-----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, LHTWRRX1ELKN6Lvhwq+AxQXi0FbWzQWTzuF9U6FrratIIqQCnhQ8xTZRQnnpB7Po LuUR4gkFAkttRKrhf5nxsw== 0000950116-96-001439.txt : 19961216 0000950116-96-001439.hdr.sgml : 19961216 ACCESSION NUMBER: 0000950116-96-001439 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961213 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07763 FILM NUMBER: 96680178 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/A 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A [ 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, 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 7,085,411 (as of October 31, 1996). =============================================================================== MET-PRO CORPORATION INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed consolidated balance sheet as of October 31, 1996 and January 31, 1996.......................... 2 Condensed consolidated statement of operations for the three-month and nine-month periods ended October 31, 1996 and 1995 ........ 3 Condensed consolidated statement of cash flows for the nine-month periods ended October 31, 1996 and 1995........................ 4 Notes to condensed consolidated financial statements.................... 5 Report on Review by Independent Accountants............................. 7 Item 2. Management's discussion and analysis of financial condition and results of operations................................ 8 PART II - OTHER INFORMATION Item 5. Other information............................................. 12 Item 6(b). Reports on Form 8-K........................................... 12 SIGNATURES.................................................................. 12 -1- MET-PRO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) PART I - FINANCIAL INFORMATION Item 1. Financial Statements
October 31, January 31, ASSETS 1996 1996 - ----------------------------------------------------------------------------------------------------------------------- Current assets Cash and cash equivalents $ 8,171,613 $ 7,415,375 Accounts receivable, net of allowance for doubtful accounts of approximately $264,000 and $195,000, respectively 10,751,621 8,941,157 Notes receivable-ESOT 400,000 400,000 Inventories 12,271,219 10,302,844 Prepaid expenses, deposits and other current assets 531,387 559,238 Deferred income taxes 668,547 649,947 - ----------------------------------------------------------------------------------------------------------------------- Total current assets 32,794,387 28,268,561 Property, plant and equipment, net 15,481,086 14,433,565 Costs in excess of net assets of businesses acquired, net 7,542,494 3,725,118 Other assets 1,582,505 1,199,343 - ----------------------------------------------------------------------------------------------------------------------- Total assets $57,400,472 $47,626,587 ======================================================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY - ----------------------------------------------------------------------------------------------------------------------- Current liabilities Current portion of long-term debt $ 1,658,304 $ 1,178,177 Accounts payable 2,509,844 2,307,034 Accrued salaries, wages and expenses 8,395,954 6,347,912 Payroll and other taxes payable 20,284 5,974 Customers' advances 758,992 411,409 - ----------------------------------------------------------------------------------------------------------------------- Total current liabilities 13,343,378 10,250,506 Long-term debt 4,082,215 1,692,962 Other non-current liabilities 166,378 101,345 Deferred income taxes 630,904 569,196 - ----------------------------------------------------------------------------------------------------------------------- Total liabilities 18,222,875 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 53,214 and 121,531 shares, respectively, were reacquired and held in treasury 713,863 475,922 Additional paid-in capital 7,997,452 7,442,810 Retained earnings 30,817,079 28,142,539 Cumulative translation adjustment 172,754 209,333 Treasury stock, at cost ( 523,551) ( 1,258,026) - ----------------------------------------------------------------------------------------------------------------------- Net stockholders' equity 39,177,597 35,012,578 - ----------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $57,400,472 $47,626,587 =======================================================================================================================
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, 1996 1995 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- Net sales $44,747,320 $40,836,917 $16,255,744 $14,089,960 Cost of goods sold 29,340,193 26,918,546 10,824,634 9,263,674 - --------------------------------------------------------------------------------------------------------------------------------- Gross profit 15,407,127 13,918,371 5,431,110 4,826,286 - --------------------------------------------------------------------------------------------------------------------------------- Operating expenses Selling 3,751,998 3,500,128 1,245,748 1,196,512 General and administrative 5,025,147 4,879,692 2,073,969 1,627,318 - --------------------------------------------------------------------------------------------------------------------------------- 8,777,145 8,379,820 3,319,717 2,823,830 - --------------------------------------------------------------------------------------------------------------------------------- Income from operations 6,629,982 5,538,551 2,111,393 2,002,456 Other income, net 718,545 390,918 479,352 129,201 - --------------------------------------------------------------------------------------------------------------------------------- Income before taxes on income 7,348,527 5,929,469 2,590,745 2,131,657 Provision for taxes on income 2,902,667 2,401,438 1,023,343 863,326 - --------------------------------------------------------------------------------------------------------------------------------- Net income $ 4,445,860 $ 3,528,031 $ 1,567,402 $ 1,268,331 ================================================================================================================================= Earnings per share, primary and fully diluted (1) $ .63 $ .50 $ .22 $ .18 Cash dividend per share - declared (2) $ .33 $ .30 $ -- $ -- Cash dividend per share - paid (2) $ .33 $ .30 $ -- $ -- =================================================================================================================================
(1) Based on weighted average number of common stock and common stock equivalents outstanding during each nine-month period (adjusted for the 3-for-2 stock splits completed on July 8, 1996 and May 12, 1995). The weighted average number of common shares outstanding was 7,068,753 and 7,058,370 in the nine-month periods ended October 31, 1996 and 1995, respectively, and 7,133,756 and 7,029,166 in the three-month periods ended October 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)
Nine Months Ended October 31, 1996 1995 - ----------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Net cash provided by operating activities $ 5,259,664 $ 4,570,266 - ----------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities Proceeds from sale of property and equipment 1,147,183 -- Acquisitions of property and equipment ( 1,526,928) ( 1,454,864) Payment for purchase of Strobic Air Corporation, net of cash acquired ( 3,529,338) -- - ----------------------------------------------------------------------------------------------------------------------- Net cash (used in) investing activities ( 3,909,083) ( 1,454,864) - ----------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Proceeds from new borrowings 3,500,000 -- Reduction of debt ( 1,447,645) ( 883,597) Exercise of stock options 235,838 299,990 Payment of dividends ( 1,530,693) ( 1,411,308) Purchase of treasury shares ( 1,346,747) ( 589,748) Cash in lieu of fractional shares ( 2,685) -- - ----------------------------------------------------------------------------------------------------------------------- Net cash (used in) financing activities ( 591,932) ( 2,584,663) - ----------------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash ( 2,411) 15,866 - ----------------------------------------------------------------------------------------------------------------------- Net increase in cash and cash equivalents 756,238 546,605 Cash and cash equivalents at February 1 7,415,375 6,648,380 - ----------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at October 31 $ 8,171,613 $ 7,194,985 =======================================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for: Interest $ 128,503 $ 203,893 Income taxes $ 2,719,529 $ 2,235,889 =======================================================================================================================
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, Strobic Air Corporation, Mefiag B.V. and Mefiag of Puerto Rico, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. NOTE 2 - ACQUISITION OF BUSINESS On September 12, 1996, the Company, pursuant to an Agreement and Plan of Merger, acquired the common stock of Strobic Air Corporation, for 195,920 shares of common stock and $3,529,338 in cash. The acquisition was accounted for as a purchase. The Agreement and Plan of Merger provides that, notwithstanding the actual September 12, 1996 closing date, the closing was deemed to be effective as of July 31, 1996. The condensed consolidated statement of operations for the three-month and nine-month periods ended October 31, 1996, therefore, includes the operations of Strobic Air Corporation for the period since July 31, 1996. On a pro-forma basis, results of operations for the nine-month periods ended October 31, 1996 and 1995 would have been as follows, if the acquisition had been made as of February 1, 1995: Nine Months Ended October 31, 1996 1995 - ------------------------------------------------------------------------------ Net sales $47,954,457 $44,694,019 Income before taxes on income 7,599,951 6,176,118 Net income 4,564,341 3,655,181 Earnings per share $ .65 $ .52 NOTE 3 - 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 October 31, 1996 and the results of operations for the three-month and nine-month periods ended October 31, 1996 and 1995 and the statement of cash flows for the nine-month periods then ended. The results of operations for the three-month and nine-month periods ended October 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. -5- MET-PRO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 - INVENTORIES Inventories were comprised of the following: October 31, January 31, 1996 1996 ----------- ----------- Raw material $ 5,094,205 $ 4,277,065 Work in progress 2,445,974 2,053,626 Finished goods 4,731,040 3,972,153 ----------- ----------- $12,271,219 $10,302,844 =========== =========== NOTE 5 - LONG-TERM DEBT Long-term debt incurred in September, 1996 in conjunction with the acquisition of Strobic Air Corporation was as follows: October 31, 1996 ---------- Note payable, bank, payable in equal quarterly installments of $87,500 plus interest at a fixed rate of 7.51%. $1,750,000 Note payable, bank, payable in equal quarterly installments of $87,500 plus interest, charged at a rate which approximates the bank's money market loan rate, LIBOR rate, or the bank's certificate of deposit rate. The Company selects the applicable rate at predetermined intervals. The effective interest rate was 6.625% at October 31, 1996. $1,750,000 ---------- $3,500,000 ========== -6- 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 October 31, 1996 and the related condensed consolidated statements of operations for the three-month and nine-month periods ended October 31, 1996 and 1995 and cash flows for the nine-month periods ended October 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 November 25, 1996 -7- 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, 1996 vs Nine-Months Ended October 31, 1995. Net sales for the nine-month period ended October 31, 1996 were $44,747,320 compared to $40,836,917 for the nine-month period ended October 31, 1995, an increase of $3,910,403 or 9.6%. This increase was due to higher sales in both the Fluid Handling and the Pollution Control Systems and Allied Equipment segments of the business and the impact of the Strobic Air Corporation acquisition which was effective August 1, 1996. The backlog at October 31, 1996 was 46.5% higher compared to the backlog at the beginning of the fiscal year. Bookings of new orders were 10.4% higher for the nine-month period ended October 31, 1996 than for the nine-month period ended October 31, 1995. The length of time required to design, engineer, manufacture and ship product, especially in the Pollution Control Systems and Allied Equipment segment of our business, combined with contract requirements, will cause shipments to vary from quarter to quarter. Net income for the nine-month period ended October 31, 1996 was $4,445,860 compared to $3,528,031 for the nine-month period ended October 31, 1995, an increase of $917,829 or 26.0%. The increase in net income is related to increased sales of $3,910,403 for the nine-month period ended October 31, 1996, the improvement in gross margin to 34.4% and the impact of the Strobic Air Corporation acquisition which was effective August 1, 1996. The gross margin for the nine-month period ended October 31, 1996 was 34.4% compared to 34.1% 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 $251,870 during the nine-month period ended October 31, 1996 compared to the same period last year. This is due to increased staffing levels required to position our diversified businesses for future growth, plus the impact of the Strobic Air Corporation acquisition. Selling expense as a percentage of sales was 8.4% for the nine-month period ended October 31, 1996, compared to 8.6% for the nine-month period ended October 31, 1995. General and administrative expense was $5,025,147 for the nine-month period ended October 31, 1996 compared to $4,879,692 for the same period last year, an increase of $145,455. The increase is primarily related to the impact of the acquisition of Strobic Air Corporation, offset by insurance rebates and improved cost controls. General and administrative expense as a percentage of sales declined to 11.2% for the nine-month period ended October 31, 1996 from 11.9% for the same period last year. Other income, net, increased $327,627 for the nine-month period ended October 31, 1996 compared to the nine-month period ended October 31, 1995. The increase results principally from the net gain on sale of idle properties. The effective tax rate for the nine-month period ended October 31, 1996 was 39.5% compared to 40.5% for the nine-month period ended October 31, 1995. The change in the effective tax rate had virtually no effect on earnings per share. Three-Months Ended October 31, 1996 vs Three-Months Ended October 31, 1995. Net sales for the three-month period ended October 31, 1996 were $16,255,744 compared to $14,089,960 for the three-month period ended October 31, 1995, an increase of $2,165,784 or 15.4%. This increase was attributable to higher sales in both business segments, combined with the acquisition of Strobic Air Corporation which was effective as of August 1, 1996. The backlog at October 31, 1996 was 50.1% higher compared to the backlog at October 31, 1995. The backlog at October 31, 1996, excluding the impact of the Strobic Air Corporation acquisition, increased 32.5% over the prior period. -8- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Net income for the three-month period ended October 31, 1996 was $1,567,402 compared to $1,268,331 for the three-month period ended October 31, 1995, an increase of $299,071 or 23.6%. The increase is related to higher sales of $2,165,784, the impact of the Strobic Air Corporation acquisition and the net gain on the sale of an idle property located in Indianapolis, Indiana. The gross margin for the three-month period ended October 31, 1996 was 33.4% compared 34.3% for the same period last year. The decrease in the gross margin can be attributed to costs recognized in conjunction with the closure and relocation of the Puerto Rico operations, and product mix, primarily in the Pollution Control Systems and Allied Equipment segment of the business. Selling expenses increased $49,236 during the three-month period ended October 31, 1996 compared to the same period last year. As a percentage of net sales, selling expense decreased to 7.7% for the three-month period ended October 31, 1996 from 8.5% for the three-month period ended October 31, 1995. General and administrative expense was $2,073,969 during the three-month period ended October 31, 1996 compared to $1,627,318 during the three-month period October 31, 1995, an increase of $446,651. A sign-on bonus of $350,000 was paid to a management representative under a three-year employment contract, as part of the Strobic Air Corporation acquisition. Excluding this transaction, general and administrative expense for the three-month period ended October 31, 1996 declined to 10.6% of net sales compared to 11.5% for the same period last year. Other income, net, was $479,352 for the three-month period ended October 31, 1996 compared to $129,201 for the three-month period ended October 31, 1995, an increase of $350,151. The increase results principally from the net gain on the sale of an idle property. The effective tax rate for the three-month period ended October 31, 1996 was 39.5% compared to 40.5% for the same period last year. The differential in the effective tax rate had virtually no effect on earnings per share. Other Matters: On November 19, 1996, the Company announced the initiation of a 100,000 share stock repurchase program. The stock repurchase program of 75,000 shares announced on April 11, 1996 has been completed. The stock repurchase programs were initiated, because in management's view, the current stock price does not reflect the true stock value. Purchases will be made from time to time in open market transactions at the prevailing prices and in accordance with applicable rules. The Company may discontinue this program at any time. On October 4, 1996, the Company closed Mefiag of Puerto Rico, Inc., a wholly owned subsidiary, and relocated the manufacturing operations to the United States. The closure will reduce operating costs, reduce inventory and generate a more efficient and effective utilization of overall capacity. Mefiag of Puerto Rico, Inc. will be liquidated on January 31, 1997. In May 1996, the Company sold an idle manufacturing facility in Forest City, North Carolina for $134,430 which was acquired with the acquisition of Duall Industries, Inc. on October 1, 1988. The Company also sold an idle piece of land in October 1996, in Indianapolis, Indiana, for $1,000,000. This property was originally acquired with the acquisition of Dean Pumps, Inc. on July 19, 1984. -9- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Liquidity: The Company's cash and cash equivalents was $8,171,613 on October 31, 1996 compared to $7,415,375 on January 31, 1996, an increase of $756,238. This increase is the net result of positive cash flow provided by operating activities of $5,259,664, proceeds received from the exercise of stock options of $235,838, proceeds received from the sale of property and equipment of $1,147,183, and proceeds received from new borrowings of $3,500,000, offset by payment for the purchase of Strobic Air Corporation amounting to $3,529,338, payment of the annual cash dividend amounting to $1,530,693, payments on long-term debt totalling $1,447,645, purchase of treasury stock amounting to $1,346,747 and investment in property and equipment amounting to $1,526,928. 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 $10,751,621 on October 31, 1996 compared to $8,941,157 on January 31, 1996, which represents an increase of $1,810,464. The acquisition of Strobic Air Corporation accounted for approximately $1,095,000 of the increase, combined with the timing and size of shipments and retainage on contracts, especially in the Pollution Control Systems and Allied Equipment segment. Inventories were $12,271,219 on October 31, 1996 compared to $10,302,844 on January 31, 1996, an increase of $1,968,375. The acquisition of Strobic Air Corporation accounted for approximately $864,000 of the increase. Inventory balances fluctuate depending upon market demand, the size and timing of orders and long lead times required. Current liabilities amounted to $13,343,378 on October 31, 1996 compared to $10,250,506 on January 31, 1996, an increase of $3,092,872. Accounts payable, customer progress payments and accrued expenses accounted for $2,612,745 of the increase, combined with an increase in the current portion of long-term debt amounting to $480,127. The acquisition of Strobic Air Corporation accounted for approximately $837,000 of the increase in current liabilities. 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 nine-month period ended October 31, 1996 amounted to $5,259,664 compared with $4,570,266 in the nine-month period ended October 31, 1995, an increase of $689,398. This increase is attributable to higher sales activity in both business segments, the timing of the payment of current obligations, advances from customers on projects in progress, and the acquisition of Strobic Air Corporation, offset by increased balances in accounts receivable and inventories. Cash flows used in investing activities during the nine-month period ended October 31, 1996 amounted to $3,909,083 compared with $1,454,864 for the nine-month period ended October 31, 1995. This increase is due primarily to the acquisition of Strobic Air Corporation which was purchased using $3,529,338 of cash and the acquisition of property, plant and equipment amounting to $1,526,928, offset by proceeds from the sale of property and equipment amounting to $1,147,183. -10- MET-PRO CORPORATION Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations continued... Financing activities during the nine-month period ended October 31, 1996 utilized $591,932 of available resources compared to $2,584,663 of cash used for the nine-month period ended October 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 $1,447,645, the purchase of treasury stock totalling $1,346,747 and cash in lieu of fractional shares amounting to $2,685 for a 3-for-2 stock split dated July 8, 1996, offset by proceeds received from new borrowings amounting to $3,500,000 and $235,838 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. In September 1996, the Company acquired the stock of Strobic Air Corporation for $3,529,338 and 195,920 shares of common stock. A portion of this acquisition was financed through $3,500,000 of bank loans. The balance was paid with internal funds. The bank loans are comprised of two notes, of $1,750,000 each, one with a floating interest rate and one with a fixed interest rate, both of which are payable in equal quarterly installments totalling $175,000 commencing December 31,1996. 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 expenditure requirements through cash flows generated from operations. -11- MET-PRO CORPORATION PART II - OTHER INFORMATION Item 5. Other Information On October 11, 1996, the Company filed a Registration Statement on Form S-3 (File No. 333-13929) with the Securities and Exchange Commission covering an aggregate of 195,920 shares of Common Stock issued in connection with the Company's acquisition on September 12, 1996 of Strobic Air Corporation pursuant to an Agreement and Plan of Merger, the terms of which are set forth in such Registration Statement. Item 6(b). Reports on Form 8-K There were no reports on Form 8-K filed for the nine-month period ended October 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) December 13, 1996 /S/ William L. Kacin -------------------------------------------- William L. Kacin, President, Chief Executive Officer and Director December 13, 1996 /S/ William F. Moffitt -------------------------------------------- William F. Moffitt, Vice President of Finance, Secretary and Treasurer, Chief Financial Officer, Chief Accounting Officer, and Director -12- EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS JAN-31-1997 OCT-31-1996 8,171,613 0 10,751,621 264,242 12,271,219 32,794,387 29,717,871 14,236,785 57,400,472 13,343,378 5,740,519 713,863 0 0 38,463,734 57,400,472 44,747,320 44,747,320 29,340,193 38,117,338 0 0 162,859 7,348,527 2,902,667 4,445,860 0 0 0 4,445,860 .63 .63
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