678,113 $ 7,270,702 ================================================================================================================ SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest $ 89,625 $ 140,476 Income taxes $ 2,005,722 $ 1,445,034 ================================================================================================================
See accompanying notes to condensed consolidated financial statements. -4- MET-PRO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements include Met-Pro Corporation and its wholly-owned subsidiaries, Mefiag B.V. and Mefiag of Puerto Rico, Inc. 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 consolidated financial statements contain all adjustments necessary to present fairly the financial position as of July 31, 1996 and the results of operations for the three-month and six-month periods ended July 31, 1996 and 1995 and the statement of cash flows for the six-month periods then ended. The results of operations for the three-month and six-month periods ended July 31, 1996 are not necessarily indicative of the results to be expected for the full year. Margolis & Company P.C., the Company's auditors, has performed a limited review of the financial information included herein. Their report on such review accompanies this filing. NOTE 3 - INVENTORIES Inventories were comprised of the following: July 31, January 31, 1996 1996 ----------- ----------- Raw material $ 4,711,282 $ 4,277,065 Work in progress 2,262,115 2,053,626 Finish goods 4,375,414 3,972,153 ----------- ----------- $11,348,811 $10,302,844 ============ =========== -5- REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors Met-Pro Corporation and its Wholly-Owned Subsidiaries Harleysville, Pennsylvania We have reviewed the accompanying condensed consolidated balance sheet of Met-Pro Corporation and its Wholly-Owned Subsidiaries as of July 31, 1996 and the related condensed consolidated statements of operations for the three-month and six-month periods ended July 31, 1996 and 1995 and cash flows for the six-month periods ended July 31, 1996 and 1995. 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 balance sheet as of January 31, 1996 and the related statements of operations, stockholders equity, and cash flows for the year then ended (not presented herein); and in our report dated February 19, 1996, 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, 1996 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. Certified Public Accountants Bala Cynwyd, Pennsylvania August 12, 1996 -6- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations Results of Operations: Net sales for the six-month period ended July 31, 1996 were $28,491,576 compared to $26,746,957 for the six-month period ended July 31, 1995, an increase of $1,744,619 or 6.5%. This increase was due to higher sales in both the Fluid Handling and the Pollution Control Systems and Allied Equipment segments of the business. The backlog at July 31, 1996 was 23.7% higher compared to the backlog at the beginning of the fiscal year. Bookings of new orders were 7.2% higher for the six-month period ended July 31, 1996 than for the six-month period ended July 31, 1995. The length of time required to design, engineer, manufacture and ship product, especially in the Pollution Control and Allied Equipment segment of our business, combined with contract requirements, will cause shipments to vary from quarter to quarter. Net income for the six-month period ended July 31, 1996 was $2,878,458 compared to $2,259,700 for the six-month period ended July 31, 1995, an increase of $618,758 or 27.4%. The increase in net income is primarily related to increased sales of $1,744,619 for the six-month period ended July 31, 1996, combined with the improvement in the gross margin to 35.0%. The gross margin for the six-month period ended July 31, 1996 was 35.0% compared to 34.0% for the same period last year. The improvement in the gross margin can be attributed to better capacity utilization, product mix and production efficiencies in both business segments. Selling expense increased $202,634 during the six-month period ended July 31, 1996 compared to the same period last year. This is due primarily to an increase in staffing levels to position our diversified businesses for future growth. Selling expense as a percentage of sales was 8.8%, compared to 8.6% for the six-month period ended July 31, 1995. General and administrative expense was $2,951,178 for the six-month period ended July 31, 1996 compared to $3,252,374 for the same period last year, a decrease of $301,196. General and administrative expense as a percentage of sales declined to 10.4% for the six-month period ended July 31, 1996 from 12.2% for the same period last year. The decrease is due primarily to an insurance rebate and improved cost controls. Other income, net, decreased $22,524 for the six-month period ended July 31, 1996 compared to the six-month period ended July 31, 1995, due to lower cash balances available for investment. The effective tax rate for the six-month period ended July 31, 1996 was 39.5% compared to 40.5% for the six-month period ended July 31, 1995. The change in the effective tax rate had virtually no effect on earnings per share. Liquidity: The Company's cash and cash equivalents was $5,678,113 on July 31, 1996 compared to $7,415,375 on January 31, 1996, a decrease of $1,737,262. This decrease is the net result of positive cashflow provided by operating activities of $2,373,293, proceeds received from the exercise of stock options of $109,838, and proceeds received from the sale of property and equipment of $135,003, offset by the payment of the annual cash dividend amounting to $1,530,693, payments on long-term debt totalling $587,992, purchase of treasury stock amounting to $978,268 and investment in property and equipment amounting to $1,271,138. 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. -7- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Accounts receivable (net) amounted to $11,549,755 on July 31, 1996 compared to $8,941,157 on January 31, 1996, which represents an increase of $2,608,598. The timing and size of shipments combined with retainage on contracts, especially in the Pollution Control Systems and Allied Equipment segment, will influence accounts receivable balances at any point in time. Inventories were $11,348,811 on July 31, 1996 compared to $10,302,844 on January 31, 1996, an increase of $1,045,967. Inventory balances fluctuate depending upon market demand, the size and timing of orders and long lead times required. Current liabilities amounted to $12,328,444 on July 31, 1996 compared to $10,250,506 on January 31, 1996, an increase of $2,077,938. Accounts payable, customer progress payments and accrued expenses accounted for $2,224,556 of the increase, offset by a reduction of $146,618 of current portion of long term debt. 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. Funds, in general, have exceeded the current needs of the Company. The Company presently foresees no change in this situation. Capital Resources and Requirements: Cash flows provided by operating activities during the six-month period ended July 31, 1996 amounted to $2,373,293 compared with $3,517,306 in the six-month period ended July 31, 1995, a decrease of $1,144,013. This decrease is attributable to higher sales activity in both business segments, the timing of the payment of current obligations, and advances from customers on projects in progress, offset by increased balances in accounts receivable and inventory. Cash flows used in investing activities during the six-month period ended July 31, 1996 amounted to $1,136,135 compared with $868,009 for the six-month period ended July 31, 1995. The Company's investing activities principally represent the acquisition of property, plant, and equipment in the combined operations. Financing activities during the six-month period ended July 31, 1996 utilized $2,989,800 of available resources compared to $2,050,350 of cash used for the six-month period ended July 31, 1995. This utilization of cash is the result of the payment of the annual cash dividend amounting to $1,530,693, reduction of long-term debt totalling $587,992, the purchase of treasury stock totalling $978,268 and cash in lieu of fractional shares amounting to $2,685 for a 3-for-2 stock split dated July 8, 1996, offset by $109,838 provided by the exercise of stock options. On February 26, 1996, the Board of Directors declared a $.33 per share annual cash dividend payable on April 26, 1996 to stockholders of record on April 12, 1996. The dividend paid on the Common Stock represented 31.3% of the prior fiscal year earnings. The Board of Directors also declared a 3-for-2 stock split on June 5, 1996 which was payable July 8, 1996 to stockholders of record on June 17, 1996. Consistent with past practices, the Company will continue to invest in new product development programs, and to make capital expenditures to support the on-going operations during the coming year. The Company expects to finance all capital expenditures requirements through cash flows generated from operations. -8- MET-PRO CORPORATION PART II - OTHER INFORMATION Item 6(b). Reports on Form 8-K There were no reports on Form 8-K filed for the six-month period ended July 31, 1996. 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) August 20, 1996 /S/ William L. Kacin -------------------------------- William L. Kacin, President, Chief Executive Officer and Director August 20, 1996 /S/ William F. Moffitt -------------------------------- William F. Moffitt, Vice President of Finance, Secretary and Treasurer, Chief Financial Officer, Chief Accounting Officer, and Director -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS JAN-31-1997 JUL-31-1996 5,678,113 0 11,549,755 222,749 11,348,811 30,043,765 27,979,698 12,873,408 49,788,679 12,328,444 2,283,148 0 0 713,863 34,795,091 49,778,679 28,491,576 28,491,576 18,515,559 23,972,987 0 0 100,117 4,757,782 1,879,324 2,878,458 0 0 0 2,878,458 .41 .41
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