8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):   June 6, 2013

MET-PRO CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	001-07763	23-1683282
(State or other jurisdiction of	(Commission File Number)	(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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On June 6, 2013, Met-Pro Corporation ("Met-Pro", the "Registrant" or the "Company") reported its results of operations for the first quarter ended April 30, 2013.  A copy of the press release issued by the Company is furnished herewith as Exhibit 99.1.

In addition, the Company held a teleconference call on June 6, 2013 during which members of management discussed the Company's financial performance for the first quarter ended April 30, 2013 and other matters relating to its business.  A copy of the teleconference transcript is furnished herewith as Exhibit 99.2.

Item 8.01 Other Events

The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated by reference in this Item 8.01

Item 9.01. Financial Statements and Exhibits.

A copy of the press release dated June 6, 2013, reporting the results of operations for the first quarter ended April 30, 2013, is furnished herewith as Exhibit 99.1.

In addition, a copy of the transcript from the Company's teleconference held on June 6, 2013, to discuss its results of operations for the first quarter ended April 30, 2013, is furnished herewith as Exhibit 99.2.

The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 except as shall be expressly set forth by specific reference in such filing.

Safe Harbor

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this communication, and other materials filed or to be filed with the United States Securities and Exchange Commission ("SEC") (as well as information included in oral or other written statements made or to be made by Met-Pro Corporation), 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 risk and uncertainties as to whether the merger agreement signed with CECO Environmental Corp. ("CECO") will be completed, and the likely adverse impact upon the Company's stock price if the merger agreement is not completed; the ability of CECO to successfully integrate the operations of the Company and to realize the synergies from the acquisition; the results of CECO's operations pending the completion of the merger transaction between it and the Company, including its ability to integrate acquisitions that it recently completed; the various risks that are identified in CECO's registration statement on Form S-4 filed with the SEC on May 23, 2013 and any amendments thereto that are thereafter filed, all of which are incorporated herein by reference; the cancellation or delay of purchase orders and shipments, product development activities, goodwill impairment, 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. You should carefully consider the factors discussed in Part I, "Item 1A Risk Factors" in our Annual Report on Form 10-K for the year ended January 31, 2013 as well as Part II, "Item 1A Risk Factors" in our Quarterly Report for the quarter ended April 30, 2013 as filed with the SEC and the registration statement on Form S-4 filed by CECO on May 23, 2013 and any amendments thereto.

Important Information for Investors and Stockholders

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.  This communication is not a substitute for the prospectus/proxy statement filed with the SEC by CECO on May 23, 2013.  Investors in Met-Pro or CECO are urged to read the prospectus/proxy statement, which contains important information, including detailed risk factors. The prospectus/proxy statement and other documents filed by Met-Pro and CECO with the SEC are available free of charge at the SEC's website, www.sec.gov, or by directing a request to Met-Pro Corporation, P.O. Box 144, Harleysville, Pennsylvania 19438, Attention: Investor Relations; or to CECO Environmental Corp., 4625 Red Bank Road, Suite 200, Cincinnati, Ohio 45227, Attention: Investor Relations. A final prospectus/proxy statement will be mailed to shareholders of Met-Pro and CECO's stockholders.

Proxy Solicitation

Met-Pro and CECO, and certain of their respective directors, executive officers and other members of management and employees are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of Met-Pro is set forth in its proxy statement for its 2013 annual meeting of shareholders and Met-Pro's Form 10-K for the year ended January 31, 2013. Information about the directors and executive officers of CECO is set forth in the proxy statement for its 2013 annual meeting of shareholders and CECO's 10-K for the year ended December 31, 2012. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the prospectus/proxy statement for such proposed transactions filed by CECO in the Form S-4 filed on May 23, 2013.

SIGNATURE

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.

Date:  June 6, 2013	MET-PRO CORPORATION
	By: /s/ Neal E. Murphy
	Neal E. Murphy
	Vice President - Finance and Chief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

Exhibit Index

Exhibit	Description
99.1	Press release issued by Met-Pro Corporation to report its results of operations for the first quarter ended April 30, 2013.
99.2	Transcript of conference call held June 6, 2013 to discuss results of operations for the first quarter ended April 30, 2013.

EX-99.1

Exhibit 99.1

Date:	June 6, 2013
For Release:	Immediate
Contact:	Investor Contact:
	Neal E. Murphy	Joseph Hassett, SVP
	Vice President of Finance, CFO	Gregory FCA Communications
	215-723-6751	610-228-2110

Met-Pro Corporation Announces First Quarter Financial Results

Harleysville, PA, June 6, 2013 – Met-Pro Corporation (NYSE: MPR-News) today announced the Company’s financial results for the first quarter ended April 30, 2013.

First quarter net sales were $22.0 million, compared with $25.2 million for the same quarter last year. First quarter net income totaled $0.2 million and diluted earnings per share were $0.02 compared with net income of $1.3 million and diluted earnings per share of $0.09 for the same period last year. Non-GAAP net income for the current quarter was $1.5 million, or $0.10 per share, and excludes $1.4 million (on a pre-tax basis) of legal, investment banking, accounting and other transaction related expenses associated with the Company’s previously announced acquisition by CECO Environmental Corp. Non-GAAP net income and non-GAAP earnings per share are defined later in this press release in the section “Reconciliation of GAAP to non-GAAP financial measures”

.

Gross profit margin was 36.5% for the current quarter as compared with 35.5% and 35.1% for the first and fourth quarters of last year, respectively.

Selling, general and administrative expenses were $5.7 million for the current quarter as compared with $7.2 million and $6.0 million in the first and fourth quarters of last year, respectively. The previous year’s first quarter selling, general and administrative expenses of $7.2 million included one-time costs of approximately $0.7 million incurred in connection with the transition to a new Chief Financial Officer.

Bookings for the first quarter were $24.1 million compared with $27.0 million for the first quarter last year. The Company’s backlog of orders as of April 30, 2013 was $27.0 million compared with $30.5 million last year. A majority of the Company’s April 30, 2013 backlog is expected to be shipped during the current fiscal year.

“Our results for the first quarter reflect the effect of the delayed timing of orders and shipment of projects for certain customers, with revenues and bookings both down from year ago levels,” stated Raymond J. De Hont, Chief Executive Officer and President. “Behind those results, however, our pipeline remains robust, as the Met-Pro brands continue to create new business opportunities across our various businesses, both domestically and internationally. On a positive note, our efficiency initiatives and disciplined cost control enabled us to expand gross margins, while reducing selling, general and administrative expenses compared with the first quarter a year ago. In addition, our balance sheet has never been stronger. Based on the overall tenor of business, the significant improvements being achieved operationally, and our growing pipeline of potential opportunities, we continue to remain optimistic regarding our forward prospects.”

On April 22, 2013, Met-Pro Corporation announced that it had entered into a definitive agreement to be acquired by CECO Environmental Corp. (NasdaqGM: CECE). Pursuant to the terms of the definitive agreement, CECO will acquire all of the outstanding shares of Met-Pro common stock in a cash and stock transaction valued at a total of approximately $210 million. The completion of the acquisition is subject to standard closing conditions including the approval of the stockholders of both Met-Pro and CECO. Please refer to our Current Report on Form 8-K filed with the SEC on April 22, 2013, the Form S-4 filed by CECO on May 23, 2013, and our other SEC filings for more information.

Mr. De Hont commented, “We are very excited about the recent announced transaction between Met-Pro Corporation and CECO Environmental Corp. This is truly a combination in which the whole will be much greater than the sum of the parts.  We are confident that this combination will lead to increased growth and profitability well beyond what would have been achieved by either company on a standalone basis. The market synergies, the expanded global footprint, the diversification of product platform, and the cost efficiencies associated with combining two smaller public companies are just a few of the compelling drivers behind this combination. Further, the strong financial position of the combined company will enable continued expansion and market leadership in our chosen markets.The benefits from this merger will generate significant value for all of our shareholders.”

On March 15, 2013, the Company paid a quarterly dividend of $0.0725 per share to shareholders of record at the close of business on March 1, 2013. In addition, the Board of Directors, at their meeting on April 1, 2013, declared a quarterly dividend of $0.0725 per share payable June 14, 2013 to shareholders of record at the close of business on May 31, 2013. This is the twenty-second consecutive year that Met-Pro Corporation has paid a cash dividend.

Mr. De Hont and Neal E. Murphy, Vice President of Finance and Chief Financial Officer, will hold a conference call for investors today, June 6, 2013, 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/news/news-releases prior to the beginning of the conference call.

Interested persons who wish to hear the live webcast 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 71310163) at 10:55 AM (Eastern) today. A taped replay of the conference call will be available within two hours of the conclusion of the call and until June 20, 2013. To access the taped replay, call the US/Canada Dial-In # 855-859-2056 or the International Dial-In # 404-537-3406 and enter conference ID 71310163.

Proxy Solicitation

Met-Pro and CECO, and certain of their respective directors, executive officers and other members of management and employees are participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of Met-Pro is set forth in its proxy statement for its 2013 annual meeting of shareholders and Met-Pro’s Form 10-K for the year ended January 31, 2013. Information about the directors and executive officers of CECO is set forth in the proxy statement for its 2013 annual meeting of shareholders and CECO’s 10-K for the year ended December 31, 2012. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the prospectus/proxy statement for such proposed transactions filed by CECO in the Form S-4 filed on May 23, 2013.

Additional Information and Where to Find It

This communication is not a substitute for the prospectus/proxy statement Met-Pro and CECO will file with the SEC. Investors in Met-Pro or CECO are urged to read the prospectus/proxy statement, which will contain important information, including detailed risk factors, when it becomes available. The prospectus/proxy statement and other documents that will be filed by Met-Pro and CECO with the SEC will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made to Met-Pro Corporation, P.O. Box 144, Harleysville, Pennsylvania 19438, Attention: Investor Relations; or to CECO Environmental Corp., 4625 Red Bank Road, Suite 200, Cincinnati, Ohio 45227, Attention: Investor Relations. A final prospectus/proxy statement will be mailed to shareholders of Met-Pro and CECO’s stockholders.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About Met-Pro

Met-Pro Corporation, with headquarters at 160 Cassell Road, Harleysville, Pennsylvania, is a leading niche-oriented global provider of product recovery, pollution control, fluid handling and filtration solutions. The Company’s diverse and synergistic solutions and products address the world’s growing need for clean air and water, reduced energy consumption and improved operating efficiencies. Through its global sales organization, internationally recognized brands, and operations in North America, South America, Europe and The People's Republic of China, Met-Pro’s solutions, products and systems are sold to a well-diversified cross-section of customers and markets around the world. 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 news 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, goodwill impairment, 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. You should carefully consider the factors discussed in Part I, “Item 1A Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2013 as filed with the Securities and Exchange Commission.

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.

Met-Pro Corporation and Subsidiaries

Consolidated Statements of Income

(unaudited)

	Three Months Ended April 30,
	2013			2012
Net sales	$	21,967,876		$	25,207,061
Cost of goods sold		13,956,466			16,256,535
Gross profit		8,011,410			8,950,526
Selling		2,717,246			3,059,581
General and administrative		3,019,415			4,144,089
Total selling, general and administrative		5,736,661			7,203,670
Acquisition expenses		1,392,819			–
Income from operations		881,930			1,746,856
Interest expense		(36,417	)		(42,535	)
Other (expense) income		(9,311	)		45,925
Income before taxes		836,202			1,750,246
Provision for taxes		605,947			491,548
Net income	$	230,255		$	1,258,698
Earnings per share, basic	$	.02		$	.09
Earnings per share, diluted	$	.02		$	.09
Average common shares outstanding:
Basic shares		14,697,269			14,678,628
Diluted shares		14,854,906			14,744,826

Met-Pro Corporation and Subsidiaries

Consolidated Balance Sheets

	April 30, 2013			January 31, 2013
Assets	(unaudited)
Current assets
Cash and cash equivalents	$	39,398,603		$	33,305,908
Short-term investments		512,325			1,022,266
Accounts receivable, net of allowance for doubtful accounts of $287,351 and $288,102, respectively		15,309,966			19,094,589
Inventories		17,973,142			17,870,720
Prepaid expenses, deposits and other current assets		1,594,453			1,848,049
Deferred income taxes		1,214			1,043
Total current assets		74,789,703			73,142,575
Property, plant and equipment, net		19,161,719			19,499,593
Goodwill		20,798,913			20,798,913
Other assets		2,820,720			2,814,100
Total assets	$	117,571,055		$	116,255,181
Liabilities and shareholders’ equity
Current liabilities
Current portion of debt	$	365,522		$	369,622
Accounts payable		6,581,059			6,081,691
Accrued salaries, wages and benefits		1,406,130			1,775,438
Other accrued expenses		3,050,415			2,780,051
Dividend payable		1,070,074			1,068,862
Customers’ advances		3,217,088			1,397,553
Total current liabilities		15,690,288			13,473,217
Long-term debt		2,170,358			2,269,885
Accrued pension retirement benefits		9,738,594			9,652,313
Other non-current liabilities		59,137			58,589
Deferred income taxes		2,118,355			2,118,801
Total liabilities		29,776,732			27,572,805
Commitments and contingencies
Shareholders’ equity
Common shares, $.10 par value; 36,000,000 shares authorized, 15,928,679 shares issued, of which 1,230,581 and 1,231,824 shares were reacquired and held in treasury at the respective dates		1,592,868			1,592,868
Additional paid-in capital		5,032,209			4,899,188
Retained earnings		99,217,801			100,054,279
Accumulated other comprehensive loss		(7,758,740	)		(7,613,536	)
Treasury shares, at cost		(10,289,815	)		(10,250,423	)
Total shareholders’ equity		87,794,323			88,682,376
Total liabilities and shareholders’ equity	$	117,571,055		$	116,255,181

Met-Pro Corporation and Subsidiaries

Consolidated Business Segment Data

(unaudited)

	Three Months Ended April 30,
	2013			2012
Net sales
Product Recovery/Pollution Control Technologies	$	8,960,364		$	10,500,840
Fluid Handling Technologies		8,121,186			9,400,199
Mefiag Filtration Technologies		2,635,229			2,852,166
Filtration/Purification Technologies		2,251,097			2,453,856
	$	21,967,876		$	25,207,061
Income (loss) from operations
Product Recovery/Pollution Control Technologies	$	134,881		$	(443,062	)
Fluid Handling Technologies		2,058,027			2,384,370
Mefiag Filtration Technologies		(34,731	)		(72,088	)
Filtration/Purification Technologies		116,572			(122,364	)
Acquisition Expenses		(1,392,819	)		–
	$	881,930		$	1,746,856

	April 30, 2013		January 31, 2013
Identifiable assets
Product Recovery/Pollution Control Technologies	$	35,928,133	$	37,932,865
Fluid Handling Technologies		18,982,592		20,093,881
Mefiag Filtration Technologies		14,966,538		15,643,078
Filtration/Purification Technologies		7,900,359		8,011,212
		77,777,622		81,681,036
Corporate		39,793,433		34,574,145
	$	117,571,055	$	116,255,181

Met-Pro Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended April 30,
	2013			2012
Cash flows from operating activities
Net income	$	230,255		$	1,258,698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		537,160			487,599
Stock-based compensation		103,451			441,401
Deferred income taxes		(78,683	)		(209,278	)
(Gain)/loss on sales of property and equipment, net		(19, 500	)		1,080
Allowance for doubtful accounts		(751	)		(38,862	)
Change in operating assets and liabilities:
Accounts receivable		3,713,797			2,171,197
Inventories		(161,868	)		(1,361,633	)
Prepaid expenses, deposits and other assets		195,949			123,755
Accounts payable and accrued expenses		569,867			(862,836	)
Customers’ advances		1,819,481			(1,036,453	)
Accrued pension retirement benefits		86,280			62,569
Other non-current liabilities		549			549
Net cash provided by operating activities		6,995,987			1,037,786
Cash flows from investing activities
Proceeds from sale of property and equipment		19,500			–
Acquisitions of property and equipment		(258,735	)		(474,884	)
Purchases of investments		(253,323	)		(763,264	)
Proceeds from maturities of investments		763,264			756,073
Net cash provided by (used in) investing activities		270,706			(482,075	)
Cash flows from financing activities
Reduction of debt		(91,347	)		(387,451	)
Exercise of stock options		123,210			–
Payment of dividends		(1,065,522	)		(1,042,183	)
Purchase of treasury shares		(133,032	)		–
Net cash used in financing activities		(1,166,691	)		(1,429,634	)
Effect of exchange rate changes on cash		(7,307	)		11,495
Net increase (decrease) in cash and cash equivalents		6,092,695			(862,428	)
Cash and cash equivalents at February 1		33,305,908			34,581,394
Cash and cash equivalents at April 30	$	39,398,603		$	33,718,966

Met-Pro Corporation

Reconciliation of GAAP to non-GAAP financial measures

 (unaudited)

	Three Months Ended April 30,
	2013			2012
Reconciliation of GAAP operating income and GAAP operating margin:
Income from operations in accordance with GAAP	$	881,930		$	1,746,856
Operating margin in accordance with GAAP		4.0	%		7.0	%
Acquisition expenses		1,392,819			–
CFO separation/transition expenses		–			695,000
Non-GAAP income from operations	$	2,274,749		$	2,441,856
Non-GAAP operating margin		10.4	%		9.7	%
Reconciliation of GAAP net income:
Net income in accordance with GAAP	$	230,255		$	1,258,698
Acquisition expenses		1,392,819			–
CFO separation/transition expenses		–			695,000
Tax benefit of acquisition expenses		(129,630	)		–
Tax benefit of CFO separation/transition expenses		–			(364,652	)
Non-GAAP net income	$	1,493,444		$	1,589,046
Per share data:
Non-GAAP net income per basic share (14,697,269 and 14,678,628, respectively)	$	.10		$	.11
Non-GAAP net income per diluted share (14,854,906 and 14,744,826, respectively)	$	.10		$	.11

Met-Pro is providing the non-GAAP financial measures presented above as the Company believes that these figures are helpful in allowing individuals to better assess the ongoing nature of Met-Pro’s core operations. A “non-GAAP financial measure” is a numerical measure of a company’s historical financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in the GAAP statement of operations.

Non-GAAP net income, non-GAAP operating income, non-GAAP operating margin, and non-GAAP earnings per basic and diluted share, as we present them in the financial data included in this press release, have been adjusted to exclude the effects of (i) expenses related to acquisition activities including legal, investment banking, accounting and other transaction related expenses associated with the Company’s previously announced acquisition by CECO Environmental Corp.and the associated tax benefit of these charges in the current year period and (ii) previously disclosed CFO separation/transition expenses and the associated tax benefit of these charges in the prior year period. Management believes that these items are not necessarily indicative of the Company’s ongoing operations and their exclusion provides individuals with additional information to compare the company’s results over multiple periods. Our financial statements may continue to be affected by items similar to those excluded in the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP financial measures should not be construed as an inference that all such costs are unusual or infrequent.

Non-GAAP net income, non-GAAP operating income, non-GAAP operating margin and non-GAAP earnings per basic and diluted share are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Met-Pro’s results as reported under GAAP.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the tables above present the most directly comparable GAAP financial measure and reconcile non-GAAP net income, non-GAAP operating income, non-GAAP operating margin and non-GAAP earnings per diluted share to the comparable GAAP measures.

###

EX-99.2

Exhibit 99.2

MET-PRO CORPORATION

Moderator: Kevin Bittle

06-06-13/11:00 a.m. ET

Confirmation # 71310163

Page 1

MET-PRO CORPORATION

Moderator:Kevin Bittle

June 6, 2013

11:00 a.m. ET

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Met-Pro first quarter results conference call.  All lines have been placed on mute to prevent any background noise.  After the speakers' remarks, there will be a question and answer session.  If you would like to ask a question during this time, simply press star then the number one on your telephone keypad.  If you would like to withdraw your question, press the pound key.  Thank you.  I will now turn the call over to Kevin Bittle, Manager of Creative Services.  Please go ahead, sir.

Kevin Bittle: Good morning, and welcome to Met-Pro Corporation's earnings conference call for the first quarter of fiscal year 2014, which ended on April 30, 2013.  My name's Kevin Bittle, and I'm with the company's creative services department.  With me on our call this morning are Ray De Hont, our Chief Executive Officer and President, and Neal Murphy, our Vice President of Finance and Chief Financial Officer.  Before we begin, I'd like to remind everyone that any statements made today with regards to our future expectations may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Please refer to our year-end report for the fiscal year ended January 31, 2013, that was filed with the SEC, for any important factors that among others could cause our actual results to differ from any results that might be projected, forecasted or estimated in any of our forward-looking statements.

MET-PRO CORPORATION

Moderator: Kevin Bittle

06-06-13/11:00 a.m. ET

Confirmation # 71310163

Page 2

Further, during today's call, we may refer to adjusted net income and adjusted earnings per share, which are non-GAAP metrics which include first quarter fiscal 2014 legal, accounting, investment banking and other transaction related expenses, as well as 2013 CFO transition costs.  The company believes the use of these non-GAAP financial measures is appropriate to enhance understanding of it's historical performance, as well as prospects for future performance.

Adjusted net income and adjusted earnings per share are non-GAAP measures that are detailed in the table titled Reconciliation of GAAP to non-GAAP financial measures, that was included in this morning's press release, and are now posted on our Web site.  With that, I will now turn the call over to Ray.  Ray?

Ray DeHont: Thank you, Kevin.  Good morning, everyone, and welcome again from Harleysville, Pennsylvania.  Earlier this morning, we released our first quarter fiscal year 2014 financial results.  I hope all of you have had the opportunity to review them.  In a moment, Neal Murphy will provide more specific comments on our financial results, but first, I would like to offer my perspective on our performance.

In the first quarter, we demonstrated continued progress in our overall efficiency initiatives and disciplined cost control, as we improved gross margins while reducing selling, general and administrative expenses when compared with the first quarter a year ago.  Gross margins in the first quarter were 36.5 percent, up 100 basis points from 35.5 percent versus last year's first quarter.  The improvement reflects structural and organizational changes to improve operational effectiveness and efficiency, as well as discipline cost control.

Margins in the quarter also compare favorably with the 34.4 percent achieved for fiscal 2013.  I'm particularly pleased with the results in our product recovery pollution control technologies business, where our focused efforts continue to show steady margin improvement, which accounted for a significant portion of this quarter's year over year margin expansion.  Total selling, general administrative expenses in the first quarter were down roughly 10 percent, or over $700,000 dollars from the first quarter a year ago, after adjusting for last year's CFO transition expenses.  This improvement also reflects structural and organizational changes to improve operational effectiveness and efficiency, as well as disciplined cost control.

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I would also note that total overhead was down sequentially from the fourth quarter of last year, a continuation of the sequential improvements achieved over the past year as we made steady progress reducing overhead as a percentage of revenues.

Net sales, bookings and backlog in the quarter were all down from a year ago, reflecting the quarterly variability that is endemic to our business.  However, backlog increased eight percent from the beginning of the fiscal year.  As we have previously noted, quarterly variation can simply be due to the timing of one large project booking or shipment.  This year's first quarter results reflect the timing of large project bookings, which either closed later than expected, or in various stages of negotiations, but have not closed in the time frame originally anticipated, both of which have negatively impacted fiscal 2014 first quarter sales.

Routine bookings for original equipment, as well as parts and consumables, are actually ahead of last year's first quarter pace.  For instance, although overall Global Pump Solutions bookings were down due to the timing of large project work, routine bookings in the first quarter were actually up 18 percent from the first quarter a year ago.

Just a little insight into some of the factors affecting this quarter's bookings metrics.  A vast majority of the year over year new order bookings decrease was in our global pump solutions business, where a year ago, we booked a $6 million dollar project.  While it is difficult to say we are going to have another project of that magnitude in Global Pump Solutions again this year, there is sufficient activity to indicate that we can recover those bookings in the form of Global Pump Solutions singles and doubles over the balance of the year.

At the same time, in our more backlog-dependent businesses, mainly product recovery pollution control, bookings and backlog in the first quarter were up 24 percent and 15 percent respectively from a year ago.  For instance, in the first quarter, we booked two orders totaling $2.3 million dollars to supply Flex-Kleen brand pulse jet dust collectors and product recovery systems to a large multi-national chemical manufacturer.  We also booked two large orders totaling two million dollars to supply two U.S. municipalities with Duall brand chemical scrubber systems.

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Importantly, separate independent engineering firms specified Met-Pro brand products for these contracts, a strong indication of the success we are achieving with our marketing strategy to build key relationships throughout targeted industries.  We were also successful in booking a $600,000 dollar Met-Pro systems brand, regenerative thermal oxidizer project, in the first fast-growing green fuels market and more recently, in April, a $500,000 dollar system that included a Met-Pro systems brand regenerative thermal oxidizer, a dual-brand chemical scrubber, and a Fybroc brand recirculation pump.

To complete the picture, quotation activity remains strong, while our pipeline of potential opportunities continues to grow.  Because we have experienced quarterly variability before, in fact as recently as the first half of last year, we remain optimistic about the outlook for the full year.  Before turning the call over to Neal, I am pleased to announce the company's board of directors declared a $0.725 cent quarterly dividend to be paid September 13, 2013, to shareholders of record on August 30, 2013.  This is the 22^nd consecutive year that Met-Pro Corporation has paid a cash dividend.

As previously announced, on April 21, 2013, the company entered into an agreement and plan of merger – the merger agreement – with CECO Environmental Corporation, pursuant to the terms of the merger agreement, in the event that the closing date of the first step merger, as defined in the merger agreement, occurs before August 30, 2013.  Then the dividend declared on June 5, 2013, shall not be paid to the company's shareholders.

However, in such event, CECO has agreed to set it's record date for the payment of it's third dividend occurring during this current fiscal year, to occur on the date that is at least two business days after the closing date of the first debt merger.  Neal?

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Neal Murphy: Thank you, Ray.  And good morning, everyone.  First quarter net sales were $22 million dollars, compared with $25.2 million for the same quarter last year, with the decrease spread across our business segments.  As Ray noted, despite lower revenues, we were able to increase year over year gross margins by 100 basis points, from 35.5 percent to 36.5 percent.  This consolidated gross margin improvement is particularly encouraging, because it was achieved despite lower sales in our high margin Fluid Handling Technologies segment.

Turning first to our Product Recovery and Pollution Control Technologies segment, first quarter sales were nine million, down 15 percent from the year ago first quarter.  Despite substantial quoting activity, timing of purchase orders and shipments on potential large projects lagged a bit in our first quarter.  More importantly, this segment reported better than a half million dollar improvement in operating profits despite lower net sales.  As Ray mentioned, we've worked hard on improving profitability in this segment, through operating effectiveness and efficiency, and results this quarter are a continuation of the turnaround that began to take hold in the second half of last year.  In our Fluid Handling Technologies segment, first quarter net sales were down 14 percent to 8.1 million.  Despite lower volumes, we were able to maintain Fluid Handling operating margins at 25.3 percent for the quarter, which were constant with last year.  While standard business in our fluid handling business was actually up from a year ago, the timing of our larger project business was down from the first quarter of fiscal 2013.  Based upon current project business activity levels and the growth of our standard business, we believe Fluid Handling should achieve it's fiscal 2014 performance objectives.

Turning to our Mefiag Filtration Technologies segment, first quarter net sales were down $2.6 million, down about eight percent from a year ago, mainly due to lower volume in Europe.  Despite lower revenues, operational efficiencies enabled Mefiag to slightly outperform last year's first quarter earnings performance, with an operating loss of $35,000 this year as compared to last year's first quarter loss of $70,000.

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Finally, first quarter net sales in our Filtration Purification Technologies segment decreased approximately nine percent from the prior year first quarter, principally due to continued weak municipal demand in our Pristine Water Solutions business unit.  However, this segment recorded an operating profit of $117,000 in the quarter, a nice improvement from the $122,000 operating loss for the first quarter of last year, once again, reflecting focus on productivity enhancement throughout the organization.

On an absolute basis, selling expenses were down over $300,000, or about nine percent, from the first quarter of last year.  Because of the variable nature of sales commissions, selling expenses tend to trend with sales.  General administrative expenses decreased 27 percent in the quarter, and even after adjusting for last year's $700,000 of CFO transition-related expenses, we were still down roughly 12 percent, or over $400,000, from the prior year's first quarter.

Total G&A expenses were also down $300,000 sequentially from the fourth quarter of last year, a continuation of the progress achieved over the past year as we've moved towards our stated objective of reducing SG&A to roughly 20 percent of revenues over the longer term, through a combination of cost control and revenue growth.

We incurred $1.4 million of legal, investment banking, accounting and other transaction expenses in the first quarter, associated with the company's previously-announced acquisition by CECO Environmental Corp.

On a GAAP basis, first quarter net income totaled $230,000 dollars and diluted earnings per share were $0.02 cents.  Adjusted net income for the quarter, which is a non-GAAP measure, was $1.5 million, or $0.10 cents per share compared with adjusted net income of $1.6 million, and diluted earnings per share of $0.11 cents for the same period last year.

Adjusted net income and adjusted earnings per share are non-GAAP measures that are detailed in the reconciliation of GAAP to non-GAAP financial measures section of our earnings release.  In arriving at adjusted non-GAAP income, we carved out merger-related expenses of $1.4 million in the first quarter of this year, and CFO transition costs last year of approximately $700,000 from net income.

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Turning to our balance sheet, it remains quite strong, with cash on hand and short-term investments at April 30, 2013, of just under $40 million, and continued reduction in debt levels to $2.6 million.  Cash flow from operations were almost seven million dollars in the first quarter.

In summary, despite lower sales volume for the quarter due to timing of large order project orders and shipments, business activity is strong, and our continuous improvement efforts have enabled us to increase adjusted operating margins to 10.4 percent in the first quarter, compared with $9.7 million percent in the first quarter a year ago.  Again, adjusted operating margins exclude merger costs in the first quarter of this year, and CFO transition expenses in the first quarter of last year.  We expect our continuous improvement activities will translate into ongoing increases in operating margin leverage, as strong levels of market activity are converted into increased revenues.  With that, I will turn the call back to Ray for some closing comments.

RayDeHont: Thank you, Neal.  Just a few concluding remarks before we open the call to your questions.  We are extremely excited about the recently announced merger of Met-Pro Corporation and CECO Environmental Corp.  This is truly a combination in which the whole will be much greater than the sum of the parts.  We are confident that this combination will lead to increased growth and profitability well beyond what would have been achieved by either company on a stand-alone basis.  The market synergies, the expanded global footprint, the diversification of the product platform, and the cost efficiencies associated with combining our two companies, are just a few of the compelling drivers behind this combination.

Further, the strong financial position of the combined company should enable continued expansion and market leadership in our chosen markets, and generate significant value for all of our shareholders.  As the merger process progresses, Met-Pro will be focused on sharpening our organization to ensure our shareholders realize the full benefits of this combination.  Project selectivity, disciplined pricing and effective project execution should help expand margins.  Disciplined cost control will help capture the operating leverage in our business model, and the commitment to sustain the investment we are making in our sales and marketing strategy should continue to build the Met-Pro brand on a global basis, creating growth opportunities both now and in the future, that will mitigate quarterly variability of the industries we serve.

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I'd like to thank the many loyal, dedicated, talented employees who have contributed to our success, and who are the foundation on which the combined Met-Pro and CECO enterprise will be built.  I also want to thank our shareholders for their continued support.  I would

also like to thank all of you for your participation in today's call.

I will now turn the call back to Kevin Bittle.

Kevin Bittle: Thank you, Ray.  At this time, we welcome any questions you may have.  I'd like to ask our operator, (Lori), to provide instructions for this portion of the call.

Operator: At this time, I would like to remind everyone, if you'd like to ask a question, please press star then the number one on your telephone keypad.  We'll pause for just a moment to compile the Q&A roster.  Your first question comes from the line of Jerry Sweeney of (Manning).

Jerry Sweeney: Good morning, guys.

Ray De Hont: Good morning, (Jerry).

Neal Murphy: Hi, (Jerry).

Jerry Sweeney: Congratulations, nice job on the expenses in SG&A.  If you have trouble hearing me, let me know.  I'm actually on the train.  But wondering if you could just dig in a little bit more on Product Recovery Pollution Control.  I'm assuming some of the timing of projects that were focused on were seasonal.  Were there any specific large projects that got pushed out to the next quarter, or was it a series of smaller projects and just, you know, overall timing in general?

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Ray De Hont: It's a combination of things, (Jerry).  Our normal business, we have projects, you know, million dollar projects, million and a half, and so forth.  But some of them, the timing isn't what you expect, and that's what happened here on that particular side of the business, you had some projects there, but on the fluid-handling side, if you go over to that side, you had a very large project last year which I mentioned, which was a six million dollar project, which is an extraordinary sized project – not normal day-to-day business, or even project business.

But it really comes down to where we're not losing them, but the negotiations, you've got Ts and Cs, you're in that mode.  You've got early stages, and you have middle stages.  So we're in various stages, a lot of opportunities out there.  There's opportunities, for instance, in the woodworking industry.  We see that coming back, with housing.  Automobile industry is perking up, and even the municipal, as I mentioned, we sold a couple projects into the municipal marketplace, which is a good sign for our product recovery pollution control.  But it all comes down to timing, as far as when these products fit these events.

Jerry Sweeney: OK – sorry, I apologize.  So you know, the fact that it is a little seasonal, maybe have a build-up until the end of the year, or is that a way to look at it, on the PRPC?

Ray De Hont: Well, look at it this way.  When you look at January and February, not a lot of construction is going on during that – those months.  So you could have some of that, and we see some of that, where customers in different parts of the country don't want their equipment until, let's say, our second or third quarter, because of the weather – the impact to a construction project.  So there's some seasonality because of that.

Jerry Sweeney: OK, got it.  Finally, you know, the cash flows seem pretty good – $7 million.  I mean, is that just a little bit of timing of some of the cash coming in, or is that a detail that you want to …

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Neal Murphy: Yes, (Jerry), it's a combination of things.  Some focus on the working capital side, a little – a little higher profitability as a percentage of sales.  But the largest driver is cash advances.  That can – there's a lot of timing issues around customer cash advances, and we received a substantial cash advance in the – in the quarter, that drove cash flow up.

Jerry Sweeney: OK, and then any – any comment on the deal closure timing?

Ray De Hont: Well, as it was published, the published date was, we were estimating September.

Jerry Sweeney: OK.

Ray De Hont: And I couldn't give you any other estimate than that – what we put on the table there.  Because we have no control over it, as far as with the SEC and so forth.

Jerry Sweeney: Got it.  Now, this is a little bit of a different question.  You think we'll – I did notice that a dividend was being paid, of record, at the end of May.  Are we going to squeeze another one of those in before the end – before the merger closes?

Ray De Hont: Well, as we discussed during the conversation earlier, we have basically announced a quarterly dividend.  And – but we also made it clear that as previously announced, in the April 21 conference call, and the information that went out, that this may not happen if this merger closes before August 30^th.

Neal Murphy: Yes, so, (Jerry), there's two – as you said, there's two different dividends.  We have the one to the shareholders of record May 30, that'll be paid June 14^th.  And then we've announced a second dividend today, to shareholders of record as of August 30.  And if the transaction closes …

Jerry Sweeney: All right, got it.  OK.  I misheard that, I apologize.

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Male: OK.  Hey, (Jerry), one clarification.  You were talking about bookings with the product recovery and pollution control side.  Their bookings are actually up year to date, over last year.

Jerry Sweeney: OK, got it.  Yes, I was just curious, timing, I mean, how that develops.  And you know it seems it maybe gets a little bit of seasonality at year end sometimes.  But I understand.

Ray De Hont: OK.

Operator: Once again, if you'd like to ask a question, please press star then the number one on your telephone keypad.  Your next question comes from the line of William Bremer of Maxim Group.

William Bremer: Good morning, Ray.  Good morning, Neal.

Ray De Hont: Good morning, Bill.

William Bremer: Let's talk pricing of the bookings.  How's pricing year over year, and let's go through the segments, if we can.

Ray De Hont: Well, I think overall, we're doing a better job as far as getting value for our products.  And that's what we've set out to do.  If you remember last year, we had – especially on the product recovery pollution control side – we had some issues with regard to margins.  And we've dedicated, you know, time and energy to improving that, and getting the value that we're selling – getting paid for the value.  So they've improved.

William Bremer: OK, so pricing in backlog is better year over year.

Neal Murphy: That's correct, yes.  I think, Bill, I'd say even across the segments, I'd say we're not seeing price reduction, and we're seeing selective price increasing.  And really, a concerted effort, particularly in Pollution Control Product Recovery.  You know, each project's a little different, so it's hard to say year over year pricing.  But we're focused on getting value – getting paid for the value we're delivering.

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William Bremer: OK, no, agreed.  Mefiag, let's go there.  We're starting to see the automotive builds stabilize, even grow a little bit here.  A lot more optimistic talk in that segment.  I'm assuming Mefiag sequentially should be better than this first quarter.

Ray De Hont: Well, when you look at it – look for the year, we're seeing as far as the automotive, we're also seeing the housing, where that should start to actually help Mefiag.  They also are getting into the printed circuit board market.  We have a filter that we've designed, working with one of the chemical suppliers in that industry, for that specific industry, which is a much bigger industry than the metal positioning and plating.  So we're trying to expand the market breadth for Mefiag, but you're right, Bill.  Especially in Europe, you're actually starting to see some activity in Europe with the automotive.  Now, on the housing side, that's in the pits over there.  But of course in the U.S. and other parts of the world, the housing is coming back and we see that being a positive impact on Mefiag globally.

William Bremer: Any chance you want to comment on what your targeted margins are for the year in that segment?

Ray De Hont: No.  Very simply.

William Bremer: OK.  Neal, in your commentary, you spoke on the Fluid Handling year objectives.  What are those objectives?

Neal Murphy: Yes, we don't – we don't share specific objectives for the company for each business, but we could foresee growth in our core business, and that includes the core elements of GPS.

William Bremer: OK.  Noticed that you bought back some stock in this quarter.  I'm assuming that was prior to the announcement of the acquisition.  Now, does that cease because of the timing?

Neal Murphy: Yes, I think there were very – very small amount of options with respect to prior employees, but beyond that, there's prohibitions against trading up through the proxy filing.

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William Bremer: OK.  And my last question is just on the restructuring.  Fantastic job on really curtailing the expenses, pretty much broad-based.  How much – what inning would you say you're in on that currently, and how much more can we expect?

Neal Murphy: Yes, that's a fair question.  If you kind of look at our history, and I'll talk in percentage terms, Bill, but obviously events and variations in revenue can change that.  But you know, if you look at the last few years, our SG&A was, you know, a few years back, 26 percent of sales, then 24 percent of sales the following year – 24.7, and last year, it was 23.6 percent of sales.

And we've publicly stated that over the next few years, we see 20 percent as a realistic target, and we see continuing on that trend line this year.  And it's a combination of selective cost reductions and cost control, but it's also continuing to grow the revenue line the way we have over the last few years.

William Bremer: OK, gentlemen, thank you.

Neal Murphy: Thank you.

Male: Thanks, Bill.

Operator: At this time, there are no further questions.  I will now return the call to Ray DeHont for any closing remarks.

Ray DeHont: Thank you, (Lori).  Once again, thank you for joining us this morning.  We hope we have been able to provide you with a useful update on Met-Pro's progress and performance.  If you should have any further questions, please feel free to contact either Neal or me at any time.  Thank you.

Operator: Thank you for participating in the Met-Pro first quarter results conference call.  You may now disconnect.

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