<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1995 Commission file number 001-07763
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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DELAWARE 23-1683282
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 144, HARLEYSVILLE, PA 19438
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 215-723-6751
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Former name, former address and former fiscal year,
if changed since last report.
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.
X Yes No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the close of the period covered by this report.
Class: COMMON, PAR VALUE $.10 PER SHARE OUTSTANDING at 4/30/95 3,131,937
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
APRIL 30, 1995
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INDEX
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Part I - Financial Information:
Condensed consolidated balance sheet as of
April 30, 1995 and January 31, 1995 2
Condensed consolidated statement of income for the
three-month periods ended April 30, 1995 and 1994 3
Condensed consolidated statement of cash flows
for the three-month periods ended April 30, 1995 and 1994 4
Notes to condensed consolidated financial statements 5
Management's discussion and analysis of the
financial condition and results of operations 6 to 8
Report on Review by Independent Accountants 9
Part II - Other Information 10
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
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<TABLE>
<CAPTION>
APRIL 30, JANUARY 31,
1995 1995
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<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,373,918 $ 6,648,380
Accounts receivable, net of allowance for doubtful
accounts of approximately $204,000 and
$184,000, respectively 9,540,058 8,107,243
Inventories 11,188,361 10,693,734
Prepaid expenses, deposits and other current assets 858,343 646,571
Deferred income taxes 500,000 500,000
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Total current assets 29,460,680 26,595,928
Property, plant and equipment, net 13,494,694 13,219,129
Costs in excess of net assets of businesses acquired, net 3,791,365 3,807,326
Other assets 1,473,015 1,546,161
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Total assets $48,219,754 $45,168,544
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,172,337 $ 1,170,821
Accounts payable 3,294,665 2,279,262
Accrued salaries, wages and expenses 5,662,726 5,777,565
Payroll and other taxes payable 8,354 6,266
Accrued income taxes 574,121 --
Customers' advances 531,254 272,387
Dividend payable 1,411,308 --
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Total current liabilities 12,654,765 9,506,301
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Long-term debt 2,583,723 2,877,386
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Other non-current liabilities 51,476 34,847
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Deferred income taxes 634,602 666,000
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Stockholders' equity:
Common stock, $.10 par value; 5,000,000 shares
authorized, 3,193,418 shares issued, at both
dates, of which 61,481 and 98,128 shares,
respectively, were reacquired and held in treasury 319,342 319,342
Additional paid-in capital 7,553,647 7,401,641
Retained earnings 24,506,194 24,816,542
Cumulative translation adjustment 348,934 233,760
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32,728,117 32,771,285
Treasury stock, at cost (432,929) (687,275)
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Net stockholders' equity 32,295,188 32,084,010
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Total liabilities and stockholders' equity $48,219,754 $45,168,544
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENT OF INCOME
(unaudited)
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<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30,
1995 1994
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<S> <C> <C>
Net sales $13,131,816 $11,737,142
Cost of goods sold 8,643,367 7,771,393
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Gross profit 4,488,449 3,965,749
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Operating expenses:
Selling 1,125,728 1,016,274
General and administrative 1,645,585 1,589,962
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2,771,313 2,606,236
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Income from operations 1,717,136 1,359,513
Other income, net 133,214 55,675
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Income before taxes on income 1,850,350 1,415,188
Provision for taxes on income 749,391 566,074
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Net Income $ 1,100,959 $ 849,114
=========== ===========
Earnings per share* $ .23 $ .18
=========== ===========
Cash dividends per share** $ .30 $ .25
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</TABLE>
* Based on weighted average shares outstanding of 4,715,097 and 4,716,072 in
the respective three-month periods, fully diluted for stock options issued,
as adjusted for a 3-for-2 stock split which was completed by the Company on
May 12, 1995.
** The Company 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.
See accompanying notes to condensed consolidated financial statements.
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
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<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30,
1995 1994
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<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Net cash provided by operating activities $ 1,272,275 $ 1,225,862
----------- -----------
Net cash (used in) investing activities:
Acquisition of property, plant and equipment (net) (575,348) (201,272)
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Net cash provided by (used in) financing activities:
Reduction of debt (292,147) (290,755)
Payment of dividends -- (780,070)
Exercise of stock options 299,990 --
Purchase of treasury shares (3,603) (83,178)
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4,240 (1,154,003)
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Effect of exchange rate changes on cash 24,371 10,184
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Net increase (decrease) in cash and cash equivalents 725,538 (119,229)
Cash and cash equivalents:
February 1 6,648,380 4,425,347
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April 30 $ 7,373,918 $ 4,306,118
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SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 72,266 $ 70,362
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Income taxes $ 272,572 $ 97,481
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position as of April 30, 1995 and the results
of operations for the three-month periods ended April 30, 1995 and 1994 and
the statement of cash flows for the three-month periods then ended. The
results of operations for the three-month period ended April 30, 1995 are
not necessarily indicative of the results to be expected for the full year.
2. 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.
3. Inventories were comprised of the following:
APRIL 30, JANUARY 31,
1995 1995
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Raw material $ 4,583,955 $ 4,381,304
Work-in-progress 1,919,410 1,834,555
Finished goods 4,684,996 4,477,875
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$11,188,361 $10,693,734
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<PAGE> 7
MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Results of Operations
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Sales for the three-month period ended April 30, 1995 were $13,131,816 compared
to $11,737,142 for the three-month period ended April 30, 1994, an increase of
$1,394,674 or 11.9%. The increase in sales was due primarily to higher sales in
the Fluid Handling segment of the business. The backlog at April 30, 1995 was
13.3% higher compared to the backlog at the beginning of the fiscal year.
Bookings of new orders were 15.3% higher for the three-month period ended April
30, 1995 than for the three-month period ended April 30, 1994. The length of
time required to engineer, manufacture and ship some of the pollution control
systems, combined with contract requirements, will cause shipments to vary from
quarter to quarter.
Income before taxes for the three-month period ended April 30, 1995 was
$1,850,350 compared to $1,415,188 for the three-month period ended April 30,
1994, an increase of $435,162 or 30.7%. The increase in income before taxes is
related to a combination of factors. Increased sales of $1,394,674 for the
three-month period ended April 30, 1995, combined with the improvement in the
gross profit margin of 0.4%, contributed approximately $523,000 to income before
taxes.
The gross profit margin for the three-month period ended April 30, 1995 was
34.2% compared to 33.8% for the same period last year. The improvement in the
gross profit margin can be attributed to higher sales volume and product mix
within both segments of the business.
Selling expense increased $109,454 during the three-month period ended April 30,
1995 compared to the same period last year. This is due primarily to an increase
in staffing levels. Selling expense as a percentage of sales was 8.6%, which is
virtually flat, compared to the three-month period ended April 30, 1994.
General and administrative expense was $1,645,585 for the three-month period
ended April 30, 1995 compared to $1,589,962 for the same period last year.
General and administrative expense as a percentage of sales declined to 12.5%
for the three-month period ended April 30, 1995 from 13.5% for the same period
last year.
Other income, net, primarily interest income, increased $77,539 for the
three-month period ended April 30, 1995 compared to the three-month period ended
April 30, 1994 due to higher cash balances available for investment combined
with higher short-term interest rates.
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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Liquidity
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The Company's cash and cash equivalents amounted to $7,373,918 on April 30, 1995
and $6,648,380 on January 31, 1995, an increase of $725,538. This increase is
the net result of positive cashflow provided by operating activities of
approximately $1,272,000 and proceeds received from the exercise of stock
options of approximately $300,000, offset by payments of long-term debt
totalling approximately $292,000 and the acquisition of property and equipment
amounting to approximately $575,000. The Company's cash flows from operating
activities are affected by the timing of shipments and negotiated standard
payment terms, including retention associated with major projects.
Accounts receivable (net) amounted to $9,540,058 on April 30, 1995 compared to
$8,107,243 on January 31, 1995, which represents an increase of $1,432,815. 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 $11,188,361 on April 30, 1995 compared to $10,693,734 on
January 31, 1995, an increase of $494,627. Inventory balances fluctuate
depending upon the business segment involved, the number of contracts in
progress, and lead times required. This is especially true in the Pollution
Control Systems and Allied Equipment segment.
Current liabilities amounted to $12,654,765 on April 30, 1995 compared to
$9,506,301 on January 31, 1995, an increase of $3,148,464. Accounts payable,
accrued expenses and customers' advances accounted for approximately $1,736,000
of the increase. The balance amounting to approximately $1,411,000 is related to
the dividend payable on May 12, 1995. In the prior year, a cash dividend of
approximately $780,000 was declared and paid in the first quarter.
The Company has consistently maintained a high "current ratio" and has made
little use of its established lines of credit. 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 three-month period ended
April 30, 1995 amounted to $1,272,275 compared with $1,225,862 in the
three-month period ended April 30, 1994, an increase of $46,413. This increase
is the result of higher accounts receivable resulting from increased sales
activity, and higher inventory balances required to meet future business
commitments.
Cash flows used in investing activities during the three-month period ended
April 30, 1995 amounted to $575,348 compared with $201,272 for the three-month
period ended April 30, 1994. The Company's investing activities represent the
acquisition of property, plant, and equipment in the combined operations. During
the three-month period ended April 30, 1995, the Company purchased land in
Waukegan, Illinois, at a cost of $395,000 in conjunction with a 22,000 square
foot building to be constructed for the Stiles-Kem Division.
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
=====================================================
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
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Financing activities during the three-month period ended April 30, 1995 provided
cash of $4,240 compared to a use of cash of $1,154,003 for the three-month
period ended April 30, 1994. Cash used for the three-month period ended April
30, 1994 includes the payment of dividends of approximately $780,000. During the
three-month period ended April 30, 1995, the Company received proceeds of
$299,990 from the exercise of stock options. The current year's dividend,
amounting to approximately $1,411,000, was paid on May 12, 1995.
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.
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<PAGE> 10
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 April 30, 1995 and
the related condensed consolidated statements of income and of cash flows for
the three-month periods ended April 30, 1995 and 1994. 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, 1995 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 23, 1995, 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, 1995 is fairly stated, in all material respects, in relation
to the balance sheet from which it has been derived.
/s/ Margolis & Company, P.C.
---------------------------------
Certified Public Accountants
Bala Cynwyd, Pennsylvania
May 24, 1995
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MET-PRO CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
=====================================================
PART II - OTHER INFORMATION
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Item 6(b) - Exhibits and Reports on Form 8-K:
- - --------------------------------------------
Reports on Form 8-K - There were no reports on Form 8-K filed for the
three-month period ended April 30, 1995.
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
AND ITS WHOLLY-OWNED
SUBSIDIARIES
----------------------------
(REGISTRANT)
DATE May 31, 1995
-----------------
/s/ William L. Kacin
----------------------------------
WILLIAM L. KACIN, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
/s/ William F. Moffitt
----------------------------------
WILLIAM F. MOFFITT,
VICE-PRESIDENT, FINANCE
SECRETARY/TREASURER
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 7,373,918
<SECURITIES> 0
<RECEIVABLES> 9,744,058
<ALLOWANCES> 204,000
<INVENTORY> 11,188,361
<CURRENT-ASSETS> 29,460,680
<PP&E> 25,259,574
<DEPRECIATION> 11,764,880
<TOTAL-ASSETS> 48,219,754
<CURRENT-LIABILITIES> 12,654,765
<BONDS> 2,583,723
<COMMON> 319,342
0
0
<OTHER-SE> 31,975,846
<TOTAL-LIABILITY-AND-EQUITY> 48,219,754
<SALES> 13,131,816
<TOTAL-REVENUES> 13,131,816
<CGS> 8,643,367
<TOTAL-COSTS> 8,643,367
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61,996
<INCOME-PRETAX> 1,850,350
<INCOME-TAX> 749,391
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,100,959
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
